The advice in these types of economic times from VCs etc. is to get to default-alive, e.g. a viable shot at cash flow positive before the money you have in the bank is gone.
While that view is understandable, can folks think of companies who did 20% type layoffs at the eve of bad times, e.g. 2001 or 2008, and then became market leaders, expanding as the market recovered?
I know Coinbase is not a typical startup given their IPO but they are a startup in other senses.
Most of the largest tech players today (including Microsoft and Google) did rounds of layoffs in 2008. Of course in those cases it was more trimming some fat rather than a do or die situation. But there are plenty of companies that have survived existential crises of this nature and come back stronger.
I should have worded that better - was trying to think of startups (or companies with startup characteristics (like the high losses and increasing costs coinbase had last q)) coming back after a very large reset.
Coinbase is an extremely profitable company. I don't think any VC advice applies to them. I think their valuation just got way out of hand, and with the crypto bear market just getting started I imagine they'll downsize like this during every cycle to come.
They burned almost a billion dollars in operating cash flow last quarter, and nearly all of their profitability in the past flowed from retail, which has shifted down dramatically. Not quite as simple as extremely profitable.
Profitable, yes. Sustainable, probably not. They are scrambling to open up lines of stable revenue that they can rely on once crypto mania starts dying down (and that is already happening to some degree).
While that view is understandable, can folks think of companies who did 20% type layoffs at the eve of bad times, e.g. 2001 or 2008, and then became market leaders, expanding as the market recovered?
I know Coinbase is not a typical startup given their IPO but they are a startup in other senses.