investment

For people that are not aware of the term (a term that I actually don’t like that much), “unicorn companies” or “unicorn startups” are companies that basically get hyper-funded and gets a lot of investments in a period of time: the idea is basically that a company (or startup) have such a wonderful idea, or a wonderful execution of that idea, that people want to put money on it, to the point of millions (or even billions) of USD, on the hope that the company will revolutionize the market. Nubank is an example; Twitter’s probably another one; and there were a lot of companies (specially startups) that are trended as “unicorns”.

For me, there is a real problem with the term – it uses a mythological animal to explain the company. Unicorns don’t exist, which basically mean that the “money” an Unicorn Company make also… don’t exist. At least, not for now; there’s a promise that it will be profitable in the future. Considering we’re talking about literally millions of USD, these want to probably get thousands of millions in return. So they start by making less than zero to the point of trying to reach eight zeroes to the right of some number, at least. They also don’t need to be sustainable, or sometimes even have good code, in the beginning – what matters is the idea, and that they somehow get founded by a group of investors.

And that’s where the problem comes in. I worked at some of these companies in the past, but up to that point I never knew what it means to have such a big money invested. The thing is, good practices in both product and code were present, for sure. But the focus was on delivering – so everything goes to the drain if you’re not delivering fast enough – you always have to deliver something new, something that the users will like, and it have to make to production really to see if that idea will make sense or not.

Which is good enough, but there’s a problem. Your products will always get worse.
(more…)