What is a Zebra Company in Startups? Exploring a Sustainable Alternative

In the world of startups, the term “unicorn” has been widely recognized to describe a privately held startup company valued at over $1 billion. However, a new term, “zebra company,” has emerged in recent years, offering an alternative business model that aims to balance profitability with societal and environmental impact. These zebra companies represent a conscientious approach, guided by a double bottom line that values both fiscal growth and positive change.

Zebra companies strive to achieve quality and focus on mutually beneficial collaborations with other organizations within their sector. Their success is measured not only by their own financial gains but also by their customers’ accomplishments and the meaningful contributions they make to the communities they serve. Unlike the popular concept of unicorn startups, zebras do not prioritize rapid growth or disruption at all costs, opting instead for a sustainable and responsible development trajectory.

This fresh approach to entrepreneurship has attracted the attention of investors who understand the importance of fostering businesses that aim to alleviate social, environmental, or medical challenges, all the while maintaining their profitability. As zebra startups continue to carve a space for themselves in the startup ecosystem, they present opportunities for founders, investors, and communities to redefine success and embrace more inclusive, balanced values.

Zebra Company Vs. Unicorn Company

Characteristics of Zebra Companies

Zebra companies are defined by their double bottom line: they focus on being both profitable and working to improve society. These startups are committed to long-term goals and put sustainability at their core. They often prioritize social and environmental concerns alongside financial returns. Here are some common attributes of zebra companies:

• They seek a balance between profit and societal impact
• They emphasize collaboration over competition
• Zebra startups aim for steady, sustainable growth rather than rapid, explosive growth
• They frequently operate within established markets, carving niches for themselves rather than trying to disrupt the entire industry.

Characteristics of Unicorn Companies

Unicorn companies, in contrast, prioritize rapid growth and high profitability. These startups are called “unicorns” because they are seen as rare and extraordinary, achieving significant market disruption and impressive revenues. Some key traits of unicorn companies include:

• They prioritize rapid growth, even at the expense of profitability
• Unicorns often focus on market dominance and disruption
• They generally seek large investments to fuel their expansion
• These startups typically have valuations of over one billion dollars

While both types of startups have their own merits, it is important to remember that not all startups will fit neatly into either the zebra or unicorn category. Many will exhibit a mix of characteristics, and entrepreneurs must decide which business model best aligns with their vision and values.

Founders and Emergence of Zebra Companies

Zebra companies emerged as an alternative startup model, focusing on profitability and positive social impact. These companies aim to challenge the traditional unicorn model, which prioritizes rapid growth and high valuations, often at the expense of sustainability or the well-being of stakeholders.

The Zebra Movement can be traced back to the vision and determination of four female founders: Mara Zepeda, Jennifer Brandel, Astrid Scholz, and Aniyia Williams. Their collaboration started with an article titled “Sex and Startups,” where they voiced concerns about the consequences of the current startup mindset. This led to the creation of Zebras Unite, a movement and collective that empowers companies embracing the zebra model to band together and support one another.

Mara Zepeda is the CEO and Co-founder of Switchboard, a platform that connects communities and helps organizations foster engagement. Her perspective on zebra companies emphasizes their “black and white” nature – seeking both profit and positive impact.

Jennifer Brandel is a Co-founder and CEO of Hearken, an audience-driven framework focused on engaging communities in the journalism process. As one of the founding members of the Zebra Movement, she contributed to the development of the Zebra Manifesto, advocating for this new approach to startups.

Astrid Scholz is the founder of Sphaera, a platform that supports problem solvers in finding and sharing solutions for social, environmental, and economic challenges. Her work has been instrumental in promoting the concept of zebra companies as alternatives to unicorns, with a focus on collaboration and shared goals.

Aniyia Williams is the founder and CEO of Tinsel, a company that creates wearable technology for women. As a pivotal figure in the Zebra Movement, she emphasizes the importance of diversity, equity, and inclusion, which are defining characteristics of zebra companies.

