The ‘Terminator’ of startups says he’s seeing two to four wind-downs a week
techcrunch.com
techcrunch.com
You weren't exaggerating.
...except for the last time we saw it.
> TC: Almost every time we’ve talked over the years, you’ve said that work is busy. Certainly, it slows down sometimes.
> MP: Sherwood has mostly been on an upward run since we started [in 1992], but we did slow down in 2014, and we couldn’t figure it out. Well, VCs were running their companies further to the edge to [improve their internal rates of returns before they hit the fundraising trail]. Turns out we had our best quarter ever in 2015 [as soon as they stopped funding those companies].
Blame the news industry for running with the same lead every couple of years. It works.
Much like the predictably news industry, people her predictably don't read the article before dismissing it.
For some, a crisis is an opportunity.
A few years ago I managed to get a cheap varidesk from a startup that was shuttering in my building...
But yeah, I generally agree with you. I like my fancy chair because I spend an awful lot of time in it every day, and I'm tall (6'6"), so most chairs are pretty uncomfortable for me and my lower back already sucks.
Ultimately comes down to strengthening those muscles. Sitting all day atrophies the muscles. I had lower back pain for the first 30 years of my life, then started deadlifting and the back pain is gone. g'luck
I still think everyone would benefit from some strength training! Any strenuous physical activity has risk from injury, but I think that risk is better to accept than the risk from doing nothing. But it's worth looking up some powerlifting videos on YouTube for good form and cues. (I've seen deadlifting videos from non-powerlifters, and I have not been impressed.) This is a good one: https://www.youtube.com/watch?v=d5eGGZXb0Is Layne Norton is a smart, thoughtful guy and an elite powerlifter.
After four years of swimming 3-4x/wk, my back is now totally fine! Highly recommended.
As for sedentary, it doesn't have to be. I worked at 100 Hamilton Ave once before it was Palantir. Boring work but there was a gym in the basement. I got my bench 1RM up to 270.
And I've worked at a certain company where the VP of Resources personally adjusted the Aeron to my 6'4" as part of my onboarding. This did not impress me.
It ain't the chair.
If that sounds good to you, consider $150/1920 instead for a thought experiment! Sounds about fair for someone like me who assuredly could work for years on end sitting on a rock or any random plastic chair outside Hanoi for all I care.. I'd be madly paranoid about spilling coffee or such sitting in a 1500 piece of furniture
I'm not willing to compromise on my health or my working conditions. Too old for that. Spend money on things that make your life more comfortable or easier when you can.
Meanwhile you have things like ad campaigns that have "unlimited" budgets. Hell, there's tripling staff size in a year without some matching revenue growth!
Chairs don't kill startups.
I know engineer pay is lower in some other countries. UK comes to mind as particularly awful for engineer pay. Still, the context of the discussion is in how much it costs _the company_ not how much it costs the engineer. It's small potatoes for a company.
If you think the countries like the UK where pay is lower than the US, which is the highest in the world, is "particularly awful", you might be living in a bubble.
Not to mention plenty of people making less than 100k even in the US, even for big tech companies you've heard of in big cities like Seattle and New York.
There are zero humans anywhere in any time or place that have global awareness and are not bounded by their personal experience and local context. So what are you even trying to say?
For the people lucky enough to be living in the world's number one economy, in an expensive city, in a well-funded startup or an established tech company, 100k is "not a lot" and spending $1500 on a chair can seem something other than absurd.
The other commenter that you replied to above pointed out very clearly that this applies only to some parts of one particular country, and it is perhaps not very polite to act like this is completely unknown to you.
You responded to this from your bubble, and then defended yourself against me by saying that we are all in a bubble. Well, no kidding, but some of us at least try to be aware of it!
Now are you starting to get even the slightest idea of what I'm trying to say?
There was a startup, Quokka Sports, where we did the office design for them in a brick-and-timber building in SF, and they freaking folded just before the office build-out was complete... going through their office, the conference rooms were literally PILED with brand new aeron chairs... So I had several for a time...
>MP: We sell a lot of patents, maybe more than anyone else. Usually, the only way to pay back [lenders’] loans is to sell the patents. So people aren’t paying what the company would have been worth but usually enough to pay back that secured debt.
So many companies saying they'll only use their patents defensively... may find that their patents will fall into the hands of someone who doesn't share their perspective.
"How much is that server worth?"
"[Some funny techie answer that is literal, irrelevant, and absurd]"
Nods and takes notes.
(I have no idea what the actual number is.)
