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Comment by tschellenbach | Hacker News Reader

Hard to say how bad it will get. VCs I talk to seem to expect it to get much worse.

At the end of the day though, as long as you make sure you're excellent at your job, you'll be able to find something new in any market.

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> VCs I talk to seem to expect it to get much worse.

Of course they would say that because it's what they want. They hoped to wrestle back power from the worker in 2000, then 2008 and now they think maybe this time. The fed is actively attacking wage growth this time around, so maybe?

Big part of it is politically motivated economic reasoning, imho

What? VCs want the insanely optimistic no-interest rate environment. Giant speculative investments, overvalued IPOs and insane acquisitions are how they get rich, and those things all coexist with huge salaries for engineers.

My personal opinion is that the crunch will hit towards the end of Q1 2023. My thinking.

1. VC market was frozen towards end of 2022. VCs will point to seasonality; my guess is they were waiting for valuations to stabilize.

2. 2023 headcount has already been planned. While there are still some openings, many companies no longer seem to be in expansion mode.

3. Blitzscale startups will be hitting Sand Hill Road in a few days. Many will take severe downrounds and have to drastically downsize as a result; others will implode altogether.

4. There still might be a more severe market downturn, in which case even larger companies will be forced to make cuts.

Of course, there's a feedback loop in play here so the situation can change very quickly.

i'm doing a presentation in Feb for a large, public sector, project scheduled for two years. If we win the deal then I can ride out the downturn there. If we don't then things get a bit more spicy. /fingers crossed

I can't recall any recessions / downturns that were known in advance with such certainly. I question if it will really materialize for this reason.

No one knows anything with certainty right now, but that doesn't stop people from speculating. Some people speculating will be right, some will be wrong.

I see almost as much speculation that "we've already seen the worst" for this recession as I do that "it's going to get much worse". Even among the crowd that thinks it's going to get worse in 2023 before recovering in 2024, they can be right and also wrong (it could continue to get worse until 2025)

I think this one is a little different because the Federal reserve is trying to induce a downturn, i.e. lower consumer demand in order to fight inflation. In spite of the Fed's efforts, consumer demand remains stubbornly high, as are unfilled job openings.

Since it is being manufactured to some extent it should have a very predictable trajectory.

It's not really though, look at the reverse repos. The fed is literally playing both sides of the board. Raising interest rates to squeeze private equity and housing but injecting trillions to keep commodity and equity prices inflated. There is a very real and growing recession / equity crash, the fed has been inflating the market with reverse repos since early 21 to keep the markets somewhat stable. (2 Trillion, extremely unprecedented, look at the max table on St Louis Fed) That has resulted in inflation because the actual economic growth is not occuring. The only way to keep the GDP from showing a drop is for prices to go up outside of the inflation index. Part of the reason for the official calculation formula change recently. The trajectory here is anything but predictable.

Yeah, it seems a little crazy to me the FOMC FFR decisions are burying the lede on RRP and TGA activities. I can't think of another similar period in Federal Reserve and Treasury history to compare to.

FOMC = Federal Open Market Committee

FFR = Federal Funds Rate

RRP = Reverse Repo Facility

TGA = Treasury General Account

The global trend is that the world consumes too much according to Greta-type of people, and those people are leading the world in EU and in the Biden admin. In parallel we have eased too much money with Covid and we’ll take it back. Third, GPT shows awesome advances. Fourth, China has production issues due to Covid so scarcity will reappear.

All this together: The VC money will get redirected from blockchain-type of startups to climate startups first, which doesn’t create as many jobs for devs, and then to AI startups if they show some results, but again this employs very different profiles from simple programmers. The rest of the economy will keep inflating a little, despite anything the Fed can do, because scarcity causes inflation.

I recently saw a headline that some economists' model showed a 100% certainty of a recession in 2023. Made me think, there's not going to be a recession. Economists have never been good at predicting anything.

Even a broken clock is right, twice a day.

Look at the signs. We have high inflation, rapidly increasing interest rates, declining stock prices. 2 negative down quarters, only 10k jobs added vs 1M estimated.

Why do you think the odds of recession are low? What signs besides, economists being in agreement, do you see?

Stock and futures markets market should be lower.

edit: Stock and futures markets should be lower if a recession is a certainty in the next 6-9 months.

Inflation is dropping like a rock, but it takes a while to fully show itself in the official numbers because it's measured year-over-year. The supply chain crunch is over. We've gotten through huge interest rate increases and only have one more half-point hike to get through before the Fed levels off. All those shocks should have put us in a recession in 2022 but didn't. Stocks and home prices dropped, but the real economy chugged along. So, why, now that we're through the worst of it, would we get a recession in mid 2023?

I'm not sure that we won't have a recession. But I'm not as convinced as everyone that it's a certainty.

> 3. Blitzscale startups will be hitting Sand Hill Road in a few days. Many will take severe downrounds and have to drastically downsize as a result; others will implode altogether.

What does this mean (blitzscale, and sand hill road) ?

Sand Hill Road is a road in the SF bay area where a lot of VC firms have headquarters. People use "Sand Hill Road" to refer to the SF VC industry the same way people use "Wall Street" to refer to NYC based finance.

I'm not really what the official definition of blitzscale is (or if there is one). I assume it means scale (specifically grow head count) really fast.

> as long as you make sure you're excellent at your job

The problem is everyone tries and thinks they're doing well. Realistically only 5-10% are "excellent at their job". 50% of us are below average.

50% of us are below the median. Depending on the distribution, there could be many of us or few of us below the mean.

Now, does the employer use the median or the mean to evaluate their employees? Interesting question..., I don't know.

All I see is people hiring programmers and IT workers. Basically the younger worker bees. Not managers who aren't programming or people with more experience than being a serf. The lesson is you're expected to start your own company at a certain point or be a construction worker (programmer, IT worker) the rest of your life. If you're not a manager on track to be a senior manager by your 40s, and you aren't just a programmer, you're screwed.

In my experience, there are lots of highly productive programmers and I.T. people in their 40s-50s.

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