“This forced other disciplined startups to loosen their ad spend to be competitive in the venture-market industry and created an era of capital-inefficient businesses. With time, this will re-adjust back to historical norms and the process will be painful.”
I thought this was a pertinent quote.
You’re going to see many companies deciding to become cash flow positive instead of growing. And if the business is stable, the quickest way to get there is to drastically cut operating costs…
One of the interesting questions for me is how long this adaptation will take. I think there are a bunch of things that could make it pretty laggy. E.g., the fact that so many execs have spent so many years in an unsustainable capital environment. Or the amount of VC money still sloshing around waiting to be applied. Or the number of VCs who basically built their careers on these kinds of unsustainable businesses. How many will be able to admit that their special genius no longer applies, and was in fact the cause of a lot of problems in the long term?
Also many companies are probably just praying that one set of layoffs and improving inflation will get them to the next era of easy funding sometime in 2024
> You’re going to see many companies deciding to become cash flow positive instead of growing. And if the business is stable, the quickest way to get there is to drastically cut operating costs…
Or or do a public stock offering at a relatively high stock price after a short squeeze.
I thought this was a pertinent quote.
You’re going to see many companies deciding to become cash flow positive instead of growing. And if the business is stable, the quickest way to get there is to drastically cut operating costs…