Zebras Fix What Unicorns Break

Magical thinking drives the startup economy — but we need a strong dose of reality.

July 13, 2017 update: For the latest, please read “Zebras: Let’s Get In Formation.”

A year ago we wrote “Sex & Startups.” The premise was this: The current technology and venture capital structure is broken. It rewards quantity over quality, consumption over creation, quick exits over sustainable growth, and shareholder profit over shared prosperity. It chases after “unicorn” companies bent on “disruption” rather than supporting businesses that repair, cultivate, and connect. After publishing the essay, we heard from hundreds of founders, investors, and advocates who agreed: “We cannot win at this game.”

This is an urgent problem. For in this game, far more than money is at stake. When VC firms prize time on site over truth, a lucky few may profit, but civil society suffers. When shareholder return trumps collective well-being, democracy itself is threatened. The reality is that business models breed behavior, and at scale, that behavior can lead to far-reaching, sometimes destructive outcomes.

Facebook — the ultimate unicorn — was weaponized to spread fake news during the presidential election. Uber has come under fire for supporting dubious political agendas, tolerating a toxic workplace culture, manipulating employee wages, and circumnavigating regulations. Medium has backpedaled, having realized that while clickbait content may produce the ad-revenue hockey stick investors want to see, it undermines the founders’ original mission to create a publishing model that enlightens, informs, and rewards quality over quantity.

Many well-reasoned think pieces* have been written about the gaping chasm between the world we need and the world that exists. Today, we want to provide the seeds of a solution — and to encourage founders, investors, foundations, corporations, and their allies to organize around it.

A company’s business model is the first domino in a long chain of consequences. In short: “The business model is the message.” From that business model flows company culture and beliefs, strategies for success, end-user experiences, and, ultimately, the very shape of society.

We believe that developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternative models will balance profit and purpose, champion democracy, and put a premium on sharing power and resources. Companies that create a more just and responsible society will hear, help, and heal the customers and communities they serve.

Think of our most valuable institutions — journalism, education, healthcare, government, the “third sector” of nonprofits and social enterprises — as houses upon which democracy rests. Unicorn companies are rewarded for disrupting these, for razing them to the ground.

Instead, we ought to support companies that provide extreme home makeovers. We can’t assume these companies will be created by accident. We must intentionally build the infrastructure to nurture them.

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