4 ms·

Remote startups with what cheap money? That era is coming to an end. They won't win anything, with cheap or expensive labor.

linuxftw 4y ago
Right? Startup wages are pathetic for top talent, there would need to be a fundamental shift in the industry to afford them.
spamizbad 4y ago
Is the thinking that VCs will stop funding remote companies? Because one advantage a fully remote org will have a slightly extended runway not spending money on rent, office furniture, and other costs associated with operating in-person operations. To me, an office sounds like something a tech company should only obtain after a strong and established revenue stream.
- time_to_smile 4y ago
  The thinking is that VCs will stop funding startups period. In the post dotcom bust startups were exceedingly rare, and what's happening right now is much larger than the dotcom burst.
  - spamizbad 4y ago
    Its trending downward, but Q2 saw roughly the same number of deals as Q2 2018, with funding up 25% from the same period. The funding levels of 2001-2005 are a long way down from here.
  - MisterBastahrd 4y ago
    That doesn't make much sense. Nobody is going to decide that a few percentage points bump in interest rates is going to stop them from pursuing profit entirely. Also, it's silly to compare current conditions to post-bust conditions: the market at the time of the bust was incredibly immature and people had been throwing money at ridiculous garbage just because someone had a landing page and a marketing team. We've gone through several entire generations of startups at this point. VCs are far more sophisticated than they were back then, and far more people have made in the tech / startup industry. Millennials and Zoomers are far more hedonistic than their parents and grandparents. They will gladly go into debt to fund their lifestyles rather than cancel that 8th streaming service they haven't watched in 3 months. They're so bad at managing money that we literally have services like Trim to remind them that they're being stupid with their bank accounts. We're not entering into a recession because the economy is collapsing and value has disappeared. We're entering into a recession because of a myriad of supply chain issues and because people are literally making and spending too much. While I believe that our entire monetary system is a disaster waiting to happen... we're a long way from being in a bad spot in terms of investment.
time_to_smile 4y ago
I'm always surprised that more people can't see the writing on the wall. The startup boom exists because money was so cheap you had to spend it. Then consumer spending started to ramp up again and money was flowing both ways. Worrying about profits was viewed as silly since that would get in the way of maximizing growth under the assumption that you could one day flip a switch and generate profit. With inflation rising consumers have much less to spend (and are already starting to rapidly take on more debt), this alone would hurt tech companies (you see this in cancelation rates rising with streaming services and a drop in e-commerce spending), but the end of cheap money will have disastrous consequences for the startup ecosytem. The number of IPOs is declining rapidly. Investors saw this coming when the pandemic hit and started to get everything together so the could cash out their chips before the casino closed. Massive layoffs are coming in tech as unprofitable companies will be forced to demonstrate that they can in fact make money (if they really can) and even profitable companies start to see their income drop (since their income is primarily other tech companies or consumers who will be increasingly tightening their wallets). What's coming is going to make the dotcom bust seem mild.
- trention 4y ago
  There is no scenario in which tech declines without the US entering a recession and when the US enters a recession, the "cheap money" is going to be coming back. There is no way the dotcom crash is repeated because today IT is integrated inside every aspect of every business. It will be just another regular recession. The biggest threat to programming jobs in the US is outsourcing (and, in the longer term - automation), not an imaginary apocalyptic event.
  - time_to_smile 4y ago
    I'll make sure to check back on this comment in 6 months, certainly hoping that I do so laughing about how much I was overreacting.
    - trention 4y ago
      If you think you will be able to tell by looking at a period of 6 months whether a contraction (that hasn't actually even started yet in terms of total employment) is just a regular recession or the apocalypse you prophesize, I have a brooklyn bridge to sell you.

linuxftw 4y ago

Right? Startup wages are pathetic for top talent, there would need to be a fundamental shift in the industry to afford them.

spamizbad 4y ago

Is the thinking that VCs will stop funding remote companies? Because one advantage a fully remote org will have a slightly extended runway not spending money on rent, office furniture, and other costs associated with operating in-person operations. To me, an office sounds like something a tech company should only obtain after a strong and established revenue stream.

time_to_smile 4y ago
The thinking is that VCs will stop funding startups period. In the post dotcom bust startups were exceedingly rare, and what's happening right now is much larger than the dotcom burst.
- spamizbad 4y ago
  Its trending downward, but Q2 saw roughly the same number of deals as Q2 2018, with funding up 25% from the same period. The funding levels of 2001-2005 are a long way down from here.
- MisterBastahrd 4y ago
  That doesn't make much sense. Nobody is going to decide that a few percentage points bump in interest rates is going to stop them from pursuing profit entirely. Also, it's silly to compare current conditions to post-bust conditions: the market at the time of the bust was incredibly immature and people had been throwing money at ridiculous garbage just because someone had a landing page and a marketing team. We've gone through several entire generations of startups at this point. VCs are far more sophisticated than they were back then, and far more people have made in the tech / startup industry. Millennials and Zoomers are far more hedonistic than their parents and grandparents. They will gladly go into debt to fund their lifestyles rather than cancel that 8th streaming service they haven't watched in 3 months. They're so bad at managing money that we literally have services like Trim to remind them that they're being stupid with their bank accounts. We're not entering into a recession because the economy is collapsing and value has disappeared. We're entering into a recession because of a myriad of supply chain issues and because people are literally making and spending too much. While I believe that our entire monetary system is a disaster waiting to happen... we're a long way from being in a bad spot in terms of investment.

time_to_smile 4y ago

I'm always surprised that more people can't see the writing on the wall. The startup boom exists because money was so cheap you had to spend it. Then consumer spending started to ramp up again and money was flowing both ways. Worrying about profits was viewed as silly since that would get in the way of maximizing growth under the assumption that you could one day flip a switch and generate profit. With inflation rising consumers have much less to spend (and are already starting to rapidly take on more debt), this alone would hurt tech companies (you see this in cancelation rates rising with streaming services and a drop in e-commerce spending), but the end of cheap money will have disastrous consequences for the startup ecosytem. The number of IPOs is declining rapidly. Investors saw this coming when the pandemic hit and started to get everything together so the could cash out their chips before the casino closed. Massive layoffs are coming in tech as unprofitable companies will be forced to demonstrate that they can in fact make money (if they really can) and even profitable companies start to see their income drop (since their income is primarily other tech companies or consumers who will be increasingly tightening their wallets). What's coming is going to make the dotcom bust seem mild.

trention 4y ago
There is no scenario in which tech declines without the US entering a recession and when the US enters a recession, the "cheap money" is going to be coming back. There is no way the dotcom crash is repeated because today IT is integrated inside every aspect of every business. It will be just another regular recession. The biggest threat to programming jobs in the US is outsourcing (and, in the longer term - automation), not an imaginary apocalyptic event.
- time_to_smile 4y ago
  I'll make sure to check back on this comment in 6 months, certainly hoping that I do so laughing about how much I was overreacting.
  - trention 4y ago
    If you think you will be able to tell by looking at a period of 6 months whether a contraction (that hasn't actually even started yet in terms of total employment) is just a regular recession or the apocalypse you prophesize, I have a brooklyn bridge to sell you.