Elizabeth Holmes.

Are we too focused on becoming a unicorn as the end-goal, rather than a milestone on the journey?

Last week Elizabeth Holmes, the Theranos founder was convicted of fraud. Theranos was a unicorn, promising to disrupt the medical industry and revolutionise lab testing by producing multiple fast blood-testing with just one drop of blood at a fraction of the cost. The technological breakthrough that Holmes and former company president Ramesh Balwani touted was never demonstrated, and the assertions amounted to outright deceit.

In 2015, it had a $10bn valuation but after revelations of fraud and burning $900m investor funds, it failed and 800 people lost their jobs.

So let’s take a step back from the unicorn hype and convey a more realistic view of what enables a sustainable tech startup:

💰Startup valuation: Blend the founders ambition with the sober adult supervision of investors.

🤑Attract investors: A startup is a bet on a business model attaining the scale beyond which the unit economics start making sense. The lack of due diligence on Theranos, speaks volumes.

📈Growth strategy: Focus on building your architecture in an intelligent way, without over taxing your cash or endangering your roadmap.

📊Set and hit your (proper) metrics:  Facts, proof, transparency and evidence have to be delivered to prove you are on the road to deliver the dream.

⚠️Know business risks: Your strategy is not to wish and dream of becoming a big fish, but to pick a small pond, engage with the smallest viable audience and gain the reputation and trust you need to move to bigger audiences. 

👁Have a vision and purpose, but don’t hallucinate: The unicorn world is filled with the idolatry of winners, constantly promoted on Instagram, creating a high many then chase. Time should be an ally, not an enemy.

🎇Blitzscaling doesn’t work: The blind folly! It’s a do-or-die approach. Cash-burning firms may find themselves stranded when the tide goes out. Don’t raise investor funds and ignore customer revenue.

⛔️Leadership red flags: The vacuum of leadership, transparency and governance in Theranos undermined the fragile startup culture that investors tolerate and accept.  It resulted in a calculated and deliberate fraud.

Mindset drives behaviour, behaviour drives culture, culture drives business outcomes. Don’t let lies become your strategy, you’ll be buried under them.

Enjoy your week!

Insightful takeaways Ian#womenintech#oneteam#startups