1 00:00:04,440 --> 00:00:12,400 Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey thereon 2 00:00:12,560 --> 00:00:16,160 Speaker 1: Welcome to Tech Stuff. I'm your host, Jonathan Strickland. I'm 3 00:00:16,160 --> 00:00:20,440 Speaker 1: an executive producer with iHeartRadio and how the tech are 4 00:00:20,520 --> 00:00:25,520 Speaker 1: you so. A decade ago, an investor named Aileen Lee, 5 00:00:25,960 --> 00:00:30,520 Speaker 1: the founder of a venture capital firm called Cowboy Ventures, which, 6 00:00:30,800 --> 00:00:35,120 Speaker 1: like crap, that's a great name. She coined the term 7 00:00:35,440 --> 00:00:40,360 Speaker 1: unicorn to describe a startup that has reached the unbelievable 8 00:00:40,400 --> 00:00:46,720 Speaker 1: milestone of a billion dollar valuation, and since then, tech 9 00:00:46,800 --> 00:00:50,400 Speaker 1: boffins have used the term unicorn to single out startups 10 00:00:50,400 --> 00:00:55,200 Speaker 1: that stand out from among the crowd. Every startup founder 11 00:00:55,400 --> 00:00:59,880 Speaker 1: is hoping for a unicorn. In fact, every investor is 12 00:01:00,040 --> 00:01:02,440 Speaker 1: hoping that they get in on the ground floor of 13 00:01:02,480 --> 00:01:07,160 Speaker 1: supporting a unicorn. The end goal for most investors is 14 00:01:07,200 --> 00:01:10,600 Speaker 1: to sink a decent investment in a startup, see that 15 00:01:10,680 --> 00:01:15,360 Speaker 1: startup climb and valuation to astronomical heights, and then rake 16 00:01:15,400 --> 00:01:19,759 Speaker 1: in the wealth when that company inevitably goes public. That's 17 00:01:19,800 --> 00:01:23,000 Speaker 1: the dream scenario. You see this huge return on your investment. 18 00:01:23,640 --> 00:01:26,800 Speaker 1: In fact, there are venture capital firms that really count 19 00:01:27,040 --> 00:01:31,680 Speaker 1: on a few of the companies they pick reaching a 20 00:01:31,800 --> 00:01:36,600 Speaker 1: level of unicorn status because it pretty much carries the 21 00:01:36,760 --> 00:01:40,920 Speaker 1: entire company. It'll help carry and balance out all the 22 00:01:40,920 --> 00:01:45,800 Speaker 1: ones that didn't really reach those levels. What's interesting to 23 00:01:45,840 --> 00:01:49,440 Speaker 1: me is that there's no point in this journey toward 24 00:01:49,520 --> 00:01:53,120 Speaker 1: billion dollar valuation where a startup actually needs to make 25 00:01:53,160 --> 00:01:57,960 Speaker 1: a profit. Startups can reach a billion dollar valuation without 26 00:01:58,080 --> 00:02:01,559 Speaker 1: making a profit. They could potentially make it without even 27 00:02:01,640 --> 00:02:04,920 Speaker 1: having a plan to reach profitability, although that's less likely. 28 00:02:06,120 --> 00:02:09,320 Speaker 1: Typically they will be at a point where they're generating revenue, 29 00:02:09,600 --> 00:02:12,360 Speaker 1: but they're not making more than what they're spending, so 30 00:02:12,680 --> 00:02:15,600 Speaker 1: they're still operating at a loss. So as an example 31 00:02:15,639 --> 00:02:19,000 Speaker 1: of this, I'll give you a unicorn example. The former 32 00:02:19,040 --> 00:02:24,680 Speaker 1: Twitter now X originally reached a billion dollar valuation back 33 00:02:24,840 --> 00:02:28,920 Speaker 1: in two thousand and nine, but Twitter didn't turn an 34 00:02:29,080 --> 00:02:35,240 Speaker 1: annual profit until two thousand and eighteen. Nine years later, 35 00:02:35,280 --> 00:02:38,200 Speaker 1: it was worth a billion dollars but had not yet 36 00:02:38,240 --> 00:02:42,160 Speaker 1: made an annual profit. It did make a quarterly profit 37 00:02:42,200 --> 00:02:45,280 Speaker 1: a couple of times before twenty eighteen, but the first 38 00:02:45,320 --> 00:02:46,799 Speaker 1: time it made a profit at the end of a 39 00:02:46,880 --> 00:02:51,839 Speaker 1: year was twenty eighteen. Crazy, So profits are not really 40 00:02:51,880 --> 00:02:55,560 Speaker 1: a necessity when it comes to achieving unicorn status. It's 41 00:02:55,560 --> 00:02:58,680 Speaker 1: certainly not a necessity for making a boatload of money 42 00:02:58,919 --> 00:03:02,919 Speaker 1: off of a company. Now, that was not always the case, right. 43 00:03:03,160 --> 00:03:07,120 Speaker 1: Once upon a time, investors were much fewer and further between. 44 00:03:07,800 --> 00:03:11,800 Speaker 1: It was harder to get hold of investment capital. So 45 00:03:11,960 --> 00:03:14,600 Speaker 1: for a business to really survive, it had to make 46 00:03:14,639 --> 00:03:16,880 Speaker 1: a profit, or at the very least, it had to 47 00:03:16,919 --> 00:03:19,360 Speaker 1: break even. Otherwise there was no way to cover the 48 00:03:19,400 --> 00:03:23,560 Speaker 1: costs of operation, and you would you run yourself out 49 00:03:23,600 --> 00:03:26,120 Speaker 1: of business. It'd be too expensive to run the business 50 00:03:26,200 --> 00:03:28,760 Speaker 1: to stay in business, and any hope of becoming an 51 00:03:28,880 --> 00:03:33,760 Speaker 1: enormous success really hinged upon being profitable. But let's put 52 00:03:33,760 --> 00:03:36,760 Speaker 1: that aside for a little bit. Let's get back to 53 00:03:36,800 --> 00:03:41,800 Speaker 1: talking about unicorns. So in twenty thirteen, Aileenlye writes a 54 00:03:41,800 --> 00:03:46,160 Speaker 1: piece titled Welcome to the Unicorn Club. Learning from billion 55 00:03:46,280 --> 00:03:51,600 Speaker 1: dollar Startups, and Lee called these billion dollars startups unicorns 56 00:03:52,080 --> 00:03:56,440 Speaker 1: because of their rarity. They were so incredibly rare. According 57 00:03:56,440 --> 00:04:00,480 Speaker 1: to her company's research, out of the thousands of companies 58 00:04:00,520 --> 00:04:03,240 Speaker 1: that had been