3 ms·

I've said it in a few other posts but post WeWork, a lot of the big D, E, F companies are expected to hit profitability/break-even soon. Some other threads are

I've said it in a few other posts but post WeWork, a lot of the big D, E, F companies are expected to hit profitability/break-even soon. Some other threads are talking about Google stealing a lot of the content. That's definitely true for weather, flights, but things like long form content is still long form. I would argue these layoffs aren't a function of the GMachine at work, but more generally all the big tech firms with lofted valuations are being 'called in'. Every week, I see at least 1 large name running lay offs here on HNews. The bubble at the 1B+ vals has started to correct. Firms are expecting people to prove their worth. Lots of times this means IPO and then trading on a multiple of earnings. Many of these guys aren't even near net positive so it's very scary. I expect 2020 to be the year startups have a lot of trouble at the Series C.

dehrmann 7y ago
Was the WeWork failed IPO the RIP Good Times[1] of this boom? [1]: https://venturebeat.com/2008/10/10/the-sequoia-rip-good-times-presentation-get-your-copy-here/ https://venturebeat.com/2008/10/10/the-sequoia-rip-good-time...
droopyEyelids 7y ago
This feels insightful. I work for a big tech company (not faang) and we're doing a bunch of insane cost cutting bullshit and we've had a hiring freeze for maybe 10 months now. It's interesting to see the inside view but see that none of it hits the financial press, or even the analyst stuff like seeking alpha.
- Balgair 7y ago
  Keep notes? I'm sure I'm not the only one on here that would love to compare/contrast what you are going through with what the rest of us have as well.
claydavisss 7y ago
This is just tech being reset to the rational expectations of any other industry. How many new businesses outside of tech can get a decade of runway to exit or show a profit? Quora et al are just the beginning and there is a lot of deadwood to be cleared out. The expectations of the last decade - that you could just get a company to a reasonable point of maturity and then just wait to be acquired - are no longer valid. Instead of bemoaning this reality check we should all be grateful that so much of the world's wealth was redirected into overcompensating us for unproductive work for so long. How many of us are paid over $200k to perform unprofitable work? Its crazy! But its been going on so long it has become accepted as the norm. Larger/profitable tech giants surely recognize there is no need to rush in an acquire startups for a premium...they will soon all be on the clearance rack...no one believes the valuations these companies and their VCs assign themselves anymore. Quora valued at $2 billion? I doubt they could get an offer for more than $100 million at this point. Interestingly since so much of the deadwood never made it to IPO, this culling could end up being a nonevent to investors. They'll stay invested in AAPL and MSFT and not miss Bay Area private startups imploding.
commandlinefan 7y ago
> big D, E, F companies D,E,F companies?
- majani 7y ago
  Series D,E,F funding

dehrmann 7y ago

Was the WeWork failed IPO the RIP Good Times[1] of this boom? [1]: https://venturebeat.com/2008/10/10/the-sequoia-rip-good-times-presentation-get-your-copy-here/ https://venturebeat.com/2008/10/10/the-sequoia-rip-good-time...

droopyEyelids 7y ago

This feels insightful. I work for a big tech company (not faang) and we're doing a bunch of insane cost cutting bullshit and we've had a hiring freeze for maybe 10 months now. It's interesting to see the inside view but see that none of it hits the financial press, or even the analyst stuff like seeking alpha.

Balgair 7y ago
Keep notes? I'm sure I'm not the only one on here that would love to compare/contrast what you are going through with what the rest of us have as well.

claydavisss 7y ago

This is just tech being reset to the rational expectations of any other industry. How many new businesses outside of tech can get a decade of runway to exit or show a profit? Quora et al are just the beginning and there is a lot of deadwood to be cleared out. The expectations of the last decade - that you could just get a company to a reasonable point of maturity and then just wait to be acquired - are no longer valid. Instead of bemoaning this reality check we should all be grateful that so much of the world's wealth was redirected into overcompensating us for unproductive work for so long. How many of us are paid over $200k to perform unprofitable work? Its crazy! But its been going on so long it has become accepted as the norm. Larger/profitable tech giants surely recognize there is no need to rush in an acquire startups for a premium...they will soon all be on the clearance rack...no one believes the valuations these companies and their VCs assign themselves anymore. Quora valued at $2 billion? I doubt they could get an offer for more than $100 million at this point. Interestingly since so much of the deadwood never made it to IPO, this culling could end up being a nonevent to investors. They'll stay invested in AAPL and MSFT and not miss Bay Area private startups imploding.

commandlinefan 7y ago

> big D, E, F companies D,E,F companies?

majani 7y ago
Series D,E,F funding