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Ask HN: What should founders do to protect against inflation?

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Re: Ask HN: What should founders do to protect against inflation?

#51

Post by tqi »

actually_a_dog wrote: post #50
tqi wrote: post #36

Many here have pointed out that the difference between 6.2% and normal inflation is not meaningful for businesses. And that makes sense. I'm curious what if anything companies/founders could do in the event of actual hyperinflation?

In practice, what they do is feed the hyperinflation, by raising prices too frequently, because there's hyperinflation, which causes... more hyperinflation. The whole reason anybody needs a wheelbarrow full of cash to buy a loaf of bread is because the price is spiraling out of control. And, it spirals out of control because all the sellers of goods get caught up in the fever of rising prices. The only thing that end…

That makes sense, and is very interesting to read about.

My question was actually more about the practical / ops side of this. What would large companies (especially large corps like Apple or Facebook) do with their stockpiles of cash on hand?

Re: Ask HN: What should founders do to protect against inflation?

#52

Post by hedora »

gnicholas wrote: post #41

Don't let customers lock you into multi-year pricing deals that aren't inflation-adjusted. It might seem strange to ask that future payments be inflation-adjusted, but that's just because we (anyone under 40 or 50 years old) does not remember high inflation from their adult life. But this is exactly what people do when there is inflation risk, currency exchange risk, etc. A payment you receive next year could worth b…

At the rates startups should be growing, customer pricing lockins are rounding error. You want to have many times more customers moving forward. If this year’s customers are getting a 10-% discount a few years from now, either that’s a < 1-2% revenue hit for your startup, or you’re going out of business anyway.
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