The Biden recession and other trends made 2023 a horrible year for startups.
“Big startups are shutting down. According to PitchBook, more than 3,000 private venture backed startups failed in the last year.”
“Of the startups raising money, 19% were funded at a lower valuation than in prior funding rounds.”
“38% of VCs disappeared from dealmaking last year and more than a quarter of a million workers at tech companies were laid off over the same period.”
“US corporate bankruptcy filings closed out 2023 with the most filings since 2010. The year has been described as a mass extinction event for startups in the press.”
Some of the startup failures Boyle namechecks (Hyperloop, Bird) seemed like stupid ideas from the git-go. “Bird the electric scooter rental company—which was also supposed to reinvent public transportation—filed for chapter 11 bankruptcy protection. It was the fastest startup to ever land a billion-dollar valuation, and at its peak was worth two and a half billion dollars. It was delisted from the New York Stock Exchange in September after failing to maintain a market cap of above $15 million dollars for 30 consecutive days.”
“Who would have thought that renting scooters to drunk people for a dollar (who would then throw them in a canal on their way home) would be a money losing business? Bird ran up more than $1.6bn in net losses since 2018 before finally running out of money.”
Smile Direct Club: $8.9 billion valuation at 2019 IPO. “The stock fell in value over time as the company proved to be unprofitable year after year. The company shut down last month $900 million dollars in debt.”
One I never heard of: “The health tech startup Olive AI which reached a peak valuation of $4 billion dollars in 2020 driven by the need for automation in healthcare during the pandemic. The company raised over 900 million dollars from investors. In 2022 the company began laying off staff citing ‘tough economic conditions.’ The company was allegedly trying to raise money when it abruptly shut down in November. Going out of business in 2023 was particularly surprising for a company with AI in its name.” Indeed, AI seems to be the current space where stupid money goes to die.
Another one I never heard of: Zume.
No.
“Zume – the robot pizza delivery company which had raised $445 million dollars in VC funding, the majority of which came from SoftBank in 2018 at a two and a quarter billion-dollar valuation, shut down this summer.” Stupid, but at least I can see why California companies would invest heavily in food automation with that $16 (and rising) minimum wage.
WeWork “set out to revolutionize office real estate – by having an app – which I’m told didn’t work very well, and free beer on tap filed for bankruptcy in November.” I’ve covered WeWork previously.
“WeWork and its founder Adam Neumann were the poster boys of how a blitzscaled business model led by a charismatic founder could apply a veneer of technology to an old business idea and attract venture capital funding to achieve a multibillion dollar valuation.”
“At its peak, WeWork was valued in private markets at $47 billion dollars. Softbank alone invested 16 billion dollars into the company. Masayoshi Son, SoftBank’s founder, allegedly invested his first $4.4 billion dollars in the shared office space company after Neumann gave him a 12-minute tour of a WeWork in 2016. With such a short tour, it’s unlikely that the free beer even had an impact.”
“Softbank – run by Masayoshi Son (Japan’s Cathie Wood) was one of the biggest startup investors in the last decade. They invested in all sorts of non tech companies that were made to look like tech in order to attain a sky-high valuation. According to Bloomberg, the SoftBank Vision Fund alone lost $53 billion dollars over the last two years on startup investments.”
“We have seen a very difficult period for startups over the last year or two, but it comes in the wake of probably the best period for VC backed startups in decades. During the decade from 2011 to 2021 VC investment in private start-ups grew more than sevenfold, from 46 billion dollars in 2011 to $345 billion dollars in 2021.”
“In 2022 when the federal reserve began hiking interest rates, this money began drying up as investors lost their taste for unprofitable, but high growth, investments.”
That investment boom was driven by two things: Low interest rates and “a recent history of profitable exits from VC funded startups like Facebook, Google, Whatsapp and Snap meant that investors were suddenly paying a lot of attention to tech startups – hoping to repeat those successes.”
“Venture capital went from being a small asset class run out of offices on Sand Hill Road that had burned investors in the dot com bubble to a massive global asset class like hedge funds or private equity.”
