Welcome!

Agile Computing Authors: Elizabeth White, Pat Romanski, Liz McMillan, Yeshim Deniz, Zakia Bouachraoui

Related Topics: @CloudExpo, Agile Computing, @ThingsExpo

@CloudExpo: Blog Feed Post

The Saga of the Unicorns | @CloudExpo #IoT #BigData #Microservices

There are signs the 'lofty valuations' of these unicorn are cooling

Unicorn is a term in the investment industry, and in particular the venture capital industry, which denotes a start-up company whose valuation has exceeded (the somewhat arbitrary) $1 billion. The term has been popularized by Aileen Lee of Cowboy Ventures. Fortune magazine counted over 80 unicorns as of January 2015. Now its most likely past 100. But their journey lately has been bumpy.

There are signs the "lofty valuations" of these unicorns are cooling. Fidelity wrote down Dropbox by 20%; Snapchat by 25%; and Zenefits and MongoDB by around 50% each. Zenefits had raised money at a $4.5B valuation in May. The reason for the markdown is the slow growth in meeting their targets. Square, which had its IPO earlier in November, was valued at $4 billion, about a third less than in its most recent private round. Several others besides Square have faced "markdowns" -  Pure Storage, Box, GoPro, News Relic, Hottonworks, etc.

What is going on? Some of it is due to stock market jitteriness. Some of the unicorns claim to be disruptive and a threat to the incumbents. This has not happened. Google, Facebook, and Amazon have continued to grow impressively. Facebook has messaging apps that compete with Snapchat and Dropbox has a rival in Amazon with a fast-growing cloud storage business. MongoDB claimed to disrupt Oracle's business, but Oracle's stock has been growing lately. Investors clearly see that profitless startups may not be as good as incumbents' growth prospects. Also, the burn rates of the unicorns are way too high. Lyft suffered a loss of $130M during the first half of this year on less that $50M in revenue. Instacart is losing $10 on each order. Open source software companies like Cloudera, MongoDB or Cassandra have a tough time growing their revenue.

Also, there seems to be a competition to pump up the valuation of these unicorns. The velocity to get into the "unicorn club" is too high. New fundraising rounds get creative to boost the valuation with investors. There are too many companies in similar spaces, each claiming to be $20-30 billion dollar companies in future. This is not going to happen. In the past downturns, healthy and well-capitalized firms have benefited. Airbnb has $2 billion in cash with a burn rate of around $100M a year.  Those firms that hoarded up cash during good times for the downturn will do well.

So unicorns, watch out before you become history.

More Stories By Jnan Dash

Jnan Dash is Senior Advisor at EZShield Inc., Advisor at ScaleDB and Board Member at Compassites Software Solutions. He has lived in Silicon Valley since 1979. Formerly he was the Chief Strategy Officer (Consulting) at Curl Inc., before which he spent ten years at Oracle Corporation and was the Group Vice President, Systems Architecture and Technology till 2002. He was responsible for setting Oracle's core database and application server product directions and interacted with customers worldwide in translating future needs to product plans. Before that he spent 16 years at IBM. He blogs at http://jnandash.ulitzer.com.

IoT & Smart Cities Stories
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Early Bird Registration Discount Expires on August 31, 2018 Conference Registration Link ▸ HERE. Pick from all 200 sessions in all 10 tracks, plus 22 Keynotes & General Sessions! Lunch is served two days. EXPIRES AUGUST 31, 2018. Ticket prices: ($1,295-Aug 31) ($1,495-Oct 31) ($1,995-Nov 12) ($2,500-Walk-in)
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...