The early signs of startup layoffs to come

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. As the team takes a break this week, we decided to replay an old yet prescient episode from earlier this week. In February, Natasha and Alex asked: What can startups learn from the rise, and now struggles, of Hopin? For companies that grew like weeds, what’s next?

Hopin was one of the first tech companies to conduct layoffs in 2022; and as we said then, while it is is perhaps a very visible canary, it is hardly the only startup that rode COVID-19’s economic disruptions to new heights. Tell us how the episode aged, and if you’re on team reckoning or team re-correction?

The market is changing. And while Hopin grew rapidly in 2021, a host of companies that thrived during COVID-19 are now resetting both internal, and external expectations. New year, new market.

Equity drops every Monday at 7 a.m. PDT and Wednesday and Friday at 6 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

US stocks tank after global equities retreat, oil collapses, bond yields fall, and cryptos drop

Welcome to the bloodbath.

This morning the major US indices opened sharply lower, with the Dow Jones Industrial Average down 872.42 , the S&P 500 slipping 193.41 , and the Nasdaq off 90.16 or 6.96% at 1,205.58 to start the day.

The declines come after the Japanese stock market fell around 5%, Chinese stocks on the Shanghai index fell 3%, Australian stocks were off over 7%, and South Korean stocks fell by over 4% (in case you were wondering London and the FTSE is also down over 7% too).

Other economic indicators are landing somewhere between basement-level and molecular in their shrinking values. The price of oil? Down. US treasury yields? Record lows. Even cryptocurrencies are off sharply today, with leading bitcoin down below $8,000 as its retreat followed declines in other asset classes.

The impact for startups and other, private companies will take some time to be felt. But if the valuation of all comps is heading down, the value of related, or even competing startups will also fall. For startups that raised at optimistic valuations in 2019, 2020’s repricing is the opposite of welcome.

It’s also going to impact the ability of some of venture capital and private equity’s biggest bankrollers to … well… bankroll. Slashing the price of oil is going to start a race to the bottom among the folks who were shoveling heaps of oil dollars over to investment funds of all stripes. Profligate spending from Russian oligarchs and journalist-murdering Middle Eastern royalty may be put on hold right now. This could further ding the chances of Vision Fund 2 coming into existence.

Over the last few years it has became a meme to report that millennials are busy killing off things like bad restaurants, golf, and other suburban delicacies. Now it appears that boomers are killing off the stock market, after jacking up the national debt, entrenching the capital class, and spending our blood and treasure getting into a wars that they also now lack to finesse to get out off. Great work, everyone.

Anyway, it’s a mess out there. Hell, even SaaS stocks are off 4.84% percent.