The Flu Manchu lockdowns brought investment from “‘working from home’ companies like Zoom and Peloton.” I always thought of Peloton as a lifestyle luxury brand.
“People were using apps like Uber and DoorDash for food delivery, and booking rentals on Airbnb to get out of big cities now that they no longer had to turn up in the office.”
“While the prior wave of profitable high growth tech stocks had been (one way or another) in the advertising space, or in businesses like cloud computing, the new wave of startups had untested business models—gig economy businesses which attracted a lot of competition and might never flip to profitability—or robot-made pizza which would be cooked on route to a customer’s home.”
“A lot of the VC’s possibly believed in many of the questionable investments that have since gone bust, but a venture capital fund isn’t really there to hold on to these investments until the underlying business flips to profitability. They invest at the idea stage with the goal of selling these businesses on to the public when the hype is at its peak.”
“They did manage to unload a number of the biggest flops like WeWork – but not at the valuations they were hoping for, and have found themselves holding the bag on a lot of investments that they bought into at peak valuation.”
“The huge valuations many of these companies were attaining in the private market may have been more of a function of how much money had flowed into the private tech startup market since 2011 rather than necessarily reflecting the quality of these companies and their business models.”
“According to Erin Griffith at The New York Times, $27.2 billion dollars in VC funding had gone into the 3,200 venture-backed companies that went out of business in the first 11 months of 2023.” And that’s just the firms trackable on PitchBook. The true total is almost certainly higher.
“That 27.2 billion dollar number excluded many of the largest startup failures that went public, like WeWork, or that found buyers at much lower prices than VC investors had invested at.”
“The hype around AI that we have seen in the last year has masked a lot of the losses in the tech space.”
“Meta was up 178 percent last year due to a combination of AI hype and cost cutting within their core business. This covers up the 46.5 billion dollars lost on the Metaverse – which no one will venture into, for fear that they run into Mark Zuckerberg.” I strongly suspect that a lot of those VR losses are actually money siphoned off for something else.
Despite this, stocks like Meta, Microsoft and Nvidia have hit all-time highs.
“One of the negative economic effects of startup shutdowns is that in such an environment it becomes harder for founders with good business ideas to get funding.”
“According to PitchBook, the number of active investors in US Venture Capital, which was defined as firms that made two or more deals in the last year, plummeted by 38% in the first three quarters of 2023 compared to the same period the prior year.”
Many of the startup failures were zombie companies, those that should have failed earlier but were kept alive by VC money and low interest rates.
“No one wants to see firms going out of business, especially startups which are often the most exciting and innovative firms, but if a business model makes no sense, or only works in a zero-interest rate environment, then its disappearance means that capital can again flow in the direction of the best businesses.”
The startup bust has direct negative effects on me personally, as I’m still between technical writing positions, and a lot of the jobs I’ve gotten over the past two decades have been with startups.
Ah, the good ol’ days of . . . April, or so, when conservative critics of the Democratic party could still count on being lectured to about the enduring moderation of Team Blue and chastised for paying so much attention to such figures as Representative Alexandria Ocasio-Cortez (a member of the Democratic Socialists of America) and Senator Bernie Sanders (a member of the Democratic Socialists of America) and claiming that these self-described socialists are the socialists they describe themselves as being, who want to “abolish capitalism” (the stated mission of the Democratic Socialists of America) and the traditional family to boot (“democratizing the family to get rid of patriarchal relations,” in the words of the Democratic Socialists of America), all of which, the usual media scolds tut-tutted, was unfair. “The Democratic party is the party of moderates,” as Politico magazine editor Bill Scher argued.
Somebody must have slipped some psilocybin into the Democrats’ potato salad at this year’s May Day picnic. Open borders? Check! Eviscerating the Bill of Rights? Absolutely, with one of those weird barbed Uncle Henry gut-hook knives! What else? I hope that whichever debate moderator finally presses this crew about the limits of late-term abortion is over 35, because Elizabeth Warren was pretty clearly ready to roll up her sleeves and perform an impromptu D&E right there underneath the Art Deco adornments and heavy brocade curtains of the Fox Theater in beautiful downtown Detroit.
