Wow. First time I've seen a layoff post that starts with boasting success. Summary: "6% of the companies we invest in are worth a billion dollars. We're laying of 20% of our staff. We appreciate their efforts. No comment on how we're taking care of those laid off or remaining staff"
They can't even bring themselves to say the words 'laying off', 'redundancies' or even the milder 'letting go'. The staff are merely 'impacted' by this change in focus!
Execs just feel like they need to retreat to the safety of euphemisms in these kind of announcements, after first boasting about how well the company is doing, of course.
If I would guess, this kind of wording reflects a view which is quite common in Silicon Valley companies: an employee is an (human) asset for the company to utilize. Once the skill of the employee is no longer needed, they can be dispose of. If I may guess it further, this view might be shared across many high-paying industries.
Tech companies in China had similar mass layoffs in the past few years, which prompted many highly skilled tech workers to seek formal opportunities in state controlled companies/entities. Why state controlled companies you might ask, well, because those companies rarely perform this type of layoffs. Once you're one of their formal employees (not employee of contract), you're set safe for life. And even if some "difficult change" has to happen, those state companies will try to compensate the effected workers with other (often equal, sometimes better) opportunities.
I know Chinese state controlled companies are heavily criticized by western view points, but you have to admit, they treats their own people fine.
the U.S. government works the same way. According to one web site, there are over 4 million federal employees. When is the last time any have been laid off? What I find most disturbing is that you think this is somehow a good thing. A government takes money by force and then spends it to "take care of its own", meaning provide cushy jobs to people regardless of their productivity, output, or necessity? This is the very essence of the ever-growing and increasingly corrupt bureaucracy.
I'm reminded of a history of Nigeria I encountered recently: https://youtu.be/E2HJbi-AG54?t=603. The Nigerian government basically ran the economy. If you wanted a good job, you worked for the government. For most people, getting elected was key to living a cushy life, and once won, the office was used to spread favors and wealth to one's friends, family, and tribe, while losing office in a subsequent election meant going back to poverty because private jobs simply didn't exist. This, of course, was a recipe for widespread corruption.
From the video: "Control of the government has been desperately important not only to avoid being oppressed by rival tribes but also because the massive role of government in the economy has made politics the preeminent route to prosperity as well as power whether for individuals, tribes, or regions. As of 1964 governments at the federal, regional, and local levels employed more than half of the wage earners in the country. Government also allocated large sums to the various regions which is also to say to the various tribes. In 1961 for example the northern region containing more than half the population of Nigeria paid only nine percent of the personal income taxes while it received 45 of the money allocated to the various regions by the federal government. At the same time the western region paid 64 percent of all personal income taxes and received less than one-fourth of the funds allocated by the federal government to the various regions. In tribal terms though Yoruba were subsidizing the house of Fulani and other Northern groups."
Whatever you might think about the unfairness of being laid off, I promise you that a growing government bureaucracy is not the solution you think it is! The government is just as self-interested as any corporation, the difference being the government gets to use force to compel you to do what it wants, while at least a corporation has to ask for your business.
Presumably when we weren't throwing billions of dollars at 2 x 20 year wars that accomplished nothing. The DoD is the largest single employer in the world.
By comparison, I'm way, way less concerned if Health or Education Depts. have more people -- a drop in the bucket compared to the cost of a Littoral Combat Ship, (which is already obsolete). It would be nice of HHS and Education had more funding and legal mandates behind them, though...
Or if instead of Nigeria you want more “civilized” examples, look no further than Eastern European governments. Here in Croatia some years ago a statistic came out that we have 4 times more government employees than Germany. Just for comparison: Germany has 83M people, Croatia little less than 4M. I shudder to think about that metric now as I’m sure its even worse.
The respective population numbers are irrelevant, because those “four time more” government employees must already be in terms relative to population size – so that's already taken into account.
(Just think about it: Surely Germany has more than a million government employees? If Croatia had over four times that in absolute terms, more than its entire population would work for the government.)
