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The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

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Re: The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

#22
post #13

I've been saying that since mid-2015 we've been seeing a slow down in the startup sector overall. Last year it was clear that new startup creations isn't keeping pace with previous years and shutdowns are more common. I think 2017 will be a disastrous year for startup formation and venture investment. SXSW this year was diminished from what it was in past years and it's clear that there's a pullback across the board.

I was at SXSW but didn't have as much time for Interactive sessions as in past years. Can you expound on your SXSW observation? I did notice the trade show seemed dominated by the country pavillions like I don't remember before. It made me wonder if they were basically bussing in international startups to cover up for the general lack of startups that wanted to buy a booth.

First, from what I am hearing, there was overall lower number of badge sales for SXSWi. The sometimes large attendance at sessions was masked by the fact that SXSW now allows any ticket type entrance to various events, but only prioritizes certain badge holders.

Second, overall attendance at unofficial events was significantly lower from previous years. Previously you faced huge lines for most parties, but many such lines, if any, cleared quickly this year.

Third, investment by startups in their own official events was significantly lower this year. Startups either attended without running their own events or participated in other party's events instead of running their own events.

Fourth, many large brands decided not to participate this year. Microsoft and Samsung were both absent for the first time in a long time. And many other companies scaled back their events.

Fifth, as you mentioned, the exhibition hall was dominated by non-startup parties moreso than in years past. This indicates that startups are not investing in SXSW as much as they had before.

In general, attendance felt lighter this year vs. 2016, and definitely vs. 2015 and 2014, which felt like a peak year for SXSWi.

While these are SXSW-specific numbers, I would wager that you are seeing similar slowdown with other startup-focused events and conferences. Meetups are more lightly attended, and certainly less sponsored.

It feels like the burst in activity is slowing. Not gone. Just slowing.

Re: The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

#25
post #23

Looks like I'm getting a new chair soon. The best thing about the Dot Com bubble bursting was my cheap Aeron. I'm ready to upgrade.

Yeah the 2008 financial meltdown saved my lumbar region. Paid 250 for a 1,600 euro chair. Very happy. On the other hand a lot of people lost everything. So that was the flipside.

Re: The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

#26
post #23

Looks like I'm getting a new chair soon. The best thing about the Dot Com bubble bursting was my cheap Aeron. I'm ready to upgrade.

Do you get yours from eBay? Any tips or particular sellers you can recommend?

Re: The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

#28
post #10

Earlier quoted context omitted.

The question should be is the rate of churn of startups going up. One might interpret the facts as presented to indicate that startups are fashionable, and more people are starting them. A certain percentage are likely to fail.

This can happen BECAUSE economy is shit. I am in Brazil, right now completely unemployed (technically I never was employed in first place, so I don't count as unemployed in statistics), and out of work. So I am thinking of what business to start, this time... (I legally own 3 business, and I think I am heir of more 3 or 4) Because the ones I have none are profitable at all, and I can't find any work (not even superma…

> And I noticed, that on social sites (Facebook for example) that shows employment, lots of people are becoming business-people too, for example I noticed scores of 18 year olds that own some business selling cakes, or making clothes, or other stuff like that.

I'm not sure how it is in Brazil, but in some parts of the US, there are many young adults 18-22 who start businesses like this. They either start right out of high school or drop out of college, create an LLC, then start a business. Once every so often, someone does well. They make it 5+ years before calling it quits for various reasons. Most of them fail right out of the gate.

The reality of, "Oh crap. This is my business. I can do whatever I want, but I am literally responsible for everything - including generating income" hits. They see that it's not so easy bootstrapping a photography business or cake business from scratch when there is no formal training in the area. No one wants photos that are washed out when a professional can do it for a few dollars more. No one wants a cake that can be replicated by spending 1/3 the price for a store bought cake mix.

Then they stop actually participating in the business, but their social media profile still says "Owner of Pop Flash Photography" or "Sole Proprietor of Wake n Bake Cakes".

One thing that some CS students in my area have done is to start an LLC once they've written something demoable. It doesn't have to be new or innovative (could be a simple calculator app that's on the app store), but if they can distribute it for use, they license it and publish it under the LLC. They make business cards for the LLC. Then they say things like, "I'm the Founder/Owner of Living Room Launched Software. We have a small app on the app store. Here's my card. Contact me if you need something."

This isn't to knock young people who have the entrepreneurial spirit! I think it's great for people to explore what they want to do in life, and it's better to fail fast straight out of HS than to blow their life savings in their mid-40s. Some kid fresh out of high school looking to get rich quick off of something easy is markedly different from the churn discussed in this article.

Re: The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week

#29

"Shut down 3 or 4 unicorns" - wonder who they were - and I find it a bit funny that he doesn't seem to know the exact number. Or maybe he's just trying to be less specific on purpose.

Unicorns do not exist, but there are a billion suckers out there ready to trade something for less than that something might really be worth.
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