launched in the previous decade from two 59 00:04:03,280 --> 00:04:07,720 Speaker 1: thousand and three to twenty thirteen, only point zero seven 60 00:04:07,840 --> 00:04:12,560 Speaker 1: percent of them reached a billion dollar valuation. I want 61 00:04:12,600 --> 00:04:15,200 Speaker 1: to say it was like thirty nine companies at the time. 62 00:04:15,720 --> 00:04:22,360 Speaker 1: So that raises a question, what exactly is valuation? How 63 00:04:22,360 --> 00:04:27,200 Speaker 1: do analysts determine or really, if we want to be accurate, 64 00:04:27,360 --> 00:04:31,360 Speaker 1: how do they estimate the value of a startup, especially 65 00:04:31,360 --> 00:04:36,480 Speaker 1: a startup that may not have a product to sell. Now, 66 00:04:36,520 --> 00:04:41,120 Speaker 1: with publicly traded companies, one way to measure value is 67 00:04:41,240 --> 00:04:45,400 Speaker 1: through market capitalization. This is a pretty simple concept, really, 68 00:04:45,760 --> 00:04:49,680 Speaker 1: So publicly traded companies have shares. Right, you can purchase 69 00:04:50,040 --> 00:04:53,520 Speaker 1: a share in the company. Each share is worth a 70 00:04:53,560 --> 00:04:57,440 Speaker 1: certain amount, and that amount is determined by the market. Now, 71 00:04:57,480 --> 00:04:59,880 Speaker 1: going into all the different forces that play into the 72 00:05:00,000 --> 00:05:03,039 Speaker 1: the share value of a company would go well beyond 73 00:05:03,080 --> 00:05:06,640 Speaker 1: my meager ability to explain. If I could explain all 74 00:05:06,640 --> 00:05:09,960 Speaker 1: of that in great detail, I would be in a 75 00:05:10,000 --> 00:05:15,640 Speaker 1: different tax bracket. But essentially, for market capitalization, you take 76 00:05:16,040 --> 00:05:19,640 Speaker 1: the number of shares that are outstanding the ones that exist, 77 00:05:19,680 --> 00:05:22,440 Speaker 1: in other words, and you multiply that number of shares 78 00:05:22,839 --> 00:05:26,680 Speaker 1: by the value per share. Then you get the market 79 00:05:26,720 --> 00:05:30,520 Speaker 1: capitalization of a company. So we'll use an overly simplified 80 00:05:30,600 --> 00:05:34,159 Speaker 1: hypothetical example. Let's say we've got a company and we're 81 00:05:34,160 --> 00:05:38,520 Speaker 1: calling it Willie's Widget Wonderland. It's a publicly traded company, 82 00:05:38,880 --> 00:05:42,080 Speaker 1: and the shares for Willy's Widget Wonderland are trading at 83 00:05:42,120 --> 00:05:46,080 Speaker 1: ten dollars per share. So for ten American dollars, you 84 00:05:46,120 --> 00:05:49,520 Speaker 1: can buy yourself a single share in this company. Let's 85 00:05:49,560 --> 00:05:52,800 Speaker 1: also say that there are only one hundred thousand shares 86 00:05:52,839 --> 00:05:56,120 Speaker 1: of this company at all, that's all that exists. Well, 87 00:05:56,120 --> 00:05:58,799 Speaker 1: we would then multiply these two numbers together, right, ten 88 00:05:59,040 --> 00:06:02,480 Speaker 1: dollars per share, one hundred thousand shares. That gives us 89 00:06:02,520 --> 00:06:06,440 Speaker 1: a million dollars. Boom, that's the market cap for Willie's 90 00:06:06,680 --> 00:06:12,600 Speaker 1: Widget Wonderland. Now, like valuation, market cap doesn't rely on 91 00:06:12,720 --> 00:06:17,080 Speaker 1: stuff like profit or revenue, at least not directly. Those 92 00:06:17,240 --> 00:06:21,200 Speaker 1: factors can play into the value of the company by 93 00:06:21,320 --> 00:06:25,000 Speaker 1: affecting the company's stock value, and that in turn does 94 00:06:25,120 --> 00:06:30,200 Speaker 1: affect market capitalization. So market cap tells us what the market, 95 00:06:30,240 --> 00:06:33,520 Speaker 1: the stock market in this case, values a company at. 96 00:06:33,920 --> 00:06:39,880 Speaker 1: Often investors will reference marketcap as the size of the company. Now, technically, 97 00:06:40,440 --> 00:06:43,080 Speaker 1: market cap doesn't indicate if a company is, you know, 98 00:06:43,200 --> 00:06:47,600 Speaker 1: physically larger or smaller than any other company, but rather 99 00:06:48,120 --> 00:06:53,680 Speaker 1: the size of its value in the marketplace. However, typically 100 00:06:54,200 --> 00:06:59,360 Speaker 1: larger cap companies are more established, and usually that means 101 00:06:59,360 --> 00:07:02,520 Speaker 1: they are also more stable than companies that have a 102 00:07:02,640 --> 00:07:06,240 Speaker 1: smaller market cap. But you know, to talk about the 103 00:07:06,320 --> 00:07:09,400 Speaker 1: value of a company beyond just the measure of market cap, 104 00:07:09,440 --> 00:07:11,240 Speaker 1: you have to talk about all sorts of other stuff, 105 00:07:11,320 --> 00:07:13,840 Speaker 1: like you might have to take into account how much 106 00:07:13,920 --> 00:07:18,280 Speaker 1: revenue the business generates, what are its costs of operation, 107 00:07:18,680 --> 00:07:21,360 Speaker 1: how much does it pay in taxes? You know, how 108 00:07:21,400 --> 00:07:24,520 Speaker 1: much of the business has depreciated over time, and by 109 00:07:24,520 --> 00:07:27,880 Speaker 1: how much. This kind of gets us into the dreaded 110 00:07:28,120 --> 00:07:32,960 Speaker 1: EBITDA or EBITA as I've heard it said that actually 111 00:07:33,000 --> 00:07:38,000 Speaker 1: it's eb I t DA. It stands for earnings before interest, taxes, 112 00:07:38,080 --> 00:07:42,840 Speaker 1: depreciation and amortization, And y'all, I have been in meetings 113 00:07:43,160 --> 00:07:47,000 Speaker 1: where EBEDA is part of the discussion, and every time 114 00:07:47,040 --> 00:07:51,120 Speaker 1: it happens, I can feel my eyes start to glaze over. 115 00:07:52,000 --> 00:07:54,000 Speaker 1: I will say that there