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

Re: Startups are pummeled in the ‘great unwinding’

#141

Post by scarface74 » Sat, Apr 04, 2020, 9:42 PM UTC

odshoifsdhfs wrote: post #135

scarface74 wrote: post #87

Earlier quoted context omitted.

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 ali…

I’m assuming you aren’t in the US. Well I am in the US and if I lost my job in the current climate, I think I would have a hard time trying to find a job. I’ve never felt that way before - not in 2000 or 2008-2010. So your friends are far from unique. The entire global economy is screwed.

Assuming you’re trying to start a lifestyle software business, your startup costs should be cheap thanks to cloud providers or just using something like VMs.

Re: Startups are pummeled in the ‘great unwinding’

#142

Post by jedberg » Sat, Apr 04, 2020, 9:44 PM UTC

timr wrote: post #99

jedberg wrote: post #67

Earlier quoted context omitted.

During the dot-com bust, rental prices went down a bit. During 2008, they stayed flat (as opposed to going up a few percent each year). So I'm guessing it will either stay flat or go negative. It depends on how quickly things recover once the shelter in place is lifted and how many people actually leave the area. The housing prices are driven by lack of supply, so even if demand softens a bit, it won't have that big…

Rents fell in 2008. I can tell you this for sure, because I had just moved to SF, and landlords were making deals. My landlord lowered my rent by $100 a month in order to keep me from moving in 2009. Even as late as 2010 this was happening. I looked at a place on Russian Hill around that time, and it was offering rent incentives. In my recollection, the market didn't pick up again until around 2012, corresponding wit…

The data seems to back you up, so I stand corrected. [0]

I was basing it on my own experience pricing the rental unit I've managed in Berkeley for the last 21 years. Each year I do a rent survey for the East Bay, and that was based on my experience there, but the East Bay is a little less price sensitive in both directions compared to SF, so that's probably the difference.

[0] https://medium.com/@mccannatron/1979-to-2015-average-rent-in...

Re: Startups are pummeled in the ‘great unwinding’

#143

Post by pkaye » Sat, Apr 04, 2020, 9:45 PM UTC

julius_set wrote: post #62

So I’m curious will property and rental prices drop in San Francisco now that funding is drying up? Can’t seem to find much information about that. For example a friend of mine who was laid off still has to pay $3300 / month for his studio. Curious how long this will last for?

The center region of the bay area will hold its value longer while the outskirts will drop earlier. Basically people will "move up" when there is an opportunity to be closer to their job. Remember not all people will lose jobs during this downturn so some will take it as an opportunity to buy. If nothing else the bay area has great weather to offer.

Re: Startups are pummeled in the ‘great unwinding’

#144

Post by hodgesrm » Sat, Apr 04, 2020, 9:49 PM UTC

bob33212 wrote: post #63

hn_throwaway_99 wrote: post #17

> For start-up workers, the past few weeks have been sobering. Many had bought into the tech industry’s change-the-world ideals, had few boundaries between their work and personal lives and hoped for big payouts if their start-ups went public. This saddened me, because it's a refrain that we hear over and over and over. Same exact thing happened during the .com bust (which scares me to believe that was 20 years ago a…

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…

Being financially successful is good for employees. If you aren't you can't pay people for very long.

The model where companies spend investor funds indefinitely looks pretty dead at this point.

Re: Startups are pummeled in the ‘great unwinding’

#145

Post by numair » Sat, Apr 04, 2020, 9:49 PM UTC

seibelj wrote: post #131

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?

Denmark. Norway. Singapore. New Zealand. Taiwan.

The fact of the matter is, there’s too many people in America invested in a cynical notion that we should expect the government to “fail,” which makes it easier to keep everything underfunded, which almost guarantees failure (random acts of heroism not withstanding). THAT, more than any single person, is what’s killing America. And that’s a bipartisan cancer.

Re: Startups are pummeled in the ‘great unwinding’

#146

Post by dnautics » Sat, Apr 04, 2020, 9:52 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”.

there's a big gulf between "lifestyle" and "SV big startup", like startups that aims for 1.25-2x growth per annum, has taken fewer rounds of funding. There's several of them in SV, too.

Re: Startups are pummeled in the ‘great unwinding’

#147

Post by hn_throwaway_99 » Sat, Apr 04, 2020, 9:52 PM UTC

lotsofpulp wrote: post #73

hn_throwaway_99 wrote: post #40

Earlier quoted context omitted.

Expedia and Booking have been around nearly 25 years and both have well over 20k employees. Seems like travel has more than enough margins to support multiple companies that size.

There’s never been an extended global shutdown of travel like now though.

Yes, everyone fully understands with travel at a complete standstill, none of these companies are viable if the current situation were the norm.

But the current situation is not the norm, people will eventually get back to travelling a lot, and when they do there will be plenty of economic activity to support large companies in the travel business.

Re: Startups are pummeled in the ‘great unwinding’

#148

Post by tdfx » Sat, Apr 04, 2020, 9:53 PM UTC

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.

If this crop of federal leadership is rotten, I'm not seeing much hope in the possible followup cohorts. The US government has effectively delegated responsibility for the crisis to state governments, and they all seem to be following the same stupid "stay in your home" model. Federal and state, their only solution has been to throw money at the problem, but that doesn't work when you've got no one around who can execute.

Taking control and centralizing all testing? Still barely happening. Isolating infected people? We've got thousands of non-critical COVID-19 patients and we are sending them home to infect their families. Anyone thought to use the hundreds of thousands of vacant hotel rooms for something? But there's no self-starters here. The option of least resistance is to just tell everyone "stay home it will be fine" and hope for the best.

I expected some failures in leadership but this is far beyond what I could've imagined. It's not Republican or Democrat, it's failures all down the line. No one is bringing anything to the table.

Re: Startups are pummeled in the ‘great unwinding’

#149

Post by not2b » Sat, Apr 04, 2020, 9:58 PM UTC

peter303 wrote: post #66

julius_set wrote: post #62

So I’m curious will property and rental prices drop in San Francisco now that funding is drying up? Can’t seem to find much information about that. For example a friend of mine who was laid off still has to pay $3300 / month for his studio. Curious how long this will last for?

In 2002 after dot.bomb, prices held flat for a while. A fair of vacancies in SoMa. The 2008 recession sort of bypassed tech.

Are you kidding? The 2008 recession killed a ton of tech. The core of traditional Silicon Valley (Mountain View, Sunnyvale, Santa Clara) had so much vacant office space that large areas zoned industrial felt like ghost towns. Sure, the companies that later became dominant survived. The electronic design automation sector held on because chipmakers couldn't stop doing design work. But it was very tough.

Re: Startups are pummeled in the ‘great unwinding’

#150

Post by closeparen » Sat, Apr 04, 2020, 10:00 PM UTC

jaggederest wrote: post #137

closeparen wrote: post #106

Earlier quoted context omitted.

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.

Interesting perspective. My employer entertains remote workers and satellite offices only to the extent that it feels the Bay Area is “tapped out.” If that thinking is at all representative of the industry, I think we’re likely to see those options evaporate rather than grow.

There are definitely IT jobs “native” to the Midwest, but they’re overwhelmingly seen as cost centers to be deskilled/automated/offshored rather than value-creating R&D.