By Oscar Jimenez*
For years, the startup ecosystem has been obsessed with the search for unicorn companies (startups valued at more than one billion dollars), which represents exponential growth and disruptive innovation. However, in a context of economic uncertainty, this “growth at all costs” model is being questioned. In their place, an alternative approach emerges, “the camels”, startups designed to be sustainable, resilient and adaptable, even in adverse conditions.
Unicorns are the result of aggressive scaling strategies, fueled by massive funding rounds from equity funds. Venture Capital; Successes like Uber, Dropbox or Rappi are examples of this mentality of scaling quickly to corner markets (BlitzScaling).
Many unicorns have faced profitability problems, toxic culture and extreme dependence on external capital, but what has caused the most doubt is having bad ones. unit economicsThat is, offering subsidized services or products, obtaining massive users, but when that benefit is removed the drop is drastic.
Camels, on the other hand, are symbols of companies designed to survive in complex environments, with key characteristics such as:
– Gross margin from early stages.
– Moderate but sustainable growth.
– Financial and operational resilience.
There are notable examples of startups as Basecamp y Mailchimp, that have grown without depending on large rounds of financing.
Failures of unicorns like WeWork and Theranos have destroyed confidence in scaling at all costs, which is why investors are now looking for businesses with clear economic metrics, rather than promises of future growth, which is why camels are gaining relevance.
The main characteristics of a camel startup are:
More precise costs: Every new hire must be backed by a tangible impact on revenue or operation.
Get paid for added value: They prioritize generating income from the beginning. Before competing for market share, they ensure that their clients perceive and pay for that differential.
Strategic financing: They do not shy away from external capital, but they use it tactically. They seek it only when it is necessary to grow, not to survive.
Risk preparation: They develop a solid capacity to respond to crises. They anticipate risks and act quickly.
Smart diversification: They expand their lines of products, services and markets, ensuring stability and expansion under a well-founded vision.
Long-term focus: They are clear that success requires time, patience and resilience.
Some startups have managed to move from a model of BlitzScaling (inefficient scaling), to one of profitability. This means optimizing the use of capital, focusing on improving unit economics and adopt disciplined growth that avoids unnecessary expenditure of resources.
But which model is better?
If the market is booming and capital is plentiful, unicorns may be more attractive, but in volatile environments or emerging markets, camels are often a safer bet.
Both models have their place in the ecosystem startupbut the shift in focus toward camels reflects an evolution in how success is measured. Instead of obsessing over astronomical valuations, perhaps it’s time to celebrate the startups that not only survive, but endure, regardless of the circumstances
Contact:
*Óscar Jiménez Rodríguez, is Board Advisor of StartUps, was Co-Founder and CEO of Epiq México, as well as President of ThePowerMBA in Latin America, CoHost of Escalables Podcast and Venture Partner of Lotux VC.
Twitter: https://twitter.com/OshcarJR
LinkedIn: https://www.linkedin.com/in/oscar-jr/
The opinions expressed are solely the responsibility of their authors and are completely independent of the position and editorial line of Forbes Mexico.