are critics who have argued 116 00:07:54,000 --> 00:07:58,240 Speaker 1: that EBEDA has been misused, that companies have leaned on 117 00:07:58,280 --> 00:08:02,840 Speaker 1: EBEDA to perhaps overstate their profitability because it does take 118 00:08:02,960 --> 00:08:07,520 Speaker 1: a lot of costs out of that equation, and that 119 00:08:07,600 --> 00:08:11,160 Speaker 1: it's really just a way for companies to make it 120 00:08:11,200 --> 00:08:13,880 Speaker 1: seem like they're doing a lot better than perhaps how 121 00:08:13,920 --> 00:08:16,240 Speaker 1: they are really doing once you take all of these 122 00:08:16,280 --> 00:08:19,320 Speaker 1: different factors into consideration. But to get into it further 123 00:08:19,320 --> 00:08:21,440 Speaker 1: would mean we'd need to find another host because I 124 00:08:21,480 --> 00:08:24,200 Speaker 1: would fall asleep. And anyway, we're not really talking about 125 00:08:24,200 --> 00:08:28,440 Speaker 1: publicly traded companies, are we We're talking startups. So a 126 00:08:28,480 --> 00:08:33,840 Speaker 1: startup typically is a privately held company, a corporation. It 127 00:08:33,960 --> 00:08:36,600 Speaker 1: usually has the goal of becoming a publicly traded company 128 00:08:36,640 --> 00:08:40,760 Speaker 1: at some point in the future. It's not necessarily its goal, 129 00:08:41,480 --> 00:08:46,320 Speaker 1: but often that is the understanding among both the startup 130 00:08:46,360 --> 00:08:50,200 Speaker 1: itself and its investors. So how the heck do you 131 00:08:50,280 --> 00:08:54,240 Speaker 1: assign value to an entity like that. It's not a 132 00:08:54,240 --> 00:08:58,640 Speaker 1: business that's established, that has a history, that has actual 133 00:08:59,400 --> 00:09:03,640 Speaker 1: spreadsheet showing things like costs versus revenue. How do you 134 00:09:03,679 --> 00:09:07,839 Speaker 1: put a value on a startup that, perhaps in its 135 00:09:07,880 --> 00:09:11,319 Speaker 1: earliest stage, is very little more than just a good idea, 136 00:09:11,679 --> 00:09:14,920 Speaker 1: or hopefully a good idea. And that's a really good question. 137 00:09:15,600 --> 00:09:18,040 Speaker 1: So let's imagine that we have a brand new startup 138 00:09:18,280 --> 00:09:21,360 Speaker 1: and the founders have, you know, an interesting idea, but 139 00:09:21,400 --> 00:09:23,640 Speaker 1: at the start, they don't actually have a product to sell. 140 00:09:23,960 --> 00:09:28,040 Speaker 1: There's no operating income for the business. Maybe they've got 141 00:09:28,040 --> 00:09:32,120 Speaker 1: a company structure, like maybe they've designated officers for the 142 00:09:32,160 --> 00:09:36,680 Speaker 1: business who are in charge of specific functions, but as 143 00:09:36,720 --> 00:09:39,360 Speaker 1: of right now, they're not yet producing something that they 144 00:09:39,360 --> 00:09:42,920 Speaker 1: can sell. How do you place a value on that 145 00:09:43,040 --> 00:09:46,720 Speaker 1: kind of operation? But hold on, it gets even more 146 00:09:46,760 --> 00:09:50,560 Speaker 1: complicated than that. Let's say that this startup is a 147 00:09:50,600 --> 00:09:55,400 Speaker 1: really new idea, like it's really innovative, something that hasn't 148 00:09:55,480 --> 00:09:59,200 Speaker 1: seen much or perhaps any representation in the market as 149 00:09:59,240 --> 00:10:01,920 Speaker 1: of right now. Now, well, that makes it even harder 150 00:10:01,960 --> 00:10:05,000 Speaker 1: because it means you have very little you can compare 151 00:10:05,080 --> 00:10:08,840 Speaker 1: that startup against in the market, So that becomes a 152 00:10:08,840 --> 00:10:11,559 Speaker 1: barrier to valuation. You can't say, oh, well, this other 153 00:10:11,679 --> 00:10:15,240 Speaker 1: company is valued at such and such, so that's probably 154 00:10:15,320 --> 00:10:17,200 Speaker 1: the ballpark where we need to look at for this 155 00:10:17,240 --> 00:10:19,600 Speaker 1: other startup. If the two startups are nothing alike, then 156 00:10:19,640 --> 00:10:23,840 Speaker 1: there's no reason to port over that value from company 157 00:10:23,840 --> 00:10:26,960 Speaker 1: A to company B. On top of that, the market 158 00:10:27,080 --> 00:10:30,840 Speaker 1: changes quickly, which makes it really hard to predict how 159 00:10:30,920 --> 00:10:33,400 Speaker 1: the startup is going to perform in the future. So 160 00:10:33,600 --> 00:10:37,880 Speaker 1: will the market continue to support this startups business model 161 00:10:38,200 --> 00:10:41,040 Speaker 1: and thus lead to enormous growth, which is what all 162 00:10:41,360 --> 00:10:44,920 Speaker 1: the parties involved want to see. Or will the market 163 00:10:44,960 --> 00:10:48,720 Speaker 1: itself change and thus the business model then becomes irrelevant. 164 00:10:48,800 --> 00:10:50,720 Speaker 1: It's not that the business model was bad, it's just 165 00:10:51,040 --> 00:10:54,000 Speaker 1: it no longer applies because the market itself has changed. 