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RIP Good Times (2008)
- gilmore606 4y agoI thought this would be a retrospective on the infamous Good Times email virus. Good times.
- uberdru 4y agoI saw this the first time around. Times are different. I do recall one VP wandering the halls loudly opining that "no start-up will ever go public again." In 2008.
- fullshark 4y agoHe was basically right!
- BryanBeshore 4y agoHahah. Because "times were different" and the money, well, that just kept flowing in the private market.
- 1270018080 4y agoI'm just surprised how quickly things are going badly. My company is trying to get a round of funding. If you asked me 8 weeks ago how it was going, I would've said "We're in a very strong position, hiring like crazy, tons of growth upcoming. We're going to get a ton of money." Now, it's "Bad. Who knows." We're still going to get money, but it's likely 75% less than we were thinking 8 weeks ago. And we're a real company with a real product and demand, not web3 or whatever. I can't imagine how those companies are going to fare.
- boringg 4y agoThey are going to going to go down like a Lead Zeppelin.
- ajross 4y agoThings turn around like this because the truth is that everyone (including and especially VCs) knew that things were overheated, and had been for well over year. But you still want to cut deals in a market that's overheated because if you don't someone else will, and there's a lot of money still being made. But once it turns over, the game is up. They know it's not coming back for another cycle for the same reason they knew that existing funding and valuation numbers were unsustainable.
- boringg 4y agoSeems likes a good time to dust off the presentation and repackage it for todays woes.
- baskethead 4y agoThe funny thing is that the presentation was completely wrong. The "good times" were only about to begin. Within a couple of years, tech went on probably its greatest stock market streak in history. If you look at tech from 2010 until 2021, the gains are so outsized that it caused things like massive income inequality in the Bay Area because the gap between tech workers and non-tech workers was humongous. AAPL went from $8 in 2010 to $180, not including the 28:1 split during that period. Google went from $300 to $3000, not including a 2:1 split. Amazon went from $100 to $3500, with no splits. Startups like Uber and Airbnb were about to be founded. Twitter was created only a couple of years previous. A tremendous amount of multi-millionaires and billionaires were minted during that time.
- babyshake 4y ago"RIP Good Times" is a bit of a lagging indicator, or at least not a leading indicator.
- uberdru 4y agoThis is absolutely right, and likely to be the pattern for this downturn as well. Just some form of evolution in the digital and analog economies.
- deleted 4y ago[deleted]
- scarface74 4y agoWhether the Big Tech companies stock saw growth doesn’t matter to VCs. And VCs have never consistently beat the S&P 500. They aren’t the ones you want to take financial advice from.
- bayareabadboy 4y agoDoes this crash feel uniquely frustrating? Or is that the nature of these things. I was in high school in 2008 so I’m not sure if I’m ignorant here or not.
- fullshark 4y agoI am frustrated in that I have money but nowhere to put it, anxious over holding it because of inflation. Just kind of sitting around waiting, losing wealth.
- trey-jones 4y agoLosing wealth to inflation might be preferable to losing it to equities in the coming months. Obviously nobody knows, but it seems long overdue. There are also positions that are very, very lucrative in bear markets, and I'll assume you know about these, or know how to find out about them.
- mistermann 4y agoI am certainly not aware, any chance you could share a few?
- AnimalMuppet 4y agoDisclaimer: This is not financial advice. Consult a professional (or several), not some random muppet on HN. One way to play it is to buy long-term bonds at about the peak of the interest rates. Bond prices are inversely correlated with interest rates; as rates drop, bond prices rise. The longer term gives you a longer lever for the interest rate move to raise the price. Then, when rates bottom, sell the bonds and buy stocks. [Edit: Because that's the top for the bonds, and usually somewhere around the bottom for the stocks.] The observant will note that this requires you to know when the interest rates are peaking, and when they are at bottom. There are some technical markers that can give you hints, but the reality is that there is no absolute way of determining these things. They turn out to be informed judgment calls.
