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My view is that capital and investment will dry up and companies that are operating at a loss(many in tech right now) will either have to downsize or close up c
by mym1990 4y ago
My view is that capital and investment will dry up and companies that are operating at a loss(many in tech right now) will either have to downsize or close up completely. This will cause a domino effect. People will lose jobs, and some of those people will have bought a million dollar shack in the past 2 years and they might have to sell at a loss or foreclose. Generally I think we have yet to see any real macroeconomic fallout from the markets cooling. I see many people already comparing this to '08 and saying 'it's definitely not that bad this time' but the reality is we haven't even seen any fallout yet.
- ripper1138 4y agoThat could be true but the impact would still be limited compared to 2008. Credit/bank failures are far worse for the general economy than some tech startups failing.
- sebmellen 4y agoI'm not 100% sure of that. Think of how many services depend on tech, and how much of that tech is built by companies operating at a loss. For example, if Cloudflare were to do mass layoffs, and potentially fail/go bankrupt, what would the ripple effects be on enterprises throughout the US?
- harpratap 4y agoNegligible. Cloudflare is tiny compared to AWS, which itself is a fraction of total computer infrastructure. On-prem is still big, reason why cloud companies keep showing massive growth.
- mym1990 4y agoI don’t think that tech companies are the systemic risk here, but they could certainly start the chain of events. In 2008 the governments and central banks had tools to use to try to bring us out quickly. Todays risk involves the possibility of stagflation, which is a long slog to get out of.
- cjbgkagh 4y agoI wonder how many profit making companies are only making profits due to lost making customers. Things could spiral out of hand.
- thawaya3113 4y agoNearly all of Alphabet and Meta’s profits are not from customers paying them to use their product, but advertisers who are trying to convince FB/GOOG customers to use their products. If those companies start disappearing, or cutting back on ad budgets, FB/GOOG don’t have a business model anymore.
- CaveTech 4y agoUnless the recession is large enough to end the concept of commerce, advertising is not going anywhere. People will continue to buy things, it’s just that what those things are may shift.
- razmooo 4y agoPeople will only continue to buy things, if they have a job and some spendable income.
- Breza 4y agoPeople have been arguing that the ad tech industry is overdue for a reckoning due to its opacity and overblown promises. The book Subprime Attention Crisis is one treatment of the topic. Tightening brand budgets might force that reckoning.
- golergka 4y agoMost of these advertisers are not VC-backed unprofitable companies who are selling dollars for 99 cents, but the boring, ordinary companies who manufacture stuff, ship it from China and make boring, ordinary profit margins. They are not going to be hit harder than the rest of the economy; probably, less.
- kache_ 4y agowhat's the most expensive SaaS that other SaaS use out there? The first one to go? I'm thinking distributed tracing companies are going to get pwn'd