166 00:10:54,440 --> 00:10:58,200 Speaker 1: Or will it turn out that the market demand for 167 00:10:58,240 --> 00:11:01,480 Speaker 1: the company's product just isn't there, like you think it's 168 00:11:01,520 --> 00:11:03,440 Speaker 1: there because it sounds like a great idea, but once 169 00:11:03,480 --> 00:11:06,319 Speaker 1: you actually get it out there, no one really seems 170 00:11:06,480 --> 00:11:09,959 Speaker 1: jazzed about it. Here this reminds me kind of of 171 00:11:10,000 --> 00:11:13,439 Speaker 1: how I see the metaverse right now. Obviously, the metaverse 172 00:11:13,480 --> 00:11:15,880 Speaker 1: itself is not a startup, but the fact that I 173 00:11:15,920 --> 00:11:19,280 Speaker 1: often see a lack of enthusiasm in the general public 174 00:11:19,400 --> 00:11:22,800 Speaker 1: around the concept of the metaverse makes me question the 175 00:11:22,840 --> 00:11:27,400 Speaker 1: wisdom of investing billions of dollars into that idea. So 176 00:11:27,520 --> 00:11:30,079 Speaker 1: the truth of the matter is that lots of factors, 177 00:11:30,200 --> 00:11:34,480 Speaker 1: some of them subjective ones, will come into play to 178 00:11:34,559 --> 00:11:38,280 Speaker 1: determine a startup's value, and they can include things like 179 00:11:38,360 --> 00:11:42,320 Speaker 1: investor opinions. If investors are enthusiastic about a startup, that 180 00:11:42,400 --> 00:11:46,440 Speaker 1: startups valuation typically goes up. But other stuff involves things 181 00:11:46,480 --> 00:11:49,240 Speaker 1: like market trends or assumptions about the market in general. 182 00:11:49,280 --> 00:11:52,440 Speaker 1: So it gets very whibly wobbly. We're going to take 183 00:11:52,440 --> 00:11:53,920 Speaker 1: a quick break. When we come back, I'm going to 184 00:11:53,920 --> 00:12:08,880 Speaker 1: talk about some approaches toward assigning value to startups. Okay, 185 00:12:08,880 --> 00:12:11,439 Speaker 1: we're back. So, as I mentioned, there are a couple 186 00:12:11,440 --> 00:12:15,600 Speaker 1: of different ways that investors will attempt to assign value 187 00:12:15,640 --> 00:12:19,520 Speaker 1: to a startup, which will ultimately determine whether a startup 188 00:12:19,559 --> 00:12:23,439 Speaker 1: reaches Unicorn status. One of those ways is called the 189 00:12:23,480 --> 00:12:28,360 Speaker 1: market multiple approach. So broadly speaking, this method takes a 190 00:12:28,360 --> 00:12:32,760 Speaker 1: look at recent acquisitions in whatever sector the startup is in. 191 00:12:33,240 --> 00:12:36,200 Speaker 1: So if the startup is at all similar to other 192 00:12:36,280 --> 00:12:39,680 Speaker 1: businesses that are part of these acquisitions, this is a 193 00:12:39,720 --> 00:12:42,679 Speaker 1: good approach, or at least a viable one. So what 194 00:12:42,760 --> 00:12:44,599 Speaker 1: you do is you look at the acquisitions that have 195 00:12:44,640 --> 00:12:48,240 Speaker 1: been made. You also take a look at how much 196 00:12:48,400 --> 00:12:51,400 Speaker 1: those businesses, those startups that got acquired, how much were 197 00:12:51,480 --> 00:12:53,800 Speaker 1: they making in sales or how much sales were they 198 00:12:53,840 --> 00:12:57,839 Speaker 1: actually seeing at the time of acquisition, And then how 199 00:12:57,880 --> 00:13:00,800 Speaker 1: much of a multiplayer is there for the amount of 200 00:13:00,800 --> 00:13:05,640 Speaker 1: sales versus the amount that was paid for at acquisition. 201 00:13:06,000 --> 00:13:09,080 Speaker 1: That gives you your market multiple. So let's talk about 202 00:13:09,240 --> 00:13:12,280 Speaker 1: our fictional widget company again. Let's imagine the widget company 203 00:13:12,320 --> 00:13:16,040 Speaker 1: is not publicly traded, it's a startup. And let's say 204 00:13:16,040 --> 00:13:18,880 Speaker 1: that investors look at how much other companies are paying 205 00:13:18,920 --> 00:13:21,679 Speaker 1: to acquire hardware companies that are in some way similar 206 00:13:21,720 --> 00:13:25,119 Speaker 1: to this widget company, and it turns out the acquisition 207 00:13:25,240 --> 00:13:29,360 Speaker 1: price is about six times greater than the actual sales 208 00:13:29,640 --> 00:13:32,160 Speaker 1: that these companies are making. That that's the average that 209 00:13:32,160 --> 00:13:36,480 Speaker 1: you're seeing across these acquisitions six times more. So your 210 00:13:36,520 --> 00:13:39,480 Speaker 1: market multiple is six and you can use that multiple 211 00:13:39,559 --> 00:13:43,280 Speaker 1: to kind of estimate your own company's valuation, though obviously 212 00:13:43,280 --> 00:13:45,440 Speaker 1: you're going to have to tweak that depending upon the 213 00:13:45,440 --> 00:13:48,160 Speaker 1: status of your own startup. So for example, if you 214 00:13:48,160 --> 00:13:51,640 Speaker 1: haven't really built out manufacturing facilities yet and you don't 215 00:13:51,640 --> 00:13:57,280 Speaker 1: actually have anything to sell, well, you can't really multiply anything. 216 00:13:57,320 --> 00:14:00,520 Speaker 1: If you're at very low scale then and maybe your 217 00:14:00,600 --> 00:14:04,440 Speaker 1: multiple is much lower because you haven't proven that you 218 00:14:04,480 --> 00:14:07,560 Speaker 1: can scale the business up yet, and that means that 219 00:14:07,600 --> 00:14:10,959 Speaker 1: investors are taking on a greater amount of risk when 220 00:14:11,000 --> 00:14:13,680 Speaker 1: they invest in your company. So your multiple ends up 221 00:14:13,720 --> 00:14:18,240 Speaker 1: being smaller than the market six times multiple that you're 222 00:14:18,240 --> 00:14:20,880 Speaker 1: seeing elsewhere. But this can be a way to kind 223 00:14:20,920 --> 00:14:25,240 Speaker 1: of guide you toward valuation. Obviously, the big hurdle here 224 00:14:25,720 --> 00:14:29,640 Speaker 1: is that the market multiple approach is dependent upon finding 225 00:14:29,880 --> 00:14:34,120 Speaker 1: comparable businesses in the market that have been acquired. If 226 00:14:34,160 --> 00:14:38,400 Speaker 1: your startup is really innovative and really doesn't resemble other 227 00:14:38,480 --> 00:14:41,160 Speaker 1: stuff that's already on the market, then you don't have 228 00:14:41,200 --> 00:14:43,440 Speaker 1: anything to compare it against. You don't have any way 229 00:14:43,480 --> 00:14:46,080 Speaker 1: to derive the multiple in the first place, because there's 230 00:14:46,080 --> 00:14:48,360 Speaker 1: no one else out there that's like you. So you 231 00:14:48,400 --> 00:14:51,440 Speaker 1: can't depend upon what's happening in other parts of the 232 00:14:51,480 --> 00:14:56,680 Speaker 1: market because it may not have any application toward your situation. However, 233 00:14:56,720 --> 00:15:00,840 Speaker 1: there are other means to assign valuation. So another is 234 00:15:00,880 --> 00:15:04,880 Speaker 1: called the cost to duplicate. This is pretty self explanatory. 