Read on Twitter
"Once Silicon Valley’s highest-flying darlings, companies from WeWork to UBER have collectively lost about $100 billion in value this year, prompting some startup executives to talk up profitability over growth..." https://wsj.com/articles/silicon-valley-adjusts-to-new-reality-as-100-billion-evaporates-11574764205 https://twitter.com/ritholtz/status/1199657258751160322
One thing we don't talk about is that the $100 billion was "lost" to the investor, but it was spent on salaries, perks, rent & more. As a result, parts of the economy received a $ injection that is not reliable in the future. I would read that investigative report. For example:
Start with how much of the $100 billion was money "taken off the table" by the founders. We know that in the case of WeWork, $2 billion went to Neumann. What about his top tier? Add it up. And then don't ever let that happen again.
Then look at salaries that were a direct result of the $100 billion. The trickle-down effects include increases in market rates for a particular job to local home values. When the $100 billion VC investment collapses, individuals and their communities also lose.
I'm also somewhat obsessed with understanding how many startups are only alive due to 3 things: 1) VC money needs to be spent, 2) historically interest rates, 3) the existence of "unicorns" that buy the services. On a daily basis I get dozens of pitch emails.
But the biggest losers? Those who don't get capital. What's the opportunity cost of not investing a more inclusive set of founders? Or in companies that create good (e.g., steady w/ benefits, trajectory, equal opportunity) jobs?
Instead of publishing lists about the fastest growing companies or those with the "coolest" perks, I want to see @Inc @FastCompany @Forbes write about the companies with staying power. Those that have achieved profit and invest in people. It's possible.
All of this is not to say that investment or growth are bad; it just needs to be more intentional. Here are a few pieces I wrote on the subject: http://www.humancompanyplaybook.com/manifesto/ & https://www.forbes.com/sites/break-the-future/2018/02/12/how-you-can-close-the-wealth-gap-that-women-face/#ddb70d06aa47
