A few days ago, one of the most important investors in Silicon Valley said that for the technology sector and in particular for cryptocurrencies, winter has begun; but he added not to be frightened because, as it arrived, the winter will end. To prove it, another announced that it had created a new fund from 4.5 billion to invest in the sector.
The image from Game of Thrones, this “winter of startups”, gives a good idea of what is happening because of the war and the financial crisis. In other times, watching stocks plummet to the bottom, we would have said that the speculative bubble is deflating, as it did in 2000. But compared to that dramatic collapse, this time the hope is that the fundamentals of the sector are more solid; if this were the case we would only be faced with a transformation exemplified by a mythological expression: “Unicorns are disappearing, it’s time for the centaurs”.
Unicorns are startups with a valuation of more than a billion dollarsa definition coined in 2013 from an investor who had created a sort of ranking of all the startups of the decade that had reached that milestone: there were 39, an average of 4 every year. A few months ago they had become more than a thousand, the result of an economy that for years, with zero interest rates, has injected money by making the valuations of startups receiving major investments soar. If the unicorn club members used to stay in one room, now they need a theater. Unicorn status has become synonymous with success, albeit those values are unrelated to turnover and profits (many successful startups don’t make a profit for years).
Now that season is over, they say: what matters is the secure turnover, based on contracts and subscriptions. With 100 million dollars in turnover, a startup can define itself as a centaur. And it is a return to the fundamentals: as with any economic activity, it counts how much you sell and not how much you think you will sell.