Startup life will get a lot worse
And some more scattered links
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I have heard from a few startup employees how they are glad that this year is coming to an end. I disagree, and they don’t like it!
With recession looming and layoffs happening all over the place, the past six months have been full of chaos, confusion, insecurity, stress, uncertainty, and panic. I know a little something about that.
Valuations are collapsing, raising capital is increasingly difficult, structured debt rounds are in vogue, budgets are getting cut, business units are shutting down, headwinds are accumulating, and headlines are getting gloomier.
While the recent generative AI developments are truly exciting, the upbeat attitude towards them is a stark reminder of the contrasting and discouraging climate in the vast majority of the tech ecosystem.
Based on everything I have observed, we are in for much more pain in Q1-Q2 of 2023. The current atmosphere is going to get worse.
While many hottest startups and category leaders across geographies have announced layoffs this quarter, it seems like we haven’t seen enough pain yet given the financial performance, funding climate, public market expectations, pandemic euphoria hangover, and venture capital-limited partner dynamic we are walking into in 2023.
I sense we will have hit rock bottom when most people we know can name a few people who have been laid off in startups and tech giants. Am I rooting for that outcome? Of course not. But that feels likely. I have made the case that layoffs are part and parcel of business, and I continue to believe so. We just lived through an unprecedented confluence of events for the past three years that made all the participants in the ecosystem rationally behave in ways that are not viable anymore. The world has already changed, and the consequences are not evenly distributed. Yet.
Of course, you shouldn’t listen to me. What would I know? This is my first real downturn. We’ll see what happens.
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Here’s another round of scattered links :
A great exploration of the linguistic flexibility versus linguistic determinism debate. The former says the languages we speak influence our thoughts, and the latter is about languages determining our thoughts. Different languages conceive of basic things like colors, numbers, time, and space.
Here are 50 reasons why cities should aspire to become more walkable. It makes people happier and healthier, cities safer, prettier, vibrant, and inclusive, and the local economy stronger and more resilient.
This a long, eye-opening, personal account detailing the logistical and communication chaos and tragedies involved in getting the covid vaccines out from freezers to Americans during the pandemic by one of the most articulate and smartest bloggers I have found on the internet. He’s not just a commentator on the flaws of the distribution and prioritization systems of the limited supply of vaccines but an active change-maker who helped build public health infrastructure. The central thesis of his essay is that early access to the vaccine was preferentially rolled out to groups based on proximity to power and the federal managerial class.
This a wonderful write-up on the downsides of living life and making decisions with the goal erring on the side of minimizing regret. It could make us too risk-averse, too anxiety-driven, and too close-minded. My take is regret minimization is still a helpful way of thinking through big, long-term decisions but a limiting heuristic for day-to-day choices because it creates unnecessary fear and blinds us from exploring new things / people / experiences.
Skip this section if you haven’t watched White Lotus yet. Here’s an interview with Meghann Fahy, who plays Daphne, about working on the show and a few memorable scenes. She deserves an Emmy just for the scene on the beach with Ethan in the finale. She’s a super underrated TV actress. Here’s content exploring the artwork in the show. A great Terry Gross interview with its White Lotus creator.
This is a good list of great shows of 2022.
Bloomberg’s Lucas Shaw, one of my must-read reporters for all things Hollywood, surveyed 50 insiders like studio chiefs, lawyers, agents, and producers to get their takes on the big questions in entertainment. It was striking to see the top preference for the cadence of new episodes of shows was weekly. Netflix, the largest player that these people have to work with daily, has reaffirmed its commitment to the binge model. Many believed that the theatrical business would never be as large as before the pandemic (not surprising!), that India and Israel would likely produce the next top foreign show like Squid Game (amazing!) and that Lions Gate is likely the next studio acquisition target (interesting!).
This rant on how shitty all the streaming apps are at downloading content compared to Netflix resonates.
TikTok has been banned in India for almost two years now. This piece talks about how Indian creators with large followings before the ban pay content managers abroad to manage their profiles and upload content to keep growing.
I have long believed TikTok should be banned in the US. Multiple states have started taking actions, like banning it on state devices. Much of the discussion around TikTok is about personal data security. I think that’s a red herring. What more dangerous and sneaky is CCP could use TikTok as a propaganda tool. Congress is showing some signs of progress.
Here’s a wonderful tribute to the late legendary sports journalist Grant Wahl by Substack’s partnership employee who worked with him on his indie publishing. It also has a collection of tributes from other sports journalists who looked up to Wahl as an icon, a friend, and a mentor.
Union Square Ventures is a storied early-stage firm based in NYC. I have been an avid reader of the blog of its senior partner Albert Wagner, who was the first VC to meet me back in 2015 for no particular reason. I liked this interview he did recently with The Information on climate change, Elon, the downturn, crypto, and incubation funds. Recommend his book The World After Capital to understand the big seismic shifts of the current era as capital becomes abundant and attention becomes scarce. USV has a new climate fund. This recent post by its cofounder Fred Wilson on Web3 and AI being two sides of the same coin did not make sense to me tbh.
