What are "Zebra Companies" that aim to balance social contribution and profit pursuit? Explaining their emergence and differences from unicorn companies.

A "Zebra Company" refers to a business that operates with the dual aim of generating profits while contributing to the creation of a better society. We will explain the fundamental background behind the recent increase in such companies and consider key points for achieving both social contribution and profit pursuit, not limited to Zebra Companies.

Zebra Companies Aim to Balance Social Contribution and Profit Pursuit

Zebra companies are businesses that strive to balance solving social issues with sustainable management. Previously, startups known as "unicorn companies," which rapidly expanded by generating enormous profits in a short time, captured the public's attention. While it's natural for companies to seek business expansion, an excessive focus on profit can lead to problems. Concerned by a societal trend unconditionally praising unicorns, four American female entrepreneurs proposed the concept of "Zebra Companies" in 2017. The Zebra company community "Zebras Unite" has expanded globally, with "Tokyo Zebras Unite" established in Japan in 2019.

Zebra companies are characterized by valuing mutual support and coexistence as a collective or herd. They prioritize not only their own profits but also social contribution and growth within sustainable limits. They were likened to the "zebra" (striped horse), which possesses both white and black, because they strive to balance two seemingly conflicting objectives: "corporate profit" and "social contribution."

Unicorn companies pursue their own profits and achieve rapid growth

While Zebra companies emerged as a new concept to counter Unicorn companies, the term "Unicorn company" itself was coined in 2013 by American venture capitalist Aileen Lee. It describes rapidly growing venture companies valued at over $1 billion, likening them to mythical creatures due to their rarity. At the time, only a handful of companies were called unicorns. However, data released in October 2021 by the American research firm CB Insights indicates that the number of unicorn companies worldwide has now reached over 800.

Generally, a unicorn company refers to a business meeting the criteria of being "founded within the last 10 years," "valued at $1 billion or more," and "not publicly listed." Companies valued at $10 billion or more are sometimes called "decacorns," and those valued at $100 billion or more are called "hectocorns." While unicorns pursue profits and rapidly expand their businesses, zebras emerged from a philosophy that carefully considers the role companies play in society and aims for sustainable prosperity.

While unicorns fundamentally aim for monopoly or oligopoly and employ various means to expand their business scale, zebra companies prioritize sharing the profits and resources they generate with stakeholders—such as customers, employees, and shareholders—rather than competing with other firms. Much like zebras living in herds, they are entities that help and coexist with each other. This approach, aiming for "mutual benefit and coexistence," is also why they are called zebra companies.

The New Business Model Pursued by "Zebra Companies" Domestically and Abroad

So, what exactly does the business of a Zebra company look like?

Operating platforms that support creators

For example, a crowdfunding company often cited as a leading example of a zebra company overseas has created a system enabling creators like video producers and musicians to freely pursue their creative activities. It does this by gathering supporters who can then tip the creators.

Selling apparel and goods that showcase the appeal of developing countries

In Japan, there are companies selling apparel and goods manufactured in local factories to support the development of developing countries. By not only creating local employment but also aiming for production that maximally respects materials and methods suited to the country or region, they communicate the appeal of developing countries.

Aiming for Environmental Conservation and Regional Development through Effective Sea Urchin Utilization

Some Japanese companies are working to simultaneously achieve marine environmental conservation and regional economic development. By farming emaciated sea urchins, which devour seaweed, and utilizing them as a high-end ingredient, they not only maintain a healthy marine ecosystem but also contribute to local fisheries and economic development.

Supporting entrepreneurs tackling social challenges

Companies engaged in social businesses tackling issues like poverty and environmental problems support entrepreneurs striving to solve global challenges—from environmental issues to discrimination, prejudice, and poverty—under the theme "Changing the World Through Social Business." They actively combat global warming by operating with renewable energy and using refurbished computers.

What these companies share is that while aiming to solve social issues, they do not rely on donations but instead establish themselves as sustainable businesses that generate profits. Rather than casually jumping on trends or being swayed by social currents for short-term sales gains, they carefully consider the societal impact of their ventures. They develop products and services with a long-term perspective. Furthermore, they go beyond solely pursuing their own profits; by collaborating with other companies and local communities, they create new value. This approach earns them recognition from customers and shareholders alike.

While unicorns charging ahead at breakneck speed tend to grab the spotlight, it is precisely because zebras live in herds that they can coexist, leverage each other's skills and resources, and create new business opportunities. The presence of zebra companies is likely to grow across various fields in the future.

As companies are increasingly expected to contribute to society, zebra companies are gaining greater attention.

One reason zebra companies are gaining attention is the growing demand for sustainable social development, exemplified by the rise of the SDGs in recent years. There is a growing tendency to demand that companies not only deliver convenient products and services but also play a role in contributing to society. Indeed, it is said that more consumers are basing their purchasing decisions on a company's philosophy and attitude towards society. Furthermore, "ESG investing" – investment activities that prioritize not only a company's financial health but also its consideration of Environmental, Social, and Governance factors – is also expanding.

Given this context, it seems necessary for all businesses, not just zebra companies, to consider not only expanding their scale and pursuing economic returns, but also how they can contribute to society through their operations and achieve mutual prosperity with stakeholders. The zebra company mindset and management style will likely gain even more attention going forward.

The spread of COVID-19 and repeated natural disasters have prompted a global reevaluation of traditional values and norms. Amidst this, it may be necessary to reconsider what our businesses truly aim to achieve, what social mission we should undertake, and what impact we wish to make. The philosophies and business models of Zebra companies, which confront various social challenges and put them into practice from a corporate perspective, can provide a starting point for such reflection.

While pursuing profit remains crucial for any company, the social stance and philosophy of coexistence and symbiosis exemplified by Zebra companies is expected to be increasingly sought after across diverse fields. Their initiatives may offer valuable insights.