It is may 12th 2022 and you’re reading the code report for the last 10 years. People have been saying: there’s a bubble intact and finally, it looks like that bubble is starting to pop, or maybe it’s just a minor correction. This is fine, i’m okay.
With the events that are unfolding currently, nobody really knows. Let’S take a look at some of the bad news that has been piling up over the last few months and find out what it means for developers, tech workers and startup founders. I pointed out how companies like snowflake and shopify were absurdly overvalued, as of today.
Shopify is down over 75 percent and they’re, not the only one. Virtually every high-flying tech stock that ipo’d over the last five years is down anywhere from 50 to 90 percent. The common theme around these companies is that they don’t actually make any money.
They may have a lot of revenue growth, but don’t actually turn a profit, and that means they need money to burn through to survive. Unfortunately, the transitory inflation wasn’t actually transitory, and now the federal reserve has had to turn the easy money spigot off. In addition, many of these companies exploded during the pandemic, and now growth is hitting a wall, because pandemic mode has been turned off now, if you’re a bag holder for one of these companies that *****, but the thing that’s a little more worrisome, is that when companies Lose money this rapidly.
They need to start cutting expenses and one of the best ways to do that is via layoffs, screw you you’re fired. Last week we saw high-profile companies like robin hood and work rise, implement layoffs and meta aka facebook implemented a hiring freeze. That’S not a good sign for a company that wants to put us all on the metaverse.
Now the big picture, as of today still looks very strong, but the dynamic seems to be rapidly changing. It could stop right here, but it could also get a lot worse and i think we should all be aware of that possibility. Now you might think the answer to this is bitcoin and crypto.
Bitcoin has also crashed 50 in the last six months and, This decline has gone hand in hand with a decline in hype for web 3 and nfts. These may be amazing, revolutionary technologies, long term, but it’s a lot harder to have fun when everybody’s losing money. Now another group of people affected are the startup founders, especially those who depend on venture capital.
Many people have called out the whole vc system. As a giant ponzi scheme made possible by easy money, investor sentiment is way down, valuations are going down and less capital is being deployed. In all likelihood, this means you’ll have a harder time.
Securing funding in the near future and companies that have already been funded will likely need to cut costs and increase growth if they want to see additional funding in the future and zombie. Companies that have no path to profitability will probably not survive very much longer. The days of companies like fast, which had 60 million or no 60 thousand dollars in annual recurring revenue and 500 employees are over fast, didn’t become profitable, fast enough and was discontinued in april.
The last time things looked, this bad was early 2020, but that time the central banks were able to print trillions upon trillions of dollars. The rich got way richer and we got the leftover crumbs in the form of stimis which we’re now paying for many times over. In the form of inflation, now i realize this sounds very pessimistic, but just remember that things could always get a lot worse like they could start world war three at any moment and draft us all onto the front lines.
Until that happens, though, i will continue to learn to code and try to create value for other people, because often the best opportunities emerge out of downturns like this. This has been the code report thanks for reading, and i will see you in the next one.