There are amazing signs of progress in the world’s transition to cleaner energy production. Here’s India’s impressive adoption of solar, America’s fast-changing energy mix, and a major scientific breakthrough in net energy gain in the fusion reaction. Check out Scatter Brain chats on carbon credits and solar panels.
Musings from an economist on AI using common economic frameworks. It talks about accessible ideas to profit off AI, how AI can inspire a much-needed productivity boom in the services sector, the turbulent transition phase we are in based on the history of technological shifts, AI as a way to democratize intelligence, and AI’s relationship with transaction costs. Another great essay on various ways to think about what machine learning can do today. It compares ML to having an army of ten-year-old interns!
This fascinating post illustrates the fallacy of anecdotal evidence. It’s from an Indian blogger, has some cultural references, and uses Indian public stocks to make arguments, but it is broadly applicable.
Here’s a take on PayPal’s moderation practice on Barri Weiss’ The Free Press. It makes the case for how PayPal has gone from empowering individuals to punishing them by cutting off access to the financial system. It has some interesting quotes from PayPal cofounders and early employees.
Here are well-articulated, characteristically representative takes on the Twitter Files saga, and they fall on different points in the spectrum of “nothing to see here, Twitter is just doing its job moderating" to "here’s conclusive proof that Twitter suppresses the Right”: Tech Dirt, Pirate Wires and NYMag. Here’s a good explainer of the Shadow Ban Semantics Controversy.
An optimistic take on the catering startup valuations from LA’s Upfront Venture’s Mark Suster, who has been around for a while and seen the aftermath of bubble bursts. I had one of his partners Aditi Maliwal on Scatter Brain a while ago.
Here’s a succinct case from indie tech reporter Alex Kantrowitz articulating the Innovator’s Dilemma Google likely is in, given the recent developments and early success of OpenAI’s ChatGPT. It is a compelling argument for those who think the chatbot is somewhat of a replacement for Google’s search. Here’s an interesting counterargument from a Google employee to the argument that Google “missed” making a move similar to OpenAI. A characteristically optimistic take from a tech CEO and a balanced, pragmatic take from the leader of OpenAI.
I have never bought the narrative that younger folks don't prefer credit cards. It made no sense to me. BNPL is credit! Both Millennials and Gen Z are adopting credit cards. Data and regulatory anomalies fueled the narrative. It was never a question of preferences. Here’s a good explainer.
Japan is notorious for its aging population, but I didn’t realize that it now has a fertility rate higher than other East Asian countries. This is a good overview piece. This is less good news for Japan and more bad news for Asia and the world. I believe in the virtues of increasing the rate of human population growth. Here’s a thought-provocating explainer on how the falling fertility rates would create a crisis for humanity. And yes, you can both worry about climate change and an aging global population. I have Brooklyn Bridge to sell you if you believe they are at odds. Pay me in green crypto.
The per capita chocolate consumption in India & Mexico is ten times lesser than in Europe. Mars, one of the largest manufacturers of chocolates, sees that as an opportunity.
Here's a cynical interview if you get pleasure from hate-reading about crypto. Of course, it makes some reasonable points given the current meltdown, but it is almost like The Atlantic pays the author to be mad about….everything!
Here’s a list of a few engineering marvels of 2022 globally. It includes the largest suspension bridge in Turkey and the largest hydrogen fuel-powered RV! The Atlantic’s Derek Thompson, one of my favorite essayists, has a pod episode on lesser-known breakthroughs across bioscience, energy, and atomic manipulation.
Here’s a blog post from an ex-Coinbase exec and current Web3 social founder making the case for subscriptions for social apps. He argues ads as the dominant biz model for consumer social happened because of a confluence of historical events, and the environment today is conducive for subscription-based social apps. Im skeptical.
TSMC’s founder’s comments on globalization and geopolitics in Arizona, where TSMC has committed to a $40 billion advanced chip plant, feel like a very underrated story.
Here’s one entertaining theory on why Elon Musk might behave the way he is. I don’t buy it, but it’s a fun thread.
Here’s a story on how nearly half of young adults (18-29 years old) are now living with their parents in America. This is a big deal in a culture where moving out and being independent after turning 18 is ingrained. Asian cultures like China don’t have that. Indian kids grow up hearing, “it takes a village to raise a child.” Here’s a thought-provoking essay advocating for that from an American venture capitalist.
Despite the unprecedented fintech boom during the pandemic, fintech startups are minuscule compared to the incumbents in revenue, customers, profits, & market caps. GGV Capital’s optimistic piece on fintech as they look forward to 2023.
Meta’s President of global affairs, Nick Clegg, spoke to a journalist In India.