Recently, I took a breather in the United Kingdom (UK) for a few weeks, midway through the spring conference season that we often complain about but secretly really enjoy. Each conference season—both those in spring and autumn—bring with it a new raft of tropes. You would have seen these from previous years, I’m sure, such as the video of the small child trying to swipe across a page in a magazine, as it would a tablet (for your information, shouting out, “It’s because kids are stupid,” gets you really dirty looks from other audience members). This year, a common one has been citing, “Airbnb owns no hotels; Uber owns no taxis: This is the new economy everyone.

Now, I have a bit of a track record with this "new economy," I’ll admit, but here’s a quick quiz question for you: InterContinental Hotels Group (IHG) is better known to most as the company that operates not only that eponymous hotel brand but also Kimpton, Crowne Plaza, Holiday Inn (and sub-brands), Staybridge Suites, Hotel Indigo and a few others I cannot be bothered to type out. So given that, how many hotels in total does IHG own or even hold leases on? As of its 2014 annual report, nine.

Another—much older—trope has been around citing the Fortune 500 "turnover" as a symptom of how much an economy can shift over time. Take a random year, and compare a selection of names that are no longer on the list with those newer entrants currently listed (use whichever companies suits your argument), and you’ve got yourself a PowerPoint slide right there. Author Jim Collins’s 2008 article "The Secret of Enduring Greatness" is a great example of how to get the nuance of this argument correct, not least noting the 1994 change to the criteria for the Fortune 500 listing to include service companies, adding the likes of McDonald's and Walmart and dumping 291 previous members (over 58%) of the club in the process. Many other original members of the 1955 F500 list—Amoco, Chrysler, Collins Radio—continue today, having been acquired by other conglomerates in the intervening years.

Often repeated in 2015 has been the term "unicorns." Unicorns in the context of this discussion are not the horned horses of myth but venture capital(VC)-backed startups with a nominal valuation north of one billion dollars (and, as we know with pre-initial public offering (IPO) valuations, just about as mythical as their namesakes).

Dave McClure, one of the founders of tech investment firm 500 Startups, recently published a somewhat hyperbolic blog post entitled, "Bubble, My Ass: Some Unicorns Might Be Overvalued, But All Dinosaurs Gonna Die." Within it, he argues that the discussion shouldn't be whether those unicorns are overvalued, instead, we should “expect most S&P 500 Dinosaurs to be disrupted and destroyed by an endless march of VC-funded Unicorns that will bash their tiny little reptile brains in with software and internet marketing.” Perhaps the word "somewhat" ahead of hyperbolic was a little redundant, now I come to think of it.

What exactly a dinosaur looks like in the eyes of McClure is unclear. Is IBM a dinosaur? Is Microsoft? I’m betting IHG would be (with its 2014 operating profit of $651 million on revenues of $1.8 billion, with current market capitalization of over $9.5 billion). Again, others, including me, have a different view of a potential bubble, which is more centered on the human risk that many businesses are taking.

There is little doubt that some of the discussed (and much hyped) startups that predominate the current tech news editorial cycles will grow into successful, profitable businesses. Maybe one might make the F500 at some stage; some will see their success lead to acquisition, while others will see failure lead to exactly the same end. Most, maybe the majority, will not even see such a soft landing. This is not a matter of a battle between unicorns and dinosaurs (which is probably coming soon from the makers of Sharknado) but one between each's ability to traverse risk and reward in a business climate, which—just as it always has—is in a constant state of flux.

Matt Mullen is a senior analyst of social business for 451 Research, where some of his primary areas of focus are digital marketing and social media technology. Follow him on Twitter @MattMullenUK.


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