UNICORN or UNICORPSE?
10 Ways to Quickly Know the Difference
After starting many companies from the ground up, I’ve created a way to determine if an idea is a potential Unicorn or really just a Unicorpse and dead on arrival.
It’s called the J-Score. The J-Score is a tally of 10 criteria. Each is subjectively rated from 0 to 10 points. The higher the number, the more likely to be successful. If the idea gets 95 or more points, it may be a Unicorn.
Here’s the 10 criteria that make up the J-Score and why they matter. If you want to skip the background and calculate your own J-Score now, check out our J-Score calculator: https://gusher.co/jscore
1. Must have MULTIPLE BARRIERS to ENTRY other than Money and Marketing. If a company simply competes on the strength of money and marketing it can end up becoming a business that slowly dies and loses relevance. Companies like Kodak, Sears, Compuserve, Blockbuster, Dell, Motorola, Yahoo, and Toys R Us forgot this. Or it can quickly die and never gain relevance, like almost every VC funded company with a burn rate.
2. Must have MULTIPLE SELLING POINTS of DIFFERENTIATION - when goods are very similar in value, having multiple selling points of differentiation allows a good to compete more effectively and warrant a higher value from consumers. Think of when tap water was the only way people drank water. Then came bottled water, water filters, water delivery etc. When people thought that water had now shifted to a mature industry again, along came brands that took water, added multiple selling points of differentiation, and commanded higher prices and market valuation, such as energy drinks, sports water, Smart Water, Vitamin Water etc.
3. Must NOT BE A “ME TOO” DEAL - must not be a copy or newer version of an existing product or company. Most “Me too” deals are out of business quickly and fail miserably or only capture a tiny fragment of market share. The originators are still around with a tremendous amount of value. Think Amazon, Apple, Wal-Mart, & Coca-Cola compared with all the others that have come and gone.
4. Must be SOMEWHAT CONTROVERSIAL - Controversy is the Universe’s gift of free sales to a company. Extreme controversy is not a goal, somewhat controversial is a plus. With controversy comes media, press, interviews, comments and a viral effect on talking about the company and its products. Sales happen and growth can become exponential with some controversy as a catalyst. Go too far and it can crush a company to failure. The way to determine if something may be too controversial is to use a simple “self embarrassment test”. Simply ask yourself the following: if you were to go on the nightly news and explain what you did for a living (the start-up) would you be embarrassed or proud? If you would be embarrassed move on to the next opportunity. It’s as simple as that.
5. Must NOT BE IN A MATURE INDUSTRY OR CATEGORY*- I am NOT saying that creating start-ups in a mature industry is bad or to be avoided. I am saying that in order to be successful in a mature industry or category our products better be fundamentally different than existing companies. They must offer a lot more value to the customers in an extreme versus incremental way. For example, if we created an automobile that was 10% more fuel efficient, it is doubtful that this would be a success in the marketplace on this criteria alone. If we created an automobile that never needed fuel and still provided all the standard amenities, looks, safety, and value that today’s customers get when they buy a new car we may have a viable product.
6. Must NOT BE A COMMODITY* - Everything in some way can be considered a commodity. By commodity in this condition I mean a commodity good such as cotton, pork bellies, wheat etc. A very standardized, universally distributed type product. Unless there is something substantially different in the form of a new paradigm I believe that higher profit lies elsewhere in the creation of value.
7. MUST WORK - If I’m considering moving forward with an idea, that idea must WORK in some capacity. What I mean is the idea can not be what I call Black Hole Research, a bottomless pit where a general idea hasn’t been proven out in some way. Whatever I do must work. There must be a proof of concept, or prototype or minimum viable product (MVP) or they must be able to be developed quickly. If we are going to say the Product or Service does “A”, it MUST do “A” phenomenally.
8. Must have a SUPPORTIVE UPTREND DEMAND - One of the worst positions for a company to find itself in is to be “ahead of its time”. Having a solution for a problem that is not widely accepted means that you may be wonderful at being ahead of the curve but not able to take advantage of the product and actually make money with it. One of the most famous examples of this is when Xerox created a new product for what is commonly known today as word processing. The product was sitting on their shelves for quite a long time doing nothing until Steve Jobs came in, saw the product, and had a new revolutionary use for it. You know the rest. The money was made because with the product in hand and a new thing called a personal computer, there was a supportive uptrend demand for word processing software.
9. Must be SALABLE - If an idea is the greatest thing the world has ever seen, yet unable to be sold to potential partners, or investors, or directly to the target market or vested interest market, the idea will never see the light of day. It will never see fruition. An idea is only as good as the partners, investors and sales it can attract. If it is unable to attract the right team, unable to get partners, or if it can’t generate sales directly, then it either must be reworked or shelved.
10. Must provide EXTREME VALUE TO CUSTOMERS - The best products are those that offer extreme value to customers where there was limited value or no value previously. Products with extreme value are able to get the best people and succeed in the marketplace. A product must have extreme value for us to start it or be involved with it.
*Exceptions are paradigm shifts and disruptor models
A couple important things. When calculating the J-Score just use your best guess for the present time. It’s not meant to be a crystal ball, just a helpful indicator. Also note, numbers 5 & 6 above have a footnote saying “Exceptions are paradigm shifts and disruptor models”, so keep that in mind.
The J-Score is not set in stone and permanent. It can ebb and flow with knowledge of the issues, markets and especially timing. A Unicorpse today can be a Unicorn idea tomorrow. And definitely vice versa. Hopefully the J-Score can help make some good decisions.
If you have any questions or comments reach out and let me know!