Elephants, Not Unicorns

Our icons tell us everything about who we are and what we value. For the last fifteen years in tech that icon has been the unicorn – startups with a valuation of at least $1B. (There are now over 1200 of them.)

The next decade deserves a different icon. One that corresponds to the behaviors and traits of the most interesting companies operating today. These startups turn their customers into members and their companies into communities. I call them elephants, not unicorns. And they establish a new paradigm for what great companies – and company-building – look like in the years to come.

First, let’s cover the two trends that make elephants inevitable: the democratization of company-creation, and the loneliness epidemic, especially as it shows up in the US.

Trend #1: The Democratization of Company Creation

• The rise of no-code tools and other tech tooling (payments processing, web hosting) is enabling more people to launch their businesses quickly and cheaply

• The revolution in mass education on entrepreneurship: hundreds of pods, YouTube channels, blogs that unpack every single part of the journey

• AI is making many aspects of company-building much easier (content marketing, accounting, web development, project management)

• The expansion of the “classic” entrepreneur persona: athletes, entertainers, artists and content creators have been increasingly turning toward entrepreneurship and telling their story in public

The question is, now that software is table stakes and (almost) anyone can build a tech-enabled company today, what will it take to actually attract and retain customers?

The lesson: Building something great isn’t sufficient. The best companies will turn their customers into members who actually care. And the most defensible moat will be the loyalty and affinity of a strong community.

Trend #2: America the Lonely

• People increasingly distrust many core American institutions – the government, corporations, media, etc. This has left many people searching for meaning in niche communities and online platforms.

• There has been a steep decrease in religious affiliation over the past several decades with more than 1 in 3 Gen Z identifying with no religion at all. These institutions have often served as a hub where members could practice weekly rituals, meet others with shared values, and build community.

• The ubiquity of technology has left a generation (or three) of Americans more lonely than ever and yearning for new spaces to belong to, and communities to join.

• Study after study show how the rise in remote and hybrid work post-COVID has taken a toll on the mental health of many Americans.

So, how can we build businesses that work to fill this void?

The lesson: Communities unlock the trust, connection, and sense of belonging that humans are craving. The smartest founders will build companies that look and act more like communities.

The Age of the Unicorn is Over

We’ve spent the past decade celebrating unicorns, their tremendous growth and the founders and investors who shape them. But in a moment like this, when user growth has stalled and the market is flat, we’re seeing many of these fabled unicorns recede from view. Those huge new rounds of funding are increasingly rare. Many of these companies have shrunk, withered away or been acquired at a not-so-unicorn price. We’re also seeing the biggest winners of this era – the FAANG platforms – face key existential questions around privacy, regulation and product strategy. These factors provide an avenue for a new archetype to come forth.

Enter: the elephant. There are a new set of traits that successful companies must embody to win in this market. Where unicorns tend to build in stealth, put scale before purpose and attract less-than-loyal customers, the elephant is grounded in a clear purpose, puts community first and is a magnet for members who commit for the long haul. Where a unicorn is fixated on product-market fit, the elephant realizes that’s only part of a bigger endeavor: building a movement, with story at its center.

Elephants grow differently, operate differently, ship products differently, and are led by a new kind of leader building a new kind of team. And most of all, they are best positioned for long-term, generational success and returns – which, ultimately, is what venture is all about.

Let’s dive in, and cover the three key traits that define this new archetype.

Trait 1: Attracting Members

One key difference between Unicorns and Elephants is their approach to growth. Where Unicorns usually focus on paid acquisition, Elephants attract customers who identify as members and become evangelists for their movement. This difference has a few notable consequences:

Elephant companies have lower CAC

When customers genuinely align with the values, story, and leadership of a brand, they set off a flywheel of organic promotion and sharing that reduces the need for paid acquisition. Instead of one-off discount codes for new customers, elephant companies invest in loyalty and referral programs that accelerate word-of-mouth virality.

Elephant members stay for the long haul

When members feel more connected to the mission of a company, and there is a community built around the usage of the product, they are less likely to churn or switch to competitors. There’s also a stronger opportunity to upsell and increase LTV when a community member trusts your brand. Devoted community members will often distribute the product to their own external communities, at no price to the core business.

💼 Case Study: Beehiiv

Beehiiv's mission is to make it easier for solo creators to make a living and grow via newsletters. They’ve scaled to $4M in ARR, but only 10% of their acquisition has been paid. The other 90% has been purely organic, thanks to a relentless focus on members and building community. This obsession is woven through every touchpoint and corner of their product. For example, instead of taking a % of subscription revenue – something that the community actively was against – they’ve set up a clean monthly fee that lets creators keep all of their subscription revenue. The company also leverages members to accelerate growth, with their simple referral plug-in. Finally, they’ve mastered the art of building in public, sharing the ups and downs of company-building along with product features they want real-time community feedback on. This has helped members feel even more connected to the company and willing to advocate for them.

