Wharton@Work

July 2020 | 

The Unicorn’s Shadow

The Unicorn’s Shadow: Combating the Dangerous Myths that Hold Back Startups, Founders, and Investors

The most successful startups are those founded by twenty-something, introverted, male, techie geniuses who toil 24/7 in their basements before making it big. Right? Wrong, says Wharton professor Ethan Mollick, whose research focuses on innovation and entrepreneurship. In his new data-driven book The Unicorn’s Shadow: Combating the Dangerous Myths that Hold Back Startups, Founders, and Investors, he dispels the widely held notions about startups that have “outsize influence over founders and the public.” Evidence shows that you not only don’t have to follow them, but you probably shouldn’t even try. “The stories we carry around about startups hold back founders, investors, and entrepreneurship in general,” he writes.

Those stories don’t end with the type of person best suited to found a successful startup, but wind their way through the entire process, from coming up with ideas to funding, from pitching to growing a business. In each chapter, Mollick offers solid advice grounded in “evidence-based entrepreneurship” for founders at every stage, wannabe founders, and investors trying to ID the next Facebook at its earliest possible phase.

One startup myth Mollick takes on is the need for a passionate pitch. Research shows it all depends on who you’re pitching to. Think of the flashy, visionary presentations on TV’s Shark Tank. Sure, the show’s directors are creating theater — and gunning for ratings — but dramatic pitches like the ones on the show, delivered to “an audience of professional investors,” are “likely to lose to a more boring, more organized speech.” Mollick turns that advice around, though, for founders pitching to amateur investors and angel investors who want to “see signs that the founder is excited about his or her company and are more likely to be swayed by charisma.”

But successful pitching goes well beyond the passion-or-no-passion distinction. Mollick, who teaches a variety of entrepreneurship classes to MBAs and executives in programs including Scaling Ventures: Developing the Playbook for Profitable Growth, offers rhetorical strategies, tips for creating a pitch deck (they average 19 slides and cover 10 categories), the stories that investors best respond to, and how to choose a logo and a name for your company and its website. It’s this kind of specific, research-based advice that sets the book apart.

Getting out from the shadow of the unicorn — using an evidence- rather than myth-based approach to entrepreneurship — isn’t just a good idea for startup founders and their investors, though. Entrepreneurship benefits society as a whole, driving economic growth, generating new wealth, providing jobs, and strengthening community development. But, cautions Mollick, the fact that the myths are so pervasive means even when founders use every tool in his book, they must still be aware of the myths and even “play into them where possible. Use the tools in the book, and the tools you will learn as a founder, to match the expectations of the monomyth where you can, while pushing the boundaries in areas that matter to you.”