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Cockroach Startups

The Unicorns are falling and Cockroaches are crawling all the way up!

· Technology,mobile apps

The year of Unicorn is over and 2016 opened with a new term “Cockroach”. This term is coined by Flickr founder Caterina Fake.

Unicorn chases growth (so that investors can invest) without caring about customers and didn't add value to anything.  Unicorn based investment strategy has wounded many startups. Now is the time for Cockroach.

Cockroach startups build slowly and steadily, keeping a close eye on revenue and profit. Expenses are also kept in check.

Special adaptations we can learn from Cockroach:

  • They can tolerate a wide range of environments.
  • React quickly to environmental cues.
  • Can survive on minimal food.
  • Leave trails so that their partners can find food easily.
  • Make collective decision to collect food.
  • They are not picky about their food.
  • Remain hidden and move fast.

These tech startups aren’t really focused on innovating on a daily basis. Rather, they’re focused on sustainability. Survival is the core of their business strategy. They are hidden from the limelight at first and their rivals ignore them but they fear their presence later on.

How startups can relate to Cockroach:

  • They tolerate a wide range of market up and downs. They are adaptable.
  • React quickly to market cues.
  • Can survive on minimal resources (funding) and can weather funding storms.
  • Leave trails so that their success partners can find the resources.
  • Make collective decision to pick resources and resource allocation. Good decision makers.
  • Cooperation and competition are balanced.
  • Remain hidden and move fast.
  • They have talented teams and they are loyal to customers.
  • Build business slowly and carefully keeping a close eye on revenue and profits.
  • Sustain in the market with limited resources.
  • Have a right team and right customer base.

Lessons we can learn from Dr. Spenser Johnson’s Who moved my cheese? (New York Times Business Bestseller):

"The key is to shift before the market (cheese) shifts by predicting its movements. "

Companies that want to outlast the funding crisis need to move fast, shy away from limelight, pick right resources, cut costs (move to a small office, kill projects going nowhere or lay off staff), focus on business sustainability and plan for a future without much money in it. They have to pivot into revenue-generating business models.

The best thing about the market ups and downs is that these startups are forced to be more creative about the products they build, smarter about who they hire and how the company spends its time. Constraints inspire creativity!

Rahul Singhal

Founder, Applop

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