I think companies that focus on a specific use case or problem where there is a strong value proposition will be the ones that do well in a recession. For example, when you have less money, what are you going to invest in? Probably not something that does everything for you. So I'd expect to see some very niche products and tools take off.
Ask HN: What tech companies/industries will do well in a recession?
171–180 of 184 posts
Re: Ask HN: What tech companies/industries will do well in a recession?
#172Speaking of a recession, I hope the recession isn't another massive redistribution of wealth into the hands of an older generation. Housing has continued shooting up, as those in the 30s find themselves with fewer assets to buy it with. The low interest rates amortize the costs allowing affordability, but the older generation still gets a massive payout. Then when the economy start recovering back up, the older gener…
It's anything but a redistribution to favor older generations. Older generations are living on savings. They don't have upwardly-adjusted salaries. They don't have time to ride equities downward-then-strongly-upward again, they have to spend from the pile they already had. The strong inflation definitely favors younger generations, who will salary-adjust with it.
The average recession lasts 15months. So if you're planning to die before Christmas 2023 you won't have time as you say. But 95% of boomers will be just fine.
Also, inflation proof incomes (like pensions and social security) and investments with inflation proofing are a much better bet than "my boss has to give me X% to match inflation".
Then there is the housing market, most people's biggest asset. Anyone without a house will get fucked by rising prices. Anyone with a mortgage will struggle as interest rates rise, but only in cashflow terms, they're still making our overall. And old people who own outright will get all the upsides and none of the downsides...
Re: Ask HN: What tech companies/industries will do well in a recession?
#173Earlier quoted context omitted.
It's anything but a redistribution to favor older generations. Older generations are living on savings. They don't have upwardly-adjusted salaries. They don't have time to ride equities downward-then-strongly-upward again, they have to spend from the pile they already had. The strong inflation definitely favors younger generations, who will salary-adjust with it.
The average recession lasts 15months. So if you're planning to die before Christmas 2023 you won't have time as you say. But 95% of boomers will be just fine. Also, inflation proof incomes (like pensions and social security) and investments with inflation proofing are a much better bet than "my boss has to give me X% to match inflation". Then there is the housing market, most people's biggest asset. Anyone without a…
Pensions? Not likely, in the US.
As for Social Security, it was designed to cover (at best) 40% of costs. That leaves your (shrinking) investments to cover the majority. And Social Security is quickly running out of money. (This should be fixed immediately. Before forgiving student debt, or many other things. Social Security is vital!)
Younger workers will get inflation adjusted raises. The older will lose purchasing power. Inflation is absolutely harmful to those on fixed incomes, less so to those on elastic incomes.
But if you're arguing that a $15 minimum wage was harmful in general, I won't disagree. Inflation hurts everyone.
Re: Ask HN: What tech companies/industries will do well in a recession?
#174I suppose we could also frame the question as which tech companies and industries will NOT do well during the recession. I think that streaming services will not do well. People will return to torrenting and piracy. Same with crypto trading platforms. Basically any place where Joe Average can't afford to spend more than he has on hand. Tesla will see a big drop too, as people will cash out to buy their groceries. As…
I would disagree - when average Joe loses his job due to a recession they are going to need some form of entertainment to fill their now wide-open schedule. People here might find torrenting and piracy pretty trivial but the average Joe is going to find it a much bigger hurdle than simply logging into Netflix and pressing go.
I agree most people won’t turn to privacy. I still think streaming services like Netflix will take a massive hit though, not because people are turning to privacy but because the market is saturated and people have lots of different streaming subscriptions. If a recession hits, I think it’s unlikely every user cancels all their subscriptions, but many will likely reduce the number to just one or two. For some people, they might axe Disney+ and keep Netflix. Others may opt for Hulu and get rid of Netflix. I think virtually all of them will see a sizable loss of subscribers.
Re: Ask HN: What tech companies/industries will do well in a recession?
#175I suppose we could also frame the question as which tech companies and industries will NOT do well during the recession. I think that streaming services will not do well. People will return to torrenting and piracy. Same with crypto trading platforms. Basically any place where Joe Average can't afford to spend more than he has on hand. Tesla will see a big drop too, as people will cash out to buy their groceries. As…
AI/ML is a bit of a wildcard for me. On the one hand, I’m certain many companies will be eager cut costs through automation. On the other, investors will likely grow cold if the results just can’t live up to the hype fast enough.
I’m in ML and looking to pivot to web dev due to this. My personal view is that ML is in the midst of its own dot-com bubble. There are plenty of valid use cases for ML currently, but on the whole it’s a solution in search of a problem, and a bit of a figurehead at most companies who are at the very least wanting to use ML/AI/data driven in marketing materials. If a serious recession hits, I think a lot of these companies will make the realization these initiatives aren’t worth much to them and cut their losses.
Eventually the field will stabilize in a much healthier place, but only after some dark days.
Re: Ask HN: What tech companies/industries will do well in a recession?
#176Earlier quoted context omitted.
AI/ML is a bit of a wildcard for me. On the one hand, I’m certain many companies will be eager cut costs through automation. On the other, investors will likely grow cold if the results just can’t live up to the hype fast enough.
The results are living up. ML is integrated into the core of so many companies at this point it’s not like it was 10 years ago. ML is here to stay and it will be almost the entire economy in the not to distant future
I think the results are mixed. I don’t think anyone is claiming ML will die off. But in my own experience, for every company with a healthy ML environment, there are dozens that are kind of just throwing money and data around without much success, or without even the type of problems ML can solve. And at many companies that do have a solid ML use case, you often have teams of data scientists looking to find new projects that justify their existence because the maintenance of existing ML products doesn’t take up capacity.
ML will always be around, but it’s also definitely in a bubble right now in my opinion and there will likely be a contraction before the profession matures and gets to a healthy place.
Re: Ask HN: What tech companies/industries will do well in a recession?
#177Earlier quoted context omitted.
AI/ML is a bit of a wildcard for me. On the one hand, I’m certain many companies will be eager cut costs through automation. On the other, investors will likely grow cold if the results just can’t live up to the hype fast enough.
I’m in ML and looking to pivot to web dev due to this. My personal view is that ML is in the midst of its own dot-com bubble. There are plenty of valid use cases for ML currently, but on the whole it’s a solution in search of a problem, and a bit of a figurehead at most companies who are at the very least wanting to use ML/AI/data driven in marketing materials. If a serious recession hits, I think a lot of these comp…
My guess is you haven't worked anywhere where ML is a part of the core product. think e.g. search and recommendations.
Re: Ask HN: What tech companies/industries will do well in a recession?
#178Avoid consumer cyclical companies.
Re: Ask HN: What tech companies/industries will do well in a recession?
#179Earlier quoted context omitted.
The results are living up. ML is integrated into the core of so many companies at this point it’s not like it was 10 years ago. ML is here to stay and it will be almost the entire economy in the not to distant future
I think the results are mixed. I don’t think anyone is claiming ML will die off. But in my own experience, for every company with a healthy ML environment, there are dozens that are kind of just throwing money and data around without much success, or without even the type of problems ML can solve. And at many companies that do have a solid ML use case, you often have teams of data scientists looking to find new proje…
Thats fair, everything is in a bit of a free money bubble right now. And yeah I've seen team looking for ML solutions that didn't really have any.
Re: Ask HN: What tech companies/industries will do well in a recession?
#180I work in Fintech. Our company has never done layoffs through the recession. It is not a FAANG company, but if you want stability, it has that.