Macron’s 25 unicorns, a dangerous charm?

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Macron’s 25 unicorns, a dangerous charm?


A unicorn is a new technology company, not listed on the stock exchange and valued at over a billion dollars. Today there are 26 in France, the best known of which are Back Market, Qonto, Doctolib and Lydia. At the international level it is still very little (according to the census methods, in the world they would be between 650 and 1,000), but the dynamic is proving exponential: there were only 12 French unicorns in 2021 and only 3 in 2020.

France seems to be attracting more and more large foreign financiers able to invest 50, 100 or 200 million euros in a start-up. The President of the Republic had set, in 2019, the goal of 25 French unicorns by 2025, a goal therefore reached, and even exceeded 3 years before the deadline.

While his five-year term remains firmly tied to the French “start-up nation” and French technology, this movement towards entrepreneurship began much longer ago, since the late 1990s, under the impetus of public policies aimed at project France into what was then called the “new economy”. Silicon Valley was the absolute model and it seems to have remained that way.

The business press is delighted with this birth record, but some discordant voices are also being heard. And our works are among those that invite us to moderate the prevailing enthusiasm. Indeed, their findings suggest that growth over-priority is an injunction that doesn’t work for most entrepreneurs.

grow or die

Because in addition to their stratospheric valuation, unicorns have in common the activity of fundraising with revenge even though they have not (generally) reached any break-even point. In other words, they are overgrowing, have a constant need for new capital, “burn money” according to the established expression, and are rarely profitable.

A recent Uber miniseries illustrates this perfectly, especially in a scene where co-founder Travis Kalanick asks his investment partner for millions again a few months after receiving a certain number. Their shared motto is “Grow or die”. The request receives a positive response.

They apply the following logic: in a new market space (Uber has created a new market), there will be a unicorn. We must therefore focus on the right one and hold on. It is a “winner takes all” strategy and investors are in “high risk, high reward” mode.


In his speech of 2019 as well as in that of this year, Emmanuel Macron explains that there is a “battle for sovereignty” there. The idea is that if France fails to build champions in sectors of the future like digital or artificial intelligence, its choices will be dictated by others.

It is true that we are far behind in this area. Deep tech, for example, these start-ups offering products or services based on groundbreaking innovations, receive very little support in France. Their research and development cycles, being particularly long, have even higher funding needs than other start-ups. And these massive investments are more made in France than American and Japanese funds.

Emmanuel Macron explains that the ambition is to irrigate the entire economy, in particular by creating direct and indirect jobs. Data from the report published in October 2021 by France Strategy also seem to corroborate this statement.

What is also interesting is that these unicorns can allow us to retain our talents, these engineers, for example, who cannot find sufficiently ambitious and cutting-edge projects in France and who move abroad. There is also in these unicorns the hope that they will be the bridgeheads, the animators, the leaders of ecosystems that we miss terribly. In his recent speech, the president states: “French Tech is obviously not just unicorns, but I see them in a sense as examples, models for the whole ecosystem”.

Unicorns or black swans?

However, the image is not so idyllic. Seeking technological sovereignty, or wanting to create jobs, is a laudable goal, but the excessive mediatization of unicorns also has negative impacts.

Two American sociologists of organizations, Howard Aldrich and Martin Ruef, strongly criticize the hunt for “black swans” in the business world in a recent article. They use the expression in reference to statistician Nassim Taleb who explains that there are some random and rare events which, if they occur, have far-reaching and exceptional consequences.

GAFAM, BATX or other NATUs… the two researchers show that they are really black swans: extremely rare and unpredictable. Yet the scientific community, like the media, devotes the vast majority of its resources to them.

All this at the expense of what constitutes 99.99% of entrepreneurship, that is, companies that do not have all of this but still make the economy work. It is in this sense that some entrepreneurs express themselves to explain that their companies are not unicorns and that they are not trying to become one.

You also need to understand that putting growth before profitability is the best way to go bankrupt. This is what we have shown on a sample made up of almost 40% of European SMEs.

Diametrically opposite

Different statistical estimation methods lead to the same result: the companies that achieve the most success, that is, that combine both strong growth and strong profitability, are very often those who have bet on profitability rather than growth. In other words, being successful at date T is more likely when strong profitability occurs at T-1 than when strong growth occurs at T-1. Thanks to data on 8 years of depth of field, we even observe a form of dependence on the initially chosen strategy.

This is diametrically opposed to the unicorn philosophy which nevertheless irrigates all aspects of the entrepreneurial ecosystem. Public policy as teacher-researcher in management puts growth on a pedestal. However, the vast majority of entrepreneurs do not share this ambition.

Other works also invite us to look at the unicorn model with suspicion, both because we overestimate their contribution to employment and because we forget the impact of growth strategies on the company’s chances of survival. In fact, in France, start-ups that have raised funds represent only 2.67% of all jobs created by start-ups. And many of the unicorns are downgraded like WeWork or even die like the Quibi streaming platform.

These unrealistic models of entrepreneurial success can also induce a number of particularly harmful behaviors. The obsession with growth and the pressure of various stakeholders, especially lenders, foster irresponsible opportunism. This has been seen in scandals such as Theranos, whose former leader, Elizabeth Holmes, was recently convicted.

Finally, there is a call to go further: some would even like to transform our unicorns into “dragons”. But we cannot continue to impose this kind of ambition on all entrepreneurs. It is also a question of giving due recognition to ordinary and everyday entrepreneurs.

Cyrine Ben-Hafaïedh, Professor of Entrepreneurship, Innovation and Strategy, IESEG School of Management and Anaïs Hamelin, University Professor of Management Sciences at Sciences Po Strasbourg and EM Strasbourg, University of Strasbourg.

This article was republished by The Conversation under a Creative Commons license. Read the original article.

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