The Unicorn Within: A book review by Bob Morris

The Unicorn Within: How Companies Can Create Game-Changing Ventures at Startup Speed
Linda K. Yates
Harvard Business Review Press (October 2022)

Here’s a “learnable, repeatable, scalable process for disrupting from the inside out”

To what does the title of this book refer? In a business context, a “unicorn” is a new or subsidiary venture that reaches a valuation of $1-billion or more without being listed on the stock market. In the U.S., for example, listed in alpha order: Alchemy, Airtable, Bolt, Chime, Fanatics, Instacart, Miro, Ripping, SpaceX, and Synk.

Linda Yates notes that the average life of Fortune 500 companies 50 years ago was 75 years. Today, it’s only 15 years and falling. “As of this writing, CB Insights reports that there are 1,135 Unicorns in the world valued at over 43.8 trillion.” Here’s another statistic that caught my eye: Only 52 US companies have been on the Fortune 500 list since 1955. Joseph Schumpeter would probably attribute that to what he characterized as “creative destruction.” Others would suggest disruption or a form of natural selection.

Yates stresses the need for a process of innovation that is “learnable, repeatable, and scalable,” one that will enable almost any organization — whatever its size and nature may be — to “succeed against clever new startups and beat them at their own game” by disrupting “from within use that to generate meaningful growth…and do that forever by building [its] own incubator and accelerating [its] own Growth Engine.” There are additional advantages “that new startups can never hope to match as long as you don’t get in your own way, and fail to leverage those advantages. You have ideas, talent, capital, brand, technology, channels, and best of all, you have customers, often millions of them.”

In this context, I am again reminded of an event years ago at a GE annual meeting when its then chairman and CEO, Jack Welch, was asked his reasons for holding small companies in such high regard. His reply: “For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”

These are among the other passages in The Unicorn Within of greatest interest and value to me, also listed to suggest the scope of Yates’s coverage:

o Beyond the Myth: Unleashing the Unicorn Within (Pages 7-17)
o The Foundational Elements of Success (26-29)
o Selecting Recruiting, and Onboarding the Team (34-49)
o Phase I: Ideation (66-109)
o Tools (70-79)

o Phase II: Incubation (150-175)
o Developing Prototypes (155-175)
o Phase III: Business Phase (176-205)
o Building the Business Case for the Venture (180-192)
o Operating and Execution PLan (192-205)

o Acceleration: From Funding to Product-Market Fit (206-225)
o Building Your Own Venture growth Factory (230-261)
o Driving the New Venture Growth Machine (262-297)
o Building the Mothership Advantage — Building an Internal Innovation Ecosystem (288-295)
o Ten Principles for Creating Unicorns (298-303)

As you work your way through Yates’s lively and eloquent narrative, keep in mind that there are now more than 1,200  “unicorns” throughout the world; in the U.S., 610 including 75 added this year. As for all startups, 90%  of all and  75% of venture-backed startups fail. Less than 50% of new businesses make it to their fifth year. And on average, it then takes about seven years for a startup to become a unicorn.

My take on all this is that many (if not most) companies can design and execute a “game-changing venture” within the limits of its resources — and do so ASAP —  in order to become more efficient, more effective, and more profitable. In this volume, Yates provides a wealth of invaluable information, insights, and counsel in response to the question “HOW?”

It is worth noting that all of the current Fortune 500 companies were once a startup. Now they are struggling each day to overcome what James O’Toole has so aptly characterized as “the ideology of comfort and the tyranny of custom.” Many of them have established  Corporate Venture Capital (CVC) funds and I expect that number to increase substantially in months and years to come. Another approach is called “Buy and Build” (i.e. mergers and acquisitions). And then there is the conglomerate diversification strategy. Exemplary organizations include (in alpha order) Amazon, Bank of America, Berkshire Hathaway, Disney, GE, Google, Johnson & Johnson, and Toshiba.

Those who share my high regard for Linda Yates’s brilliant book are urged to check out Sprint: How to Solve Big Problems and Test New Ideas in Just Five Days, published by Simon & Schuster (March 2016). With John Zeratsky and Braden Kowitz, Jake Knapp explains how to solve the biggest problems, answer the most difficult questions and/or generate the best ideas with what he characterizes as a “sprint team.” Knapp invented the Google Ventures process and has run more than a hundred sprints with startups. However, the same process — with only minor modifications — can work within almost any organization. It offers uniquely valuable resources and capabilitiess to the “Unicorn Tool Box.”

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