Case Study Of Unicorns And Cockroaches
Of Unicorns and Cockroaches – Why ambition without focus drives valuation but fails to create value “The man who starts out simply with the idea of getting rich won’t succeed, you must have a larger ambition” - John D Rockefeller While it is one thing for Rockefeller whose Standard Oil had a monopoly in the US oil market to speak of larger ambition, for firms today to speak of world domination based merely on larger than life ambitions is outrageous. Some of them are rewarded for the same by being addressed as a ‘Unicorn’ – a coveted distinction given to firms valued at $1 billion before going public. It appears that Indian businesses and investors too have taken Rockefeller’s words to heart, with these brands often facing disgraceful ends. …show more content…
But one reason stood out - its blind ambition which clouded reason and logic. The brand in its insane ambition to be the market leader lost its focus from its core e-commerce business. Snapdeal acquired businesses, all from different categories like logistics services, payment wallet, ad targeting, grocery-retailing, probably in hope to create an ecosystem to give its e-tail arm a superior advantage over its competition. But it backfired. It failed to build a competitive advantage from these acquisitions leading to excessive cash burn and credibility loss for the founders, resulting in them having little say in the merger …show more content…
The agenda of these new businesses is presumably to attract the nth round of funding to survive the present, with a wishful thinking of living their ambition of dominating the future. But the alarming fact is as instances of multiple rounds of cash infusions are going down coupled with high burn rate, more businesses are shutting shops. The new age brands now live the narrative of ‘go big or go home’. And in most cases, it represents the glorified ambitions of one-upmanship and market domination. A contrast to Unicorns which seem to employ a ‘grow at any cost strategy’ are the ‘Cockroaches’. The insect known for its survival instincts represents businesses which are known to take the ‘get it right’ approach to their core business. They invest only in business-critical infrastructure. They grow slowly yet steadily whilst keeping an eye on the revenues and profits unlike the
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Lenovo Essay
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