Trait 2: Purpose-led Growth

If unicorns are obsessed with “VC-backable” models that will 100x (or, more often, die), Elephants are driven by something else: they want to create a massive, meaningful impact in the world. Their pitch isn’t framed as a way to court VCs, but as the necessary antidote to a problem that drives them as humans every day. They are obsessed with solving it, with or without VC support. And their view of success is over a much longer time horizon. They’re motivated by creating value that is sustainable and lasts.

Elephants use purpose-driven storytelling to hire and grow

Similar to how customer acquisition becomes a flywheel when it’s based on true resonance, finding talent and partners becomes self-reinforcing when Elephant companies offer alignment on mission and a more fulfilling work environment.

Elephants use purpose to get press and raise awareness

In a moment when so much of new tech is met with skepticism, especially from the mainstream press, it’s increasingly crucial for founders to tie their product and purpose to something that actually matters in the world. Companies and products that touch on disinformation, mental health, inequality, the U.S. healthcare crisis, or global warming – even indirectly – will have a better avenue through which to build awareness and earn media more organically. On the flipside, consumers and the press are increasingly eager to “cancel” or take down projects that make mistakes or do something that doesn’t align with their values. A strong foundation of purpose-driven storytelling gives companies something to stand on.

💼 Case study: Humans Anonymous 

Humans Anonymous is a mental health company that’s creating virtual community spaces in response to the loneliness epidemic. Members support each other in anonymous audio spaces where they share their experiences on isolation, relationships, anxiety, ADHD and more. (The app was an overnight success, ranking #1 in Health and Fitness on the App Store on its first day live.) Humans Anonymous is grounded in a deep and explicit sense of purpose, which the founding team established on TikTok the year prior to launch. This approach has been hugely beneficial in securing top talent and advisors too! A solution as simple as anonymous audio spaces for mental health created by a founder-influencer certainly doesn’t fit the mold of VC-backable. Still, through its commitment to purpose and novel storytelling strategies, Humans Anonymous has found extraordinary product-market fit: members spend an average of 1.2 hours in the app per day.

Trait 3: Build in Public

Where unicorns hoard information and IP, elephants build in public, establishing deeper trust with partners, employees, and customers through their storytelling. Instead of viewing the rest of the players in their space as competition, Elephants know that a stronger herd means everyone going farther. Elephant founders don’t keep the stories of their companies to themselves — they share them publicly because they recognize these stories are part of creating something bigger than themselves.

Elephants are led by public-facing founders 

And the more they share about their journey, the more they become a magnet for customers, partners, and talent. Doing so builds trust and accountability among all parties involved. Increasingly, customers want to know about the human (and humans) behind the products they are voting for with their wallets.

Public storytelling galvanizes community and reinforces the moat

In an era where (almost) anyone can build anything, it’s not always tech that will prove the key differentiator – it’s community. Of course, there are downsides to sharing your entire product strategy and company journey publicly: most notably, copycats. But when founders build a substantive, personal connection to their communities through public storytelling, it doesn’t matter how many copycats emerge – they’ll struggle to cultivate the same kind of loyalty.

💼 Case Study: The Browser Company

Josh Miller from The Browser Company is a great example of a public-facing founder whose transparency has become a magnet for customers, investors, and everyone in between. He’ll share public video messages about the product roadmap, insights on new features, and what is and isn’t going well.

This commitment to transparency and building in public runs in parallel to their purpose of building a better and more soulful internet. Josh’s brand, The Browser Company’s brand, and this common mission all build on one another.

In search of elephants

At Park Rangers Capital, we believe that the startups that define the next chapter in tech will be elephants, not unicorns. At the highest level, these companies will turn their customers into members and their companies into communities. And they’ll be led by an elephant founder who leverages purpose and public storytelling to turn their brand into a magnet.

Critically, elephant founders are community builders, just as much as they are founders. And that’s why Park Rangers intends to be the home and resource for community-focused entrepreneurs. It will also comprise a thriving community for like-minded investors, founders, creatives and partners. More on this in posts to come.

It’s been ten years since Aileen Lee’s brilliant piece in TechCrunch outlining unicorns and some of the trends that define them. Those unicorns have created products that shifted the ground on which other companies build – and made it a whole lot easier to become an entrepreneur. This next decade will require a different approach to business building, one where elephant companies (and the funds that back them) will be rewarded with the greatest returns.

At Park Rangers, we are always eager to connect with:

• Founders (and founders-to-be) who are on the path to building elephant startups

• Current founders who want to learn more about incorporating elephant traits into their startup

• Investors (LPs & co-investors) who believe in our thesis and want to back the next generation of elephant startups

If you’re in any of the categories above, don’t hesitate to reach out here, email me at [email protected], or DM us @parkrangerscap on all socials. We’re building a movement at Park Rangers Capital and, just like elephants, we won’t be doing it alone.