Down Goes the Unicorn

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The past couple of years in venture capital have taught us that a unicorn isn’t just a mythical animal. There has been an influx of “unicorn” startups, especially in Silicon Valley. Venture capitalist Aileen Lee coined the term in 2013 to describe a private company with a valuation of more than one billion dollars. There are reportedly more than 400 unicorn companies around the world, according to CB Insights. Airbnb, DoorDash, WeWork, and Uber are a few American unicorns that have attracted investors with their disruptive natures. The buzz and excitement surrounding unicorns have led to something of an untouchable status for these companies. However, some unicorns do not live up to their expectations. WeWork’s failed initial public offering (IPO) is a prime example of this. It convincingly sold its concept of the shared office space to investors such as SoftBank’s Masayoshi Son, who quickly bit with a couple billion dollars of investment money. While unicorn startups wow at first sight with their innovation, the hype around them quickly dies out once they become larger.

Many prized unicorns seem to impress people with their ability to infuse technology into their core business product. This kind of technological prowess attracts the attention of investors who believe that tech companies are the companies of the future. Uber, Lyft, and Slack are some of the most recent unicorns to have gone public. All three companies, post-IPO, have seen their market capitalization drop significantly from their IPO valuations, PC Mag reports. With the promise that these unicorns show, what could be the reasons for their post-IPO losses? A constant pattern with unicorns seems to be that they build up so much hype, and garner so much investment money, before they can even start scaling their products to the mass market. In addition, these companies are not able to accurately project how their products will perform in the future, especially given the disruptive nature of technology. The promise that unicorns show in the beginning is not always sustained when they get larger and go public.

The current state of unicorn companies post-IPO leads to speculation about their futures. How can these promising startups sustain the momentum they had in previous funding rounds? Before we can even answer this question, we should think about the nature of companies such as Uber and DoorDash that simultaneously compete in two different markets. For example, Uber does not seem to have the market pricing power to pay drivers less or charge riders more, so it is difficult to achieve sustainable profitability. The business models of some of these companies could be what are hurting their profitability. This lack of profitability is difficult to explain, because the services of Uber, DoorDash, and Slack are so valuable to millions of people. Since they are valuable services, we can be sure that people will continue to use them. But it might take a long time for these companies to become very profitable, if profitable at all.

            

America’s Nutritional Inequality

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Just a week ago, I was in a van for roughly thirteen hours, driving from New York to South Carolina. My job entailed helping with navigation via Google Maps. Although we stayed mainly on highways and freeways, I couldn’t help but look at the rural, seemingly poor towns we passed. As I zoomed in closer on the map, I noticed the recurring presence of McDonald’s, Burger King, Hardee’s (once we reached Virginia), and other fast-food establishments. I thought about Whole Foods and a local health food store back home called Down to Earth, and the variety of fruits, vegetables, and health products one can choose from. Whole Foods and Down to Earth would be anomalies in most rural areas, where fast-food establishments dominate. Often we find ourselves so invested in the outcomes of major domestic and international events that we fail to think about issues like nutritional inequality, an issue that even one road trip can raise.

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The False Premise of America’s Education Reform

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Although it is one of the strongest countries in the world, America has an education system that consistently underperforms compared with other developed countries. Standardized tests, which gauge basic skills such as math and reading, are a strong measure of national academic achievement. American students test far below those of countries like Singapore, China, Finland, and Japan that are known for scoring particularly well. Aware of their students’ underperformance in comparison with students in those countries, Americans mistakenly implement education reform initiatives that are expected to drive up test scores. Our frenzied focus on improving test scores results in a sort of tunnel vision that impairs education officials. They are so intent on improving a single indicator of educational quality that other, less obvious yet more important factors − teaching quality and the level of school resources, among others − are left out. Education reform efforts in America are inefficient. In attempting to improve standardized test performance, they tend to avoid  key issues that actually exacerbate larger problems.

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Europe’s Immigration Crisis: What We Can Learn From It

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Coming into the school year, I was only somewhat aware of the immigration and refugee crisis spreading all over Europe. It was not until my Introduction to Public Policy class that I really got a grasp of the surrounding issues. The class focuses on immigration and refugee policy. A major group project in it is a policy brief on the immigration and refugee practices of a country of our choice. Many are part of the European Union (EU), which has an open borders policy. Open borders across Europe were enacted in 1985 as part of the Schengen Agreement, which did away with border checks. By now, 26 European countries have open borders. Although the idea was good in theory, EU countries could not have predicted its outcome in the years to come.

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