Startups are pummeled in the ‘great unwinding’ • Hacker News Board

Re: Startups are pummeled in the ‘great unwinding’

#111

Post by Natsu » Sat, Apr 04, 2020, 9:14 PM UTC

0x0001 wrote: post #107

scarface74 wrote: post #84

Earlier quoted context omitted.

You weren’t around in 2000 or 2008 were you? Your startup is only in “better shape” as long as VCs are willing to keep funding you. VCs are only willing to keep funding you if they have confidence that you will have a profitable exit.

Not all startups require VC capital, some of us are just running without venture funding just clients money, some startups are in better shape because are on right market on the right time. You just need to be in the right time.

I think startups will adapt in time. I mean, I'm surprised there aren't TP-finding apps right now...

Re: Startups are pummeled in the ‘great unwinding’

#112

Post by xiaolingxiao » Sat, Apr 04, 2020, 9:17 PM UTC

BillinghamJ wrote: post #75

qppo wrote: post #54

Startups are in way better shape than traditional small businesses. By our very nature, we need months of runway just to keep running. We're designed to weather this kind of storm because "zero revenue" is the default state. Hearing about Bird cutting 30% of their workforce is awful. But it's nothing compared to the thin-margin Mom & Pop, or medium sized private enterprise that had 1 week of cash on hand and ceased o…

Our board and investors have made it clear they think it's highly unlikely any meaningful funding will be able to progress until early 2022 at this point. Recently-funded or reasonably conservative startups should be able to do okay with that, but ones without a lot of runway are going to be in a really difficult position.

Did your investors give some justification for the 2 year time span? For example, did they account for the possibility that many business won't open until September, or a second wave of infection that will hit late fall, followed by say, recession in full swing all of 2021.

Re: Startups are pummeled in the ‘great unwinding’

#113

Post by onetimemanytime » Sat, Apr 04, 2020, 9:17 PM UTC

benatkin wrote: post #14

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

Another thing that's more than half a decade old is your objection. The term "startup" has come to have a broad meaning. The meaning of words changes over time. Fortunately, new terms often come along to fill gaps. In this case there is the term early-stage startup .

>>Another thing that's almost a decade old is your objection. The term "startup" has come to have a broad meaning. The meaning of words changes over time.

They use the word "startup" when it serves their interests. Yet, we don't call 10 year olds babies. Too bad

Re: Startups are pummeled in the ‘great unwinding’

#114

Post by scarface74 » Sat, Apr 04, 2020, 9:17 PM UTC

0x0001 wrote: post #107

scarface74 wrote: post #84

Earlier quoted context omitted.

You weren’t around in 2000 or 2008 were you? Your startup is only in “better shape” as long as VCs are willing to keep funding you. VCs are only willing to keep funding you if they have confidence that you will have a profitable exit.

Not all startups require VC capital, some of us are just running without venture funding just clients money, some startups are in better shape because are on right market on the right time. You just need to be in the right time.

And you’re probably not looking for a large exit. You are trying that unheard of concept of spending less than you make. What you are doing is running a “lifestyle business”.

That’s not a negative despite what the tech bro’s think. I hate the idea of success for a company seems to be “we got another round of funding while losing money”.

Re: Startups are pummeled in the ‘great unwinding’

#115

Post by kirstenbirgit » Sat, Apr 04, 2020, 9:17 PM UTC

scarface74 wrote: post #84

qppo wrote: post #54

Startups are in way better shape than traditional small businesses. By our very nature, we need months of runway just to keep running. We're designed to weather this kind of storm because "zero revenue" is the default state. Hearing about Bird cutting 30% of their workforce is awful. But it's nothing compared to the thin-margin Mom & Pop, or medium sized private enterprise that had 1 week of cash on hand and ceased o…

You weren’t around in 2000 or 2008 were you? Your startup is only in “better shape” as long as VCs are willing to keep funding you. VCs are only willing to keep funding you if they have confidence that you will have a profitable exit.

I'd say only 0.1% of startups have a VC attached.

