People would be forgiven for thinking of Silicon Valley as a mythical zoo. The region has long been renowned for its population of Unicorns - those rare companies with a $1bn+ valuation - but how much do we know about its Zebras?
It was at a Facebook event where I met Saul Klein, an experienced venture investor, who coined ‘Unicorns powered by Zebras’.
What Saul described resonated with me as something that summed up the increasing democratization of products/services.
Saul’s analogy explains that Zebras are the driving force behind many of the most renowned Unicorns and that it’s fuelling entrepreneurship.
Two examples Saul gave were Airbnb & Uber. At Airbnb, the Zebras are the community of homeowners, known as ‘Hosts’. At Uber it’s the community of drivers known as ‘Partner Drivers’.
In Saul’s’ analogy these Unicorns are simply providing the environment and toolset for two parties to exchange value in a way that either wasn't even possible before and/or is just far easier now. The end result is that;
Buyers now have a greater diversity and volume of choice, often driving a better buying experience and better value for money.
Suppliers, the Zebras who are often individuals, now have the ability to earn extra income by offering a product or service.
The key principle is that the Unicorns are not the ones delivering the product/service; they have an ‘army’ of entrepreneurially minded people doing that. The focus for the Unicorns is to identify the need/opportunity and then (i'm oversimplifying here) provide the best toolset for the two parties to exchange value.
Quite obvious and clever when you think about it - and it’s the driving force behind many of these Unicorns’ ability to achieve a $1bn+ valuations. If the market is big enough, then the scale potential of these companies is vast and they aren’t restricted by the smaller economies of scale model that would come from, for instance, being a company that creates and sells it's own product.
I then started to wonder if Facebook is any different? Is Shopify any different? Are YouTube, Ebay, Google, Spotify, Paypal etc..?
The consistent factor is that none of these Unicorns have a one-sided client base, ultimately, I think it’s fair to say they are all two-sided marketplaces in one way or another...they would be nothing without two parties exchanging value through them.
Part of my excitement and interest in this concept is probably given a bias by the fact that I consider Whalar to be business that fits this description of being powered by Zebras and, hopefully, the Unicorn description will fit in time...
Even if my own bias is making me see this to an extreme, I still find it fascinating and exciting to see how the provision of many products/services is becoming increasingly democratic through technology and driving entrepreneurship.
Article originally published on LinkedIn.