Unicorns and Search Satyrs
January 23, 2015
I read with considerable amusement “The Age of Unicorns.” The notion that in the last 12 months or so, we have entered an “age” is pretty darned silly. Toss in the unicorn, and we have the makings of a slam bam, Manhattan analytic levitation.
The premise of the story is that $1 billion valuations are everywhere. I assume that the mythical $1 billion, backed by very real bucks from rich folks and wild eyed VCs, are the unicorns.
A “real” unicorn and a female venture capitalist. Image source: http://wallpapersinhq.com/79414-white_unicorn/
The Time Warner wizards report:
Today the technology industry is crowded with billion-dollar startups. When Cowboy Ventures founder Aileen Lee coined the term unicorn as a label for such corporate creatures in a November 2013 TechCrunch blog post, just 39 of the past decade’s VC-backed U.S. software startups had topped the $1 billion valuation mark.
The list of the identified unicorns is located at this link. (Relax before browsing this Fortune list. The presentation is designed to boost dwell time and make the user experience similar to visiting a Time Warner cable storefront. I assume the list has 63 companies. If there were more, I couldn’t figure out how to coax the Time Warner/Fortune to display more items. Wow, this was like waiting for the Time Warner cable guy to arrive.)
I identified a handful of search satyrs. In my mind, these are not true unicorns. The search satyr is a breed apart, smaller than the average unicorn, and probably more promiscuous because with each marketing opportunity, the search satyrs behave like chameleons munching peyote buttons.
Search satyrs closing deals for customer support, data management, Big Data (whatever that is), search, content processing, etc. Promiscuous solutions?
My short list includes:
Palantir, which is described as a member of the sector “Big Data”
- Actifio, also pegged as “Big Data”
- MongoDB, which is a member of the sector “database software”
- Sogou, which isthe only occupant of the “search engine” category
What I found interesting is that each of these companies handles big data (whatever that actually means). Each of the companies rely on a database. And each of the companies includes findability tools with their “solution,” “framework,” “product,” or “service.”
In short, these are search satyrs, ready to have a go at any information challenge that has cash and is impressionable to PowerPoints, generalizations, and assorted stories about return on investment, improving an organization’s operation, and solving problems that other firms have found intractable.
In short, these companies are quite a bit alike, but each is positioned in a way that appears to set them apart from their competitors.
- Actifio, for example, manages data. Dassault, a company that owns Exalead, relies of Actifio. With Actifio, Dassault becomes a single data platform. I thought that Exalead provided this type of functionality when I learned about the use of Exalead to manage a global logistics company disparate apps and data. Oh, well.
- MongoDB, which is an open source project, is a repackager and services play. The idea is to become the RedHat of information management. You can watch a video about the text search function included in the data management system here.
- Sogou is Chinese for search dog, not search satyr, but I prefer my translation. The idea is that Sogou is supposed to be a Google killer, presumably more robust than Jike.com which went dark not long ago. Sogue is leaner and meaner than Baidu, the present champ for Web search and assorted oddities included in the index. Will Google rebuild a bridge to China? If the answer is no, maybe Sogou will be a Bigger Dog.
Several observations:
Which of these outfits is likely to generate a payback to their investors? My hunch is that none unless there is some exogenous factor that arrives from an orbit near Jupiter’s.
Which of these outfits will generate a sustainable revenue flow that obviates the need for additional infusions of capital over the next 12 to 18 months? My view is that none of these outfits will pull this off. Again a Drucker discontinuity might save the day, but that strikes me as tough to bet on.
Which of these outfits will displace one of the major players now dominating their business sector? From the hollow here in rural Kentucky, I would edge toward this answer, I would assert, “I am not sure.” Excellence and big money are not locked like protein pairs.
Why, then, are information access systems getting these billion dollar valuations? The short answer is verbal hypnotism, spreadsheet fever, and MBA magic that whips up billions in fantasy revenue before breakfast.
Does my somewhat cautious view jibe with the panting of the Fortune hunters?
Nah. Modern high tech magic is tossing around fairy dust the way TV talking heads output viewpoints.
Stephen E Arnold, January 24, 2015
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