What a Unicorn Knows: A book review by Bob Morris

What a Unicorn Knows: How Leading Entrepreneurs Use Lean Principles to Drive Sustainable Growth
Matthew May and Pablo Dominguez
Matt Holt Books (February 2023)

How and why do only a few startups become “unicorns” and all the others don’t?

In finance, “unicorn” is a term that describes a privately-owned startup with a valuation of over $1 billion. The term was introduced by venture capital investor Aileen Lee (founder of Cowboy Venture) in 2013 to describe rare tech startups that become valued at more than $1 billion.

I have read and reviewed all of Matt May’s previous books and thus was especially interested in What a Unicorn Knows. In my opinion, it is the most valuable book he has created thus far, in collaboration with Pablo Dominguez. I expect it to have wider and deeper impact than any of its predecessors, In Pursuit of Elegance, The Laws of Subtraction, and Winning the Brain Game.

So, why do only a few startups become “unicorns” and all the others don’t? May and Dominguez: “It’s not the technology; it’s the impediments, the obstacles, and the forces of resistance all working against them as they attempt to scale, grow, and build a sustainable,  competitive position.” Like most other startups, unicorns endure a crucible of severe stress; unlike most of them, they succeed because their leaders understand the physics of sustainable growth.

May and Dominguez like to think of a company in the throes of scaling up “as a vehicle for rapid but sustainable growth whose movement is like that of a Formula 1 race car. Both have amazingly advanced technology. Both need speed, acceleration, aerodynamic efficiency, and maneuverability to succeed. Competition aside, both face opposing physical forces that must be overcome to win. These naturally occurring forces have business corollaries that can determine whether or not a company realizes its long-term potential.

More specifically, they cite four primary forces that work against any object in motion, such as a rapidly growing company:

Scientifically speaking, inertia is the resistance to any change in the current state of motion. Corporate inertia is often responsible for waning product performance and competitiveness, feature fatigue, and poor innovation pipeline throughout the given enterprise.

The Unicorn Model™ responds to these four forces:

DRAG: In the realm of science, drag is the resistance of air against a moving object. In the business context, it manifests itself at the strategic level and can result in adverse indicators such as sluggish market moves, inability to change direction with agility and misalignment of strategies and objectives.

INERTIA: Scientifically speaking, inertia is the resistance to any change in the current state of motion. Corporate inertia is often responsible for waning product performance and competitiveness, feature fatigue, and poor innovation pipeline throughput.

FRICTION: Friction occurs when moving parts rub against each other, and in business it is a common cause of slow adoption speed, poor customer experience, retention/ renewal difficulty, and undelivered customer outcomes.

WASTE: It is ineffective work more than inefficient work that produces most waste in organizations. Ineffectiveness results when performing unnecessary work, which restricts value flow. Peter Drucker nails it: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

May and Dominguez also suggest that these same forces also pose serious mental and emotional challenges to members of teams in competition as it does to their organization.
These are among the passages of greatest interest and value to me, also listed to indicate the scope of May and Dominguez’s coverage:

o Five Business Principles: Summaries
– Principle 1: Strategic Speed (Pages 10-11 and 15-56)
– Principle 2: Constant Experimentation (11-12 and 57-97)
– Principle 3: Accelerated Vakue (12-13 and 99-136))
– Principle 4: Lean Process (13 and 137-185)
– Principle 5: Esprit de Corps (13-14 and 187-222)
o Unpacking Strategy Design (25-46)
o Choice-Making (27-35)
o Innovation Amnesia (59-63)
o The Experimentation Flywheel (64-78 and 82-85)

o Unpacking The Rapid Experimentation Flywheel (66-76)
o Testable Hypogyhesis (71-76)
o Business Experiment (77-81)
o The Friction Factory (100-108)
o Voice of the Operator: Interview with Tony Ulwick (117-120)

o The Customer Value Map (127-135)
o A Leaner View of Lean: The Kaizen Sprint (164-171)
o The Lean Kaizen Canvas (171-183)
o Pressure: A Force Multiplier (194-203)
o People/Culture Fit (212-221)

I commend May and Dominguez on how the organization, coordination, and presentation of the material in this book when explaining how unicorns achieve competitive advantages so quickly and sustainably. For example, with regard to lean methods, “we have discovered that applying a broader interpretation of lean — one of [begin italics] balanced optimization [end italics] can be a powerful way to battle the momentum-stealing effects of drag, inertia, friction, and waste. They cite five guiding principles that, when adopted, make ScaleUp success much more likely:

1. Strategic Speed
2. Constant Experimentation
3. Accelerated Value
4. Lean Process
5. Esprit de Corps

In the separate chapter devoted to each, they explain HOW the strategies and tactics of unicorns are guided and informed by these principles.

Whatever their size and nature may be, all organizations need leadership at all levels and in all areas of the given enterprise who can respond effectively and immediately — in real-time — to whatever crises and challenges may occur. When reflecting on that, I was again reminded of my favorite passage in Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Obviously, no brief commentary such as mine could possibly do full justice to the value of the information, insights, and counsel that Matthew May and Pablo Dominguez provide but I hope that I have at least provided some indication of why I think so highly of their book.

Here are two concluding suggestions: Highlight key passages, and, keep a lined notebook near at hand in order to record your comments, questions, and page references as well as responses to the suggestions and recommendations strategically inserted throughout the book’s lively and eloquent narrative. These two simple tactics will facilitate, indeed expedite frequent review of the most important material later.



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