- adamsmith143 4y agoLots of young kids surprised by the business cycle. Recessions and downturns happen like clockwork nearly every 10 years for the past 50 years. Get used to it. It's not different this time. Save cash, dollar cost average your investments and keep living. Life goes on.
- fny 4y agoA business cycle with double digit inflation and repeat supply shocks is not normal. A business cycle at 100%+ debt to GDP is not normal. This is a generational deleveraging that'll be painful for everyone.
- jdsully 4y agoDouble digit inflation happened before. The debt to GDP is new though, it’s never been this high.
- ssnistfajen 4y agoNone of what you described is new or "not normal". Japan has been this way for nearly 3 decades and they are hanging around just fine. Sure it's not a growing behemoth but they are far from doomed.
- postalrat 4y agoI've been hearing similar things all my life. I thought previous events would be different. Maybe this time it actually will be. Who knows.
- adamsmith143 4y ago"It's different this time" they said for the 10th time. Sure be worried if 90% of your net worth is tied up in FAANG stock which everyone has known have been overvalued for 5+ years or if you work for some unprofitable unicorn then yes a reckoning is coming. There is nothing to indicate structural instability like in 2008.
- recursivedoubts 4y agodaily reminder that we've never seen buffett indicators coming off this level: https://www.longtermtrends.net/market-cap-to-gdp-the-buffett-indicator/ https://www.longtermtrends.net/market-cap-to-gdp-the-buffett... this could get really, really bad, in a way most people aren't prepared to think about
- 55555 4y agoAnd this is during a period when more and more companies are choosing to stay private longer.
- ad404b8a372f2b9 4y agoIsn't that the effect of ETFs becoming wildly popular?
- jorblumesea 4y agoWe've also never seen credit be this cheap. So it makes sense that companies would take on lots of cheap debt. The profit to debt ratio is less important than the strings attached to that debt.
- recursivedoubts 4y agountil it isn't debt can't get cheaper: it's getting more expensive and it's been super cheap since 2008 we'll see, maybe this time it's different
- danielmarkbruce 4y agoBuffett indicator is meaningless at this point. The S&P500 makes about 30% of their revenue outside the US.
- recursivedoubts 4y agosure, maybe it's different this time, but .7 * 200% is ~140%, which was the peak around 2000 (and the only other time we've been this far out) we'll see
- mtoner23 4y agoChill out, talk to a friend not in tech, their business is probably doing great right now. Unemployment is unprecedently low. Things are actually pretty good right now
- deleted 4y ago[deleted]
- gnulinux 4y agoExcept the stock market, which is in >1 year lowest.
- sophacles 4y agoIts still higher than anything pre-covid though. If you look at the charts for S&P, dow, russel, nasdaq since 2008, there's a clear "bubble" around covid times, and the current values look approximately where I would expect them if there wasn't the covid bump.
- thepasswordis 4y agoUnemployment is low because companies have had access to really cheap money, and have been hiring people in an attempt to grow their business. This is the point of low interest rates, but it has caused inflation, and it has caused a potential "bomb" now that rates are hiking. Those employees were hired in the hopes of fulfilling tasks which were also being fueled by cheap money. When the money dries up (which it has), it's only a matter of time before those jobs get cut.
- postalrat 4y agoI think unemployment, at least for developers and real engineers, is low because a lot of people basically retired or semi-retired during or after the pandemic.
- boringg 4y agoDepends on which lens you look at. Is the world about to blow up? Most likely not. (Russia. unseen asteroid). Are things going to be more challenging over the next 3-5 years compared to the last 3-5 years (less pandemic) yes. To your point, hopefully if we are out of the acute phase of the pandemic then in comparison things might be better than that last two years though we aren't going back to the 2010s era. If you work at a large corporation - probably stay on cruise control. As a founder / investor I would certainly be stretching out time lines and lowering expectations on favorable exits and if you are at a company without revenue I would be concerned. Macro environments have deteriorated rapidly - outside the fed stepping in (which would be even more concerning) unlikely to have great exits for awhile. Investors have also lost a lot of money recently so aren't likely to step in. Flight to quality ensues.. But yes agree, everyone does need to chill out in these uncertain times. The sun will rise tomorrow just like it did today.
