There's a reason why certain companies are called unicorns--they're nearly as rare as the mythical beasts. As of January 2019, there were 357 unicorn companies worldwide. Yet because of all the hype around them (and the great returns they give investors), every startup now wants to be a unicorn when it grows up.

Some companies have a product-market fit that is perfectly positioned with market trends and macro or micro economics, and they take off. They get to a billion-dollar valuation and we call them unicorns. However, there are many, many more people out in the world who start, nurture, and grow highly successful companies that aren't in the class of unicorns.

The Wrong Motivation

There are many good reasons to start a business:

  1. You see a problem, and you believe you can solve it.

  2. You have cool new tech, and you believe that it can be useful.

  3. You have a burning desire to make the world a better place (this is actually a variant on No. 1, but with slightly different motivation).

Wanting to create a unicorn isn't a good reason. This is because getting that elusive $1 billion valuation isn't at the core of a company. It's an end, not a journey, and to be a successful entrepreneur, you have to be driven by what the company is, not just where you want it to end up.

Passion for what you're doing is one of the key things Techstars looks for in accelerator applicants, because we know that this is one of the indicators of future success. Wanting to get to a billion-dollar valuation is not an indicator of success--it's an indicator of impatience.

Diversity of Thought and Innovation

I'm grateful, actually, that there are so few unicorns. Too many would result in a lack of diversity of thought or innovation, and these are essential.

If too many companies became unicorns, the result would be a world overrun by these few companies, and we would all do things just one way.

Of course, in that imaginary future, there would be inefficiencies and new technologies would continue to pop up, and entrepreneurs would jump in to solve for those inefficiencies or use those new technologies--so I probably have nothing to worry about.

My Advice

So my advice to you all is this: Don't try to be a unicorn. Instead of holding yourself to this nearly impossible standard, aim for being the best of your kind of company, for your customers.

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Published on: Jun 18, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.