Catastrophe and Raw Survival in the Age of Unicorns

[UNICORN: A tech startup that reaches a $1 billion market value as determined by private or public investment. The term was originally coined by Aileen Lee, founder of Cowboy Ventures.1]

The cycle of boom and bust is nothing new, and an analysis of companies that implode and those that thrive will reveal that it isn’t mysticism or a unique brand of nebulous charisma that decides the make or break.

From research into human and group behavior, L. Ron Hubbard summed it up thusly in an article from September 20, 1969, entitled “Stability”:

“It can be said of companies, societies and governments that

 “THE BEST GUARANTEE OF STABILITY IS ADMINISTRATIVE SKILL.”

To put it succinctly, you need people who know what they’re doing; and an MBA plus more letters after the name may or may not do the trick. Competence, results and statistics (metrics) are the only barometers worth consulting.

Some are so disillusioned by the traditional approach that they intentionally seek out untrained applicants who can soak up their unique methods like a dry sponge— those with qualities like integrity, willingness and ingenuity, combined with loyalty.

Whether you’re seeking trained and experienced partners or taking the “blank slate” approach, it is imperative to focus on administrative skill and specialization.

L. Ron Hubbard went into more detail on this vital subject:

“In areas where the abilities which add up to administrative skill are missing, the organization or country can expect to fail or be overthrown.

“Even such small things as file keeping, accounts records, personnel placement, add up to better longevity.”

Let’s take a brief look at two colossal failures from 2015, promising companies that no longer exist:

“Quirky” was an invention platform launched in 2009. People could vote on product ideas and Quirky would make them into reality. Sounded like a great idea, and investors agreed. But their products didn’t sell. A Bluetooth speaker they developed for $400K sold 28 units. They had technical problems. A botched security update resulted in a nationwide product recall.

Quirky’s proficiency in survey technology, product development and financial management was severely lacking. They had raised $185 million in venture capital but wound up bankrupt. Despite the best of intentions, Quirky ended up on the scrapheap of failed ventures.2

“Rdio,” launched in 2010, was a promising music-streaming service in the vein of Spotify and iTunes, but it also fell through. Some chalked it up to being overshadowed by Spotify, yet competition is integral to virtually any business. Rdio evidently lacked branding know-how and identification in a highly competitive market and failed to carve out its niche.

After raising $125.7 million, Rdio filed for bankruptcy, was broken apart and sold off like a virtual garage sale.3

Fortunately, entrepreneurs are a resilient bunch. They shrug off failure, forge ahead and make headlines for massive success achieved down the road, seasoned and wiser.

The term unicorn* is thrown around—a startup (tech related) valued at $1 billion or more (in some cases MUCH more). Uber, Airbnb and SpaceX come to mind.4 But some experts declare many of these figures are inflated, based to a large degree on capital raised (equity) instead of tangible, potential worth. These experts say we’re headed over another cliff, and this time with an exponentially steeper plummet.

But even if the cliff is real, how can one avoid falling? Is there a level of skill, insight and professionalism one can reach to avoid being a casualty?

Mr. Hubbard gives insight here where he states:

“No matter what the intention of those at the top, no matter how bright or honest they may be, if their administrative lines are clumsy or in any way false, if they are not backed up by skillful, well-taught administrators, they can be nullified.”

“Bad administration, lack of know-how, lack of trained clerks and executives, can defeat utterly any plan or program no matter how urgent or beneficial.”

Let’s take a rapid glimpse at two companies that are getting it right:

Globalization Partners made #6 on the Inc. 5000 list for 2016. CEO Nicole Sahin started the firm in 2012 as a solution for companies seeking expansion into other countries. They provide an efficient system to outsource global corporate infrastructure, payroll, tax and HR compliance, reducing the timeline to hire an employee in another country from 6–12 months to 3–5 days. Globalization Partners has seen a 16,000 percent growth rate over the last three years. The company is also notably 75 percent composed of women.5, 6

Cyber security firm Cylance landed at #26 on the 2016 Inc. 5000 list, with a 7,600 percent growth rate over three years. Launched in 2012, Cylance proactively prevents, rather than reactively detects, advanced persistent threats and malware. Their technology is deployed on over four million endpoints, protecting hundreds of enterprise clients worldwide, including Fortune 100 corporations and government institutions. Cylance is also reportedly in the unicorn class with a $1 billion valuation.5, 7

What do these companies do that others do not? For one, they exemplify competence in their specialized field and evidently deliver consistently on their promises. They also deliver in arenas that are two of the most potentially devastating: personnel and security. Only the future will tell if they survive, but if they do, it will be because they intentionally or inadvertently followed the basic laws pertaining to groups and administration.

Mr. Hubbard summated the ingredients of organizational stability:

“The continuance of an organization and its leaders can be said to be entirely dependent upon the skill, training and integrity of those who handle the administrative lines, details and contacts of the group.”

Many entrepreneurs and managers simply lack the necessary know-how, but they have no shortage of courage and determination. L. Ron Hubbard wanted people in the business world to thrive for the advancement of the culture, so he provided extensive and highly workable technology applicable to any group, government or business.

In an age of unicorns, let’s get some more of them up and running—and SURVIVING, based on real, measurable value. If enough of us do our jobs, perhaps the unicorns won’t fall over the cliff—and neither will you!