The conventional wisdom is that there are two kinds of entrepreneurs:

· Small-Midsized Business Owners (SMB): They comprise the bulk of entrepreneurs

· Unicorn-Starters (U-Starters): This type uses the Silicon-Valley-style venture-development method to build a unicorn with capital-as-a-weapon. It seeks first-mover ideas, minimum viable products (MVP), product-market combinations, angel capital, (AC), and venture capital (VC). In this method, entrepreneurs start the ventures, seek VC, and are replaced by professional CEOs. This method accounted for 6% of Billion-Dollar Entrepreneurs (BDEs), i.e., entrepreneurs who started and built ventures from startup to more than $1 billion in sales and valuation. Examples include Earl Bakken (Medtronic) and Pierre Omidyar (eBay).

Unicorn-Builders: The Unpublicized Model

However, there is a third, and mostly unpublicized, kind of entrepreneur – the Unicorn-Builders who accounted for 94% of BDEs. In this method, unicorn-entrepreneurs stay as CEO by delaying or avoiding VC – and keep control of the venture and of the wealth they create. To stay as CEO, Unicorn-Builders bootstrapped till leadership Aha by avoiding VC (76%) or delaying it (18%).

Unicorn-Builders who avoided VC include:

· Sam Walton (Walmart) who used the big box concept and improved the strategy

· Michael Dell, who built Dell with business-chain and cash-flow-based financing

· Michael Bloomberg, who built Bloomberg with an alliance and business-chain financing


· Richard Burke, who built UnitedHealthcare with alliances and cash-flow-based financing

· Richard Schulze, who built Best Buy with cash-flow-based financing and leasing

· Bob Kierlin, who built Fastenal with cash-flow-based financing and leasing.

Unicorn-Builders who delayed VC and controlled their ventures include:

· Jeff Bezos who took off with angel capital and then used VC after leadership Aha

· Bill Gates, who used limited VC, after strategy and leadership Aha, because he wanted experienced board members with a vested interest in Microsoft

· Brian Chesky, who used limited incubator capital to prove his business model, followed by angel capital and then VC after proof of model and leadership to build Airbnb

· Mark Zuckerberg who beat MySpace with a brilliant university-focused strategy, and then used angel capital and VCs, but kept control of Facebook.

Instead of focusing on the Unicorn-Starter method, with its emphasis on the VC method, including pitch competitions, minimum viable products, incubators, accelerators, venture studios, angel capital, and venture capital, and helping very few entrepreneurs. business schools can do better by focusing on the Unicorn-Builder method and teaching everyone the skills and finance-smart strategies needed to takeoff without VC.

Instead of focusing on the method that has mainly worked for a few in Silicon Valley, business schools can focus on the method that was used by Unicorn-Entrepreneurs everywhere. This change in focus can help all entrepreneurs to build unicorns in Silicon Valley or outside, and with access to VC or not.

MY TAKE: Many Unicorn-Builders do not seek publicity unless they plan to take their companies public, so their accomplishments are not widely heralded by the business press. But that does not diminish their achievements or their importance for business schools.

Building a unicorn is not about the idea. It’s about the unicorn-strategy to beat the idea. It’s about the process to find the unicorn strategy. It’s about the skills to implement the unicorn strategy. It’s about the entrepreneur – not the pitch, nor the plan, nor the idea. It’s about you.


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