The startup world outside Silicon Valley

🌈 Abstract

The article discusses the concept of "camel" startups, which are companies that strive to be profitable from the first day, in contrast to the traditional "unicorn" startups that focus on rapid growth and funding. It highlights the challenges faced by startups in regions outside the major tech hubs and how the camel approach can be more suitable in these environments.

🙋 Q&A

[01] Unicorns vs. Camels

1. What are the key differences between unicorn startups and camel startups?

• Unicorn startups focus on rapid growth and raising multiple rounds of venture capital funding to achieve a valuation of over $1 billion.
• Camel startups, on the other hand, strive to be profitable from the first day and do not rely on constant funding. They aim for slow and sustainable expansion rather than "growth at all costs".
• Unicorns are more common in major tech hubs like Silicon Valley, while camel startups are more prevalent in regions outside these hubs, where access to funding and talent is more limited.

2. What are some examples of camel startups mentioned in the article?

• M-Pesa, a mobile money platform that allowed people in Kenya to send and receive money using basic cell phones, addressing the lack of banking infrastructure.
• d.light and Zola Electric, companies that provided affordable solar-powered products and pay-as-you-go plans to bring electricity to remote areas in India and Tanzania, respectively.

3. What are the advantages of the camel startup approach?

• The necessity to be profitable from the start forces camel startups to come up with innovative solutions and new ways of doing things.
• Camel startups are better suited for regions outside the major tech hubs, where access to funding and talent is more limited.

[02] Unicorn Playbook

1. What are the key steps in the "unicorn playbook" described in the article?

• Come up with an amazing idea
• Go to a startup accelerator or pitch it to venture capitalists (VCs)
• Raise money, hire people, and aim to grow as fast as possible
• Raise additional rounds of funding every 2 years and become huge
• Get acquired by a big company or consider an IPO

2. What are the challenges of the unicorn playbook in regions outside the major tech hubs?

• Lack of access to VC money
• Difficulty in finding a large talent pool to hire from
• Lack of the necessary infrastructure to support rapid growth

3. Why is the unicorn playbook not feasible in these regions?

• The article states that in the "frontier" (outside the big tech hubs), startups do not have the benefit of multiple rounds of funding with millions of dollars, making the unicorn playbook impossible.