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Startups are pummeled in the ‘great unwinding’

nytimes.com

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Re: Startups are pummeled in the ‘great unwinding’

#131

Post by seibelj »

pixelmonkey wrote: post #109

One of my good friends is a restaurant owner in NYC and my spouse is a doctor/surgeon in NYC. Startups aren't pummeled -- they're insulated. Restaurant owners and doctors are pummeled. And all of you who thought incompetent federal government leadership was OK in this modern world -- you were bamboozled. You can start apologizing now.

But I genuinely believe all federal government leadership is incompetent - it’s not a matter of it being “OK”, that’s just the default for every administration. Which country on earth is responding to this well without resorting to authoritarian practices?

Re: Startups are pummeled in the ‘great unwinding’

#132

Post by renewiltord »

maxerickson wrote: post #24
_bxg1 wrote: post #23

Earlier quoted context omitted.

Roughly. I would broaden the colloquial meaning to "new-wave tech companies". Ones from the past decade that aren't FAANG and maintain an agile culture (or at least purport to), and have a certain San Francisco sheen to them even if they aren't actually from there

I feel like you are now vigorously explaining that the other poster was right, that we should use some other name.

It's a bit like asking you to define just how many grains of rice there are in a heap. You may be unable to do so and yet know a heap when you see it.

Re: Startups are pummeled in the ‘great unwinding’

#133

Post by WalterSear »

Natsu wrote: post #111
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.

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

Get with the times.

https://cryptoticker.io/en/toilet-paper-token-bitcoin/

Re: Startups are pummeled in the ‘great unwinding’

#134

Post by rexreed »

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.

You answered your own question. It's not that people don't think you're valued, it's that the value you are getting commensurate with pay levels is unsustainable in the region. When the tide goes down, the first boats to flounder are the ones on high ground. I hope we can also see an unwinding of the ridiculous cost of living that is part of the rationale behind unsustainable wage growth. These things go hand in hand.

Re: Startups are pummeled in the ‘great unwinding’

#135

Post by odshoifsdhfs »

scarface74 wrote: post #87
bob33212 wrote: post #63

Earlier quoted context omitted.

Good start-up CEOs struggle with this because many of them do care for their employees at a personal level, but they also have an obligation to the owners/investors to be financially successful. And the most findnacially successful CEOs are going to put investors first when they are up against the wall. I assume they rationalize it by saying that if the company is successful that is better in the long run for everyon…

Once you take outside funding, whether the founders “care” about their employees is irrelevant. They don’t guide the company any more. Their investors do. If they “cared” about their employees and weren’t looking for a large exit, they would be creating a “lifestyle” business and not seek VC funding. I’m not making a moral judgement either way. Everyone should go into any employment situation with their eyes wide ope…

I agree with you but at the same time, a lot of people can't really create a lifestyle business. Yes, if you are a Senior Developer in SV, you can probably save 50k a year and then move to bumfuck Montana and start your lifestyle business, but a lot can't. I know many senior developers in my country that if they save 2000-3000 are probably in the top savers.

I already refused investment as I didn't think my goals aligned fully with the investors, but I am lucky as I don't have to pay rent (family flat) and I did some contracting that allowed me to save some money. Most of my developer friends will be fucked if their companies fire them as atm no-one will really hire them in the next few months for sure.

Re: Startups are pummeled in the ‘great unwinding’

#136

Post by scarface74 »

ElFitz wrote: post #128
scarface74 wrote: post #114

Earlier quoted context omitted.

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”.

It's only a lifestyle business if they aren't interested in hyper-growth & all Otherwise, "just" spending less than you make and trying to make it on their own only makes them bootstrapped, don't you think?

Its hard to find investors if you aren’t interested in hyper growth. The financial risk that the company will go out of business is the same but the expected returns are a lot lower. That just doesn’t make sense from an investors standpoint from a risk/reward vantage point.

Re: Startups are pummeled in the ‘great unwinding’

#137

Post by jaggederest »

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.

Work remote, move to the midwest (or, really, anywhere outside of the bay area or NYC), own your house outright.

The idea that the options are "get paid usurious amounts of money" or "live 90 minutes from work with a bunch of roommates" is a false dichotomy.

Re: Startups are pummeled in the ‘great unwinding’

#138

Post by filmgirlcw »

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…

This strikes me as wishful thinking and also incredibly myopic about the realities facing many startups.

A startup that recently closed a big round (and the need to close the round wasn’t necessitated by massive debt or existing expenses — so think almost all of the money can be used as future runway) might be in a better short-term position than a business that is relying on net-30 or net-90 payments from clients that might not come and that will struggle gaining new revenue needed to pay bills. This is especially true if the startup can pause or slow-down hiring for now to extend the runway — but that’s a short-term advantage.

Longer term, there is absolutely nothing inherent to being a “startup” that will make it any better at weathering the future than any other type of business. And when investments come back — and it could take years, we just don’t know at this point the extent of the economic situation — it is the biggest/best-connected that will benefit. Plenty of startups won’t ever be able to raise that future round. Plus, they get the additional disadvantage of trying to figure out an actual business model during a recession. At least existing businesses — even if they don’t survive — had a working business plan in place first.

> I've got friends in manufacturing, hospitality, services, and so on that will not return to work because their businesses are going to or have already failed, for good. That's the fucking terrifying thing happening right now and it's more deserving of attention than us tech bros.

This is the only part I agree with. I don’t want to see any business fold — but I’m much more concerned about people who aren’t venture-backed founders right now.

Re: Startups are pummeled in the ‘great unwinding’

#139

Post by akiselev »

wozniacki wrote: post #100
im_down_w_otp wrote: post #78

Earlier quoted context omitted.

I think this is definitely true for venture-backed startups which scaled conservatively. However, scaling conservatively runs directly at odds with what a lot of venture backed startups are expected, told, or cajoled into doing. For those that went along with the conventional wisdom of the times, they're now extremely overextended having spent all that potential runway with no way to get it back and no hot marketplac…

If a business - any business whether a takeaway restaurant or a food hall or a white table cloth sitdown - cannot scrape by for more than a few weeks without steady revenue, wouldnt you say they are in a highly saturated niche or a highly saturated location or both or that they don't serve anything distinctive whether its their food or the experience, that couldnt be replaced by any other Joe Homecook with comparable…

Most businesses operate that way for the same reason Starbucks doesn't check your ID every time you go to the counter to pick up a coffee. It's cheaper to just make another coffee in the rare scenario someone takes someone else's cup than to slow down everything. It is the optimal happy path that leads to far more productivity.

Re: Startups are pummeled in the ‘great unwinding’

#140

Post by filmgirlcw »

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.

Not to mention VCs becoming more risk averse — not wanting to throw good money after bad. So not only does it need to be a profitable exit, it needs to be profitable at a good multiplier compared to every other business seeking investment.
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