Unicorn Startup Vs Cockroach Startup

unicorn vs cockroach

All founders want a unicorn 
But the smart ones want this creepy creature:

After the funding winter of 2022, many unicorns have gone into hiding. Spotting a new one has become difficult.

One species, that seemed to be forgotten, has caught the eye of investors.

This species can withstand extreme temperatures, survive for a long duration without food and water, almost eat anything, and regrow limbs at will – it’s the cockroach (startup).

Cockroach startups can survive on very little funding and rely on whatever cash they have on books. Thus, becoming investor favourites.

They are basically built for any economic condition.

Unlike (some) unicorns burning to grow strategy, cockroaches remain frugal. They operate in a hyper-lean manner and focus on survival before growth.
 
The approach to capital is the differentiating factor for such startups.

How does one build a startup for all seasons?

1) Value your equity – don’t dilute to an extent that turns the founder into an employee, even if it enables a higher valuation.
2) Be frugal – keep your team lean and impactful, and conserve your capital.
3) Be investment ready – remove barriers by keeping documents ready. Legal compliances, due diligence etc.

Not all startups can be cockroaches though, for an ecosystem to thrive, diversity is necessary.

Also, cockroaches often evolve into formidable unicorns – Zerodha is exhibit A.

Which cockroach startup do you know about?

#startups #unicorns #founders