Are these unicorns ready to fly?. A regular column on the information industries
| Published date | 10 June 2019 |
| Pages | 438-440 |
| DOI | https://doi.org/10.1108/DPRG-06-2019-081 |
| Date | 10 June 2019 |
| Author | Peter Curwen |
| Subject Matter | Information & knowledge management |
Rearview
Are these unicorns ready to fly?
A regular column on the information industries
Peter Curwen
Peter Curwen is based at Newcastle
Business School, Northumbria
University, Newcastle upon Tyne, UK. Bynow,wehavebecome
accustomed to the idea that
an internet-based company
with barely any revenues andquite
possibly some significant trading
losses to its name can float on the
stock market with a valuation of many
billions of dollars. Equally, by now, we
have worked out that as these
companies typically provide their
basic products at zero cost to the
user, they must be selling something
else to someone else, which turns out
to be data about users to advertisers.
Furthermore, we know by now that
whereas older people have
reservations about the loss of privacy
implicit in using these companies’
websites, those under the age of 40
happily accept the trade-off between
free products and services, and the
divulgence of what was not that long
ago considered to be private
information.
As discussed in severalprevious
rearviews, someof the companies that
have used the above tradingmodel
have prospered mightily, whereas
others have fallenby the wayside.
However, the possibility of failure is
not going to act asa deterrent to
would-be entrepreneurs –if you can
start from nothingbut potentially end
up with shares worthhundreds of
millions of dollars, the incentive is
massive. What is lessevident is why
hard-nosed businessmen remain
willing to sink billions of dol lars in
internet start-upseither by investing
while they are small and unlisted –at
which point their marketvalue is a
matter of conjecture–or by buying
their shares in thecourse of an initial
public offer (IPO).
A company valued in excess of $1 bn
pre-launch is now universally referred
to as a “unicorn”. A full list can be
found at https://en.wikipedia.org/wiki/
List_of_unicorn_startup_companies
which includes those former unicorns
that have had an IPO. A majority of
valuations fall within the $1-2 bn range,
but in total, the roughly 270 unicorns
listed, at the end of 2018, were worth
$860 billion. Among the list of well-
known unicorns that have had IPOs are
Snap, Spotify, Twitter, WhatsApp and
Xiaomi –unicorns are predominantly
based either in China or the USA.
Possibly the greatest mysteryof all is
how unicorns can continue to appear
with new ideas that can attract billions
of dollars of investment. However,
part of the reason is that many
unicorns are not wholly original in
conception. Take ride-sharing
company Lyft, for example, which
might appear to be just a copy-cat
PAGE 438 jDIGITAL POLICY, REGULATION AND GOVERNANCE jVOL. 21 NO.4 2019, pp. 438-440, ©Emerald Publishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-06-2019-081
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