I worked for a startup that got shutdown. Don't like failure? Don't work in Silicon Valley. Anyways, Cisco (our probable exit strategy) leaned ever so slightly in the other direction and the VCs pulled our funding. But they also sent in a turnaround guy to reposition us for either the direction Cisco ever so slightly leaned in (soon to lean back) or something else.
Guy was the biggest asshole in the world. Moving the company to Microsoft Exchange is not a worthy accomplishment for a turnaround executive. Two weeks later, he shut us down for good but not before putting his 8 months pregnant wife on the insurance plan. This was a strange detail given that he was worth about $20M.
This guy had taken the job to shut us down. He then brought in a squadron of his buddies who shut us down properly and put a bow tie on it only after laying off everyone else. Basically, he sucked a lot of money out of the VCs. I occasionally Google'd him to figure out if he'd ever done anything afterwards of any merit. Nope.
That guy was a vampire.
https://www.youtube.com/watch?v=kdXKdRoB9Wk [potentially NSFW for language]
[0] http://www.bizjournals.com/sanjose/news/2017/03/09/quixey-al...
Highlighting the value of reclamation just draws the heat off of the irrationality of the tech bubble. Amazon isn't a rich ecosystem, it's oligarchic.
And, indeed, any systemic failure in a capitalist economy gets explained away by saying that some cadre of vultures will exploit arbitrage until the gap closes. No one really questions the systemic failures per se. The economy happily creates this surplus in full anticipation of it being scrapped and fed to vultures. Banks repossess cars and capitalists think "working as intended" instead of "there's so many delinquent car loans that there's an industry of repo men and maybe that's significant." This criticism extends similarly to the tech bubble.
I think the gp meant https://en.wikipedia.org/wiki/Amazon_rainforest
That is, if people being fired from these miserable startups is good for the economy, wouldn't them not having worked there at all have been even better?
The East Coast Monopoly mindset was why Xerox PARC had money to create things, but never got anything done with them.
It's a reason why young people find it hard to get full time permanent jobs and are instead hired as temps instead.
No they aren't. This is a nice theory, but it simply does not hold up in reality. Stop repeating it as gospel.
>If it is not, large vetting processes are required and hiring people reduces.
People vet their employees either way.
>It's a reason why young people find it hard to get full time permanent jobs and are instead hired as temps instead.
No it isn't. This reasoning was used to justify the 90 day trial period in NZ and it did NOT lead to more jobs.
I did notice the trade show seemed dominated by the country pavillions like I don't remember before. It made me wonder if they were basically bussing in international startups to cover up for the general lack of startups that wanted to buy a booth.
Second, overall attendance at unofficial events was significantly lower from previous years. Previously you faced huge lines for most parties, but many such lines, if any, cleared quickly this year.
Third, investment by startups in their own official events was significantly lower this year. Startups either attended without running their own events or participated in other party's events instead of running their own events.
Fourth, many large brands decided not to participate this year. Microsoft and Samsung were both absent for the first time in a long time. And many other companies scaled back their events.
Fifth, as you mentioned, the exhibition hall was dominated by non-startup parties moreso than in years past. This indicates that startups are not investing in SXSW as much as they had before.
In general, attendance felt lighter this year vs. 2016, and definitely vs. 2015 and 2014, which felt like a peak year for SXSWi.
While these are SXSW-specific numbers, I would wager that you are seeing similar slowdown with other startup-focused events and conferences. Meetups are more lightly attended, and certainly less sponsored.
It feels like the burst in activity is slowing. Not gone. Just slowing.
Markets and investors adapt to experience. Much like this article said, companies are learning to wind down companies faster and pivot earlier. Founders and VCs get better at managing risk.
Discounting for the fact that they're only seeing failures.
I cringe every time I see another "Come help us change the world at..." or "Come help us reinvent blah blah" here on HN. Instant red flag to me, but I'll be damned if they didn't get funded anyway.
The whole idea of creating a large valuation so that you can have a successful exit is literally just that. You are creating demand for the company so that you can sell it to somebody and keep part of the money. The idea of starting a company so that you share in part of the profit generated by the company is ludicrous in today's world.
But always keep in mind that being "successful" is not the only way to move money from an investor's pocket into your own. You can merely hype the hell out of the company. If successful, you can engineer an exit with no viable product. You can also create the "killer demo" which encourages a large company to buy you just so that they can suppress the technology (not so common in this decade, but was standard practice in the 2000's).
And here's the best part. If you "fail" utterly, you can still pocket a fair amount of cash. Most successful entrepreneurs that I worked with do not have the attitude that "this company must succeed". Not by a long shot. They throw spaghetti up against the wall over and over and over again, with the belief that eventually something will stick. They view the "failures" as the salary they get paid (from investors) while waiting for the money train to roll in to town.
