Invisible Unicorns: The Billion Dollar Tech Co’s No One Talks About

Originally published on Scrappy & Strange, the Founder Collective Newsletter — Sign up here!

Last week Outcome Health raised their first round of funding—$500M at a $5B valuation—from Goldman Sachs and Google. The company, founded in 2006 by then college students Rishi Shah and Shradha Agarwal, places TVs and tablets in doctors offices which play health-oriented content and then sells the pharma ads that appear on them. Outcome Health has screens in 40,000 doctors offices, roughly 20% of US-based practices, and works with 100 partners to produce content. Bootstrapped and debt-funded for its first eleven years, this clever reinvention of the billboard business model generated $200M in 2016 revenue with 100% YoY growth.

Moreover, the company is part of an even smaller group of billion dollar tech startups co-founded by women. With this financing, Shradha Agarwal joins the elite ranks of Sandy Lerner at Cisco, Judith Faulkner at Epic, Lynda Weinman of Lynda.com, Julia Hartz of Eventbrite, Adi Tartarko of Houzz, and Jessica Alba of Honest Co.

Despite this astonishing success and newsworthiness of their achievements, there has been very little written about the company outside of its hometown Chicago media. Even the half billion dollar financing was little noted in the startup/tech press — no stories about it were published by TechCrunch, Recode, VentureBeat, or Wired — though Alex Konrad from Forbes wrote a great profile. In fact, there has been almost no tech coverage on this extraordinary company (even using its prior name, Context Media) for the last decade.

To put this fundraising in perspective, Outcome Health’s $5.5B post-money valuation would make it the 245th most valuable company in the NASDAQ’s ~3,300 company index, larger than Dunkin Donuts or TripAdvisor and just a skosh smaller than Staples. It would be the 21st most valuable company on the Wall Street Journal’s list of billion dollar startups. Hardly anyone is talking about it. That leads to a few interesting questions:

How many billion dollar startups are out there, under the radar?

Why has the company gone undetected by the press for over a decade?

More importantly, what can funded startups learn from them?

Disney Combines Nostalgia & Tech

Disney’s research group has developed a technique called “computational thermoforming” which combines 3-D printing, graphical displacement mapping, and vacuum forming to create a new method of building movie props. These techniques are all 30+ years old, but combined, create something entirely new. This is a good reminder that new perspectives can be as useful as new technologies.

Other Weirdness from Around the Web

• A pair of designers has earned $1.9M reissuing graphics standards manuals and selling them on Kickstarter. [FastCoDesign]
• “Monkeylectric does $1M in sales annually. There is the Xmas rush and in summer, the Burning Man bump.” [The New York Times]
• A sponge on a string may replace endoscopies as the easiest way to test for esophogeal cancer. [The Telegraph]
• One in five people on YouTube watch unboxing videos. Literally, people opening boxes. [Fortune]
• Teenager earns $350,000 building a bot that helps people order limited edition Supreme clothing online. [Wired]
• MIT is hard at work developing shapeshifting pasta. [FastCoDesign]

Founder Collective News

Don’t Get Seduced by GMV

Micah Rosenbloom explains why founders should be careful about using GMV (Gross Merchandise Value) as a core metric. An excerpt:

Once a startup takes VC, the pressure to grow leads founders to rely on loose metrics and to ignore proving or to fix core fundamentals. Some blame VCs, other entrepreneurs. I blame human nature. We’re all motivated by progress, and we feel that more people, more sales, more venture money is indicative of progress.

Startups must be mindful of the difference between activity and progress. I’ve seen GMV (Gross Merchandise Value) become the metric of success, but in reality, it’s a measure of market activity, not necessarily a sound business. If you’re raising money solely based on GMV growth, there’s a likelihood of burning out before core problems are fixed, as I experienced as Handshake flamed out in 2000.

Ph.D. to CEO

Founder Collective has the great fortune of having an office between two of the greatest research institutions on the planet, Harvard and MIT. We want to help more Ph.D.s become CEOs, so we’ve started a series of posts that begins with an interview of Accion Systems co-founder/CEO Natalya Bailey, who explains how she went from a lab at MIT to launching a satellite propulsion company in under a year.

Portfolio News

• Buzzfeed gave Bloomberg a backstage pass for their expanding video empire [Bloomberg]
• Lorem raised $1.1M to connect small businesses and web developers for quick assistance [TechCrunch]
• Kaggle, the leading data science community, announced its millionth member [Kaggle]
• Formlabs announced a new SLS-based 3-D printer, the Fuse 1, and a robot factory called the Form Cell. [Formlabs]
• Tulip, the app platform for manufacturers, picks up $13M from NEA [TechCrunch]
• Andela expands from Nigeria to Uganda, with backing from Chan/Zuckerberg [WiredUK]
• Sudden Coffee has released a new flavor based on famed font, Helvetica [FastCoDesign]