- codeulike 4y agoThe economy is like a software stack thrown together out of random chaotic components and now and again it blue-screens and people squint at the hex error message and pretend they know the bug that caused it but really they don't. And the important thing is to keep backups
- amelius 4y agoAnd the free market is a system where software runs without an operating system to keep an eye on fair scheduling and resource use.
- aaronbrethorst 4y ago‘Free market.’
- speed_spread 4y ago'Operating System'
- tetrahedr0n 4y ago> Free market: an economic system in which prices are determined by unrestricted competition between privately owned businesses. Interesting concept, I wonder if it works.
- aaronbrethorst 4y agoSounds better than what we have today.
- borodi 4y agoIf only there was a world where the bussinesses didn't talk to each other so they wouldn't collude or fix prices, or join/buy their competition.
- deleted 4y ago[deleted]
- Bubble_Pop_22 4y agoRecessions are for the economy what workouts are for humans and what forest fires are for the soil. They are essential , matter of fact fundamental for the long term stability of the economy. We should welcome them like we welcome hard workouts, instead we are wussies unfortunately. People are already calling for Jay Powell to rescue markets by ignoring inflation and cut interest rates once again, just to make their favorite meme stock rally again...
- davesque 4y agoI always get a kind of morbid kick out of watching everyone do the same hand wringing over and over again every few years.
- deleted 4y ago[deleted]
- awsrocks 4y ago
- blobbers 4y agoAre any VCs willing to post their investment take on this? How bad is the Series A/B/C crunch going to be this time around? What are you telling your LPs and what are you telling your portfolio companies? I lived through '08 crisis, and have to say a lot of big players got started right after. Uber was just starting out back then; so if you get laid off, maybe go join a flying car start up.
- Fergi 4y agoFrom Craft: https://m.youtube.com/watch?v=vBkzm4a7iY4&feature=youtu.be https://m.youtube.com/watch?v=vBkzm4a7iY4&feature=youtu.be
- blobbers 4y agoThanks for this link!
- sroussey 4y agoIt’s the other way around: LPs are telling VCs not to expect the allocations they might have expected. I hear 66% reduction from institutions, anecdotally. For several years going forward. If an institution had 1:1 allocation public:private and public drops 80% then rebalancing will take a while. If every startup and fund simultaneously took a 80% haircut, things would be smoother, quicker. Unicorns don’t want to be marked at $200m and $10m preseed don’t want to be the $2m that is far more accurate value. This dynamic will take a few years… private slowly coming to realize the new reality, public stopping the bleed, and allocations moving more public for several years.
- Donald 4y agoMobile apps were just emerging in 2008 and stimulated VC interest. I think it's unlikely that this current downturn in the business cycle will get saved by the same magnitude of technology entrant.
- lumost 4y agoInflation is high, labor is tight, trade is falling - I'd be willing to take a bet on industrial automation and robotics powered by modern AI and 3-d printing.
- dang 4y agoThreads from back then. Others? Sequoia Capital’s 56 Slide Presentation Of Doom - https://news.ycombinator.com/item?id=328685 https://news.ycombinator.com/item?id=328685 - Oct 2008 (36 comments) A CEO's Sequoia Meeting Notes - https://news.ycombinator.com/item?id=327937 https://news.ycombinator.com/item?id=327937 - Oct 2008 (61 comments) Sequoia Rings the Alarm Bell: Silicon Valley Is in Trouble - https://news.ycombinator.com/item?id=327279 https://news.ycombinator.com/item?id=327279 - Oct 2008 (75 comments) Sequoia's "RIP Good Times" presentation (on SlideShare) - https://news.ycombinator.com/item?id=328708 https://news.ycombinator.com/item?id=328708 - Oct 2008 (2 comments) Sequoia Capital: Armchair quarterbacks - https://news.ycombinator.com/item?id=331202 https://news.ycombinator.com/item?id=331202 - Oct 2008 (37 comments) Related: "RIP Good Times": Silicon Valley's Cuban Missile Crisis - https://news.ycombinator.com/item?id=4080268 https://news.ycombinator.com/item?id=4080268 - June 2012 (118 comments)
- softcactus 4y agoWow it seems like back then there was a much higher concentration of founders/vc people on here. Just goes to show how big tech has gotten over the last 14 years.
