The Era of Startups Is Over • Hacker News Board

Re: The Era of Startups Is Over

#61

Post by [deleted] » Sun, Oct 08, 2023, 9:53 PM UTC

CalChris wrote: post #58

ianbutler wrote: post #55

Earlier quoted context omitted.

Last year interest rates weren't 5.5%, they were 3% and investments were already starting to tighten up. It now costs even more to deploy capital and looks to remain that way for a while, possibly indefinitely. It's really as simple as that. Higher scrutiny, tighter purse strings, the dynamic has been shifting for a while.

That's pretty simple but it doesn't explain how or why low quality startups will get weeded out. It explains why there will be fewer startups but it says nothing about their quality.

[deleted]

Re: The Era of Startups Is Over

#62

Post by ianbutler » Sun, Oct 08, 2023, 9:59 PM UTC

CalChris wrote: post #58

ianbutler wrote: post #55

Earlier quoted context omitted.

Last year interest rates weren't 5.5%, they were 3% and investments were already starting to tighten up. It now costs even more to deploy capital and looks to remain that way for a while, possibly indefinitely. It's really as simple as that. Higher scrutiny, tighter purse strings, the dynamic has been shifting for a while.

That's pretty simple but it doesn't explain how or why low quality startups will get weeded out. It explains why there will be fewer startups but it says nothing about their quality.

Maybe help me understand where in my original comment I lost you? I'm not seeing where your lack of clarity stems from. If you have to have significantly more solid economic fundamentals, per what I originally wrote, before you'll get investment, that almost tautologically removes low quality startups.

Re: The Era of Startups Is Over

#63

Post by gumby » Sun, Oct 08, 2023, 10:51 PM UTC

fallingknife wrote: post #56

gumby wrote: post #42

Earlier quoted context omitted.

> I sort of dislike the term "lifestyle business" as to me the term implies something you can do without working too hard at it--which is not necessarily the case. There is nothing wrong with the term. I first encountered it in the early 80s, but I think it dates back to the 60s when people started to question the big company profile of the then social contract. Yiu say, “which is not necessarily the case”. Well in t…

It is utter insanity to think that running a small retail location like a surf or dive shop is easy or that you would be able to just shut down for a day on a whim and not need the revenue.

If you've ever lived in a beach town in the caribbean, south pacific, even hawaii etc you'd encounter all sorts of businesses like this.

Reminds me of the parable of the management consultant and the fisherman, oft quoted here on HN.

Re: The Era of Startups Is Over

#64

Post by charles_f » Mon, Oct 09, 2023, 12:01 AM UTC

What changed? Is it the interest rates? The saturation of the market? The reduction of RoI? The competition that reduces available capital for whomever wants to jump?

I'm willing to believe that statement, I'm sure there can be tons of arguments made to back it up, lots of data to be seen, but there's none in this post and we're left to guess with a generic Ray Dalio economics video.

The general self-substantiation of that post doesn't blend well with its general snarky "o, sweet summer child" tones.

Re: The Era of Startups Is Over

#65

Post by Anticlockwise » Mon, Oct 09, 2023, 2:33 AM UTC

ianbutler wrote: post #62

CalChris wrote: post #58

Earlier quoted context omitted.

That's pretty simple but it doesn't explain how or why low quality startups will get weeded out. It explains why there will be fewer startups but it says nothing about their quality.

Maybe help me understand where in my original comment I lost you? I'm not seeing where your lack of clarity stems from. If you have to have significantly more solid economic fundamentals, per what I originally wrote, before you'll get investment, that almost tautologically removes low quality startups.

I think the point being made is that it's easy to tell low quality after the fact, but it's not obvious before investment. The startups that'll get weeded out will be the ones whose business fundamentals aren't obvious. Some of them will be low quality anyway. Some other businesses could have been high quality even if the fundamentals don't look it (Facebook springs to mind).

I think you're defining quality of startup to be "has known good unit economics" and that's certainly one determinant of quality, but part of why investors have been throwing money at Adam Neumann and others is that it's not the only way that a startup can become a huge success.

Re: The Era of Startups Is Over

#66

Post by geniium » Mon, Oct 09, 2023, 7:53 AM UTC

dartos wrote: post #34

vonnik wrote: post #11

Shallow ahistorical analysis. Apple and Microsoft were born in the oil shocks of the late 70s and survived Volcker’s high rates through the early 80s. Google barely took off before the tech crash wiped out the Valley in 2001. Many companies we use today were young and dicey affairs during the 2008-2009 financial crash. Just because the bloom is off the rose, and both VCs and financial tourists like Tiger are overfund…

Implying there was any analysis is being generous.

Just wanted to say that!

Re: The Era of Startups Is Over

#67

Post by geniium » Mon, Oct 09, 2023, 7:54 AM UTC

vonnik wrote: post #11

Shallow ahistorical analysis. Apple and Microsoft were born in the oil shocks of the late 70s and survived Volcker’s high rates through the early 80s. Google barely took off before the tech crash wiped out the Valley in 2001. Many companies we use today were young and dicey affairs during the 2008-2009 financial crash. Just because the bloom is off the rose, and both VCs and financial tourists like Tiger are overfund…

Totally agree, thanks for your comment vonnik!

Re: The Era of Startups Is Over

#68

Post by geniium » Mon, Oct 09, 2023, 7:55 AM UTC

This seems like a perfect post to engage on solo entrepreneur and indie hackers and bootstrapper that have basically more space to thrive and we love the idea that we don't need to have VC money to launch and build a great product that can turn into an amazing business!

Re: The Era of Startups Is Over

#69

Post by ianbutler » Mon, Oct 09, 2023, 5:42 PM UTC

Anticlockwise wrote: post #65

ianbutler wrote: post #62

Earlier quoted context omitted.

Maybe help me understand where in my original comment I lost you? I'm not seeing where your lack of clarity stems from. If you have to have significantly more solid economic fundamentals, per what I originally wrote, before you'll get investment, that almost tautologically removes low quality startups.

I think the point being made is that it's easy to tell low quality after the fact, but it's not obvious before investment. The startups that'll get weeded out will be the ones whose business fundamentals aren't obvious. Some of them will be low quality anyway. Some other businesses could have been high quality even if the fundamentals don't look it (Facebook springs to mind). I think you're defining quality of startu…

I hear what you're saying, I think this is a case where there's no perfect total solution. I would amend what I said to be more "on the balance" more bad then good get weeded out.

The thing about Facebook is they were widely profitable and quickly growing quite early on if I recall correctly, so not sure that's a great example, but I get what you're saying anyway.