In our predictions for 2016, we said that we should expect that Unicorns — privately held startups with valuations in excess of $1 billion, would find this year to be much more difficult. (You can check out that prediction, “Whither unicorns and their business models?“)
Already, we’ve seen articles in Fortune, Wall St. Journal, and New York Times write about Unicorns this year, all validating our concerns about unrealistic valuations and pressures. Add to it, Bloomberg Businessweek, which wrote, “Unicorns Aren’t So Beloved Anymore” (Print headline: “The Last (of This) Unicorn?”) about Zenefits.
Zenefits has quickly become the poster child for unchecked growth, with a CEO who was ousted and concerns that the company may have broken laws and did not maintain compliance.
This isn’t to say that all Unicorns are or will face a similar phase — but just that we continue to think that 2016 and beyond will be a tougher time for Unicorns.
Left unsaid in our predictions is what the impact of tighter money, lower valuations, etc. will have on smaller startups. We think it could be a tougher time for them, too.