4 ms·

The long waited startup crash is happening but with a clever camouflage. None of the executives would ever have to admit their product sucked. They’ll simply bl

The long waited startup crash is happening but with a clever camouflage. None of the executives would ever have to admit their product sucked. They’ll simply blame it on the market. It’s employees who’ll face the worst. I hate the VC startup culture even more now.

deleted 6y ago
[deleted]
devmunchies 6y ago
well, most tech companies are non-essential by nature. There are lots of companies that are only feasible in a bull market. There are lots of product people can simply go without in most industries. Tech just has more non-essential, nice-to-have companies than other industries.
- lowdose 6y ago
  Which industry is not a technology industry according to you? And which companies would survive another century without becoming a technology company?
  - dredmorbius 6y ago
    There are lo-tech spaces, and a great many which are not, or avoid high technology, which is what most people. mean by "tech sector", if not the even narrower band of "high information technology". https://en.wikipedia.org/wiki/High_tech https://en.wikipedia.org/wiki/High_tech Particularly the cited reference, the OECD definition: Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product Classification", OECD Science, Technology and Industry Working Papers, No. 1997/02, OECD Publishing, Paris. https://read.oecd-ilibrary.org/science-and-technology/revision-of-the-high-technology-sector-and-product-classification_134337307632 https://read.oecd-ilibrary.org/science-and-technology/revisi... Page 7 specifically divides industries into four technology levels, high, medium-high, medium low, and low. Given J.S. Mill's wonderful definition of technology, 'the study of means", there's little in human activity which is ccompletely atechnological. There remains, however, much that is quite some remove from the cutting edge. In the technology adoption lifecycle, high tech are innovators. An early-adopter firm is itself still not high tech itself. https://en.wikipedia.org/wiki/Technology_adoption_life_cycle https://en.wikipedia.org/wiki/Technology_adoption_life_cycle
- SQueeeeeL 6y ago
  No, companies who produce mission critical products like chemical modeling and database systems are always going to critical. A product can be essential and still made out of 1s and 0s.
  - pessimizer 6y ago
    > products like chemical modeling and database systems are always going to critical. I don't think they will ever represent "most tech companies," though.
AznHisoka 6y ago
In most cases it is not that their product sucked but rather it isn’t mission critical enough. It is just a vitamin compared to other things companies/people are paying for. Nothing wrong with being a vitamin (you can be vastly successful) but it’s the first expense that is going to get cut in a recession.
- toomuchtodo 6y ago
  Opendoor was trying to play real estate market maker. This is easy money during an expansionary upswing, and a dangerous game to be in near the end of the credit cycle (a phrase used elsewhere in the capital markets you might apply here: "Picking up nickels in front of a steamroller"); you could suddenly be holding an enormous amount of assets on your books you can't afford the carrying costs for and have to unload them at fire sale prices. There are some business models that are attractive when capital is cheap, but not so great when the tide goes out and you suddenly have to be a real business, because capital is no longer freely available. I would propose that this is different than the discretionary businesses you describe, that are sustainable outside of extraordinary economic circumstances.
  - seiferteric 6y ago
    I wonder why this is a problem. Maybe our problem is with the assumption that companies should last forever in the first place. If it was not so difficult and stressful to change jobs, I think it would be better if more companies only existed for as long as they were useful/initiative, but when the steam runs out they are liquidated and everyone can walk away happily.
    - toomuchtodo 6y ago
      Anything that would make transitions between roles easier for employees during destruction of orgs sounds like good policy to support economic dynamism. A convo for another thread.
      - coliveira 6y ago
gwbas1c 6y ago
> None of the executives would ever have to admit their product sucked. I personally wouldn't be that harsh. IMO, I used to come across a lot of founders who just didn't understand the point of running a business. It's an easy trap to fall in when there's lots of investors looking to put their money and willing to work with 1 in 10 success rates.
onion2k 6y ago
I don't think you can tell whether something is a crash, a down turn, or just some companies using C-19 as a convenient cover to cut some dead wood until it's over and you can see the aftermath. This could be the beginning of a huge swath of staff cuts across the whole of tech or it could be a tiny bit of bad news. Shouting about how the sky is falling certainly isn't helpful without more data to back up the claim.