Speaking of the Democratic Socialists of America, Stephen Green looks in on those lunatics. “No perfume in the quiet room, no misusing doors, no talking to cops, no talking to the press, always display your credentials, beware of right wing infiltrators.” Plus the usual lunacy about pronouns, and triggering, and singing “The Internationale.”
Monthly apprehensions of migrants in Mexico have begun to slow down, indicating that its government’s recent border crackdown is yielding results.
Authorities in Mexico apprehended 18,758 migrants in July, according to preliminary data from Mexico’s immigration agency, reported by The Wall Street Journal. While this number is more than double the amount detained in the same month last year, it is a decline from the record-setting 31,573 apprehensions in Mexico in June.
“China Wants to Hit Back at Trump. Its Own Economy Stands in the Way.”
China’s imports from the United States only a fraction of the trade going the other way, so it cannot match Washington tariff for tariff. Much of that trade consists of agriculture goods like soybeans, as well as specialized products like Boeing jetliners or the American-made chips for the smartphones China makes.
There are several things China could do. It could call for a boycott of American goods or stop buying Boeing planes. It could devalue its currency, which would in effect partially nullify American tariffs. It could make life much harder for American business and executives in China, or it could exercise its power over key parts of the global supply chain, like its dominance over key manufacturing minerals called rare earths.
Some investors on Friday signaled they expect at least one of those moves. China’s currency, the renminbi, fell to its weakest point so far this year. Shares of rare earths companies rose, while Boeing’s shares fell more than the broader market on Thursday.
But each of these measures has drawbacks. Perhaps the biggest among them is that China’s economy is growing at its slowest pace in 27 years. Many of the arrows Beijing has in its quiver could ricochet and hit its own factories and workers.
Plus the perils of weakening the renminbi. Also: “As they consider their moves, Chinese officials will also try to parse Mr. Trump’s negotiating strategy. Experts said his capricious style had flummoxed Beijing.”
The manifesto is insane. Part of it discussed commonly debated issues such as the environment and the economy in ways that are well within the boundaries of political conversation going on today — indeed, that might have come out of the New York Times or many other outlets. Other parts of it mixed in theories on immigration from far right circles in Europe and the U.S. Then it threw in beliefs on “race-mixing” straight from the fever swamps. And then it concluded that the solution is to murder Hispanic immigrants, going on to debate whether an AK-47 or an AR-15 would best do the job. By that point, Crusius had veered far from both reality and basic humanity.
But the question is, was he inspired by President Trump? It is hard to make that case looking at the manifesto in its entirety.
Crusius worried about many things, if the manifesto is any indication. He certainly worried about immigration, but also about automation. About job losses. About a universal basic income. Oil drilling. Urban sprawl. Watersheds. Plastic waste. Paper waste. A blue Texas. College debt. Recycling. Healthcare. Sustainability. And more. Large portions of the manifesto simply could not be more un-Trumpian.
This is a colossal fraud, and it won’t work. The public doesn’t buy it; the candidates aren’t talking about it; when Congress returns in September, Lindsey Graham’s Senate Judiciary Committee will grill the authors of the politicization of the intelligence agencies, the FBI, and other parts of the Obama Justice Department as well as the propagators of the false Steele dossier and the fraudulent FISA warrant applications. Graham (R-S.C.), will get the publicity, and the bare-faced liars who chair the House Judiciary and Intelligence committees, Jerry Nadler (D-N.Y.) and Adam Schiff (D-Calif.), will be talking to themselves about their “solid evidence” of the president’s crimes. Weissman and the lesser Democratic Torquemadas couldn’t find them; Nadler and Schiff can’t declare what their evidence is (because there is none).
This is the last echo of this attempted rape of the Constitution and no one will be listening when the Congress returns in September. They will listen to the Graham committee’s exposés of the Democrats who acted corruptly, and they will notice the indictments when the special counsel, (John Durham, who unlike Mueller does have full retention of his faculties), starts bringing them down.
