The article carefully points out VC funding receding even before the pandemic, which is simply accelerating what was already trending. Reminiscent of how 9/11 and its aftershocks sped up the dot-com bubble popping, which had already been in motion.
The examples of "fake tech", startups assuming easy entry into markets due to mass adoption of internet computing (via smartphones) and then running into fundamental problems with their business models, and the valuations based on creative accounting also sound familiar.
What little I know of history has indeed convinced me that major ordeals are quite often the logical conclusion of small or past things unaddressed, gone out of proportion. "Bubbles" are such a thing. Real "black swans" are incredibly rare; and this (CODID-19 pandemic) isn't one.
Indeed, the current dotcom situation is a bubble, and it was long due. Meanwhile, let's hope investors become better at identifying real value, real innovation, real game changers. It's often the boring stuff.
It is and in truth I had given up on HN accepting the idea of a coming bust years ago. Any time I read a comment questioning the quantities of money being thrown around, the dubious value of some investments or asking how long this can last it was usually downvoted to oblivion or dismissed with plenty of "people have predicted a downturn for N years and it's still not happened!"
Yet here we are. I'm quite sure some who genuinely believe the coming recession is purely due to Covid-19 and not an inevitability that has been years in the making. I don't know what I would say to those people, I think they might be beyond convincing.
Anyway after a couple of painful years I'm sure we'll be able to watch the recovery and the beginnings of the next boom/bust cycle unfold right here on HN.
It's derived from one of Shakespeare's less popular plays, Winter's Tale, which contains the amusing stage direction "Exit, pursued by a bear."[1] (Apologies if you knew this, sincerity via text is hard)
Their actual headline/url seems to be "Technology startups are headed for a fall," which is less fun.
also -- this markes the absolute lowpoint in the play and things start slowly but definitely improving from that point on. although Antigonus does end up eaten by the bear.
Coronavirus is just accelerating the market correction in startups that was already underway. In the end it may actually do some good to just pull the bandaid off fast.
This is just the next wave in the cycle and those of us that have been around a few years know what to expect. Those that haven’t been though this before or are in denial will learn the hard way.
Nobody cares about your pumped up valuation anymore. If anything pumped up valuations only hurt you in times like these. Options become worthless and early investors don’t want to take a hit at the benefit of others that come in on a severe (down 50+%) down round. What people do care about is how much cash you have and what your burn rate is. Cash is king.
Getting new cash will mean making it with old fashioned revenue and profit. If you can’t do that your days are likely numbered.
Right now is an excellent time for fully online services to make their mark like a few products I've seen promoted on this forum (specifically the IPTV centralization site in the last month or two).
I think once we get through the pandemic and begin returning to normal life we may, at least short term, see companies drop the whole develop product, get VC buy in and cash to burn, then explode staff count and product depth without the user base or revenue streams to maintain them. Companies will be more conservative short term and consider their liquidity and ability to reshuffle and adapt vs a titan of their segment buying up all the smart engineers. Some may still go for that (true unicorns, perhaps?). Maybe I'm being optimistic.
The title used for this HN submission isn't the title chosen by The Economist - but it's so much better! (And really sums up the article's content in a terse manner)
Well, it was one of their titles. Actually the submitter posted "Exit unicorns, pursued by bears - Technology startups are headed for a fall", which was perfectly legitimate. But the first part is so good, we truncated to that.
Unicorns are just symptomatic of the decadence of late capitalism. Companies that can only exist because of an overabundance of greater fools who create a short-term "success" from purely trading the inflated capital of a popular but failing startup - totally divorced from its actual business. The enormous prevalence of fraud and reward for failure, of front-runners, bent sell-side analysts, the wretched hive of scum and villany that is Wall St.
I hadn't known Lime had effectively shut down in most markets, although upon reflection it's fairly obvious that would happen.
(Incidentally, while I couldn't get the archive.md link that neonate published to work, either, I could read the full article simply by disabling JavaScript and reloading the page. It's remarkable how many paywalled magazines this works with now. It's almost as if rewriting an essentially all-text web site to be a snazzy web app that pushes all the smarts to the client side has some drawbacks! Who could have predicted.)
> It's almost as if rewriting an essentially all-text web site to be a snazzy web app that pushes all the smarts to the client side has some drawbacks! Who could have predicted.
That's not their threat model. 99.9% of people don't think to disable javascript. However at the same time search engines get the full text making the story more discoverable. I wouldn't be surprised if you'd get the full story if your referer said you came from Google too, that at least used to be a thing.
I didn't know that Lime shut down either. I haven't been out to see but I wonder if they collected up their scooters, or if they are all just sitting with their batteries draining. If the batteries go out entirely how will they find the scooters later?
Anyone know if they'll be selling the scooters, or breaking them down and selling the batteries? Are the batteries good for performance items, or just mediocre energy/power density so maybe good for portable power packs?
