The past couple of years in venture capital have taught us that a unicorn isn’t just a mythical animal. There has been an influx of “unicorn” startups, especially in Silicon Valley. Venture capitalist Aileen Lee coined the term in 2013 to describe a private company with a valuation of more than one billion dollars. There are reportedly more than 400 unicorn companies around the world, according to CB Insights. Airbnb, DoorDash, WeWork, and Uber are a few American unicorns that have attracted investors with their disruptive natures. The buzz and excitement surrounding unicorns have led to something of an untouchable status for these companies. However, some unicorns do not live up to their expectations. WeWork’s failed initial public offering (IPO) is a prime example of this. It convincingly sold its concept of the shared office space to investors such as SoftBank’s Masayoshi Son, who quickly bit with a couple billion dollars of investment money. While unicorn startups wow at first sight with their innovation, the hype around them quickly dies out once they become larger.

Many prized unicorns seem to impress people with their ability to infuse technology into their core business product. This kind of technological prowess attracts the attention of investors who believe that tech companies are the companies of the future. Uber, Lyft, and Slack are some of the most recent unicorns to have gone public. All three companies, post-IPO, have seen their market capitalization drop significantly from their IPO valuations, PC Mag reports. With the promise that these unicorns show, what could be the reasons for their post-IPO losses? A constant pattern with unicorns seems to be that they build up so much hype, and garner so much investment money, before they can even start scaling their products to the mass market. In addition, these companies are not able to accurately project how their products will perform in the future, especially given the disruptive nature of technology. The promise that unicorns show in the beginning is not always sustained when they get larger and go public.

The current state of unicorn companies post-IPO leads to speculation about their futures. How can these promising startups sustain the momentum they had in previous funding rounds? Before we can even answer this question, we should think about the nature of companies such as Uber and DoorDash that simultaneously compete in two different markets. For example, Uber does not seem to have the market pricing power to pay drivers less or charge riders more, so it is difficult to achieve sustainable profitability. The business models of some of these companies could be what are hurting their profitability. This lack of profitability is difficult to explain, because the services of Uber, DoorDash, and Slack are so valuable to millions of people. Since they are valuable services, we can be sure that people will continue to use them. But it might take a long time for these companies to become very profitable, if profitable at all.