Notable examples of zebra companies include BaseCamp, Buffer, and Clue. These organizations aim for steady growth and long-term sustainability while addressing societal needs through their products and services. The zebra model provides a concrete framework for startups that reject the notion of sacrificing values for the sake of achieving unicorn status.

Impact of Zebra Companies

On Society

Zebra companies are characterized by their focus on doing real business and addressing societal challenges. These startups prioritize sustainability and inclusivity, aiming to create a positive social impact by providing solutions for underserved markets and prioritizing employee happiness. This approach can lead to better quality products, services, and job opportunities for local communities, fostering a sense of social responsibility within the corporate world.

On Startups and Businesses

Zebra startups differ from traditional so-called “unicorn” startups by focusing on achieving profitability and demonstrating it for a while rather than aiming for rapid growth and disruption. This more sustainable and measured approach can lead to the following:

• Improved stability for employees, customers, and stakeholders
• Increased collaboration among businesses, fostering partnership opportunities and reducing cutthroat competition
• A more diversified and innovative business landscape

On Investment and Economy

While zebra companies may not attract the attention of venture capitalists, who often look for larger returns, they can find alternative sources of capital through crowdfunding, partnerships or impact investors. This can lead to a more inclusive and diverse investment landscape, including:

• Investment opportunities that prioritize social and environmental impact, in addition to financial returns
• A shift in focus from short-term gains to long-term sustainability and real value creation
• A more resilient economy due to the increased diversity of funded businesses

Overall, zebra companies bring about a more sustainable and inclusive startup landscape with a focus on improving society and creating long-lasting value. By considering a more comprehensive range of stakeholders and prioritizing collaboration, these firms contribute to a healthier, more resilient economy and society as a whole.

Business Models and Growth Strategies

Comparison of Business Models

In the startup world, there are two main types of companies: unicorn and zebra. Unicorns are startups that focus on exponential growth, aiming to achieve a valuation of $1 billion or more. They often prioritize profit and rapid expansion over other aspects like company culture, team well-being, or social impact.

On the other hand, zebra companies are:

• Driven by both profit and purpose
• Focused on solving real problems and improving society
• Committed to a sustainable business model
• Mutually beneficial to customers, employees, and stakeholders

Zebra companies strive for a balance between being profitable and pursuing a greater cause. They care about their team’s well-being, customer success, and having a positive impact on society.

Approach to Sustainable Growth

For Zebra companies, growth strategies revolve around the following:

• Sustainable business models: Zebras prioritize long-term success and financial stability, ensuring that the company can thrive without relying on a constant stream of funding.
• Problem-solving: Zebras focus on addressing genuine problems and providing value to customers, which in turn leads to organic growth.
• Creating a company culture: Zebras cultivates an environment where employees feel valued, heard, and supported, thereby improving employee retention, productivity, and overall job satisfaction.
• Fostering customer success: Zebras place customer satisfaction at the heart of their operations, with dedicated resources to ensure clients enjoy a seamless experience and derive value from the products or services provided.
• Pursuing mutualistic growth: Zebras strive for mutually beneficial relationships with partners, vendors, and stakeholders, nurturing a network for collective success.

While unicorns typically aim for rapid expansion and large profit margins, zebra companies focus on sustainable growth that benefits all parties involved. Through a balanced approach, zebras can achieve longevity in the market and build strong, lasting relationships with their customers, employees, and partners.

Key Roles and Skillsets in Zebra Companies

In zebra companies, it is crucial to have a well-rounded team to facilitate sustainable growth and impact society positively. Several key roles and skill sets are vital in achieving this balance.

• Chief Technology Officer (CTO): The CTO is primarily responsible for overseeing the company’s technology and product development. They ensure that the technical aspects of the business are in line with its core mission and vision. Key skills for a CTO include product development, innovation, technical leadership, and problem-solving.
• Chief Marketing and Sales Officer (CMO/CSO): This role involves reaching out to customers and securing their loyalty, creating marketing campaigns, and driving sales growth. A strong CMO/CSO needs skills such as marketing strategy, sales management, customer relationship management, and data analysis.
• Chief Executive Officer (CEO): The CEO plays a vital role in managing the company’s finances, investments, partnerships, and overall operations. This position demands skills in financial management, strategic planning, leadership, and communication.

