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Wednesday, June 29, 2022

Unicorns Are Dead, Let’s Build Dragons Instead

If you are a startup – raising money in 2017 is a piece of cake. All you have to have is a semi-realistic idea, a couple of people who have a LinkedIn profile and a warm introduction to investors, who want to “get into the investment scene”. According to Frode Eilertsen, in Norway “… if you have a pulse, you can get seed funding.” It is no surprise we are getting juice-pressing companies that raise over $100 million and go bankrupt not too long thereafter.

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Compare that to over ten years ago, when I first pitched my startup idea to an investor. Armed with a 45+ page business plan, an NDA and a one-pager – I went into my first meeting. The first question they had was whether I would pay myself a salary. If I would say “yes”, their answer would be: “Sorry – not interested, we want to see your own commitment.”

Those were the days, and I miss them because that was the real deal. Today’s startups think that it is totally okay to pay $4 000 (or more, if in the US) salaries to the founders while not having a single customer. At the same time, they treat funding rounds as a metric for success. That would not be a problem at all if those companies would not be funded. Yet – they are, and it’s time to wake the hell up.

Entrepreneurship used to be about making something amazing out of your garage – despite all odds. It was about being hungry (often literally), it was about dreaming big and not confronting to the norms. Garry Kasparov once said to me: “Steve Jobs wanted to build Apple and kill IBM, today – the peak of ambition is to raise funding and sell-out to Apple.”

Winning used to be about being different, it was about being a “unicorn” (as much as I don’t like the word). My fear is that we have forgotten what it is like and that the “startup industry” has become just that – an industry, a factory of “unicorns” that will probably all die out of starvation when the funding supply comes to an end.

Think about it. Even the investment market is so bullish that the basic mathematics are ignored. Often, I take part in a jury for startup pitching events, and when I screen the applicants – many have $3+ million valuations, zero revenues, no users or clients and sometimes no real products to speak of.

At the same time, when we started raising capital for our own business, we could barely meet the same mark. Despite growing 100% yearly when it comes to revenue. Starting with 87 000 EUR in year one, 264 000 EUR in year two, 490 000 EUR in year three and over 600 000 EUR in 2016. Despite having clients such as Microsoft, Amazon, Paypal, Zalando, OP, and much more.

Why? Because we are a business and a not a startup. Because we do not conform to the norm and we like it. We do not have a quick exit strategy, we do not have a simple and scalable product, we do not pay ourselves a lot. What we do have is our “hustle” spirit, an actual culture (not to be confused with a “startup culture”), a vision to actually change the world, a long and painstaking path ahead of us. It is unclear, it is scary, but we think that we will persevere.


“Taking on financial risk in the hope of profit”. It is as simple as that. It is when you risk what you have, following your dream, your passion, while chasing profitability. If you are raising money in order to feel safe, while chasing that profit – the real entrepreneur is your investor as per the dictionary definition.

Get out of the bubble and start hustling. Real entrepreneurship is about getting to your clients as soon as possible. We call this the Minimum Viable Sale, or the ability to sell anything before you have a product (Not to be confused with the old-fashioned Minimum Viable Product). This means that when we do anything at ArcticStartup – we first make a presentation and actually sell the idea of a product. Only then we begin making the actual product. That’s how Media HoneypotCoFounder MagazineDeal Room app and others have come to existence. Sales before products.

Entrepreneurship is when you are scared. It is a risk, and we love it. We wish more people took that risk, the actual risk – not the fake “fully funded from day one” kind of risk. There is nothing wrong with raising money at the right time, just tired of companies doing it from day one.


Investors, if you are reading this – please understand that we have full respect for you all, and as said above – we think that often you guys are the real entrepreneurs today.

That being said – you have stopped looking for outliers, the crazy entrepreneurs, the hustlers. Investors today have standardized the industry and are hoping to find “unicorns” when they want everyone to act like sheep.

Your pitch deck does not follow the standard “problem, solution, market, team” dynamic? Out. You do not go to startup events? Out. You want to first build a business and then figure out scale later? Out. You have a totally new model nobody has ever heard of before? Out.

If it is not the “right” tech in the hottest industry of the day, be it blockchain, AI, big-data or anything else – you seem to be not interested. Well, we think that if you want to really find good companies then you need to break your own standards and really look for the outliers.

Then, you might find unicorns and if you are lucky – even dragons. Because let’s be fare – unicorns are weak, defenceless and pointless creatures – it is a horse with a horn for crying out loud.

Dragons on the other hand – that’s the real deal – they can really be entrepreneurial and unicorns stand no chance. That’s what our plan is – to find and nurture dragons at ArcticStartup – not unicorns. We call them “ArcticFounders”.


We love the startup scene – it is our home. It is our bread and butter. Yet true innovation is out there in the real world. To make a lasting impact in this world – we all need to get out more (both from your phones that you are addicted to and from the startup industry).

Do not go to just startup events – visit industry events. Do not only dream of being covered in TechCrunch, find out what your customers are actually reading. Don’t build products for startup people, build ones that change the world. Dream big, hustle.

We have been doing that for a year now and amazing people have listened. Gary Vaynerchuk joined us as an investor, and we are looking for a few more to join in order to start changing the course of this startup ship. If what we preach strikes a cord with you – reach out, if not – speak up. Over and out.

Original post appeared on Dmitri Sarle’s blog.

Photo credits: Pinterest

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