Sure, but everyone knew they were doomed from the beginning, no? I imagine that many of the very thin wrapper products exist solely to make some profit while ChatGPT (and others) don’t offer that functionality out of the box, and not to evolve into a sustainable business over the next decade.
Off topic: It's really annoying and distracting when they put these "related videos" that automatically start playing while I'm reading an article. Really bad UX.
It does not mean the company couldn’t make a desirable product, nor that nobody paid for it, it means the company didn’t make the product profitable in time, before the cash ran out. There are lots of reasons this can happen to good products that people do want to pay for, in addition to reasons like lack of market fit, building products people don’t want, building bad products, and failing to build a product at all.
I have feeling that economy (or maybe just spending?) has contracted by approximately 10%, coupled with an additional 10% inflation rate.
So a typical small business in the technology sector might experience a reduction in revenue of about 10%, while simultaneously facing a 10% increase in operating costs.
Which economy are you feeling this about, and what is your feeling based on?
Is this just the "technology sector" economy that you're feeling this about? Because the linked article is about the broader startup economy (though seems to be mainly about VC-funded startups?). And a 10% contraction would dramatically hit employment (companies, on average, don't have access to that much money to pay employees if revenue decreases 10%).
FedEx & UPS: Amazon delivery is up, which means they use FedEx and UPS less.
I noticed on the Macrotrends report for Union Pacific that the decrease is only in the last two quarter's results, and follows back to back yearly increases of 11.63% and 14.08%. The longer chart shows UP is subject to cyclical ups and downs since at least 2012. https://www.macrotrends.net/stocks/charts/UNP/union-pacific/...
The article doesn't say whether this is higher or lower than usual when compared to the total startup population.
Saying "this is the highest number ever reported" is like when presidents brag about receiving the most votes in history - the population is just bigger!
if the number of start-ups shot up before crashing, that's also bad, isn't it? like when a company grows a lot and then lays off a large fraction of its workers, it indicates something has fallen through, doesn't it?
I caught up with a friend recently who has been involved with startups for years as a founder or engineer. His current position is senior engineer at a blockchain startup, funded a few years ago when VC money was flowing and “blockchain” was hot.
“Honestly, I don’t even know what we’re building or who will use it,” he admitted.
People love to talk about the successes and use that to justify the VC startup model, but I suspect many if not most are like this - a pretend company based on a buzzword with no real customers or viable business model.
Sad to say my startup is part of this grim statistic. We raised capital in October of 2021 and were unable to raise follow on capital. I laid off all staff and we shut down two months ago.
Founders today are conserving cash. Gone are the days of raise money, build a big team, and grow grow grow. Now it's all about doing more with less, with slow and steady growth.
They'll still take meetings - it's free information so they'll never turn that down. Even if they're a solid 'no' from the outset.
VCs aren't always transparent with their reasoning. Some of them said they don't believe in our category anymore. Some of them said "great work, show more growth". It's always difficult to parse the signal here.
It sucks, but you can't be too hard on yourself. Many of these investors haven't deployed capital in months.
Am I missing something, there appears to be no context to this article? When it says "543 startups shut their doors", that is 543 of which population of startups? Are they just referring to companies with SEC filings? There have been millions of companies started in the US this year, given "the US Census Bureau shows that 5,044,748 new businesses were started in 2022" [1]
The article doesn’t say what normal is, but does say “The third fiscal quarter saw 212 shutdowns, the highest number since the firm began tracking the data. Last year, 467 companies folded.”
Largest quarterly number and ‘higher than last year’ of course don’t directly compare to normal. They also aren’t a percentage, so this doesn’t help us understand if the failure rate is higher, or there are just more startups.
The firm in question is Carta. Browsing through their set of blog posts and data, the headlines don’t seem to project a dismal picture at all, somewhat the opposite. https://carta.com/blog/category/data-research/
50 comments
[ 3.5 ms ] story [ 106 ms ] threadPlenty of them are sub-5-person shops that will close having made a decent profit for all involved.
I have feeling that economy (or maybe just spending?) has contracted by approximately 10%, coupled with an additional 10% inflation rate.
So a typical small business in the technology sector might experience a reduction in revenue of about 10%, while simultaneously facing a 10% increase in operating costs.
Is this just the "technology sector" economy that you're feeling this about? Because the linked article is about the broader startup economy (though seems to be mainly about VC-funded startups?). And a 10% contraction would dramatically hit employment (companies, on average, don't have access to that much money to pay employees if revenue decreases 10%).
https://fred.stlouisfed.org/series/PCEC96
https://fred.stlouisfed.org/series/A939RX0Q048SBEA
FedEx revenue dropped 10%. Dell revenue dropped 10%. Union Pacific revenue dropped 10%. Foot Locker revenue dropped 10%. Cisco sales are 10% down.
Maybe because I was following these companies …
I noticed on the Macrotrends report for Union Pacific that the decrease is only in the last two quarter's results, and follows back to back yearly increases of 11.63% and 14.08%. The longer chart shows UP is subject to cyclical ups and downs since at least 2012. https://www.macrotrends.net/stocks/charts/UNP/union-pacific/...
For Cisco I noticed you switched from revenue to sales. The most recent quarter's revenue results show an 8% year-over-year increase. https://newsroom.cisco.com/c/r/newsroom/en/us/a/y2023/m11/ci...
Behind FedEx’s Strategic Decision to Leave Amazon at the Curb
https://fortune.com/2019/08/07/fedex-amazon-deliveries/
In fact, the US Economy grew more than 5% year-over-year
Saying "this is the highest number ever reported" is like when presidents brag about receiving the most votes in history - the population is just bigger!
Another example is anytime more money is spent/received on/for something that ever before, and the effect of inflation is being ignored.
“Honestly, I don’t even know what we’re building or who will use it,” he admitted.
People love to talk about the successes and use that to justify the VC startup model, but I suspect many if not most are like this - a pretend company based on a buzzword with no real customers or viable business model.
Same as it ever was.
Silicon Valley "innovation" is "run for years losing millions or even billions of dollars every year without as much as a plan to become profitable".
Maybe now companies will start creating actual sustainable businesses?
[0] https://fred.stlouisfed.org/series/M2SL
Founders today are conserving cash. Gone are the days of raise money, build a big team, and grow grow grow. Now it's all about doing more with less, with slow and steady growth.
VCs aren't always transparent with their reasoning. Some of them said they don't believe in our category anymore. Some of them said "great work, show more growth". It's always difficult to parse the signal here.
It sucks, but you can't be too hard on yourself. Many of these investors haven't deployed capital in months.
[1] https://www.commerceinstitute.com/new-businesses-started-eve...
Largest quarterly number and ‘higher than last year’ of course don’t directly compare to normal. They also aren’t a percentage, so this doesn’t help us understand if the failure rate is higher, or there are just more startups. The firm in question is Carta. Browsing through their set of blog posts and data, the headlines don’t seem to project a dismal picture at all, somewhat the opposite. https://carta.com/blog/category/data-research/