The president deliberately has escalated the controversy by attempting to make the four extremist freshman Democratic congresswomen the real face of the Democrats, and by pointing out, in the case of Rep. Elijah Cummings (D-Md.), the inappropriateness of Cummings’ assault on the integrity of the acting secretary of the Department of Homeland Security.
The president undoubtedly knows that he is playing with fire assaulting the most holy of the taboos of political correctness so explicitly, though his grasp of the political arithmetic is almost certainly correct. I assume he can reassure his own followers and whatever independent voters may be left in this fierce partisan crossfire that he is not racist. In sober times, it would be clear that no case whatever exists that he is a racist. But these are not sober times and he has contributed something to their insobriety, though—one must remember—in reaction to immense provocations.
Last year, cops in MD serving a red flag removal order, killed a 61 year old man who got upset when they came for his guns. He was flagged because his sister called after they had a political disagreement. These “laws” will continue to be abused like this. https://t.co/rc09rEAuh0
Active shooters are a rounding error. “If you feel the need to take training to protect your life and the lives of your loved ones, take a Defensive Driving Course.” (Hat tip: Karl Rehn.)
“AT&T employees took bribes to plant malware on the company’s network. DOJ charges Pakistani man with bribing AT&T employees more than $1 million to install malware on the company’s network, unlock more than 2 million devices.”
But here’s the part that blew my mind: I started to lose weight. Before the detox I weighed 166 pounds. Twelve weeks later, I hit a new low adult weight: 155. I’ve cinched in my belt a notch. My bloodwork looks much better (my triglycerides dropped by half in six weeks). And as my belly fat has reduced, I do feel better and more energetic.
The weight-loss and triglyceride reduction mirrors my own experience when I first went on Atkins.
New York Times revenues continue to decline. I’m sure that somehow this is all Russia’s fault…
Leftwing protestors call for the murder of Senate Majority Leader Mitch McConnell. Naturally Twitter suspended the account…of his reelection campaign, for showing videos of leftwing protestors calling for his murder:
Here are the messages that McConnell's re-election campaign received from Twitter telling them that they could not expose the hatred coming from the Democrat Party directed at McConnell pic.twitter.com/sECCRXRYYd
Nancy Pelosi says she wants to be Speaker again. How nice of her to fire up the Republican base for midterms…
Democratic advantage on generic congressional ballots down to 1.2%. And that’s from Reuters, which is not known to be particularly Republican or Trump friendly…
I’m thinking that the Democrats who are making such a big deal out of these ads really don’t themselves believe in democracy. They have been going on and on for a year and a half about how Donald Trump shouldn’t be President. Personally, I want to believe in democracy, and what I saw back in November 2016 is that the American people voted Donald Trump into office. I accept that he is rightfully President because he won the election. It bothers me tremendously that so many people won’t do that. I think they do not believe in democracy. And I know they are leaning very hard into the argument that what happened wasn’t real democracy. Look at those stupid ads they’ve made such a big deal about!
AND: Please don’t tell me about Hillary Clinton winning the popular vote. What if Donald Trump had held rallies in upstate New York and various places in California, etc. etc.? He won the election that was held. She won an imaginary election that he wasn’t competing in.
Baghdad now has thriving night life and bars again. Plus men sport hairstyles that look like they’re auditioning to play the next alien race on Star Trek. Also this: “As the war against ISIS wound down, [Iraqi Prime Minister Haider al-]Abadi began removing the drab, ugly concrete blast walls that once divided neighborhoods. The government is moving many of these barriers to the Syrian border, where it is creating a wall to keep out ISIS militants.” (Hat tip: Instapundit.)
Bret Easton Ellis on Kayne West’s redpilling: “As someone who considers themselves a disillusioned Gen-X’er, I think there IS a backlash brewing against leftist hysteria…What I used to semi-align myself with has no answers for anything right now, just constant bitching and finding ways to delegitimize an election.” And if you can’t trust the author of American Psycho to offer unbiased political commentary, who can you trust?