The Economist is one of the few publications I consider worth my money. Its journalism is thoughtful and for the long term, rather than sensationalised click-bait.
It's not ideal, but better than banning every site that might ever have a paywall, which, aside from leading to the loss of a big chunk of quality content, would create confusion relating to the fact that paywalls behave differently based on regions, previous site visits, click origins etc.
[+] [-] Apocryphon|6 years ago|reply
The examples of "fake tech", startups assuming easy entry into markets due to mass adoption of internet computing (via smartphones) and then running into fundamental problems with their business models, and the valuations based on creative accounting also sound familiar.
This really is the dot-com bubble 2.0, isn't it.
[+] [-] K0SM0S|6 years ago|reply
Indeed, the current dotcom situation is a bubble, and it was long due. Meanwhile, let's hope investors become better at identifying real value, real innovation, real game changers. It's often the boring stuff.
[+] [-] smcl|6 years ago|reply
Yet here we are. I'm quite sure some who genuinely believe the coming recession is purely due to Covid-19 and not an inevitability that has been years in the making. I don't know what I would say to those people, I think they might be beyond convincing.
Anyway after a couple of painful years I'm sure we'll be able to watch the recovery and the beginnings of the next boom/bust cycle unfold right here on HN.
[+] [-] darepublic|6 years ago|reply
[+] [-] grey-area|6 years ago|reply
[+] [-] Amorymeltzer|6 years ago|reply
Their actual headline/url seems to be "Technology startups are headed for a fall," which is less fun.
1: https://en.wikipedia.org/wiki/The_Winter%27s_Tale#The_Bear
[+] [-] kristjankalm|6 years ago|reply
[+] [-] code4tee|6 years ago|reply
This is just the next wave in the cycle and those of us that have been around a few years know what to expect. Those that haven’t been though this before or are in denial will learn the hard way.
Nobody cares about your pumped up valuation anymore. If anything pumped up valuations only hurt you in times like these. Options become worthless and early investors don’t want to take a hit at the benefit of others that come in on a severe (down 50+%) down round. What people do care about is how much cash you have and what your burn rate is. Cash is king.
Getting new cash will mean making it with old fashioned revenue and profit. If you can’t do that your days are likely numbered.
[+] [-] charwalker|6 years ago|reply
I think once we get through the pandemic and begin returning to normal life we may, at least short term, see companies drop the whole develop product, get VC buy in and cash to burn, then explode staff count and product depth without the user base or revenue streams to maintain them. Companies will be more conservative short term and consider their liquidity and ability to reshuffle and adapt vs a titan of their segment buying up all the smart engineers. Some may still go for that (true unicorns, perhaps?). Maybe I'm being optimistic.
[+] [-] ornornor|6 years ago|reply
[+] [-] ZephyrOhm|6 years ago|reply
[+] [-] neonate|6 years ago|reply
[+] [-] edoceo|6 years ago|reply
[+] [-] onetimemanytime|6 years ago|reply
[+] [-] itronitron|6 years ago|reply
[+] [-] smoyer|6 years ago|reply
[+] [-] dang|6 years ago|reply
[+] [-] guiriduro|6 years ago|reply
A better world is possible.
[+] [-] chipotle_coyote|6 years ago|reply
(Incidentally, while I couldn't get the archive.md link that neonate published to work, either, I could read the full article simply by disabling JavaScript and reloading the page. It's remarkable how many paywalled magazines this works with now. It's almost as if rewriting an essentially all-text web site to be a snazzy web app that pushes all the smarts to the client side has some drawbacks! Who could have predicted.)
[+] [-] eythian|6 years ago|reply
That's not their threat model. 99.9% of people don't think to disable javascript. However at the same time search engines get the full text making the story more discoverable. I wouldn't be surprised if you'd get the full story if your referer said you came from Google too, that at least used to be a thing.
[+] [-] killion|6 years ago|reply
[+] [-] toss1|6 years ago|reply
[+] [-] cntlzw|6 years ago|reply
[deleted]
[+] [-] mprev|6 years ago|reply
[+] [-] tomhoward|6 years ago|reply
Someone usually posts a link to the workaround in the comments: https://news.ycombinator.com/item?id=22800580
It's not ideal, but better than banning every site that might ever have a paywall, which, aside from leading to the loss of a big chunk of quality content, would create confusion relating to the fact that paywalls behave differently based on regions, previous site visits, click origins etc.
So it's the least-worst solution.
[1] https://news.ycombinator.com/newsfaq.html
[+] [-] mirimir|6 years ago|reply
[+] [-] throwaway98797|6 years ago|reply
There goes the fourth estate.
[+] [-] devit|6 years ago|reply
[+] [-] techsupporter|6 years ago|reply
People need to be paid for their labors under the system we currently have, so either pay up or don't click.
[+] [-] unknown|6 years ago|reply
[deleted]