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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’

#421

Post by not2b »

pasttense01 wrote: post #313
sjg007 wrote: post #249

Earlier quoted context omitted.

States can borrow money if they want, they are called bonds. The Feds can print money or they can sell bonds. That's the difference.

No. Lots of states have very strict limits on the amount of money they can borrow in their constitutions.

There are also often limits on the purpose the money is borrowed for: in many states they can borrow to fund infrastructure or pay for some other project that spans many years, but they can't borrow to just meet a deficit. The result is that without federal aid we'll see a repeat of 2008 and just after: firing schoolteachers and other state workers, making those who remain take a pay cut, jacking up university expenses even more. And the impact on revenue is going to be much larger than 2008/2009.

Re: Startups are pummeled in the ‘great unwinding’

#422

Post by pj_mukh »

exolymph wrote: post #304
pj_mukh wrote: post #297

Earlier quoted context omitted.

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.

Nope. I just don’t live in the tenderloin. Unfortunately that’s where all the hotels are. So I’m not surprised that visitors (and twitterati) get a certain sense.

Re: Startups are pummeled in the ‘great unwinding’

#423

Post by siruncledrew »

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…

Comparing startups against small/mid-sized businesses is like comparing a lion cub against a house cat. People see them as the same when they look like they are equal, then their paths quickly diverge when/if growth kicks in.

Many, many businesses are suffering in some way, and startups are not impervious to it either - a major question is who is able to suffer through this longer in order to come out the other side alive. The advantage of startups here is that they have more direct “supply lines” to capital to “hold out through the winter” whereas businesses relying on government help and bank loans are not in as good of shape to survive when depending on indirect third-party capital.

Long-term, this sucks the most for non-venture backed companies if they can’t hold out and die, or make it through and are hampered with debt so much that they are handicapped from returning to normal for quite some time. Conversely, I think this is where investors and venture-backed startups will see an opportunity to thrive because they could easily “sink the damaged ships” and corner markets in a new wave of cheap M&A deals and market share growth.

Re: Startups are pummeled in the ‘great unwinding’

#424

Post by 0x202020 »

changdizzle wrote: post #406
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…

Can I ask what the project is? Have worked in the space for a bit and would love to connect to learn more.

Analytics and AV tagging/insights. So I can give them a bit deeper stats from data that they all have than what most teams can get internally, but then via tagging tournament audio and video can also show any clips that lead to the statistics. They can also upload their practice and scrimmage footage for private tagging and review.

Say Team X is the best team at Objective Y, they can filter that down and watch tournament footage of their strategies on that objective only instead of scrubbing through footage manually.

Re: Startups are pummeled in the ‘great unwinding’

#425

Post by Zenbit_UX »

jariel wrote: post #341
filmgirlcw wrote: post #138

Earlier quoted context omitted.

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…

No, it's not myopic. Startups lose money, which means they are usually raising capital for runway, and can conserve as well. Moreover, many startups don't have working capital requirements, retail rents, inventory etc.. Finally, a lot of products are digital and some booming. So it's fair to say many startups have an advantage.

It's myopic because the commenter is usi g their own circumstantes (i.e. anectodal evidence) to make a broad statement that startups are fine right now. Great for OP that their circle of friends at startups are unaffected but it is indeed myopic to extrapolate that to the entire startup scene being fine.

Re: Startups are pummeled in the ‘great unwinding’

#426

Post by Zenbit_UX »

pmart123 wrote: post #299
nostrebored wrote: post #283

Earlier quoted context omitted.

That's far from a sound business model.

I'm not sure I buy this. 80-90% revenue declines across many industries is unprecedented. Especially in cases where poor operations didn't impact the business. Businesses like Hilton or Disney that have operated for 100 years may go bankrupt (not out of business) before this is all over.

Hilton may go bankrupt but Disney won't, they've been quite successful at diversifying their portfolio and I'm sure their streaming service is doing quite well. They recently announced that at least one of their upcoming movies will skip theatres and go directly to their streaming service, while others theatrical releases are being pushed back.

This allows certain parts of their business empire to fund the less performant ones e.g. adventure parks. Hilton has no such option, they're quite invested in the hospitality industry which leaves very little room for pivoting.

Re: Startups are pummeled in the ‘great unwinding’

#427

Post by Marazan »

anthony_r wrote: post #388
Marazan wrote: post #346

Earlier quoted context omitted.

Ah yes, ABCT. First, assume the market is made up of rational actors. Second, assume that sustained irrational investment choices have been made by the rational actors.

What is "rational". I don't think that this theory assumes anything about "rationality". It's many of the other economic theories that are built on the pinnacle of "rationality".

I mean, the fact that ABCT is not backed up historical events either is a bit of a blow to its credibility.

Re: Startups are pummeled in the ‘great unwinding’

#428

Post by scollet »

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.

I know it's not the crux of your argument but your lamentation is more about prohibitive housing, bordering on classism.

Re: Startups are pummeled in the ‘great unwinding’

#429

Post by ghaff »

qes wrote: post #416
ghaff wrote: post #253

Earlier quoted context omitted.

Yes. However it can also be pitched as there's no big upside and the salary is so-so but it's a "lifestyle business" even though the hours and other time-off are nothing to write home about.

I'm the CTO of a "lifestyle" business, though we don't really call ourselves that. Salaries here are excellent for our area (MN). Time-off is better than average, and we have free worldwide flights for vacations as a perk. Highly flexible work hours and location - we have some FTE's 100% remote, living in other states; I'm 90% remote. No overtime culture, no death marches. Maybe every 2-3 years we have a couple weeks…

That sounds great. A lot of the time "lifestyle" businesses for the owners (in the sense of control, no outside investors, etc.) doesn't trickle down to the employees in any meaningful way though.

Re: Startups are pummeled in the ‘great unwinding’

#430

Post by nnntom »

0x202020 wrote: post #316
exolymph wrote: post #306

Earlier quoted context omitted.

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

Thank! It’s exciting and scary at the same time. I’ve had some small projects that have also made small amounts of money, but never anything to possibly turn into a business

Hi! I know someone who could help with the business side of things. If you’re interested my email is in my about page. Best of luck either way!
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