A million tiny horses

The economics of venture capital depend on the idea of a unicorn—a rare startup so successful it more than repays all of the money investors lost elsewhere. But as the barriers to entry and scale vanish, and small teams can create massive systems, the unicorn is going extinct. Smaller companies can target a microniche, and extract enough profit to fund a sustainable business without ever taking on venture funding. These “lifestyle businesses”, once derided by startup founders, are looking far more appealing in uncertain economic times. Hundreds of thousands of laid-off tech workers no longer believe the myth of profitable stock options. And the cost of experimenting is vanishingly small, so everyone can have a side hustle.

What comes next? In this talk, Startupfest content chair Alistair Croll tackles the demise of unicorns, and explains how the world of startup venture capital is splitting in two: huge VCs reinventing themselves as Private Equity firms that invest in public stocks, roll up industries, and scale rent-taking platforms; and the rise of a million tiny horses—small, bootstrapped businesses tailored far more closely to an intimately understood customer base.