In a LinkedIn post, Ladd said: “One cannot be a member of LinkedIn without noticing the never ending posts and articles recognising that another company has achieved the near mythical status of being named a unicorn. Obtaining unicorn status is indeed rare. A business only has a 0.00006% chance of becoming one.”
In 2021, there were 340 startups valued as unicorns, Ladd noted.
As of 2022, there are 1,000 worldwide driven primarily by increased investments from VCs and crossover funds like Tiger Global Management and SoftBank.
Ladd added: “According to multiple sources that I researched for this post, unicorns have several characteristics in common: unicorns are disruptive, tech savvy, consumer focused, efficient, growth driven, adaptable, resilient, and can persevere.”
“Last but not least, to become a unicorn, a company must have a rock solid leadership team, beginning with a CEO that exhibits coolness under fire, an ability to see further than others, nerves of steel, and possesses exceptional judgement.”
The brutal truth, however, is that far too many unicorns, especially newly minted ones in transportation and logistics, have achieved their status in spite of their faults, and not because of their brilliance.
“Put simply, the companies are unicorns in name only. This is what happens when you have founders who lack hands on industry experience, but who’ve mastered the art of fundraising<“ Ladd wrote.
“The unfortunate personality trait that stands out the most among too many of the executives who work at unicorns is vanity. As a journalist and analyst, I have access to nearly any executive I want to speak with. Give an executive at a unicorn an opportunity to be interviewed, and most will move heaven and earth.”
He continued: “Until a few months ago, unicorns in transportation and logistics appeared to operate flawlessly.”
“They regaled the press and public with tales of how their latest acquisition or investment in software, gave them superior operating capabilities above and beyond everybody else. It was management by false press releases at its finest.”
He concluded: “What we are witnessing now is the vanity of the unicorns being exposed. On a near daily basis, logistics, software, and/or rapid grocery delivery companies, are announcing layoffs, an inability to raise additional capital, and a retrenchment of their businesses.”
“Obligatory press releases and slick sentences from company spokespersons place a positive spin on the events regardless of the facts.”
Too many CEOs misjudged the market, Ladd believes.
“They’re inexperienced. Their companies are a house of cards built on shifting sands. And the walls are crumbling in. What’s my prediction? Pain.”