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Y Combinator's Message to Founders

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Re: Y Combinator's Message to Founders

#91

Post by gls2ro »

axlee wrote: post #44
gz5 wrote: post #13

Also an opportunity: 1. Good people will be more available (there will be public company cuts and private cuts, as well as resignations, especially people working for companies in the Series B to Series D range (who raised those rounds at the old multiples) who will need massive growth/patience for their options to grow into the new multiples). 2. As businesses cut costs, those are opportunities for products and serv…

> As businesses cut costs, those are opportunities for products and services which enable efficiency. This is key. Innovation aside, if you can simply provide comparable services at a lower price point, the downturn just increased your customer base tenfolds: nobody is looking too much at cutting costs when things are looking up. Find niches that got too greedy over the past few years, and undercut them.

I think this sounds good when you think about a very small nieche, but if you think about global market, then in a recession as many companies go bankrupt, then there are few chances to find cheap providers so that what you offer will stay at lower cost.

I hope to be wrong about this as I would like very much to see some lower prices in some areas.

Re: Y Combinator's Message to Founders

#92

Post by time_to_smile »

nopenopenopeno wrote: post #20

I am currently graduating with a CS degree and interpreting this as a warning to not accept the offer from the exciting startup and instead accept the offer from the big corporate fintech company. Is there any reason I could be wrong?

If you have the choice between "exciting startup" and "big corporate fintech company" then you don't have worry and economic down turns at all.

The reality is that in a turn down turn you aren't choosing among great options. In 1999 software engineers making 100k+ in 1999 (this was a lot more money back then) working for a cool startup ended up working in banks making boiler plate code for ~80k. Most of them were forced out of the industry.

If you're in a position to be making choices like you describe than there is no meaningful down turn in your industry.

A more likely outcome in the event of a serious is that in 5 years you aren't doing CS related work. Talk to people that have worked in aerospace during various periods of down turn (or any similar industry).

Re: Y Combinator's Message to Founders

#93

Post by VirusNewbie »

aresant wrote: post #18

Dagnabit. Here we go again - this is a fantastic, pragmatic amendment to those notes -> https://dalton.substack.com/p/letter-to-myself-in-late-2008?... For a taste: "Doing multiple small layoffs is a form of cascading failure. Do one layoff, but much much deeper than seems correct. Do it decisively. Do it so that you get profitable. In your case that is something like a 70% cut, not a 5-10% cut. Yes you read that rig…

I cannot imagine a way I would interpret a 70% layoff as anything other than the CEO/management team being incompetent. I mean, if you can actually execute with 70% less, why did they hire in the first place?

The only way this might work is if a company was expanding into a completely new market and pivots away from that (ie, software startup gets a hardware division going, etc)

Re: Y Combinator's Message to Founders

#94

Post by blueboo »

aresant wrote: post #18

Dagnabit. Here we go again - this is a fantastic, pragmatic amendment to those notes -> https://dalton.substack.com/p/letter-to-myself-in-late-2008?... For a taste: "Doing multiple small layoffs is a form of cascading failure. Do one layoff, but much much deeper than seems correct. Do it decisively. Do it so that you get profitable. In your case that is something like a 70% cut, not a 5-10% cut. Yes you read that rig…

“Race, don’t chase.” Find a way to profitable — default alive — and grow from there. Don’t lie bleeding and default dead. Sounds like Dalton could’ve used this podcast at the time…

https://www.manager-tools.com/2008/10/race-don’t-chase-part-...

Re: Y Combinator's Message to Founders

#95

Post by adamsmith143 »

nopenopenopeno wrote: post #20

I am currently graduating with a CS degree and interpreting this as a warning to not accept the offer from the exciting startup and instead accept the offer from the big corporate fintech company. Is there any reason I could be wrong?

If you discount your stock options to be worth 0 (which is the most likely scenario) and it still makes sense to work at the Startup then go for it but save aggressively because while they may tell you there won't be layoffs and they are in a strong financial position when layoffs do come they are almost always last in first out.

Re: Y Combinator's Message to Founders

#96

Post by liuliu »

wolverine876 wrote: post #82

Like inflation, it's self-fulfilling. Perception is reality. Some people who strongly influence public perception - to whom we seem to have ceded our power to think critically and independently - who look for social disruption, want it. If businesses pull in their horns, stop supporting innovation, the economic result is easy to predict.

That's why it is extremely frustrating to watch this unfold. The easiest way to kill inflation is to kill growth. But that won't help people in need anyway.

An empty shelf of baby formulas are not a sign of "economy is too hot". It is a sign of supply issue.

Re: Y Combinator's Message to Founders

#97

Post by hopefullywrong »

wolverine876 wrote: post #82

Like inflation, it's self-fulfilling. Perception is reality. Some people who strongly influence public perception - to whom we seem to have ceded our power to think critically and independently - who look for social disruption, want it. If businesses pull in their horns, stop supporting innovation, the economic result is easy to predict.

Agreed, some part of this feels like capital is flexing its muscle after a period of employees having incredible gains.

Re: Y Combinator's Message to Founders

#98

Post by hopefullywrong »

liuliu wrote: post #96
wolverine876 wrote: post #82

Like inflation, it's self-fulfilling. Perception is reality. Some people who strongly influence public perception - to whom we seem to have ceded our power to think critically and independently - who look for social disruption, want it. If businesses pull in their horns, stop supporting innovation, the economic result is easy to predict.

That's why it is extremely frustrating to watch this unfold. The easiest way to kill inflation is to kill growth. But that won't help people in need anyway. An empty shelf of baby formulas are not a sign of "economy is too hot". It is a sign of supply issue.

If it's a demand issue maybe companies fall in line and all have their layoffs at the same time, reduce worker purchasing power, and then there's fewer shortages of things. problem solved.

Re: Y Combinator's Message to Founders

#99

Post by adamsmith143 »

throwanem wrote: post #61
adamsmith143 wrote: post #52

Earlier quoted context omitted.

>I think the era of stupid money chasing silly ideas are over. Same thing happened at the end of the dot-com era. It's called the Business Cycle. Those days are not over, they're merely hibernating

Hibernating? They've been the order of the day since 1987. Sure, there's booms and crashes, but that's why we call it a cycle .

Yeah. My parent comment was insinuating that "This time is different" which of course it won't be.
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