Chasing Unicorns
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Gold rushes are not a new phenomenon. The first prospectors who worked the California gold fields in 1849 could earn 10 to 15 times what east coast wage earners made at the time. This level of financial incentive motivates many people. Unicorn hunters are in the same category. The success of the original “Facebook” entrepreneurs launched many copycats. Just as the late arrivals to the California gold fields discovered, the big financial success is enjoyed by the pioneers. Currently there are about eight million apps offered for sale. Fewer than three percent of those apps had enough sales to recover the $100,000 investment needed to create the app. This herd mentality sets the stage for the next gold rush. The big salaries funded by venture capitalist have siphoned away the engineering talent that normal companies need to survive. A persistent talent vacuum sets the stage for a big disruption in unexpected sectors.
Napoleon Hill in his book “Acres of Diamonds” did a great job of explaining how this happens. In his book a farmer sells his land to search the world for diamonds. He returns 20 years later to discover that his land is now a diamond mine. Similar stories will be told about today’s unicorn hunters. After a string of unicorn hunts in regions where all of the unicorns have been harvested, searchers will return to discover that the best opportunities are in places that have not been trampled by the herd.