deleted 6y ago

[deleted]

devmunchies 6y ago

well, most tech companies are non-essential by nature. There are lots of companies that are only feasible in a bull market. There are lots of product people can simply go without in most industries. Tech just has more non-essential, nice-to-have companies than other industries.

lowdose 6y ago
Which industry is not a technology industry according to you? And which companies would survive another century without becoming a technology company?
- dredmorbius 6y ago
  There are lo-tech spaces, and a great many which are not, or avoid high technology, which is what most people. mean by "tech sector", if not the even narrower band of "high information technology". https://en.wikipedia.org/wiki/High_tech https://en.wikipedia.org/wiki/High_tech Particularly the cited reference, the OECD definition: Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product Classification", OECD Science, Technology and Industry Working Papers, No. 1997/02, OECD Publishing, Paris. https://read.oecd-ilibrary.org/science-and-technology/revision-of-the-high-technology-sector-and-product-classification_134337307632 https://read.oecd-ilibrary.org/science-and-technology/revisi... Page 7 specifically divides industries into four technology levels, high, medium-high, medium low, and low. Given J.S. Mill's wonderful definition of technology, 'the study of means", there's little in human activity which is ccompletely atechnological. There remains, however, much that is quite some remove from the cutting edge. In the technology adoption lifecycle, high tech are innovators. An early-adopter firm is itself still not high tech itself. https://en.wikipedia.org/wiki/Technology_adoption_life_cycle https://en.wikipedia.org/wiki/Technology_adoption_life_cycle
SQueeeeeL 6y ago
No, companies who produce mission critical products like chemical modeling and database systems are always going to critical. A product can be essential and still made out of 1s and 0s.
- pessimizer 6y ago
  > products like chemical modeling and database systems are always going to critical. I don't think they will ever represent "most tech companies," though.

AznHisoka 6y ago

In most cases it is not that their product sucked but rather it isn’t mission critical enough. It is just a vitamin compared to other things companies/people are paying for. Nothing wrong with being a vitamin (you can be vastly successful) but it’s the first expense that is going to get cut in a recession.

toomuchtodo 6y ago
Opendoor was trying to play real estate market maker. This is easy money during an expansionary upswing, and a dangerous game to be in near the end of the credit cycle (a phrase used elsewhere in the capital markets you might apply here: "Picking up nickels in front of a steamroller"); you could suddenly be holding an enormous amount of assets on your books you can't afford the carrying costs for and have to unload them at fire sale prices. There are some business models that are attractive when capital is cheap, but not so great when the tide goes out and you suddenly have to be a real business, because capital is no longer freely available. I would propose that this is different than the discretionary businesses you describe, that are sustainable outside of extraordinary economic circumstances.
- seiferteric 6y ago
  I wonder why this is a problem. Maybe our problem is with the assumption that companies should last forever in the first place. If it was not so difficult and stressful to change jobs, I think it would be better if more companies only existed for as long as they were useful/initiative, but when the steam runs out they are liquidated and everyone can walk away happily.
  - toomuchtodo 6y ago
    Anything that would make transitions between roles easier for employees during destruction of orgs sounds like good policy to support economic dynamism. A convo for another thread.
    - coliveira 6y ago

gwbas1c 6y ago

> None of the executives would ever have to admit their product sucked. I personally wouldn't be that harsh. IMO, I used to come across a lot of founders who just didn't understand the point of running a business. It's an easy trap to fall in when there's lots of investors looking to put their money and willing to work with 1 in 10 success rates.

onion2k 6y ago

I don't think you can tell whether something is a crash, a down turn, or just some companies using C-19 as a convenient cover to cut some dead wood until it's over and you can see the aftermath. This could be the beginning of a huge swath of staff cuts across the whole of tech or it could be a tiny bit of bad news. Shouting about how the sky is falling certainly isn't helpful without more data to back up the claim.