How are startups shaped by macro conditions at birth?
papers.ssrn.com
papers.ssrn.com
Those references also show that the data are available so it's it's a shame the authors only looked at 07/08. Looks like the first author worked on this while a grad student. Perhaps they will expand it into a book.
There is also a selection bias in the companies that do get funded, and the fact that they're coming out the door without a growth-at-all-costs culture.
Talent is the cheapest it's been certainly in at least 10 years. The rest of the economy is going okay, so customers shouldn't be impossible to get. If you want office space, that's going great.
I don't know if anyone can raise money right now, though.
I think that's the specific conclusion I could get from it, the paper is very heavy and there's tons of caveats because every recession is different. But yes, if you are good/lucky enough to start a start up during a recession that has reduced labor demand, then you get to pick from a very talented pool.
Currently, I'm not sure if we had a recession last year, the labor market stayed strong despite the market correction and very public layoffs. I guess when everyone and their mother is calling for a recession it's just not going to happen? Yields are uninverting, historically I believe this is a strong signal of a coming recession, and the markets are calling for interest rates to start getting cut in March of next year. So I guess we'll see.
The other question that I found very interesting is: Do start ups born in a recession come to be because the idea and quality has to be very good? Or do they come to be because above-average confident people are the only ones willing to put their ideas out there? Or a combination of both?
That being said overall market movements take a while to shake out; the mortgage bubble was first pointed out as early as 2006. People have been calling out China’s property bubble since the 2010s.
For tech at least I get the impression that the labor market out there is tough.
Anedcotes of course, but what I hear is that maybe the Bay Area tech labor market is tough - but there's a lot of country that isn't the SFBA and nobody I know who isn't bent on working for a FAANG is having trouble finding work.
Overall far fewer opportunities and salaries are down, and more stringent requirements across the board. Whereas before I would get a good response for an application - at least to the technical test or interview stage - now I just get rejections or crickets. I suspect many jobs are fake or they already have the candidate lined up. I'm not desperate so I haven't been trying especially hard, but I can imagine it's not a good time to be looking for work in a hurry.
Infact the market is so good, that people living few blocks from the office premises(multiple locations) immediately decline once HR mentions that they need to come to office at least once every 2-3 weeks.
Then we have some junior interviews where they are asking more than what our mid and some new seniors make and 100% WFH, while most of us are in office most days(heck I mentioned in some other thread a while ago that I even commute 2h each way to/from work, cumulative 4h on office days).
I think, market is mostly volatile now and some are enjoying it while the others are suffering.
Also, let me not start the rant about now 99% of startups and SME now posts for only Senior Engineer/SWE with pay of juniors from 5 years ago or something, no wonder people won't apply.
I don't know if your company genuinely needs be office-only or you just have management who thinks they need to be office-only, but it sounds like there are applicants you are leaving on the table.
So yes, there are jobs, but not ones that I would apply for. Not being picky, but just for practical reasons. Even so, taking that into account, the job market is pretty terrible this year.
So, in summary the "come to office" is just pleasing the management mostly. Also, most of the contractors we have can't enter the premises due to security bs, but in the end it is just all garbage when employees "need to come in every 2-3 weeks" I'd say. I on the other hand have to be in office because I need to deal with some non-smart sensitive hardware that is a bit too large and power hungry.
Speaking of pay, my employer actually pays pretty solid compared to what I hear my friends are making in similar positions to what my employer offers,but before this one, I frustratingly had to decline too many interviews because pay was insulting, I mean we need some pay disclosure upfront regulation here in EU and outright ban asking for expectations instead and then at the end stage citing fußball table and console to accept a huge paycut.
Also that cautious VCs saw promise with the company, so it's better people and a better business.
But, I'm hedging my bets as well with side projects that would appeal to people in a recession , small purchase items that help them learn while they are looking for work: supernatural blogging tools svekyll.com and extrastatic.com. And a way to level up in Japanese by combining anki flashcards with Japanese classic books and learning kanji (community.public.do).
But, I'm concerned about this next year. Lots of people at my co-working space are saying this is the worst sales environment they have ever seen. It's anecdotal but it feels like that to me too.
My guess is this question won't return much of use, but it would return far more value than examine the "macro conditions" of failed startups (or indeed any startup condition).
From the abstract: "While funding conditions cannot explain differences in outcomes, a labor market channel can: recession startups are better able to retain their founding inventors and build productive R&D teams around them."