[HN Gopher] How are startups shaped by macro conditions at birth? ___________________________________________________________________ How are startups shaped by macro conditions at birth? Author : Bostonian Score : 32 points Date : 2023-12-02 16:25 UTC (1 days ago) (HTM) web link (papers.ssrn.com) (TXT) w3m dump (papers.ssrn.com) | Bostonian wrote: | Discussed at | https://marginalrevolution.com/marginalrevolution/2023/12/do... . | | From the abstract: "While funding conditions cannot explain | differences in outcomes, a labor market channel can: recession | startups are better able to retain their founding inventors and | build productive R&D teams around them." | gumby wrote: | This is has been an article of faith long and extensively | remarked on over many cycles: tech crashes of 83, 01, etc and | financial recessions and shocks like 87, 90, 01, 07). Their list | of references seem to show that this specific question _hasn 't_ | been rigorously examined though, which is somewhat surprising. | | Those references also show that the data are available so it's | it's a shame the authors only looked at 07/08. Looks like the | first author worked on this while a grad student. Perhaps they | will expand it into a book. | raziel2701 wrote: | What I took from it is that if you're a startup that got its | funding during a recession (meaning there's lots of laid-off | people floating around), you get to collect very talented, | skilled R&D people. Hence if that's the situation for your | startup you would say that being a recession start up is great. | | I think that's the specific conclusion I could get from it, the | paper is very heavy and there's tons of caveats because every | recession is different. But yes, if you are good/lucky enough to | start a start up during a recession that has reduced labor | demand, then you get to pick from a very talented pool. | | Currently, I'm not sure if we had a recession last year, the | labor market stayed strong despite the market correction and very | public layoffs. I guess when everyone and their mother is calling | for a recession it's just not going to happen? Yields are | uninverting, historically I believe this is a strong signal of a | coming recession, and the markets are calling for interest rates | to start getting cut in March of next year. So I guess we'll see. | | The other question that I found very interesting is: Do start ups | born in a recession come to be because the idea and quality has | to be very good? Or do they come to be because above-average | confident people are the only ones willing to put their ideas out | there? Or a combination of both? | bobthepanda wrote: | Economists have predicted 9 out of the last 5 recessions, so | the saying goes. | | That being said overall market movements take a while to shake | out; the mortgage bubble was first pointed out as early as | 2006. People have been calling out China's property bubble | since the 2010s. | | For tech at least I get the impression that the labor market | out there is tough. | deadbabe wrote: | The title made me think this was going to be about speculating | the optimal time to birth a baby so they can be well positioned | to create a successful startup by the time they reach full | maturity. | ttul wrote: | I started my first startup in September 2001. We got amazing | people for nothing and free office space. Post-2008, my series-A | failed to produce any sales because the market was simply gone. | But at least I could find and retain good engineers. I would be | afraid to start a company today. | xvedejas wrote: | What part of today would have you worried? My start up is | having a great time finding people (amid tech layoffs) and our | office space is heavily discounted due to WFH/high office | vacancies. Our sales are going well also (our industry has been | booming). It seems to me like a good time as any to build a | company. ___________________________________________________________________ (page generated 2023-12-03 23:00 UTC)