235 00:15:05,000 --> 00:15:07,840 Speaker 1: How much money would it take to build a duplicate 236 00:15:07,960 --> 00:15:12,880 Speaker 1: copy of the startup in question. Now, actually coming up 237 00:15:12,920 --> 00:15:15,080 Speaker 1: with that figure can be a little tricky because it 238 00:15:15,120 --> 00:15:18,040 Speaker 1: can involve stuff that's a little more ephemeral than just 239 00:15:18,480 --> 00:15:21,840 Speaker 1: how much do the facilities cost? How much is the 240 00:15:21,840 --> 00:15:28,080 Speaker 1: business paying its staff, like how much is not just 241 00:15:28,240 --> 00:15:31,560 Speaker 1: rent but the cost of operations. It can actually include 242 00:15:31,600 --> 00:15:35,840 Speaker 1: other stuff too, like intellectual property that becomes harder to 243 00:15:35,840 --> 00:15:39,840 Speaker 1: put an actual, like monetary value to and that gets 244 00:15:39,880 --> 00:15:43,680 Speaker 1: a bit wishy washy, or things like the value of 245 00:15:43,760 --> 00:15:46,400 Speaker 1: research and development that's going on within the startup. How 246 00:15:46,400 --> 00:15:49,520 Speaker 1: do you put a monetary value on that. So the 247 00:15:49,560 --> 00:15:52,800 Speaker 1: cost to duplicate has a pretty big drawback. It gives 248 00:15:52,880 --> 00:15:57,640 Speaker 1: a snapshot of a company's current value, but it doesn't 249 00:15:57,680 --> 00:16:01,160 Speaker 1: necessarily take all of its assets into account because not 250 00:16:01,200 --> 00:16:04,640 Speaker 1: all of them are so easily reduced to a figure, 251 00:16:04,960 --> 00:16:08,400 Speaker 1: and it cannot bring into account the potential for the 252 00:16:08,440 --> 00:16:12,080 Speaker 1: company's success. Right It's looking at a snapshot of why 253 00:16:12,120 --> 00:16:15,000 Speaker 1: it's valued right now, but it's not telling you what 254 00:16:15,160 --> 00:16:18,640 Speaker 1: will it be valued six months from now, assuming that 255 00:16:18,680 --> 00:16:22,880 Speaker 1: everything's working well. So there are assets that just might 256 00:16:22,920 --> 00:16:26,480 Speaker 1: not be quantifiable, but they are still valuable to the organization, 257 00:16:26,560 --> 00:16:28,040 Speaker 1: but they're not going to show up on a spreadsheet 258 00:16:28,040 --> 00:16:31,240 Speaker 1: because he can't reduce it down to that data point. 259 00:16:31,600 --> 00:16:34,960 Speaker 1: For that reason, the cost to duplicate method can undervalue 260 00:16:35,160 --> 00:16:38,640 Speaker 1: a startup, sometimes by a significant amount. So you could say, like, 261 00:16:38,640 --> 00:16:42,560 Speaker 1: all right, well this is the low ball range of 262 00:16:42,640 --> 00:16:45,800 Speaker 1: the company's valuation. That would be a safer thing to say, 263 00:16:45,880 --> 00:16:50,160 Speaker 1: because you are acknowledging that this cost to duplicate method 264 00:16:50,680 --> 00:16:53,960 Speaker 1: does not take all assets into account because it just 265 00:16:54,320 --> 00:16:57,920 Speaker 1: it's not designed to be able to do that. Next up, 266 00:16:58,480 --> 00:17:03,640 Speaker 1: we've got the discounted cash flow method, or DCF method, 267 00:17:04,080 --> 00:17:06,199 Speaker 1: and in some ways it's kind of the opposite of 268 00:17:06,240 --> 00:17:10,080 Speaker 1: the cost to duplicate approach, because it's all about looking 269 00:17:10,119 --> 00:17:12,919 Speaker 1: forward as opposed to getting a snapshot of current value. 270 00:17:13,640 --> 00:17:17,159 Speaker 1: The DCF method requires analysts to predict how much cash 271 00:17:17,200 --> 00:17:20,400 Speaker 1: flow a startup will have in the future, and then 272 00:17:20,600 --> 00:17:24,840 Speaker 1: also bring into account the expected return on investment that 273 00:17:24,880 --> 00:17:27,520 Speaker 1: the startup is going to create, and putting those together 274 00:17:27,640 --> 00:17:30,160 Speaker 1: tells you how much that cash flow itself is worth, 275 00:17:30,520 --> 00:17:33,440 Speaker 1: and that ends up allowing you to place a valuation 276 00:17:33,600 --> 00:17:36,720 Speaker 1: on the company. To me this method comes across a 277 00:17:36,760 --> 00:17:39,800 Speaker 1: lot like telling fortunes. You're making the best guess you 278 00:17:39,880 --> 00:17:43,600 Speaker 1: can based upon the information that's currently available, but knowing 279 00:17:43,600 --> 00:17:46,560 Speaker 1: how things can change quickly means that at some level 280 00:17:46,600 --> 00:17:49,320 Speaker 1: you really have to acknowledge that this approach is far 281 00:17:49,359 --> 00:17:53,600 Speaker 1: from bulletproof. The last method can sometimes feel the most 282 00:17:53,720 --> 00:17:58,080 Speaker 1: arbitrary of them all. It's called the valuation by stage method, 283 00:17:58,480 --> 00:18:02,600 Speaker 1: So this method assigns value based upon how far along 284 00:18:02,680 --> 00:18:06,880 Speaker 1: the startup is as it develops to become a real boy. Wait, 285 00:18:07,080 --> 00:18:10,240 Speaker 1: I'm sorry, No, I'm sorry, that's pinocchio. I mean when 286 00:18:10,240 --> 00:18:13,679 Speaker 1: the startup is becoming, you know, its own standalone, real 287 00:18:13,720 --> 00:18:19,040 Speaker 1: company that can exist without regular injections of investment