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Nobody can predict what is going to happen over the next 12 months but we haven& #39;t had a real bad tech downturn since 2000 (2008 terrible for lots of other folks but nbd for tech) let me tell you what starting a company in 2000 was like.. https://twitter.com/refsrc/status/1527238287471292417">https://twitter.com/refsrc/st...
Let me first set the stage. Early 2000 was bonkers. 2 MBAs, good slide deck, a good domain name equaled 10s of millions of dollars of VC funding. We charged those startups absurd hourly rates to have new college grads build their websites. Great skills arbitrage it was!
Then suddenly there was zero traffic on US101. Everyone knew someone who’s company shut down. We heard crazy stories like companies lost their HR teams first and couldn’t figure out how to exit the rest of their employees ..
People really got hurt. tax bills on now worthless stock, margin calls, all of it. Terrible
But we raised money somehow in Q4 of 2000 from @sequoia. Raising money then was weird – like zombie apocalypse weird – VC offices are full of glass conference rooms, and we were often the *only* people in the offices. I think we were the only SW deal Sequoia did in Q4 of 2000…
Then the spreadsheets came. Full of assets from bankrupt companies their creditors wanted to sell us. Normal stuff like aeron chairs, Sun servers, and cisco switches. Also, weird stuff like DJ stations on 55” Plasma Screens (which were like $5k back then!) Lots of these...
I remember going to a company office next to the Oracle Campus in Redwood shores like some sort of sketchy repo man to pick up some gear we bought while about to be laid off employees milled awkwardly around…
We bought one cisco switch from Webvan - who also happen to have been funded by Sequoia Capital. I made a joke to our new funders that they bought this switch twice. Was funnier in my head….
We didn’t have a stocked micro kitchen or other costly perks. We had a product, customers and were off and building. Managed to raise a big series B about 18 months later. Then did a small layoff. Was an awful thing to have to do (and most awful for those impacted)...
But between Mid 2000 to Mid 2002 things didn’t seem like they had gotten better in the tech economy, and we wanted to make sure we had the runway to operate for as long as we could
Until you’ve been a founder or small business owner it is hard to describe the awful pit-in-the-stomach feeling of “if this doesn’t come through, I can’t make payroll.”
I have no idea if now is going to be the same, better, or worse than the 2000s crash. But bad times can last multiple years and if you can make decisions now that extend your runway that’s probably the right call
