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Last year, 2015, was the year of the unicorn, a startup that raised so much venture investment, it was valued at $1 billion or more.
But 2016 has become the year of the “unicorpse.”
Many unprofitable, once high-flying startups are having their come-to-Jesus moments: they may have problematic products, can’t easily raise more VC money, no one wants to buy them, and no one is interested in their IPOs.
And their employees, who were once proud, company-T-shirt-wearing loyalists, are starting to wake up and feel a sense of quiet desperation.
The poster children startups for the unicorpse era: blood-testing startup Theranos, which is now under criminal investigation; fintech startup Powa Technologies, which declared bankruptcy; and Zenefits, whose CEO resigned amidst a regulatory scandal and layoffs followed.
But all of Silicon Valley is feeling the pall because VC money is tighter. A few days ago, venture investor Bill Gurley wrote a detailed explanation of why the unicorn situation “just became dangerous … for all involved” in the startup world.
People are reading a new book by Dan Lyons, a writer for the HBO Show “Silicon Valley,” that exposes his experience in the over-the-top startup world, called “Disrupted: My misadventure in the startup bubble.”
And now everyone in the Valley is reading a post called “Uncanny Valley” by writer Anna Wiener for N+1, which portends to be a first-person account of life at a dying startup.
It begins (emphasis ours):
MORALE IS DOWN. … We escape for drinks and fret about our company culture. “Our culture is dying,” we say gravely, apocalyptic prophets all. “What should we do about the culture?”
And it offers other jewels like:
Members of our core team have been shepherded into conference rooms by top-level executives who proceed to question our loyalty. … Our primary investor has funded a direct competitor. This is what investors do, but it feels personal: Daddy still loves us, but he loves us less.
… and like this:
We talk about our IPO like it’s the deus ex machina coming down from on high to save us - like it’s an inevitability, like our stock options will lift us out of our existential dread. … But we see now that we’ve been swimming in the Kool-Aid, and we’re coming up for air. We were lucky and in thrall and now we are bureaucrats, punching at our computers, making other people - some kids - unfathomably rich.
… and this:
I SKIM RECRUITER EMAILS and job listings like horoscopes, skidding down to the perks: competitive salary, dental and vision, 401k, free gym membership, catered lunch, bike storage, ski trips to Tahoe, off-sites to Napa, summits in Vegas, beer on tap, craft beer on tap, kombucha on tap, wine tastings, Whiskey Wednesdays, Open Bar Fridays, massage on-site, yoga on-site, pool table, Ping-Pong table, Ping-Pong robot, ball pit, game night, movie night, go-karts, zip line. Sometimes I forget I’m not applying to summer camp.
And people are talking about it:
So I thought I was going to hate this (yet another bitter, one-sided take on startup culture), but I love it. https://t.co/j5mOj8LXv4
— Ashley Mayer ❄️ (@ashleymayer) April 28, 2016
tfw you read something new and know instantly it will be read by historians trying to understand “tech” in 2016 https://t.co/ISEFiCjKLO
— Parker Higgins @ ???? (@xor) April 25, 2016