Don't chase unicorns: why resilient "dragon" startups win

Executive overview

Startup valuations built on hype don't survive downturns. Founders chasing unicorn status make short-sighted decisions to grow at any cost.

Dragon companies — those with strong unit economics, customer loyalty, and resilience — outlast unicorns because they're built to survive, not just to raise.

Techstars CEO Maëlle Gavet draws on her experience navigating Russia's 2014 currency crisis and scaling companies across industries to offer a framework for founders operating in volatile markets.

Dragons vs. unicorns

• A unicorn is a paper valuation; most are unsupported by fundamentals
• A dragon resists economic downturns, has strong unit economics, stays loyal to its customers and mission
• Obsessing over unicorn status pushes founders toward "grow at all costs" decisions they later regret
• Dragons may not be as flashy, but they survive the battles unicorns don't

How Techstars filters signal from hype

• Invests at pre-seed — often just two people and an idea
• ~600 pre-seed investments per year across all geographies and industries
• Diversification removes FOMO-driven investment decisions
• Techstars companies are 5× more likely to reach a Series A than solo founders
• Support goes beyond capital: three-month bootcamp, hiring help, fundraising support, access to 7,000 alumni, 7,000 mentors, 20,000 investors

Framework for navigating economic crisis

• Step 1: Know your cash burn and runway — nothing else matters if you're about to run out
• If runway is 18–24 months, shift to offense: find one or two high-leverage bets
• Downturns create hiring opportunities — top talent previously locked up by big tech becomes accessible
• B2B businesses are feeling the pain first; B2C pressure is coming
• Stay agile: revaluate decisions constantly as the environment keeps shifting
• Embrace uncertainty — the ability to operate with partial information separates successful founders from the rest

Wartime CEO vs. peacetime CEO

• Wartime CEO: comfortable with uncertainty, switches between defense and offense quickly, makes big calls with incomplete data
• Peacetime CEO: maintains stable foundations, ensures processes are solid, keeps the business humming
• Neither type is superior — the match between CEO profile and business phase is what matters
• Current environment (2022–2023) is wartime

Startup vs. big-company innovation

• Zero to one is grueling; not every person is suited to it — and that's fine
• Large companies can enable entrepreneurial behavior if structured well; not all are bureaucratic dead ends
• Key question Gavet asks every prospective founder: "Are you ready to spend the next 10 years on a roller coaster for this problem?"
• If the answer is "I think I can do it in five," that's a red flag
• Less than 1% of pre-seed-funded startups succeed — set expectations accordingly

Staying focused in the trenches

• Limit priorities to two or three maximum; say no to everything else
• No one succeeds alone — lean on team, investors, and board
• Friends and family are not optional extras; they're a durability asset
• Entrepreneurship is a marathon; surround yourself with people who support both the business and the human

On diversity as investment thesis

• Techstars is not a DEI investor — it's a universal investor
• Portfolio should reflect the world because the best opportunities are in untapped potential
• Over 25% of portfolio companies led by women in recent years
• More Black and Latino founders backed by Techstars than any other investor over the past four years