cash. Obviously, 288 00:18:19,560 --> 00:18:23,000 Speaker 1: the earlier the startup is on the journey, the lower 289 00:18:23,040 --> 00:18:25,840 Speaker 1: its valuation is going to be. And only if the 290 00:18:25,880 --> 00:18:28,680 Speaker 1: startup is able to hold together and continue to develop 291 00:18:29,320 --> 00:18:32,920 Speaker 1: and reach certain milestones like finding the right leadership team 292 00:18:32,960 --> 00:18:37,560 Speaker 1: that's a milestone, or forming strong allegiances in partnerships with 293 00:18:37,680 --> 00:18:42,720 Speaker 1: other companies that's another milestone. Hitting these milestones tells the 294 00:18:42,760 --> 00:18:45,359 Speaker 1: investor community, Oh, you have reached the next kind of 295 00:18:45,480 --> 00:18:49,560 Speaker 1: level in your growth, and thus your valuation has increased 296 00:18:49,680 --> 00:18:52,800 Speaker 1: because you are more stable and you're on a better 297 00:18:52,920 --> 00:18:58,320 Speaker 1: footing for reaching profitability or eventually going public. As we said, 298 00:18:58,480 --> 00:19:02,320 Speaker 1: profitability kind of doesn't matter, it's kind of crazy, but 299 00:19:02,480 --> 00:19:05,080 Speaker 1: profitability in the view of investors, as in they're getting 300 00:19:05,080 --> 00:19:08,280 Speaker 1: a return on their investment. So that can also include 301 00:19:08,280 --> 00:19:10,159 Speaker 1: things like if you're able to show that you have 302 00:19:10,200 --> 00:19:15,280 Speaker 1: a really strong path toward generating revenue and scaling up 303 00:19:15,359 --> 00:19:21,679 Speaker 1: the business, that is incredibly valuable, enormously valuable, and a 304 00:19:21,680 --> 00:19:25,240 Speaker 1: lot of startups fail to ever reach that because scaling 305 00:19:25,520 --> 00:19:28,399 Speaker 1: is hard. Now, the goal of the investor is pretty simple, 306 00:19:28,480 --> 00:19:32,760 Speaker 1: to get a return on their investment, preferably a nice, big, 307 00:19:32,880 --> 00:19:38,480 Speaker 1: fat return. The goal of the startup that depends. There 308 00:19:38,520 --> 00:19:43,720 Speaker 1: are a few potential outcomes for startups, and depending upon 309 00:19:43,760 --> 00:19:46,720 Speaker 1: what the founders want, some of them may be desirable 310 00:19:46,720 --> 00:19:48,840 Speaker 1: and some of them may not be. All of them, 311 00:19:49,440 --> 00:19:54,040 Speaker 1: assuming everything turns out well, means that they will be very, 312 00:19:54,720 --> 00:19:59,440 Speaker 1: very wealthy. We're going to talk about those potential outcomes 313 00:19:59,560 --> 00:20:12,480 Speaker 1: after we take another quick break. All right. Before the break, 314 00:20:12,520 --> 00:20:15,960 Speaker 1: I mentioned that there are a few different potential outcomes 315 00:20:16,000 --> 00:20:19,159 Speaker 1: that are hoped for among startups in general and unicorns 316 00:20:19,160 --> 00:20:25,040 Speaker 1: in particular, and they're pretty easy to understand. One, as 317 00:20:25,119 --> 00:20:29,400 Speaker 1: I've mentioned before, is for the company to ultimately go public, 318 00:20:29,680 --> 00:20:35,440 Speaker 1: to become a publicly traded company. Usually this is managed 319 00:20:35,480 --> 00:20:40,080 Speaker 1: by having an initial public offering or IPO. There's a 320 00:20:40,240 --> 00:20:44,080 Speaker 1: whole process involved in that, and obviously it's not just 321 00:20:44,200 --> 00:20:47,080 Speaker 1: for the tech sector. It's for any company that's going public. 322 00:20:47,840 --> 00:20:52,320 Speaker 1: But the goal here is to offer shares of the company, 323 00:20:52,640 --> 00:20:56,520 Speaker 1: shares of ownership up for sale on the stock market, 324 00:20:57,080 --> 00:21:00,240 Speaker 1: and this will end up creating a big in jecttion 325 00:21:00,359 --> 00:21:04,680 Speaker 1: of capital which the business can then use toward, you know, 326 00:21:04,840 --> 00:21:10,159 Speaker 1: increasing the size of the business, expanding business in various ways, 327 00:21:10,480 --> 00:21:14,879 Speaker 1: business e business stuff. So it's all about growth really. 328 00:21:15,160 --> 00:21:20,000 Speaker 1: It does, however, mean also that the leadership and the 329 00:21:20,040 --> 00:21:25,400 Speaker 1: investors are seeding some control of this business to the shareholders. 330 00:21:25,680 --> 00:21:27,840 Speaker 1: Like when you own a share in a company, you 331 00:21:27,920 --> 00:21:32,200 Speaker 1: also technically have a say in how that company is run. Now, obviously, 332 00:21:32,560 --> 00:21:35,959 Speaker 1: if you only have a share and there are millions 333 00:21:36,000 --> 00:21:39,800 Speaker 1: of shares out there, your voice is a tiny one 334 00:21:39,920 --> 00:21:43,040 Speaker 1: and it's only through big collections that you can really 335 00:21:43,440 --> 00:21:48,080 Speaker 1: make any kind of movement. But there are groups that 336 00:21:48,160 --> 00:21:51,080 Speaker 1: form together to do just that. And they're also like 337 00:21:51,320 --> 00:21:55,159 Speaker 1: activist investors who will invest very heavily in a company 338 00:21:55,200 --> 00:21:59,639 Speaker 1: so that they have you know, a significant ownership, maybe 339 00:21:59,680 --> 00:22:02,760 Speaker 1: not you know, enough to rank a whole percent even, 340 00:22:02,800 --> 00:22:05,919 Speaker 1: but significant enough for them to be a voice that 341 00:22:06,119 --> 00:22:10,119 Speaker 1: is impossible to ignore. And that means that you know, 342 00:22:10,160 --> 00:22:13,119 Speaker 1: you're not making all of your own decisions. Some of 343 00:22:13,160 --> 00:22:17,399 Speaker 1: those decisions are subject to the whim of the shareholders. 