Why are start-ups the new black? Is there something amiss when media great and small, politicians of all hues , academics of all disciplines and corporate actors of all industries agree? I am always concerned when universal acclamation indicate the establishment of a settled view. I also wander whether we are about to experience dramatic change. Maybe a dramatic shift in our understanding of the utility, usefulness and merit of supporting economic actors aiming to create start-up unicorns.
I should first declare that I am heavily invested in entrepreneurship research and practice. It is a major part of my academic career as I have tried to understand exceptional behaviour, including work on political entrepreneurs, social entrepreneurs and the syndication of venture funds. I should also acknowledge that I have “co-founded” four entrepreneurial ventures so far. One has folded, two were sold and one is dormant. I have gained from venturing and would recommend it to others.
And yet I am concerned. Entrepreneurship is about personal gain, the recognition of opportunity and the adoption of risk. If all economic actors were just chasing unicorn valuations, entrepreneurship cannot sharpen competition or improve efficiency. So maybe we should rethink the hype surrounding the start-up ecosystem. Are start-ups vehicles for testing innovation or for advertising economic success? And can over valued start-ups, whatever they are called, possibly thrive in a sea infested with service piranha and venture sharks? Unicorns after all are contrived creatures, whose apparent role in myth is evidence of magic. An odd metaphor for return on investment, let alone economic utility.