As zebra company develops its products and services, it needs to focus on creating a minimum viable product (MVP). The MVP is a critical component in the early stages of a startup to test and validate the product with real users. It enables the startup to iterate and improve the product according to customer feedback, fostering a better customer experience.

Data analysis plays a pivotal role in zebra companies. It offers valuable insights into customer behavior, preferences, and outcomes. These insights can help fine-tune marketing strategies, optimize customer experience, and inform decision-making across the organization.

In summary:

Longevity and Success of Zebra Startups

Startups Failures Vs. Successes

The startup scene comprises both unicorns and zebras. While unicorns are known for their rapid growth strategies and high valuations, often exceeding $1 billion, they tend to cause societal harm and have a high rate of failure. In contrast, zebra startups focus on sustainable growth, long-term success, and creating a loyal customer base. They aim for longevity by not chasing unrealistic growth targets and instead concentrate on generating income.

Some key differences between unicorns and zebras startups are:

• Unicorns focus on rapid growth and high valuations, while zebras focus on sustainable growth and serving the real needs of customers.
• Zebras aim for a more equitable distribution of value and profits among stakeholders.
• Zebras adopt the mindset of long-term success and viability over quick exits.

Notable Zebra Startups

Several Zebra startups have demonstrated their ability to achieve longevity and success while maintaining a supportive environment for their employees and their customers. Two well-known examples are Basecamp and Mailchimp:

• Basecamp: A project management and team collaboration software company that has been in the market since 2004. It remains privately owned, operates profitably, and has a loyal customer base.
• Mailchimp: Launched in 2001, Mailchimp is an email marketing service provider that has grown organically without aggressive marketing. It remains independently owned and operates profitably.

Both Basecamp and Mailchimp exemplify the core principles of Zebra startups: focus on sustainable growth, long-term success, and creating value for customers and stakeholders.

Challenges and Opportunities in Zebra Startups

Addressing Societal and Economic Issues

Zebra startups focus on being both profitable and socially responsible. By addressing societal and economic issues, they offer an alternative to the aggressive growth-at-all-costs mindset of many unicorn companies. This approach has led to concerns about democracy and the potential negative effects of unicorns on both society and the economy. Zebra startups, in contrast, aim to create a more inclusive and sustainable business environment.

One of the primary challenges for Zebra startups is striking a balance between profit generation and social impact. To overcome this issue, they need to identify viable strategies that focus on long-term growth and deliver tangible benefits to society. Initiatives such as Zebras Unite have emerged, supporting startups that incorporate a social impact lens while also generating revenue.

Embracing Alternative Business Models

Zebra startups are increasingly exploring alternative business models that prioritize environmental, social, and governance (ESG) factors. These models often emphasize collaboration and sustainability rather than competition and rapid growth. By doing so, they can mitigate some of the negative effects traditionally associated with unicorns, such as societal harm and workforce injustices.

Some key aspects of these alternative business models include:

• Cooperative structures: Encouraging cooperation and shared ownership, which can lead to more equitable distribution of profits and decision-making power.
• Employee ownership: Implementing employee stock ownership plans (ESOPs) and other models that share wealth and control with the workforce.
• Impact investing: Attracting investors interested in supporting ventures with positive social or environmental outcomes in addition to financial returns.

Embracing these alternative models presents opportunities for zebra startups to differentiate themselves in a crowded market, gain access to dedicated investors, and create lasting value for their stakeholders. However, it also poses challenges, such as navigating regulatory frameworks and building the necessary infrastructure to support non-traditional business structures. Despite these hurdles, zebra startups have demonstrated that combining profit and purpose can lead to robust growth and positive change in the world of entrepreneurship.