344 00:22:18,080 --> 00:22:20,000 Speaker 1: It gets a little more complicated than that, but you 345 00:22:20,040 --> 00:22:23,320 Speaker 1: get the basic idea, But there's no rule that says 346 00:22:23,359 --> 00:22:27,840 Speaker 1: a startup, even a unicorn, has to go public. It doesn't, 347 00:22:28,280 --> 00:22:32,240 Speaker 1: It could remain a private company. The issue with that, however, 348 00:22:32,480 --> 00:22:37,200 Speaker 1: is that private companies don't have a way to generate 349 00:22:37,280 --> 00:22:41,639 Speaker 1: this enormous influx of capital the way a publicly traded 350 00:22:41,640 --> 00:22:46,760 Speaker 1: company does with an IPO, So it is very difficult 351 00:22:47,080 --> 00:22:50,520 Speaker 1: to get the capital together to do things like expand 352 00:22:50,520 --> 00:22:54,280 Speaker 1: the business and to scale up, and it might mean 353 00:22:54,359 --> 00:22:58,080 Speaker 1: having to get more investments, which you know that can 354 00:22:58,640 --> 00:23:04,480 Speaker 1: end up being a law term challenge, or relying upon 355 00:23:04,560 --> 00:23:08,720 Speaker 1: the company's own profitability where you're pouring the profits back 356 00:23:08,760 --> 00:23:11,919 Speaker 1: into the company itself, or to grow the business. But 357 00:23:12,119 --> 00:23:15,440 Speaker 1: that can be much much much slower than holding an IPO. 358 00:23:15,960 --> 00:23:20,720 Speaker 1: Even in publicly traded companies, growth isn't always enough. It's 359 00:23:20,720 --> 00:23:24,040 Speaker 1: not enough for a company to grow from quarter to quarter. 360 00:23:24,720 --> 00:23:28,360 Speaker 1: The rate of growth becomes important. Shareholders want to see 361 00:23:28,359 --> 00:23:33,280 Speaker 1: a company grow faster this quarter than it grew last quarter, 362 00:23:33,840 --> 00:23:38,400 Speaker 1: So the rate of growth is important, not just that 363 00:23:38,440 --> 00:23:41,640 Speaker 1: the company grew, but how fast did it grow. It's 364 00:23:41,680 --> 00:23:45,080 Speaker 1: wild to me that it could be a case where 365 00:23:45,160 --> 00:23:47,600 Speaker 1: you might say, oh, this company didn't grow as much 366 00:23:47,600 --> 00:23:50,840 Speaker 1: as we hoped it would, and therefore we've lost confidence 367 00:23:50,840 --> 00:23:53,440 Speaker 1: in it. It's crazy to me that that's a thing, 368 00:23:53,560 --> 00:23:57,360 Speaker 1: because the company still grew, it just maybe didn't grow 369 00:23:57,400 --> 00:23:59,879 Speaker 1: as fast as you liked. So like sometimes you'll see 370 00:24:00,160 --> 00:24:06,000 Speaker 1: headlines about a company reporting a decline in growth but 371 00:24:06,160 --> 00:24:08,639 Speaker 1: still growing. It's just not growing as quickly as it 372 00:24:08,760 --> 00:24:11,440 Speaker 1: was previously, and yet that can be seen as this 373 00:24:11,920 --> 00:24:16,480 Speaker 1: terrible sign. And I think personally this focus on growth 374 00:24:16,920 --> 00:24:21,439 Speaker 1: has been incredibly unhealthy for companies in general and for 375 00:24:21,560 --> 00:24:24,280 Speaker 1: society as a whole. I just don't think it's the 376 00:24:25,160 --> 00:24:29,959 Speaker 1: right philosophy. It's very difficult to sustain, and it drives 377 00:24:30,000 --> 00:24:34,720 Speaker 1: a lot of bad decisions. I would say, but that's 378 00:24:35,080 --> 00:24:39,600 Speaker 1: again I'm getting off topic. I apologize so anyway that 379 00:24:39,720 --> 00:24:43,920 Speaker 1: even with public companies or private companies, growth is always 380 00:24:44,440 --> 00:24:47,119 Speaker 1: a concern, and it's harder to do when you're a 381 00:24:47,160 --> 00:24:50,800 Speaker 1: private company. Sometimes there is a third option. You don't 382 00:24:50,840 --> 00:24:53,080 Speaker 1: have to go public, and you don't have to stay private. 383 00:24:53,440 --> 00:24:56,600 Speaker 1: The third option is he finds yourself a sugar daddy. 384 00:24:57,359 --> 00:25:00,280 Speaker 1: By that, I mean you find a bigger company that 385 00:25:00,320 --> 00:25:04,320 Speaker 1: wants to acquire your startup. This is kind of it 386 00:25:04,359 --> 00:25:07,400 Speaker 1: almost became a joke that people were going out and 387 00:25:07,440 --> 00:25:11,679 Speaker 1: founding startups just in the hopes that a bigger company 388 00:25:11,680 --> 00:25:14,120 Speaker 1: would come along and spend a ridiculous amount of money 389 00:25:14,200 --> 00:25:17,320 Speaker 1: to acquire the startup. And you don't have to worry 390 00:25:17,359 --> 00:25:20,120 Speaker 1: about whether or not your business is profitable, like that 391 00:25:20,160 --> 00:25:22,479 Speaker 1: never even becomes a concern. All you have to do 392 00:25:22,560 --> 00:25:27,040 Speaker 1: is create an organization that seems desirable for some reason 393 00:25:27,600 --> 00:25:30,080 Speaker 1: and then sign on the deadline and accept the big 394 00:25:30,080 --> 00:25:33,560 Speaker 1: old checks. And you didn't have to do something as 395 00:25:33,600 --> 00:25:38,160 Speaker 1: complicated as running a business and making it successful. There's 396 00:25:38,200 --> 00:25:40,119 Speaker 1: a bit of there's a bit of truth to that, 397 00:25:40,320 --> 00:25:43,959 Speaker 1: but that's obviously an oversimplification and almost a parody of 398 00:25:44,000 --> 00:25:47,840 Speaker 1: what's actually happening. So what is going on here, Well, 399 00:25:47,880 --> 00:25:51,480 Speaker 1: maybe the bigger company is looking at the startup as 400 00:25:51,640 --> 00:25:54,879 Speaker 1: a potential rival further in the future, and so the 401 00:25:54,880 --> 00:25:58,480 Speaker 1: bigger company wants to buy the smaller company before the 402 00:25:58,520 --> 00:26:02,640 Speaker 1: smaller company a company