“Cultural appropriation is not a glitch of American life. It’s a feature. It’s part of what makes the country great. We take your culture, we get rid of the oppression, the mass murder, the slavery, the intransigent poverty and the endless internecine wars. We keep the pasta and the funny hats.”
Uber software decided pedestrian was a false positive. Result: Dead pedestrian.
Since Dick’s Sporting Goods has decided to lobby for gun control (just how does that increase shareholder value for a sporting goods company?), Springfield Armory has cut ties with them.
Now some links from the “Old News Is So Exciting!” file:
Since I was distracted primary week by a dying dog, this bit of news slipped under the radar and I only recently realized I forgot to report it: Democratic State Rep. Dawnna Dukes went down in flames back in March, along with fellow Democratic state reps Roberto Alonzo of Dallas, Tomas Uresti (brother of convicted felon and former state senator Carlos Uresti) of San Antonio, and Diana Arevalo of San Antonio.
From 2015: “Police find 3,700 knives, satanic shrine in mobile home of Florida woman who tried stabbing an officer.” I think that’s taking your cosplay too far. Also, unless your ID card says “Sarah Kerrigan,” you don’t get to be the Queen of Blades…
This Penny Arcade post is actually from several years ago. I thought it was a swell piece of writing then, and since Tycho relinked to it recently, I read it again, and still think it’s a swell piece of writing. I commend it to your attention.
President Donald Trump also pulled out of the Paris Agreement on Climate Change. You know, the one that was so anti-American Obama never bothered to even submit it to the Senate, sure in the knowledge they’d reject it. Naturally, liberals freaked out over the end of something that never actually had the force of law, much like they freaked out over the rollback of tranny bathrooms, another Obama “law” imposed entirely by judicial fiat. “My acts of executive fiat are sacred and immutable, yours are crimes against democracy.” Liberals seem to regard Climate Change Treaties not as something subject to cost/benefit analysis and the checks-and-balances of Constitutional law, but as Holy Writ, the failure of which to heed irreparably stains America’s soul.
A leading young Democrat and de Blasio administration employee has a secret taste for sickening kiddie porn that involves baby girls as young as 6 months old, court papers revealed Friday.
Jacob Schwartz, 29, was busted for allegedly keeping more than 3,000 disgusting images and 89 videos on a laptop after downloading the filth from the internet.
The illegal smut shows “young nude females between the approximate ages of 6 months and 16, engaging in sexual conduct… on an adult male,” court papers say.
Obama is the one who imposed what we might deem — in appropriately Maoist parlance — the “Three Authoritarianisms.” They were the Paris climate accord, the Iran deal, and US intelligence agencies being used to surveil American citizens.
All three of these “authoritarianisms” were entirely ex-Constitutional. The first two were in essence treaties on which Congress (and by extension the American people) never got to vote or, for that matter, discuss in any serious way. The Paris accord probably would have failed. As for the Iran deal, we still don’t know the full contents and therefore debating it is somewhat moot. We have, however, seen its consequences — corpses littered all across Syria, not to mention untold millions of refugees.
“Nothing that an Islamic terrorist can do will ever shake the left-wing commitment to open borders—not mass sexual assaults, not the deliberate slaughter of gays, and not, as in Manchester last week, the killing of young girls. The real threat that radical Islam poses to feminism and gay rights must be disregarded in order to transform the West by Third World immigration.”
“A federal grand jury has indicted 35 [St. Louis] store owners on federal conspiracy charges for trafficking contraband cigarettes, distributing controlled substances and money laundering.” The charges seem on the weak side to me, but see if you can notice a pattern in the names indicted… (Hat tip: Director Blue.)
“The Atomic Bomb Considered As Hungarian High School Science Fair Project.” Why so many math geniuses born in Budapest between 1890 and 1920? Simple: A high concentration of Jews. “In general Jews born in Europe after 1920 didn’t have a great life expectancy.”
