Every startup founder seems to dream of building the next unicorn – a company valued over $1 billion. The billion-dollar tag has become the ultimate goal in India’s tech circles. Funding announcements make headlines, LinkedIn is flooded with celebratory posts, and valuations are flaunted like trophies. But in this frantic race to unicorn status, one question often gets ignored: What about real innovation and solving customer problems?
The Unicorn Obsession is Killing Innovation
India now boasts over 100 unicorn startups (118 as of January 2025), and there’s even talk of reaching 1,000 unicorns in the next few years. The startup ecosystem is proud of these numbers, but this obsession with unicorn status is coming at a cost. For many, “startup success” has devolved into a vanity parade of funding rounds and sky-high valuations, rather than impactful products. Announcing a new funding round and touting a multi-million dollar valuation has become more celebrated than actually building a sustainable business or innovative product. In this chase for investor approval and media hype, truly novel ideas often fall by the wayside. The result? Plenty of startups with impressive valuations, but little originality or genuine value to show.
Worse, the unicorn mania can create unsustainable business practices. Chasing growth at any cost – just to hit that billion-dollar mark – often means burning cash, ignoring revenues, and pushing impractical expansion. It’s no surprise that around 90% of Indian startups fail within 5 years, often because they prioritized aggressive scaling over sustainable business models. A unicorn valuation on paper means nothing if the company collapses under its own weight. We’ve seen even celebrated unicorns like Byju’s and OYO face brutal reality checks – plummeting valuations, losses, and questions about profitability. It begs the question: Is chasing the unicorn label really worth it when it can kill the very innovation and viability a startup was meant to pursue?
Copycat Ideas and the “Not Scalable” Mindset
A troubling side effect of this valuation-first mindset is a copycat culture. Every third startup nowadays seems to be a clone of another, bringing the same idea with nothing more than a new UI or a slight tweak. Founders are gravitating toward “proven” concepts that investors find familiar – whether it’s another food delivery service, one more fintech app, or the next e-commerce platform – even if the market is already saturated. Original ideas are often dismissed early with the dreaded remark: “But is it scalable?” In other words, if an idea doesn’t promise a massive, immediate user base and a quick path to a billion-dollar valuation, it’s deemed uninteresting. This mentality stifles creativity. Instead of solving unaddressed customer problems, many startups chase whatever trend VCs are funding this quarter.
- Herd mentality: If social commerce or crypto is hot, you suddenly get dozens of lookalike startups in that space, all hoping to be the next unicorn.
- Lack of originality: Pitch decks start to sound the same – “the Uber of X,” “the Amazon of Y” – as entrepreneurs recycle ideas that worked elsewhere, with little innovation.
- Fear of niche solutions: A founder who dares to tackle a unique niche problem is told it’s “not scalable” because it may not target a billion-dollar market from day one.
This copy-paste approach might make it easier to get initial funding (since investors recognize the model), but it also means startups are increasingly indistinguishable. When ten companies are doing roughly the same thing, nine of them are redundant. The focus on scale and hype over substance means the true essence of entrepreneurship – creativity, problem-solving, breaking new ground – is getting lost. Innovation dies when everyone is playing it safe and just trying to match a template for “the next big startup” rather than inventing something genuinely new.
Solve Problems First, Valuation Will Follow
Lost in all the unicorn hype is a simple business truth: Real businesses are built by solving real problems. The most successful companies didn’t start off obsessed with becoming unicorns; they started by focusing on their users’ pain points and building a product or service that people genuinely needed. Do that right, and valuations have a way of taking care of themselves. In startup vernacular, this means prioritizing product-market fit, customer satisfaction, and sustainable growth over flashy funding news.
We should celebrate the founders who choose substance over style – those working on meaningful, if unglamorous, solutions. Not every great business will be a unicorn, and that’s okay. If your startup serves customers well, runs profitably, and grows at a healthy pace, you’ve already won. You’re creating value, which is the real point of entrepreneurship. And if that journey takes you to a billion-dollar valuation eventually, it will actually mean something because it’s backed by a solid product and happy users, not just hype.
It’s time to flip the script. Instead of asking “How can I make this idea scale to a billion-dollar company?”, ask “How can I solve this customer’s problem in a way no one else has?” Focus on building a product that delivers real benefits. Obsess over your users, not your investors. Remember, each “unicorn” was once a small startup obsessing over customers – the valuation came later as a result of success, not the definition of it.
India Needs Innovators, Not Just Unicorns
In the end, the Indian startup ecosystem doesn’t need more unicorns for the sake of unicorns; it needs more innovators and problem-solvers. Chasing a unicorn status as a goal in itself is like chasing a mirage – the pursuit might energize you for a while, but it won’t quench the thirst for long-term success. Our measure of success should shift from vanity metrics to real impact. Are we alleviating a pain point for users? Are we improving lives or businesses? These are far more important questions than “What’s our valuation now?”.
Dear founders: let’s refocus. Build your dhandha (business) by solving a pressing problem or fulfilling an unmet need. Let funding and valuations be by-products, not the end goals. Stop worrying about becoming the next unicorn and start worrying about being the startup that actually makes a difference for its customers. If we get that right, the growth and financial success will follow naturally. And even if it doesn’t turn into a unicorn, you’ll have built something far more enduring: a startup that stands on the solid ground of innovation, customer value, and sustainable progress. India has enough people chasing unicorns; now it needs more people chasing real solutions. Innovate first – the unicorns will take care of themselves.