Unicorns Vs. Zebras

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Unicorns" and "zebras" are fun ways to talk about two different types of startups, each with its own vibe and way of growing a business.

Unicorns are those rare startups that reach a crazy high valuation of $1 billion or more. Aileen Lee , a venture capitalist, came up with the term to describe these super successful companies that grow really fast, usually thanks to big investments from venture capitalists. They’re all about scaling up quickly, taking over markets, and making a ton of money for their investors. Think of companies like Uber , Airbnb , and Stripe . As of May 2024, there are over 1,200 unicorns around the world according to CB Insights .

Going after that unicorn status can be pretty risky, as it focuses on rapid growth and shaking things up, sometimes putting expansion ahead of profits.

On the flip side, we have zebras, which represent a different approach to startups. These companies care more about being sustainable, acting ethically, and solving real problems rather than just chasing fast growth and big valuations. Entrepreneurs introduced the zebra concept because they thought the unicorn model didn’t really capture what most startups are about. Zebras aim to create solid, profitable businesses that balance making money with doing good. They’re all about providing value to everyone involved—customers, employees, and communities—not just raking in cash for investors. Zebras are like “black and white,” showing the balance between profit and social impact, and they’re built to last, focusing on long-term success instead of just hitting that billion-dollar mark.

Currently, there are an estimated 34,979 zebras worldwide. Actual zebras....

The concept of zebras in the startup world is more qualitative than quantitative, making it difficult to determine an exact number. Unlike unicorns, which are defined by a specific valuation threshold, zebras are identified by their business philosophy and approach rather than a measurable financial milestone. The number of zebra companies is not typically tracked or quantified in the same way unicorns are.

However, the movement towards zebra-like businesses has been growing, as more entrepreneurs and investors are seeking to build companies that prioritize sustainability, ethical practices, and social impact. This trend reflects a broader shift in the startup ecosystem toward more responsible and inclusive business models, but no precise count is available.

Forget Unicorns. We Need More 'Zebra' Startups.

I remember reading an article in Entrepreneur Magazine by Yifat Oron , Senior Managing Director at Blackstone Head of the Tel Aviv Office, where back in 2018 she used examples as evidence that the zebra movement owes its momentum primarily to female entrepreneurs and entrepreneurs of color, groups that have historically struggled to secure financing in equal numbers to their peers, despite their ability to demonstrate profitability and commitment to good causes.

The nature of zebra companies is very much aligned with women's characteristic business acumen. Once they are able to secure the initial funding, female entrepreneurs tend to prefer more certainty and take less risk and, consequently, grow profitable and sustainable businesses -- albeit at a slower pace and, potentially, on a smaller scale.

The Big Think is a favorite website of mine to visit, so it came as no surprise that that had something to say about "The Zebra Effect".

The Zebra Effect is seen most obviously today in start-up culture. All start-ups need energy, innovation, and an idea. Ideally, they need some USP that will make them stand out. But there are also many advantages that come from collaborating with like-minded start-ups. Zebras Unite is a website that focuses on this idea and believes that cooperative business ventures are not only profitable but sustainable and “better for the world.” Start-up culture is obsessed with Steve Jobs disruption, or the obsessive profit-driven, crunch culture that dominates Silicon Valley. But Zebras Unite serves the “overwhelming majority of entrepreneurs who don’t fit that mold.” There is no law of nature dictating that success and entrepreneurialism need to be unicorns.

No one navigates life entirely independently. We rely on a network of friends and family for support and a framework of civil society to help us pursue our aspirations. From the moment we are born, we are inherently dependent on others, and a significant aspect of life involves learning to collaborate effectively with those around us. This principle also applies to the business world.

For instance, a zebra cannot outpace or overpower a lion; they must employ collaborative strategies for survival. Similarly, smaller companies often face challenges when competing with larger enterprises. As a small organization navigating a competitive landscape, it is crucial to explore partnership opportunities to enhance capabilities and increase impact. This approach encourages a proactive search for reliable allies and resources. The key is to establish symbiotic, mutually beneficial relationships with other companies.