VCs ask founders a lot of questions. It’s a big part of their job. They’re deploying other people’s money and just as founders have an obligation to make money for their investors, venture firms have an obligation to bring preferably significant returns to theirs.
Founders need to ask investors questions, too. The most important one (or two): are you still deploying funds/when was the last time you made an investment?
PitchBook recently reported that the number of VCs in US deals peaked at 18,504 in 2021 and fell to 9,966 last year.Read More...
Tech has been experiencing ‘massive layoffs’ lately, but always good to look at the why, before you jump to the ‘Oh NOOOO!’
“When people hear layoffs, that is a highly charged word… But you have to understand this in the broader context, which is there was explosive growth during the pandemic, and all that growth was unexpected,” said Russell Hancock, chief executive of Joint Venture Silicon Valley, to MarketWatch.
The ‘broader context’ is that tech is going through a period of adjustment and ‘right sizing.’ Said MarketWatch, “The largest number announced by a Big Tech company so far is the 18,000 projected layoffs at Amazon.com Inc— but Amazon hired hundreds of thousands of workers during the pandemic to grow into the second-largest employer in the U.S. (From) fewer than 800,000 employees at the end of 2019… to more than 1.6 million at times last year…Microsoft grew its workforce more than 50% … hiring roughly 77,000 workers; it recently announced 10,000 layoffs. Meta Platforms Inc. nearly doubled its head count from roughly 45,000… to more than 87,000…then decided to cut about 11,000 workers.”Read More...
The Demise of Web 2.0: Ignoring Product-Market Fit
Anyone working on a startup – or an investor deck – knows that one of most important criteria to investors (besides what your company will do to ensure that they’ll see an exit at some point in their lifetime, or at all) is product-market fit, which is especially important at this juncture, given the downturn in the market. Although we will remind you once again that some of the biggest companies emerged during the worst of times.
That said, Big Tech is no more immune to the vagaries of the market and the importance of product-market fit than is anyone else, but one thing that they do have- so far – is deep pockets.
Does that really help? At Alphabet, “Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending,” said CNBC. It had missed analysts’ expectations. “CEO Sundar Pichai said in the statement that the company is “sharpening our focus on a clear set of product and business priorities,” while Ruth Porat, the finance chief, said “we’re working to realign resources to fuel our highest growth priorities.” So, does that mean so much for moonshots et al and, instead, sharpening the focus on what people do want, rather than what the company feels that they might or should want?Read More...