Re: Startups are pummeled in the ‘great unwinding’

#116

Post by scarface74 » Sat, Apr 04, 2020, 9:20 PM UTC

kirstenbirgit wrote: post #115

scarface74 wrote: post #84

Earlier quoted context omitted.

You weren’t around in 2000 or 2008 were you? Your startup is only in “better shape” as long as VCs are willing to keep funding you. VCs are only willing to keep funding you if they have confidence that you will have a profitable exit.

I'd say only 0.1% of startups have a VC attached.

How many companies are running with no VC funding that fit the profile of the parent poster?

“By our very nature, we need months of runway just to keep running. We're designed to weather this kind of storm because "zero revenue" is the default state.”

Re: Startups are pummeled in the ‘great unwinding’

#117

Post by avip » Sat, Apr 04, 2020, 9:21 PM UTC

qppo wrote: post #54

Startups are in way better shape than traditional small businesses. By our very nature, we need months of runway just to keep running. We're designed to weather this kind of storm because "zero revenue" is the default state. Hearing about Bird cutting 30% of their workforce is awful. But it's nothing compared to the thin-margin Mom & Pop, or medium sized private enterprise that had 1 week of cash on hand and ceased o…

I work for a well funded + product + paying customers + whatever su. Since inception of covid-19 the vast majority of customers withheld pretty much everything (some violated signed contracts). Some are MIA and impossible to communicate with.

It's a global turmoil and it's too soon to make assumptions about how great of a shape we're in.

Are we better off than baristas? Likely.

Re: Startups are pummeled in the ‘great unwinding’

#118

Post by marcosdumay » Sat, Apr 04, 2020, 9:21 PM UTC

closeparen wrote: post #106

rexreed wrote: post #79

I'm sorry for some of my schadenfreude here, but really, so many of these startups are overfunded with way too many employees to begin with. They've often paid top dollar for expensive technical talent in locations with very high cost of living. I can't wait to see a pull back to solid fundamentals. I don't see why a daily vacation rental company honestly needs 240 highly paid employees. One company cited in the arti…

Why is it so offensive to people in this industry that our skills are valued? Sometimes it seems a little crazy to me too, but I'm not, like, excited to need to live with 5 roommates 90 minutes away from work again like you seem to be.

The GP is not complaining that our skills are valued, it's complaining that those companies have an awful low productivity.

You know, people filling low productivity jobs means that our skills aren't valued enough.

Re: Startups are pummeled in the ‘great unwinding’

#119

Post by sambull » Sat, Apr 04, 2020, 9:21 PM UTC

scarface74 wrote: post #114

0x0001 wrote: post #107

Earlier quoted context omitted.

Not all startups require VC capital, some of us are just running without venture funding just clients money, some startups are in better shape because are on right market on the right time. You just need to be in the right time.

And you’re probably not looking for a large exit. You are trying that unheard of concept of spending less than you make. What you are doing is running a “lifestyle business”. That’s not a negative despite what the tech bro’s think. I hate the idea of success for a company seems to be “we got another round of funding while losing money”.

But for a whole summer I didn't pay for a ride share app.. thanks VCs!

Re: Startups are pummeled in the ‘great unwinding’

#120

Post by darkwizard42 » Sat, Apr 04, 2020, 9:22 PM UTC

JMTQp8lwXL wrote: post #42

tedd4u wrote: post #33

Startups have had years to prepare, work on their plan, strengthen their fundamentals, and raise capital if necessary. I think the shock is that probably this is a faster onset and deeper drop scenario than most had modeled. Every [1] startup has been thinking for the past couple years about their plan for when the recession would come. Probably hundreds of articles written in mainstream and economic/financial press…

People always write about coming recessions. I could "recession year 20NN" and find someone proclaiming a recession would happen that year. Given someone in the peanut gallery is always claiming recession is near imminent, when are businesses supposed to prepare? Leaving piles of purposeless cash is poor business acumen: it could be put into R&D, expanding operations, or returned to shareholders.

I think what you can do is diversify and start thinking about business investments that would be good regardless of continued high growth or recession.

So continuing to invest in improved infra might be a good area to put your cash/resources since that will pay off really well in high growth and probably still have savings in a slower period.