Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Startups are pummeled in the ‘great unwinding’

nytimes.com

Post reply on HN
Print view View original

281–290 of 443 posts

Re: Startups are pummeled in the ‘great unwinding’

#281

Post by dragonwriter »

axiom92 wrote: post #278
sershe wrote: post #267

Earlier quoted context omitted.

Never been to Pittsburgh, but what do you miss, other than the weather? I lived there for 3 years (Mountain View, SoMa, Inner Richmond), and outside of work it's basically a giant cluster of generic burbs and gridlock, with a filthy medium-quality city in the middle, priced 3-4 times the amount of an average burby gridlock (e.g. San Antonio) or a medium-quality city (e.g. Denver then). There's awesome nature but it's…

Interestingly, in addition to the weather, I do miss nature. I think nature is always next door depending on where you are in the Bay area. For example, you can be in Foster City at 5 pm, get on 92W and reach crystal springs water reservoir on Canãda road by 5:10 (you already feel like you're far away from the city); 15 more minutes and you could be on Skyline (this was also one of my favorite "amaze the tourist" rou…

> Canãda road

Cañada Road

Re: Startups are pummeled in the ‘great unwinding’

#282

Post by perl4ever »

not2b wrote: post #154
tdfx wrote: post #148

Earlier quoted context omitted.

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…

Only the federal government has the ability to borrow money. States have to balance their budgets every year, and whoops, half their tax money has now vanished, because so many can't work. Delegating responsibility to state governments and simultaneously refusing to provide the needed resources is a recipe for failure. Allowing unlimited profiteering on essential supplies and forcing states to bid against each other,…

"half their tax money has now vanished"

Well, maybe, but also (some) states have delayed the income tax deadline to June along with the Feds, which is also a problem for cashflow.

Re: Startups are pummeled in the ‘great unwinding’

#283

Post by nostrebored »

EthanHeilman wrote: post #273
shoo wrote: post #213

Earlier quoted context omitted.

> Plus, they get the additional disadvantage of trying to figure out an actual business model during a recession. this has a bit of a silver lining: it'll help filter out bullshit business models that appear to work in the times of plenty.

It will also filter out sound business models that actually do work in times of plenty, but don't under the conditions of a pandemic.

That's far from a sound business model.

Re: Startups are pummeled in the ‘great unwinding’

#284

Post by appleshore »

numair wrote: post #145
seibelj wrote: post #131

Earlier quoted context omitted.

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.

Everything’s not underfunded. It’s a problem of how the bureaucracies and agencies are created.

Re: Startups are pummeled in the ‘great unwinding’

#285

Post by markmark »

pjc50 wrote: post #151
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.

Right now, client funding is extremely vulnerable. The startup I was working for in 2001 blew up when clients stopped paying bills due to their own bankruptcy. The one I was working for in 2008 was badly crippled by all the clients we were pre-sales engaged with simply closing their external purchasing.

This is the thing I've seen a lot of tech people missing, they are all "I'll be fine, my company already works from home and our business isn't effected". Yes, but what about your customers businesses? What if they stop paying? Or what about _their_ customers. The entire economy is going to be hit hard, and that will ripple through.

Re: Startups are pummeled in the ‘great unwinding’

#286

Post by SpicyLemonZest »

yalogin wrote: post #226

To me the most pertinent question is how long is the impact going to last. Are we ever going to get this under control? If it takes 6 months can any of the service businesses survive that long? What about startups?

I'm extremely optimistic about the coronavirus, something like the 90th percentile among positions I've read, and even I think we'll still be facing impacts in 6 months. Even if the lockdowns end this month and the public health problem is considered resolved in June, that won't be enough time to shake off all the effects.

Most businesses will certainly be allowed to open long before then, though.

Re: Startups are pummeled in the ‘great unwinding’

#287

Post by hodgesrm »

vl wrote: post #190
hodgesrm wrote: post #152

Earlier quoted context omitted.

The term "lifestyle business" really annoys me. It's Silicon Valley propaganda. There are better ways to build companies than taking hundreds of millions or billions in funding. Pre-crisis startup funding was largely decadence enabled by cheap money. By contrast early generation SV companies took relatively small amounts of funding if at all. Intel for example took the equivalent of $18.4M US in 2019 dollars prior to…

> Pre-crisis startup funding was largely decadence enabled by cheap money. Arguably with current rates we are going to have cheapest money ever possible. On top of that a lot of traditional investment vehicles are contracting.

It's a fair point but I think that the key issue is different. VC funds are a kind of equity investment; the question is whether they are actually delivering results. In the case of some of the top-notch US funds I would guess the answer is yes and will continue to be so.

On the other hand large funds like SoftBank are clearly under-performing. Cracks in that model were already appearing prior to Covid-19. So yes, interest rates are low, and equities should benefit in general. However it does not follow that VC investment funds are overall a good bet. To make that argument you would have to trade off against alternatives like real estate, more traditional industries, on-shoring of supply chains, etc.

Re: Startups are pummeled in the ‘great unwinding’

#288

Post by lobster45 »

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?

We have a dentist friend that had to close her office. She is not able to get a loan and this is her business

Re: Startups are pummeled in the ‘great unwinding’

#289

Post by invertY »

SpicyLemonZest wrote: post #276
invertY wrote: post #223

Earlier quoted context omitted.

You cannot disrupt a market if the market itself ceases to exist. This is basic stuff. A whole load of VC stuff relies upon the larger market to predate, has stupidly vapid IPO targets (which the actual big boys, Central Banks, are now culling off, since their actual liquidity stuff like Reits etc are crashing) and basically 100% worthless business models. "Juicer" or whatever it was? Go look up what Glencore is doin…

> No-one in this thread seems to note this: try finding some ex-Soviet citizens who lived through 89-96 and ask them some serious questions. If there's one thing the dissolution of the Soviet Union proved, it's that a complete economic and political collapse does not prevent people from disrupting markets. Many Western companies got their first foothold in the region during that time.

CN has already penetrated Western markets.

Do you expect the Martian Axioms to help you?

Re: Startups are pummeled in the ‘great unwinding’

#290

Post by cinquemb »

markmark wrote: post #285
pjc50 wrote: post #151

Earlier quoted context omitted.

Right now, client funding is extremely vulnerable. The startup I was working for in 2001 blew up when clients stopped paying bills due to their own bankruptcy. The one I was working for in 2008 was badly crippled by all the clients we were pre-sales engaged with simply closing their external purchasing.

This is the thing I've seen a lot of tech people missing, they are all "I'll be fine, my company already works from home and our business isn't effected". Yes, but what about your customers businesses? What if they stop paying? Or what about _their_ customers. The entire economy is going to be hit hard, and that will ripple through.

I think startups that cater to providing services to government funded organizations will probably do better, especially with all this new government debt globally in the form of "stimulus".
Post reply on HN