Elephant Company Scorecard
Evaluate companies on community, purpose, and public-building strength.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 99%
The Elephant Company Scorecard replaces valuation symbolism with three operating traits. First, a company is community-obsessive: customers act like members, participants, and evangelists rather than conducting purely transactional purchases. Second, it is purpose-driven: the business seeks to change something fundamentally wrong in an industry through a meaningfully new approach, often reinforced by distinctive brand and design. Third, it builds in public: a founder and sometimes employees communicate openly, demonstrate expertise, and make the company more human and accessible. These traits collectively strengthen distribution in markets where software itself is increasingly commoditized. The scorecard is not a substitute for financial, product, or technical diligence; it identifies whether the company has the identity, mission, and public participation needed to build a durable following.
Origin
Erica Wanger developed the model while forming Park Rangers Capital and published it in the essay “Elephants, not unicorns” as an alternative to Silicon Valley's fixation on unicorn valuations.
Core principles
- 01Headline valuation does not equal durable company success.
- 02Strong communities treat customers as participating members.
- 03A meaningful purpose changes an industry rather than adding a minor feature.
- 04Public-facing founders and employees create authentic distribution.
- 05Brand and design should evoke the mission, not merely decorate the product.
How to run it
- 1
Reject Valuation as the Verdict
Begin without treating unicorn status as evidence of durable success. Examine underlying behaviors and strategic traits instead.
Pro tip Review customer and operating evidence independently of the last funding round.
Watch out A high valuation can reflect market conditions rather than company durability.
- 2
Score Community Obsession
Determine whether customers are treated as participants, evangelists, or members. Look for belonging, referrals, repeat engagement, and peer connection.
Pro tip Inspect the language customers and the company use to describe participation.
Watch out Calling customers members does not create a community by itself.
- 3
Score Purpose
Identify the industry problem the company intends to change and whether its approach is meaningfully new. Inspect how brand and design express that purpose.
Pro tip Ask what would remain important if a single product feature disappeared.
Watch out A generic mission statement cannot compensate for an incremental product.
- 4
Score Public Building
Assess whether founders and employees communicate their work, ideas, and learning openly. Look for credible sector expertise and sustained engagement.
Pro tip Evaluate several company voices rather than only the official brand account.
Watch out Promotional posting without authentic learning does not qualify.
- 5
Test Trait Reinforcement
Examine whether community, purpose, and public building reinforce one another to create distribution. A strong company should show a coherent loop among the three traits.
Pro tip Look for members who spread the mission after engaging with public company voices.
Watch out One exceptional trait may not overcome two absent ones.
- 6
Complete Conventional Diligence
Combine the scorecard with financial, market, product, legal, and team analysis. Use it as a strategic lens rather than a standalone investment decision.
Pro tip Compare scorecard evidence with retention and referral data.
Watch out Do not infer sound economics solely from community enthusiasm.
In the wild
A newsletter platform refers to users as creators and members, helps them participate in a broader independent-media movement, and has founders and employees publicly sharing lessons from operating the product. Its identity extends beyond a single software feature.
→ The three traits reinforce a distribution advantage grounded in belonging, purpose, and public expertise.
A startup adds one workflow feature to an established software category, uses generic branding, has no visible founder voice, and interacts with buyers only through transactions. Even with rapid fundraising, it scores weakly on all three elephant traits.
→ The scorecard flags limited identity and distribution durability despite market enthusiasm.
Common mistakes
Equating Funding with Success
A high valuation, especially during a bull market, does not establish durable metrics, distribution, or strategic quality.
Faking Community with Vocabulary
Renaming customers as members is meaningless without participation, connection, advocacy, and less transactional behavior.
Using Purpose as Decoration
A purpose-driven company must pursue substantive industry change. Generic mission language and distinctive visuals alone are insufficient.
Is it for you?
Best for
It is best for founders, executives, and early-stage investors assessing companies in crowded software markets.
Not ideal for
It is not ideal as a complete financial underwriting model or for businesses where public identity and community participation are irrelevant.
From the transcript
“And then elephants have three traits. So they are community obsessive, like I said, they're in very culty spaces.”
“The second core trait of an elephant company is it's purpose-driven.”
“And then the third bucket of an elephant company is building in public.”
From the episode
Inside the Hidden Playbooks of Businesses That Actually Win