Should we be scared? According to CB insights we should be, for there are 111 unicorns with a total Cumulative Valuation of $404 billion dollars. That’s a lot of money invested in highly speculative ventures.

However, not everyone thinks that we are headed in a crash. Patrick Enright from Fundweb acknowledges unicorns, but thinks that the better organized ones can hold their ground.

“Other ‘unicorns’ share the same characteristics as decacorns but are valued at less than $1bn, and are beginning to challenge the status quo in industries such as mobile payments, social media and drug discovery.”

I think it’s important to consider both sides of the equation, although it’s clear that the race to fund the next big idea is on, that excitement is blinding some to much needed business planning.

“The race to find the next Facebook is driving many on the Sand Hill Road to write outrageous checks for unsubstantiated concepts. Metrics like operating margins, break-even points and future cash flows seem to have taken a back seat.”

Sound familiar? During the dotcom crash, similar buzzwords such as networking, tailored web experience, new paradigm and other examples of empty catchphrases bombarded the media and investors with an insatiable hunger for more.

The economic landscape really has changed since the dotcom era. It turns out that technology is helping entrepreneurs disrupt industries to utilize resources never dreamed profitable before (Airbnb, Etsy). Amongst the unicorns are actual work horses building significant businesses backed by VC’s but also fueled by hardworking founders and employees. If you’ve ever worked in a startup before you know that it’s a gamble. And if you don’t gamble, you can’t win. So, to have the best chances of success, entrepreneurs need to deliver real customer value. If not, their marketplaces will burst.