- cortesoft 4y agoI think it is even more about how big hackernews has gotten... slashdot was the place back then
- CHB0403085482 4y agoRIP slashdot. Too many in-built ads now...
- mellavora 4y agoYes, I go back to slashdot every now and then and cry. It was so good in its glory days. Makes me wonder what will come after HN. Everything has a lifespan.
- 4y ago
- ransom1538 4y agoFavorite slide: "V Shaped recovery unlikely"
- swellguy 4y agoThis is more of a generational cashout. Social security will see the same effects at some point. You can see it from the ludicrous vanguard distributions from 2021. Turns out the stock market was just a ponzi scheme after all.
- sydthrowaway 4y agoWhat should the average investor do?
- yalogin 4y agoSo everyone has accepted that this is going to be a downturn and possibly a severe one?
- lettergram 4y agohttps://gasprices.aaa.com/ https://gasprices.aaa.com/ This doesn’t look promising. Economic activity has a direct correlation with energy prices. If things cost more and there are fewer youre talking inflation. At the same time, they dumped a bunch of money into the market AND by seizing Russian assets a lot of countries are going to diversify AND there are less market for USD. We’ve increased the circulating dollars, raised energy costs, and reduced food supplies. Yeah, this is going to be a wild ride.
- Vox_Leone 4y agoIn recent days, products that greatly impact inflation, such as oil, have recorded historic highs in prices. A barrel of Brent reached US$ 135. Another factor that also has an impact is that of food, which may have its fertilizer supplier affected, Russia is a major export market. On wheat, which both countries are major producers, there has also been an impact. That is a major driver of social unrest. The mid-2022 forecast from the UN Department of Economic and Social Affairs said that the reduction in growth prospects is broad-based, including both the world's largest economies (the United States, China and, most significantly, the European Union) and most other developed and developing countries. Prospects seem dire, indeed.
- Animats 4y agoThis time it's much worse. Last time, the crash was mostly financial. This time, it's real world. - Pandemic - Major war in Europe. - Global warming has forced enough climate change to reduce worldwide food production. - Last time, the presentation says, US overcapacity was a problem. Now, it's undercapacity. Shortages in food, semiconductors, cars, fuel...
- zionic 4y agoWe let the MBAs and PMs optimize every ounce of redundancy away for “efficiency” and “share price”. Now a small ripple becomes a tidal wave, and we all pay the price for not letting the engineers run the show
- danielmarkbruce 4y agoYeah, engineers never over optimize on some dimension. Never happened.
- zionic 4y agoNever? Of course not. But they do a much better job. I don't know the current stats, but I recall hearing something like 70% of china's ruling party have engineering degrees. Whereas the overwhelming majority of ours are lawyers. I think that plays a part in why China's infrastructure is so good, and why they've been kicking our ass the last 30 years in terms of growth.
- danielmarkbruce 4y agoI don't buy it. Pointing to China isn't convincing. China has been growing off a small base. Let's see how their GDP growth goes off a base like the US. US is 5-6x larger per capita.
- andrewstuart2 4y agoI don't know which engineers you work with, but my experience is that engineers will prematurely optimize just about anything they can measure and put in a promotion packet. Or heck, just for fun. I'm no exception either. I think system theorists probably would have the best shot of helping anticipate the negative feedback loops we're experiencing.