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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’

#301

Post by icelancer »

tdfx wrote: post #148
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 exe…

Governors are just locking people in their homes and shuffling off blame. None of them think probabilistically or listen to anyone that does.

We are looking at an economic collapse that rivals late 80's Japan. People are viewing the "economy" as money. They need to rethink their smugness. Japanese salarymen work harder and longer hours than any American yet their salaries and purchasing power are half that of equivalent positions in America. The Nikkei has still not recovered from the crash 30 years ago.

That is our future if we just keep staying locked in houses. Also this "remote work" revolution people are cheering on should be rethought pretty damn fast. If this truly is the new normal, people are not going to hire Americans for $25/hr with benefits if we never meet them. Managers will just hire Indonesians for $4/hr since it's all the same to them.

At some point we need to let businesses reopen and ues temperature tracking + mandatory face occlusion. This isn't perfect, or even that good, but widespread testing won't happen anytime soon (it's not cheap and our government agencies are completely incompetent at large project design), so we just need to accept some risk.

But since no one thinks in a probabilistic way - since we are afraid to - it's gonna be shelter in place for a few months while the governors just cover their asses instead of actually searching for an 80% good solution, and blame Trump for not figuring it out either.

There is no leadership in our government, you are right. State, federal, local. Embarrassing.

Re: Startups are pummeled in the ‘great unwinding’

#302

Post by halfmatthalfcat »

yingw787 wrote: post #3

I've heard numerous times startups have had a hard time getting a smaller amount of funding from angels and VCs. As in, "I want $500k" and "no, we only do deals with $1M+", or something like that. I thought that was crazy. This is probably the pendulum swinging back, as pendulums do. I am interested in how this situation affects larger companies. My guess is since they're so much larger this time around than back in…

There are pre-Seed focused VCs that do these kind of deals, like Precursor.

Re: Startups are pummeled in the ‘great unwinding’

#303

Post by mikeyouse »

JimTheMan wrote: post #274
Spooky23 wrote: post #255

Earlier quoted context omitted.

“Better” in that you still exist. A friend’s medical practice will implode April 30... their business is down 90% and they won’t be able to pay rent or the employees. They are only staying open in hope for some sort of aid or debt jubilee. The partners will lose pretty much everything. People with cash aren’t going to keep plowing money into startups, they are going to buy depressed assets. Every leveraged real estat…

Out of curiosity, would you be able to elaborate on the type of practice? I wouldn't imagine they are a GP? This crisis would increase their traffic. Cosmetic surgery?

Shelter in place means shelter in place -- almost all non-essential procedures have stopped, where "essential" has varying degrees of severity depending on where they are. I personally know of cardiology, oncology, and internal medicine groups who have basically cut their businesses by 90% to keep people at home. It's not safe for their staff or for other patients to continue normal operations.

Re: Startups are pummeled in the ‘great unwinding’

#304

Post by exolymph »

pj_mukh wrote: post #297
sethammons wrote: post #215

Earlier quoted context omitted.

Not OP. I've only visited the Bay Area a few times. Human filth, needles, and just so many people packed into the space. I can't imagine raising a family in that situation. Contrast that with where I am now: I have a very large house on 10+ acres of land on the edge of a lake. Each of my kids has their own room and there are lots of rooms and corners to "get away from each other". We have room for food storage, a hom…

Live in San Francisco for 3 years now. Haven't seen a single needle yet or "human filth". AMA.

Dang, you must live in an awfully rich neighborhood.

Re: Startups are pummeled in the ‘great unwinding’

#305

Post by postingawayonhn »

JimTheMan wrote: post #274
Spooky23 wrote: post #255

Earlier quoted context omitted.

“Better” in that you still exist. A friend’s medical practice will implode April 30... their business is down 90% and they won’t be able to pay rent or the employees. They are only staying open in hope for some sort of aid or debt jubilee. The partners will lose pretty much everything. People with cash aren’t going to keep plowing money into startups, they are going to buy depressed assets. Every leveraged real estat…

Out of curiosity, would you be able to elaborate on the type of practice? I wouldn't imagine they are a GP? This crisis would increase their traffic. Cosmetic surgery?

At least where I am (Australia/New Zealand) I have been hearing that GP visits are way down. I think people are trying to avoid the health system as much as possible and are therefore putting off any appointments that are not critical.

Re: Startups are pummeled in the ‘great unwinding’

#306

Post by exolymph »

0x202020 wrote: post #296

I’ve got an esports side project that was starting to get some interest within the community and generate non-trivial MRR (~4k mo). I have a closed alpha that a few teams in the league were using, and I was talking at some level to basically everyone that could be in the market for the current version of the problem. I was looking into getting a business/sales partner in order to have more success on the business sid…

Congrats, that's awesome. Good job and good luck seizing the opportunity!

Re: Startups are pummeled in the ‘great unwinding’

#307

Post by exolymph »

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.

> all of you who thought incompetent federal government leadership was OK in this modern world

Nobody thinks this, they just disagree with you about what constitutes competence.

Re: Startups are pummeled in the ‘great unwinding’

#308

Post by frgotmylogin »

irrational wrote: post #184

I work for a Fortune 150 company as a programmer. I've had lots of people ask me why I don't move to California and work for a startup. The main reason is because I'm risk adverse and I really don't like the Bay Area (I spent many years living in San Ramon, Alameda, Newark, etc. in my youth and have no desire to ever return). Now I have a new reason to be grateful I work for a Fortune 150 company. I've been able to w…

I'm a programmer at a Fortune 500 company, and it's a similar situation. I feel very lucky. I do wish I had as much knowledge of our day to day financial situation as all of the startup guys on here though, just to know where things are headed.

Re: Startups are pummeled in the ‘great unwinding’

#309

Post by stickfigure »

sethammons wrote: post #215
axiom92 wrote: post #209

Earlier quoted context omitted.

>I spent many years living in San Ramon, Alameda, Newark, etc. in my youth and have no desire to ever return I understand that this is not center to the point you're making but I am curious! What makes you hate the Bay area? I lived there for ~4 years and recently moved to Pittsburgh. I can't wait to move back. In fact, the mere mention of these places evokes a strong sense of homesickness in me for some reason.

Not OP. I've only visited the Bay Area a few times. Human filth, needles, and just so many people packed into the space. I can't imagine raising a family in that situation. Contrast that with where I am now: I have a very large house on 10+ acres of land on the edge of a lake. Each of my kids has their own room and there are lots of rooms and corners to "get away from each other". We have room for food storage, a hom…

The "Bay Area" is a big place. I live a similar lifestyle and I'm 45m from downtown Oakland. You could do closer if you're willing to spend more or have neighbors.

Re: Startups are pummeled in the ‘great unwinding’

#310

Post by tim333 »

filmgirlcw wrote: post #138
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 th…

>nothing inherent to being a “startup” that will make it any better at weathering the future

I can think of a few things:

a) expecting no revenue for a while anyway

b) mostly can work from home / remote

c) early startups can cut back to a few founders on ramen

None of that really applies to mom and pop restaurants / retail etc.

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