In fact, counting federal, state and local governments, Germany has some 6 million government employees (~4.8m directly and ~1.2m in public agencies). Also, there might be things that are government provided in one country and private in another (postal service, telcom and utilities, railway, schools, childcare...), which you would need to account for as well.
> an employee is an (human) asset for the company to utilize. Once the skill of the employee is no longer needed, they can be dispose of.
This is exactly accurate and there’s nothing amoral about that. The flip side is a job is just a way to make money and when it’s no longer wanted or needed, the employee is free to dispose of it
It seems like it is taboo to even discuss the collapse of the so-called "tech" industry. The people invested in it appear to police the dialogue online, which is not something I remember before the dot-com collapse. (Of course, in the early 00's we did not have the same level of manipulation through data collection, tracking, re-ordering of results, comment voting systems, etc.). The attempts of the "tech" believers to "argue" with simple questions or the presentation of facts is hilarious.
Too many years of "zero" interest rates has resulted in some warped thinking.
I am hoping the SBV failure serves as a hallmark, a final exclamation point for the startup world.
Cuz now it's gone, and all that's left is Big Corporate. Basically NYC but with that California faux niceness. I'll give the New Yorkers this: they'll tell you to eat shit and die on the street to your face, but they don't fake it; they respect others enough to stab you in the front, not in the back.
It’s not just the cheap money, it’s across the board woke language policing. While we should all strive to be more inclusive, it shouldn’t be at the expense of honest and clear communication.
This has nothing to do with "wokeness" or inclusivity, this is known as past exonerative.
It's a way of distancing yourself from the blame. "Mistakes were made" instead of "we made mistakes". Or "a suspect was killed in an officer-involved shooting" instead of "a policeman killed the suspect". "Teammates were impacted" instead of "we laid people off".
It's like saying "shit happens, who knows who's to blame" when we all know who's to blame.
It is disingenuous, at best, to equate collapse to "going back to the cave age". If your house's roof collapses you do not end up in a cave. You either pay a small fortune to have it fixed or, if you lack the wealth to do so, sell it at a loss to someone who can.
Tech/IT is too valuable to be ditched altogether, so we are not going back even to the 80s or 90s. But collapse is appropriate for the kind of lean times ahead: companies getting bought on the cheap, investments evaporating, projects shelved, jobs (or even careers) lost.
The idea that you can just throw away an employee is bizzarre to most of the developed world. You have a responsibility to them (usually a legal one); the employee-employer relationship is an unbalanced one in many ways, and relies on that for fairness. If you want people you can get rid of at the drop of a hat you should be hiring contractors and paying the associated premium.
It should not be bizarre. Everybody should adapt and act accordingly, save money and keep your axe sharp. No job is forever, no employer is your friend or family.
What about demanding a salary no less than 50% of the value you add to the company? How many industries would stop being viable if their whole workforce would demand to be compensated for the worst case scenario Everysinglepaycheck? A couple years ago this would have sounded like hyperbole, but then the Great Resignation happened, so there's that...
From that point of view, severance payments are not noble handouts but compensation strategies to reduce the overall payroll cost.
Whatever country you moved to, odds are there's more of a brain drain from there to the US than vice versa. When places heavily regulate laying employees off, they just make employers much more apprehensive and conservative about hiring.
From a capitalist perspective, the paternal employer-employee relationship is one of mutual benefit. Ensuring that the the employee's incentives align more closely with their employer's. At the same time it acts as (an arguably weak) justification for corporate profit, a comfortable and loyal employee is one who does not concern themselves too much with where the rest of the money is going.
The idea of the relationship as transient and adversarial directly opposes this. When companies force their workers into precarity, while at the same time making record profits, there ceases to be a justification for accepting that profit in the eyes of the worker. Eventually leading to some kind of societal response.
I actually see elegance and justice in the cold, ruthless capitalist approach; I tend to think of it as tough love... But I don't believe that the system we have today is capitalism and so this cold, ruthless approach is actually unfair.
