For Tech Startups, the Party Is Over | Hacker News Reader

For Tech Startups, the Party Is Over

wsj.com

9 pointskazanins7 comments

This is kinda sad to me, sure a lot of the recent tech companies that have sprung up on free money are worthless. But a lot of them are taking on really big and interesting problems they probably wouldn’t be able to do otherwise.

It makes me wonder about the games we play with money and how that affects our ability to innovate. Free money had almost a UBI sort of feel.

There are efficiency innovations that will be made on this side of the pendulum swing.

https://archive.ph/cwXm6

From the article:

> Funding is suddenly scarce as venture capital firms grow stingy, forcing young companies to get frugal and focus on breaking even

adj stingy

1. stingy, ungenerous -- (unwilling to spend) 2. meager, meagre, meagerly, stingy, scrimpy

also known as frugal and prudent in US/GB-EN

>“It’s not a 2001, in my opinion, or a 2008 scenario,” said former Cisco Systems Inc. CEO John Chambers, who is now a venture capitalist. “Marginal startups just will not get funded, but I actually think that’s a healthy phenomenon.”

Do folks here who experienced 2001 and 2008 agree with this?

I am not particularly concerned about layoffs at my company, but I do wonder how extensively this correction is going to affect the job market for devs.

Basically, people are expected to be more discerning about what they'll yeet money at. Remember, wealth tends overtime to trickle up, so good or bad investment, the people at the top'll probably make it back eventually anyway.

The big diff is now founders need to measure up to "can you make it back at least X% in Y% time?) Where X% is now non zero.

I experienced 2001 and 2008. In 2001, f**kedcompany.com was daily reading to find out which random startup(s) went under that day. For me, every company meeting was the one where I wondered if we were all being fired. I started as employee #45 at a company, which then grew to over 150, and then shrank back down to 40. The world of 2008 felt (to me) more like a global economic calamity vs. tech explosion.

In both of those cases, tech compensation felt more "normal" and getting a low six-figure exit felt like the best-case scenario. No one I knew was looking for unicorns or otherwise expecting life-changing money. Fast forward a few years, and it feels like everything changed. People started making massive piles of cash and everyone was looking for a unicorn.

What happens now? I'm not sure. I think the market gets a little tighter, but I don't think it's a crash. The world is software, and there's only going to be more of it. With such high stakes, any slowdown will be temporary until VC money gets sick of not being spent (and not making returns).

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