As you know, currently there are so many layoffs executed in several startups. It is clear that the company needs to save money and layoff is the simplest thing to apply. Many employees are worried about this, something called Startup Bubble.
What is Startup Bubble?
Startup Bubble can be translated as an obvious market rise, but unsustainable, from increased speculation in tech stocks. Sounds a bit horrible, doesn’t it? Startup as you know, starting the business by burning cash as much as possible to grow higher in short time. It happens until they can’t burn more money, because they have no money, but disbursement from the Investor.
Look, Startup usually relies on funding in series. You can see series A, B,C and so on. On the other side, investor will ask for profit reports, no more revenue. It should be on black ink, not red ink. Mean no more losses.
Startup always want to get higher growth but it depends on startup. There are brand awareness, repeated customer, great revenue and so on. It looks great when it is achieved in the short term. The employees even the employer feel proud of achievement and it makes them to burn more money until running out.
As discussed above, when there is no more money, a warning button is on. More losses which is no profit at all, layoff until breaking up because of bankruptcy.
Startup Bubble is coming
Startup Bubble actually becomes a warning at the beginning because Startup always start business in loss first and get profit afterwards. Perhaps the confidence makes them to keep moving forward faster and faster.
The question is, when will Startup get benefit? Hard to answer because there are 2 possibilities, the profit makes them much better or Startup Bubble will burst little by little until everything is gone.
How to fight against Startup Bubble?
As Startup Bubble is something must be happened, everyone should be ready since the beginning. When creating a Startup, make sure they have maximum money limit to burn. Besides, don’t forget to answer this amazing question “When will the Startup get profit?” clearly.
Never infatuate with growth only, talk deeply by data to the investor to make them sure about what Startup does and will get. Remember, growth doesn’t mean profit and in business world, profit is number one to gain.
Finally, do you still want to work here after hearing something new called Startup Bubble? Alright, there are flexible time, no complicated bureaucracy and many things, but there are also negative things discussed above.
So, are you ready to adapt with Startup Bubble?