There are an increasing number of ways to refer to a startup. One of the best known terms is the unicorn, the name given to a company that reaches a value of more than 1,000 MM dollars before going public. There are also gazelles, cockroaches and, as we told you in a previous article, camels.
One of the biggest goals of risk investors was to find a unicorn. Although now that the COVID19 crisis has undoubtedly affected and will continue affecting the economy, one of the safest bets are camels. These animals are known for surviving in very adverse conditions, and that is the main characteristics of this type of company.
Characteristics of camel companies
These types of companies are resilient, they are prepared for the future, they proceed with caution in good times and therefore survive in bad times, they focus on long-term growth, with a lot of adaptability and survival. This is how they manage to survive in the worst situations.
COVID19 is bringing a very precarious economic period, and startups must adapt in order to keep going. However, not everything that this virus has brought is negative, at this time the digital market has grown to unexpected levels.
Although unicorn companies are still among the most wanted, the number of investments is decreasing. It is going to be more and more complicated to get funding, so right now camel companies are a better option. An example of this is Marfeel, a startup that appeared in the Financial Times ranking as one of the fastest growing European companies in 2019.
This stage that is being experienced right now has created extreme conditions in the global market. And when the IPO (Initial Public Offering) of some unicorn companies failed, the model of startups preferring stability over speed started to make more sense.
How to be a camel startup
Speed should not be prioritized over efficiency, the best thing is to continue with a more stable growth, and this is achieved by having specific characteristics.
Price is not a barrier to growth, and products should be charged from the start, not given away for free. It is better to manage costs over the life cycle of the company, adjusting to the long-term growth curve. To achieve this, you must change the trajectory of the project, growing in a more controlled and managed way. This allows the growth trajectory to adapt when it is necessary to return to a more sustainable situation. It is therefore important to maintain a fair price from the beginning.
As we have already mentioned, this type of company is created for the long term, with a controlled trajectory. It must be taken into account that discoveries and breakthroughs never come at the beginning of a company. The main strategy of the camels is to survive. Successful camels only spend resources on activities that make them stronger.
These companies have a wide and deep resilience. They tend to be used to grow in small markets with fewer opportunities. As for example Guiabolso, a company that started in Brazil with many difficulties, since the market was not as big as Silicon Valley or London.
As you can see, camel startups are gaining more and more popularity, and the bet on them is increasing. In times of uncertainty what people are looking for is stability, so this is the perfect opportunity. And now, which animal do you prefer?