Seattle’s unicorns are boring.
That was one funny takeaway from a panel last week hosted by TiE Seattle featuring executives from some of the region’s privately-held billion-dollar startups, also known as “unicorns” given their sky-high valuations.
“It’s a pretty boring thing,” said Auth0 CEO Eugenio Pace as he described his company’s identity and authentication platform.
“It’s not as boring as contract management!” piped in Icertis CEO Samir Bodas, whose startup helps companies keep track of deals that require extensive contracts.
Other panelists included Kristen Forecki, vice president of operations at Convoy, which operates a digital freight network, and Param Kahlon, chief product officer at UiPath, a robotic process automation (RPA) vendor that has a large R&D operation in the Seattle area.
These companies — along with other newly-minted unicorns in Seattle such as sales automation startup Outreach — certainly lack a “sexy” factor, which is symbolic of the region’s enterprise tech DNA as a whole.
And maybe being boring isn’t such a bad thing.
High-profile consumer-facing companies such as Uber, Lyft, and Peloton were among the biggest IPO flops of 2019, while enterprise software providers including Crowdstrike and Zoom fared much better.
Icertis, Auth0, and Convoy all raised huge funding rounds this year that helped them reach unicorn status. UIPath, headquartered in New York, reached a $7 billion valuation earlier in 2019.
There are now more than 400 unicorns globally, according to CBInsights, and 125 companies reached the $1 billion mark this year alone. Other Seattle-area unicorns include used goods marketplace OfferUp; pet-sitting startup Rover and remittance company Remitly are also close to the billion-dollar mark.
Given the increased access to venture capital dollars and the uncertainty of the IPO market — and the U.S. economy as a whole — startups are staying private longer.
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Only one Seattle-area company went public this year: Adaptive Biotechnologies‘ IPO in June. While some of the panelists said they are thinking about an IPO and getting prepared for such an event, it wouldn’t be a surprise to see startups stay on the IPO sidelines in 2020.
An IPO provides a company with more cash while giving investors and employees a chance to liquidate their assets. But Bodas said there are ways to do that without going public, such as raising another venture round and giving out “secondaries” to workers.
“I’m not entirely sure why you would go public and take on all this compliance and SEC and quarterly pressure — man, it’s such a pain in the ass,” he said. “To be public is hard.”
Added Bodas: “If capital is available to me without the pain, I’ll take capital over the pain and capital, any day.”
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The four panelists also shared their most important lessons. Here’s a recap of the responses:
Icertis CEO Samir Bodas: “One thing I didn’t appreciate, that I appreciate more now, is how much culture matters. When I came out of business school, I thought culture was all BS. I thought it was all about making money, and as long as you put enough money in people’s pockets, they will take the pain. That’s absolutely wrong. To be able to articulate that culture through your values, and knowing how those values are used in action and how you live them — it makes a huge difference for people.”
Convoy VP of Operations Kristen Forecki: “There are always going to be new challenges that you can’t anticipate, so you have to expect the unexpected. Something I tell my customer service teams, is that if you work in an emergency room and you were always hoping that nothing crazy comes through the door, you’re just going to have a really bad day every single day. So you have to expect something crazy is going to happen and you have to just focus on building the toolkit to handle it and to continue to handle it better every time.”
Auth0 CEO Eugenio Pace: “Worrying about things that I have no control of is completely useless. It’s a complete waste of time. The only thing you have control over is yourself, and then the rest you can influence. It’s much better to put all the energy and emphasis on the things you control fully or things you can influence. That’s been my guiding principle.”
UiPath CPO Param Kahlon: “After 20 years of doing this, the most important aspect of a company to succeed is culture. Culture builds long lasting differentiation. We get customers who come to us and say they want to do business with us because they started with a competitor and were treated like crap, and they like the way we treat them. And the lesson we’ve learned it’s very hard to keep the culture when you grow. It’s easy to manage it at 50,100, 200 people, but very hard when you’re in the thousands. It’s a very tough problem.”