Evergreen State College in Washington State remains shut down after a particularly virulent outbreak of Social Justice Warrior rage. It’s been hard to keep up with all the Stupid on display there…
A few heartland Democrats are trying to un-Pelosi the party. Good luck with that, but I suspect any variance from the Official Party Line on abortion, tranny bathrooms or illegal aliens will meet with swift punishment from the SJW faction controlling the levers of power in the party. (Hat tip: Director Blue.)
Jim Goad takes a stroll through the latest leftist “math is racist” garbage. “In the only way we know how to quantify such things—by scores on math tests, duh!—it would appear that if math is indeed ‘racist,’ it is biased strongly against non-Asians.” (Hat tip: Director Blue.)
The Dallas Court of Appeals has ordered Judge George Gallagher removed from the case and all orders he has issued since granting a motion to transfer venue vacated.
In April, Gallagher granted a motion to transfer venue in the case from Collin County to Harris County, the backyard of the three criminal defense attorneys who were appointed as special prosecutors in the case. The motion to transfer venue was legally baseless and centered on the prosecutors’ complaints about criticism they have received on social media. The decision to grant the motion followed months of bad rulings from Gallagher in which he had turned a blind eye to abuses of the grand jury process by the special prosecutors.
When Gallagher granted the motion to transfer venue, Paxton’s defense team immediately informed him that they would not consent to him continuing to preside over the case and cited to the Code of Criminal Procedure, which requires the consent of the defendant before a judge can continue on a case after venue is transferred.
Uber and Lyft are back running in Austin following Governor Greg Abbott signing a bill creating statewide ride-sharing rules superseding Austin’s draconian version.
New York Times offers buyouts to editors…and eliminates the “public editor.” But don’t worry; rumor has it that they left the Trump Conspiracy Theory Unit intact… (Hat tip: Dwight.)
Kathy Griffin fired from CNN’s New Year’s Eve duties for holding up severed Trump head prop. And just when she was cultivating that “Eldritch Undead Lich” look Dick Clark sported in his final years…
Oakland’s monthly rent has doubled in the last five years, but the Oakland police are laying off people and no longer investigate property crimes. (As Zero Hedge notes, average rent is now more than it was in San Francisco in 2012.) How’s that Blue State model of high taxes, high public union salaries, and declining basic services working out for you California?
Only voters can stop California’s union pension crisis. “Government union bosses are desperate to protect their gravy train at taxpayers’ expense. That’s why they are spinning a web of lies about the [ballot initiative].”
“With CalPERS’ actuaries demanding a pension funding increase from $3.7 billion to $7.25 billion by 2020, the state must either cut payroll by 30 percent or find a massive new tax source, like overturning Prop. 13.” (Hat tip: Pension Tsunami.)
“Thanks to our low-tax, low-regulation environment that allows all businesses to thrive, the State of Texas has become the national leader for technology job creation, and we continue to attract tech companies from around the country and around the world,” [Governor Greg] Abbott said. “On behalf of the State of Texas, I am pleased to welcome LiveOps to the Lone Star State as the company seeks to transform cloud-based customer service. With their help, the State of Texas can, and will, continue to lead the nation in job creation within the technology sector.”
California-based Relativity Media files for bankruptcy. Forbidden Kingdom was pretty good. Skyline was a pile of crap…
Add California to the list of Democratic Party controlled polises trying to kill Uber.
The War on Photography continues apace in Northern California.
Facebook is opening a $1 billion data center in Ft. Worth This means they’ll be able to ignore your “Most Recent” setting and tag you in sunglasses spam ten times faster…
Today will be full of Stuff. And Things. So enjoy a LinkSwarm!
Barack Obama, the MegaBanker’s friend. “Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.”
How Uber is taking on Bull De Blasio. Man, Democrats hate it when you threaten the profits of their favored entrenched monopolies.
Return to the joyous heydays of lesbian feminists collective. “Sitting in endless meetings, unable to reach agreements, and taking days to produce one leaflet because someone objected to the word seminal.” Can’t imagine why they didn’t take the world by storm…
All the people who should sue Gawker. It’s a lengthy list. Plus this: “Gawker is the kind of place where they hold up pictures of Sabrina Erdely and say: ‘Now this is how you do it!”
