Unicorns and the Quest for Fire

BushmenSanWhen Naoh watches how a boy makes fire with a stick and flint, his life is changed forever. Matches and lighters didn’t exist thousands of years ago, Greeks thought that Prometheus stole fire from the gods and gave it to humans, but more likely our ancestors obtained fire from natural sources and kept it burning to use for various purposes, such as cooking and heating, as Naoh’s tribe in La Guerre du feu (Quest for Fire).

When I read about innovation today, I feel that our current understanding of how new products and services are developed and introduced into the market, resembles our ancestors’ quest for fire. Even the iconography we use seems to be inspired by a similar way of reasoning. It is the case of those mythical unicorns that fire up the imagination of venture capitalists in quest for profit. And that’s probably the reason why today’s economies, which like old tribes do not know how to make a unicorn—I am not thinking about any particular one—have to carefully protect their established companies.

Having said that, Jean Paul Simon’s “How to Catch a Unicorn” is worth reading. At least, he has managed to ask a few interesting questions: What can explain the unicorn phenomenon? Are all unicorns born mobile? Did Europe miss the mobile turn? What policies do we need? And maybe the most interesting, the last side question: Are all unicorns platforms?

The control of fire was a turning point in human evolution, allowing humans to cook food and obtain warmth and protection. Many anthropologists believe that, without cooked food, the human brain would not have developed into what it is today. Like fire, innovation comes with the promise of increasing wealth, but we still need to ditch Prometheus and find the sticks and flint of innovation. Maybe only after we are truly able to produce innovation at will, will our (collective) brain develop into what we need for a better tomorrow.

3 comments

  1. I shall read JRC report. I did not know the people in Seville made that sort of thing.

    However, I think the explanations for Unicorns appearance, and “unicorn-like” characteristics is possibly simpler. This link
    gives a good explanation. Of course, as in any mathematical model, you could agree or disagree whether this applies to start ups.

    • HI Jose,

      Thank you very much for your comment. If I understand you correctly, you mean that the explanation for unicorns might be just simple statistics. I have not read the paper yet, but I guess it is plausible that the number/size of new/innovative companies may follow a power law distribution. However, that would not explain why America and Asia are much more prolific than Europe, which I think is where the JRC report is pointing .What do you think?

      Do you know the people in Seville?

      • Exactly. I the favourable environment is key to the development of “new species” including Unicorns and this unique environment leads to a power law, whereby a very small number of big firms are successful.

        In addition, Those firms are few and concentrated in a certain (geographical) area.

        There are several reasons for this.

        1. Economic climate and funding. See the paragraph on pg. 17 regarding Armageddon.
        2. Economic environment: Existing companies (the GAFA as they call them in the report) clearly favour the growth providing people and funding . In addition, they provide second generation VC. (people with good start up experience able to act as active Venture capitalist).
        3. Experience. Many unicorns are started by serial entrepreneurs. This means they are “second generation animals”

        Regarding the question on Europe vs. US, and Asia there are plenty of reasons to explain it (you know them :):

        – European markets are smaller and much fragmented. Language and communication barriers are important particularly in Southern Europe.
        – European VC normally add local deployment as a pre-condition. (to get VC funding you have to develop your project in a given region -sometimes even in a given town). This makes organic growth very difficult.
        – It may be anecdotal, but all people I know who plan starting a new company with global ambitions, go to the US. (and particularly to the Pacific Coast).
        – Of course, Europeans prefer safe and well paid jobs (particularly as compared to Asia where there are no safe jobs to choose). This is normal, it would be stupid to do otherwise.
        – US investment is 4 times greater than EU (see pg 30-31)

        But finally, having said that, I must say I have not found a good econometric analysis that would prove the “intrinsic” European backwardness , after accounting for evident elements such as

        – VC funding availability
        – Localized talent resources, including VC expertise and involvement.
        – VC limits and red tap.

        In fact, this is my major criticism of the report. They give some figures (from other reports), anecdotal experience, comments,… but they have not unified treatment of data and it is difficult to raise conclussions.

        Regarding, JRC I used to collaborate with them in my previous life. They are good, but may be the “environment” makes them isolated.

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