What's even more awesome (as in, it strikes me with awe) is that if you manage to hype your way into the second round (or higher) consistently, then you are a high flyer and people will flock to stuff money into your pockets, even though you have never actually produced a "successful" venture.
I am absolutely convinced that your job as a founder is not to make the company "successful". Your job is to raise money, make connections and sell the company. Sure success is a "nice to have", but leave that to your CTO/COO/unwitting co-founder. I often see founders on HN complaining of burnout, trying to keep it all together. Meanwhile all of the successful founders I've worked with don't get bogged down with that stuff. Their the ones going home at 4:30 while the hired help stays until 2 in the morning propping up the server with popsicle sticks and devising various sacrifices to appease whatever god seems to be angry at the time.
Typed partially in jest... only partially...
2015 was a banner year for startup funding, and you would expect many of those war-chests to be running low right around now.
https://www.wsj.com/articles/is-the-tech-bubble-popping-ping...
Infact, I would argue that he should be doing 7-8 a week. Clearing out the deck and making way for the new is a good way we can maintain a long term healthy eco system.
Frankly, many iffy biz models that escape startup death aren't survivors but are just long term zombies that are propped up by investor stupidity with no clear path to sustainable growth.
The indication (more than normal) is given in the response to the first question, from which the article's title is taken:
> MP: We’re seeing two to four companies wind-down a week, which we’ve never seen before. I think more [investors] are taking the Sequoia Capital approach, meaning if something isn’t working, they’re moving on
edit: I think the parent was slightly edited but apologies if I simply misread.
One might interpret the facts as presented to indicate that startups are fashionable, and more people are starting them. A certain percentage are likely to fail.
I am in Brazil, right now completely unemployed (technically I never was employed in first place, so I don't count as unemployed in statistics), and out of work.
So I am thinking of what business to start, this time... (I legally own 3 business, and I think I am heir of more 3 or 4) Because the ones I have none are profitable at all, and I can't find any work (not even supermarket cashier).
And I noticed, that on social sites (Facebook for example) that shows employment, lots of people are becoming business-people too, for example I noticed scores of 18 year olds that own some business selling cakes, or making clothes, or other stuff like that.
It is basically desperation, people can't find jobs, so they start their own business out of desperation, and of course most of these will fail anyway, from the smallest one (someone selling cupcakes from their garage) to the biggest ones (venture-backed stuff post-IPO...)
The scope of this article seems to be VC-backed businesses, and more specifically ones that have had more than one round of funding, but have either run out of money, or are on the obvious path to run out of money..
I'm not sure how it is in Brazil, but in some parts of the US, there are many young adults 18-22 who start businesses like this. They either start right out of high school or drop out of college, create an LLC, then start a business. Once every so often, someone does well. They make it 5+ years before calling it quits for various reasons. Most of them fail right out of the gate.
The reality of, "Oh crap. This is my business. I can do whatever I want, but I am literally responsible for everything - including generating income" hits. They see that it's not so easy bootstrapping a photography business or cake business from scratch when there is no formal training in the area. No one wants photos that are washed out when a professional can do it for a few dollars more. No one wants a cake that can be replicated by spending 1/3 the price for a store bought cake mix.
Then they stop actually participating in the business, but their social media profile still says "Owner of Pop Flash Photography" or "Sole Proprietor of Wake n Bake Cakes".
One thing that some CS students in my area have done is to start an LLC once they've written something demoable. It doesn't have to be new or innovative (could be a simple calculator app that's on the app store), but if they can distribute it for use, they license it and publish it under the LLC. They make business cards for the LLC. Then they say things like, "I'm the Founder/Owner of Living Room Launched Software. We have a small app on the app store. Here's my card. Contact me if you need something."
This isn't to knock young people who have the entrepreneurial spirit! I think it's great for people to explore what they want to do in life, and it's better to fail fast straight out of HS than to blow their life savings in their mid-40s. Some kid fresh out of high school looking to get rich quick off of something easy is markedly different from the churn discussed in this article.
I find this fascinating, as it really speaks to my experience in small companies. The thing you actually create -- code, docs, self-serve product, sales and marketing collateral -- isn't particularly valuable. Most of the knowledge is tribal knowledge, and you're all just spending time trying to expand that. It's amazing how far you can go, and have to go, with the informational equivalent of duct tape and string.
Anyone know what these 3 / 4 "Unicorns" are?
Also, isn't the term "unicorn" use to refer to wildly successful startups that have very low chance of failing? This sounds like an oxymoron...