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Camel vs unicorn startups: what is the difference and which business model to take

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startups (photo: iProUP)

The pandemic It broke schemes, marked a turning point for all humanity and taught people that everything can change from one day to the next. This disruptive phenomenon also generated a paradigm shift in the ecosystem of startup, which requires a new type of company in a context of recession and post-pandemic uncertainty.

In this stage, the new generation of startups should aspire to be a camel instead of a unicorn, as defined by global venture investor, Alex Lazarow; likewise, one must think about developing a resilient, prudent structure, designed for the long term and with a business model based on the customer needs.

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Given the lack of venture capital financing, these startups must be able to cross the desert and survive for a long time without food or water, like a camel. Their ability to manage their resources efficiently will allow them to stay afloat.

Difference between a unicorn and a camel in startups

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Unlike unicorns, who prioritize growth over revenue generation, the camels will seek a balance between their growth and the flow of income to ensure sustainable developmenta trait that they appreciate in a context of global uncertainty for the most cautious investors that makes them opt for a less attractive risk.

Although resilience and the ability to survive in adverse conditions are part of the DNA of companies in developing countries Latin Americansin an increasingly complex context, atomizing risk is key and a priority.

In that sense, regionalization is inevitable trying to overcome some limitations such as the size of the Latin American market and the unpredictability of macroeconomic variables. Entering new markets will allow the company to grow and diversify risks to maintain operations.

But when you’re faced with crafting a regional expansion strategy, it primarily means you’re faced with questions like, What type of company am I and how will I do it? How to manage my human and financial resources?

Camel vs unicorn startups. (photo: Infochannel)
Camel vs unicorn startups. (photo: Infochannel)

What to do if there is a camel startup

To minimize the risk associated with any expansion process, it is important to anticipate and project various opportunity scenarios, such as the possibility of working closely with local companies within the framework of a collaborative scheme, developing business B2B or promote innovation in large corporations. In this sense, the explosion and massification of APIs is allowing companies to collaborate organically

According to data collected by Endeavor from the expansion experiences of several entrepreneurs, three main difficulties The ones they faced were:

– Hire local talent.

– Adapt the team to the local culture.

– Adapt the business model to the target market.

Given these challenges, it will be necessary study in depth the country in which you are going to land and accepting it with humility beyond the experience of, for example, the place of origin, regionalization requires close attention to the specificities of each country, and may require being able to validate the solutions again with new users.

How to expand a startup

An expansion strategy includes adapting company culture, customer service models, business and marketing strategies, and even security policies to the new market.

In addition, it will be necessary to find new suppliers and talents that adapt to the needs of the company. Know the regulatory and tax aspects before choosing a target It is another of the great challenges that startups must face to analyze before making a decision.

In this sense, as mentioned above, an alternative could be that part of the (non-strategic) proposal be enable a B2B format where the product connects through APIs to another company that is already based in this country and in this way, offer more services for its ecosystem.

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Illustration of expanding startups. (photo: BBVA ALMarket)
Illustration of expanding startups. (photo: BBVA ALMarket)

An example of a startup with a camel model

B2Chata company that centralizes sales and customer service through instant messaging, is an example of a camel model.

The company has maintained a strong and profitable business through 2021 and projects revenue of $2.7 million in 2022.

B2Chat. (photo: The Spectator)
B2Chat. (photo: The Spectator)

“We were never interested in being a unicorn, the “make it or break it”, working 24/7. We are looking for a company that is very good, that generates a lot of employment, where we all have a good job, without stopping growing and generating economic value. Of course we want to generate dividends, but our path is not to value and revalue the company and then sell it… We don’t want to be filled with investors simply to grow at all costs; growing at all costs without responsibility destroys equipment and decreases the quality of service”, he explains. Pamela Richter, co-founder and CRO of B2Chat.

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