Cockroach Startups vs Unicorns: Survival or Spectacle?

Vasundhra Tewari

| 2025-09-26 | Industry & Events

The startup landscape is obsessed with unicorns, those flashy companies chasing the ‘billion-dollar dream’. But in reality, there are only a few that hit the mark, and the rest are just chasing a not-to-happen dream. In the midst of the Unicorn obsession, a metaphorical startup type emerged called as Cockroach Startup that focuses on resilience, often bootstrapped, and can survive market crashes, funding winters, and downturns, just like cockroaches.

Spectacle vs Survival: The Gist

Unicorn Startups = Spectacle

Rare, glamorous, and celebrated
Dominate headlines, symbolize ambition, and attract massive attention
Defined by billion-dollar valuations, huge VC funding, and rapid growth
Fragile in downturns, survival depends on constant funding and high-risk scaling

Cockroach Startups = Survival

Tough, lean, and built for resilience
Focus on profitability and cash flow from day one
Often, bootstrapped or run with minimal funding
Not glamorous, but can outlast market crashes, funding winters, and downturns
Made to thrive in tough times

Unicorns vs Cockroaches: The Comparison

Aspect	Unicorn-First Model	Cockroach Model
Growth speed	Very high; often aggressive scaling, even if not profitable	More measured, gradual
Dependency on investment	Very high; many rounds needed before profit	Lower; often bootstrap or minimal external funding early on
Risk in downturns	High burn rates, fixed costs, and scaling costs cause vulnerability	Lower lean operations, focus on margins, safety nets
Visibility & hype	Very high; often media attention, investor attention	Lower public glory, but more sustainable reputation building
Exit or valuation upside	Possible big payoff, but also high risk	More modest but steadier; less volatile

Why Unicorns Are Fading?

A Change in Investor Priorities

Previously, the investors were more focused on chasing massive TAM figures, but now the old “growth at any cost” playbook is losing ground. In the present scenario, the venture capitalists are inclined towards knowing the unit economics, profitability, operating efficiency, and cash burn.

This is why the lean and sustainable business models are getting more attention than before, fading the Unicorn ones, and that’s how the new startups are focusing on becoming more resilient.

Macro Risks & Funding Winters

Macro risks like global inflation, war breakout between nations, rising interest rates, and shaky capital markets have made investors far more cautious. This shift has cooled the flow of easy money into startups.

IPO Blues and Falling Valuations

Many prominent unicorn startups that went public or were revalued have struggled to deliver. From weak IPOs to falling valuations, mounting losses, and downward revisions have shaken confidence. These serve as a reminder that big numbers on paper don’t always mean real profits.

Why Cockroach Startups are Rising?

Thrive When Funding Dries

During the funding winter when the venture capital slows down, startups that have been frugal and disciplined from the very beginning are in a stronger position. Instead of depending on large cash infusions to keep growing, they learn to make the most of limited resources, control expenses, and generate steady revenue.

The Bootstrap Culture

Many founders today prefer to start small and keep control of their businesses rather than chase big rounds of funding. By working with limited capital, they’re forced to stay disciplined, build only what’s necessary, and focus on generating cash flow early.

Strong Foundation to Multifold Growth

These startups might not grow at lightning speed, but they lay down solid foundations. By taking this steady approach, they open the door to multiple stages of growth and create businesses that are built to last.

Other factors:

Investor mindset shift
Economic uncertainty
Unicorn struggles

Top Indian Cockroach Startups

Zoho

Launched in 1996, this startup was completely bootstrapped. It avoided big VC funding and grew steadily by reinvesting profits.

Zerodha

Founded in 2010, it was bootstrapped and was profitable from the early days, keeping costs low with a tech-first model. This startup didn’t chase vanity valuations, but focused on customer trust and scale.

Zo Rooms

It’s often cited in contrast to show the cockroach vs unicorn model to its competitor, OYO rooms. While the latter startup went the unicorn way with massive VC funds, Zo Rooms kept lean operations.

IndianMART

Launched in 1996, this startup bootstrapped for 13 years before its first funding in 2009. Later became a profitable B2B marketplace and IPO in 2019. The best example of how keeping expenses low and focusing on SMEs can give long-term growth.

Info Edge (Naukri.com, Jeevansathi, 99acres)

This startup was founded in 1995, but built patiently over decades. It has also survived the dotcom bust. Their profitable core was Naukri.com, which funded the other ventures.

The unicorn model may look spectacular, but it often struggles to hold up over time. However, the Cockroach startups rely on resilience, lean operations, and a focus on survival, which gives them a better chance of lasting in the long run.

With global uncertainty and tighter funding, the real value lies in building startups that can withstand shocks. The lesson for many founders is clear: it’s better to be a cockroach that survives than a unicorn that burns out early.