becomes a competitor. You can look 403 00:26:02,680 --> 00:26:06,800 Speaker 1: at Meta slash Facebook. That company has done this a lot, 404 00:26:07,119 --> 00:26:11,439 Speaker 1: purchasing companies that either we're already starting to compete with 405 00:26:11,520 --> 00:26:18,200 Speaker 1: Facebook's attempt to dominate online attention, or we're rising up rapidly, 406 00:26:18,400 --> 00:26:20,760 Speaker 1: and then Meta swoops in purchases the company for some 407 00:26:20,840 --> 00:26:25,040 Speaker 1: ridiculously high cost and then may or may not end 408 00:26:25,119 --> 00:26:29,040 Speaker 1: up doing anything with it. Maybe the bigger company sees 409 00:26:29,119 --> 00:26:32,119 Speaker 1: that there are bits and pieces of the startup that 410 00:26:32,160 --> 00:26:35,000 Speaker 1: could be useful in the bigger company's own products, Like 411 00:26:35,960 --> 00:26:38,399 Speaker 1: it's not that the startup itself represents something that the 412 00:26:38,400 --> 00:26:41,639 Speaker 1: company wants, but rather the assets that the startup has. 413 00:26:41,920 --> 00:26:44,720 Speaker 1: Some of those look really valuable, and maybe you incorporate 414 00:26:44,760 --> 00:26:48,199 Speaker 1: those into your own stuff, and then maybe later on 415 00:26:48,280 --> 00:26:51,320 Speaker 1: you even discontinue that stuff. I'm looking at you, Google, 416 00:26:51,520 --> 00:26:54,600 Speaker 1: Google does this all the time. But it remains that 417 00:26:54,640 --> 00:26:57,640 Speaker 1: sometimes the startup team is really just hoping to drive 418 00:26:57,720 --> 00:27:01,680 Speaker 1: valuation up as quickly as possible and get some offers 419 00:27:01,760 --> 00:27:04,800 Speaker 1: from bigger companies that can lead to a huge opportunity 420 00:27:04,840 --> 00:27:08,359 Speaker 1: to cash out. This can go different ways, too, right Like, 421 00:27:08,400 --> 00:27:14,520 Speaker 1: there are stories about startup founders who turned down fairly 422 00:27:14,600 --> 00:27:17,440 Speaker 1: big offers to buy out their company because they say, oh, 423 00:27:17,480 --> 00:27:20,520 Speaker 1: now this is undervaluing what we're going to do. And 424 00:27:20,640 --> 00:27:24,840 Speaker 1: sure maybe right now, like as of right now, you 425 00:27:24,840 --> 00:27:29,080 Speaker 1: know your your fifty million dollar offer is more than 426 00:27:29,200 --> 00:27:31,520 Speaker 1: enough to cover all the assets that we currently own, 427 00:27:31,600 --> 00:27:34,080 Speaker 1: but it doesn't cover the potential, and we would rather 428 00:27:34,280 --> 00:27:37,560 Speaker 1: bank on our potential than cash out for fifty million. 429 00:27:37,960 --> 00:27:41,280 Speaker 1: There are plenty of stories like that, but again, unicorns 430 00:27:41,280 --> 00:27:44,640 Speaker 1: are rare, or at least they're supposed to be. Remember, 431 00:27:44,680 --> 00:27:47,560 Speaker 1: like in twenty thirteen, when Aileen Lee first coined the 432 00:27:47,640 --> 00:27:52,680 Speaker 1: term unicorn, her company estimated that there were fewer than 433 00:27:52,800 --> 00:27:58,960 Speaker 1: forty companies that would merit unicorn status from two thousand 434 00:27:58,960 --> 00:28:03,280 Speaker 1: and three. Within that decade, there were like thirty nine companies. 435 00:28:04,000 --> 00:28:08,520 Speaker 1: But according to say CB Insights, as of July twenty 436 00:28:08,640 --> 00:28:14,639 Speaker 1: twenty three, there were over twelve hundred unicorns in the world. 437 00:28:15,720 --> 00:28:21,160 Speaker 1: And then not only that, you had variations that were 438 00:28:21,200 --> 00:28:27,480 Speaker 1: even more kind of grandiose than unicorn. There's the deccacorn, 439 00:28:28,040 --> 00:28:32,680 Speaker 1: that's a startup that hits a ten billion dollar valuation, 440 00:28:33,240 --> 00:28:39,760 Speaker 1: or the Hectocorn, which is a hundred billion that's a 441 00:28:39,840 --> 00:28:43,400 Speaker 1: lot of money. If you're wondering what companies were hitting 442 00:28:43,720 --> 00:28:47,560 Speaker 1: more than one hundred billion in valuation, SpaceX would be one. 443 00:28:48,240 --> 00:28:53,040 Speaker 1: Byte Edance, the parent company of TikTok is another. But yeah, 444 00:28:53,080 --> 00:28:56,400 Speaker 1: there are lots of companies out there that are in 445 00:28:56,440 --> 00:29:01,960 Speaker 1: the unicorn decacorn status a lot more than there were 446 00:29:02,000 --> 00:29:05,000 Speaker 1: back in twenty thirteen, so it's not nearly as rare 447 00:29:05,080 --> 00:29:07,480 Speaker 1: as it used to be. I mean, it's still not like, 448 00:29:07,920 --> 00:29:10,480 Speaker 1: if you go out there and launch a startup today, 449 00:29:10,480 --> 00:29:13,160 Speaker 1: you've got a real good chance of having a unicorn 450 00:29:13,200 --> 00:29:16,800 Speaker 1: on your hands. It is not that common, right, It's 451 00:29:16,840 --> 00:29:20,239 Speaker 1: still pretty darn rare. It's just way less rare than 452 00:29:20,280 --> 00:29:25,080 Speaker 1: it was when Alienly coined the phrase back in twenty thirteen. Okay, 453 00:29:25,480 --> 00:29:29,120 Speaker 1: that's it. That's what a unicorn is in the world 454 00:29:29,160 --> 00:29:32,200 Speaker 1: of business, and the tech world in particular is known 455 00:29:32,360 --> 00:29:35,080 Speaker 1: for these, So that's why I thought I would cover it. 456 00:29:35,440 --> 00:29:38,400 Speaker 1: I hope you are all well, and I'll talk to 457 00:29:38,440 --> 00:29:48,880 Speaker 1: you again really soon. Tech Stuff is an iHeartRadio production. 458 00:29:49,160 --> 00:29:54,200 Speaker 1: For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, 459 00:29:54,320 --> 00:29:59,280 Speaker 1: or wherever you listen to your favorite shows.