The difference is that in a capitalist system (with a constrained money supply; an even monetary playing field), when you get tossed out, you can get back up and you still have a chance to compete. In this system, when you get tossed out, it's game over (feels like slow withering away, a constant struggle to stay afloat).
The winners' wealth compounds infinitely beyond the point when it becomes impossible to compete against them. Billionaires are earning enough passive yield on their diversified portfolios that some of their businesses become useless appendages and they can afford to run them as a hobby, at a loss... Yet nobody can compete against those businesses; they're essentially subsidized by the money printer which serves as a compounding interest machine for the billionaire.
No real business which relies on profits from its economic activities can compete against a business which is funded by an infinitely compounding source of wealth.
Given that money is taxed by governments each time it hops between economic participants, it can barely hold onto a tiny fraction of its original face value after just 10 hops (at that point, almost all of it will be back in the hands of government)... It can't stray too far from the government money printer. But that's not a concern for billionaires who earn their yields almost straight out of reserve banks.
> I actually see elegance and justice in the cold, ruthless capitalist approach; I tend to think of it as tough love... But I don't believe that the system we have today is capitalism and so this cold, ruthless approach is actually unfair.
I'm curious as to how the hypothetical Capitalism would avoid quickly collapsing into a much more extreme version of the current state of affairs. Capital producing more capital seems built into the system, without strict controls on capital accumulation I don't see how the end result could be anything other than monopoly.
Because the risk is supposed to lie in the hands of the investors, the founders, and the people who make the decisions. When the risks taken by the people at the top succeed, they profit, when they fail, they tend to push that onto their employees through layoffs and withholding raises. Then they will turn back around saying that they deserve their lavish lifestyles because they are the ones taking the risks. You can't have your cake and eat it too.
If you have the luxury of a safety net or in-demand skillset, then yes, getting laid off is not a risk. If you have less means, and the costs (both monetary and social/emotional) of needing to relocate to find another job turn into something much more daunting. In that kind of situation, loss of a job is a very negative event, much more than, say, a 10% decline of a wealthy person's portfolio would be.
re why work for an employer when you could take your own risk: generally speaking the odds of losing a job due to layoff are still less bad than the odds of a bootstrapped business failing, even if attempting to start a business was a realistic option, which it is not for many people.
Losing a job is a negative event, the parent is not disputing that. The parent is disputing that there is minimal risk for an employee, they are getting paid month to month for their work.
Except it's not upper management bleeding income, it's the company. They still get their golden parachutes and massive bonuses, then they downsize other parts of the company in order to claw back the costs. They don't have to worry about losing their healthcare or having to survive. Hell they don't even have to care about keeping the company alive, they can just straight up kill it and still reap the benefits like we've seen with Sears and the scumbag Eddie Lampert.
That's the risk. They destroy the bonuses and benefits of their workers to fuel their own rat race.
Employees also usually get bonuses, and stock options. Your point is possibly true for companies as big as FAANG ones, but for a startup invested in by YC, it's highly unlikely the founders are getting any real bonuses. They might get some money about in series B or C, but that's already less than 99.9% of startups that get to that stage probably.
You are simplying the situation by thinking about everyone as successful unicorns. Most companies and founders are not.
So are you saying that, in the multi-million VC-fuelled start-up climate of the last couple decades, founders haven't made sure to pay themselves at least the same salary as their employees?
If you are, I'm not buying it. And if you're not, i.e. if you admit that they did, your point falls to pieces.
Which includes the employees. They want the cool tech, the stock options, the prestige of working at FAANG or some new startup, the all-you-can-eat cafeterias... the price of working in a fast-moving, always-changing industry is that you're likely to be on the receiving end of some of those changes.
Want to be protected from layoffs? Take a salary cut and work for the government. Or be the most incredible software engineer at a boring as hell credit union or community college.
I certainly don't wish for anyone to be laid off and I know, from personal experience, that it can be tough. But by choosing the startup or FAANG world and enjoying all the benefits, you're practicing guaranteeing that you'll be affected by some adverse outcome, somewhere along the line. Accept it and move on.
It also seems the job wouldn't have existed without someone willing to take the risk? I myself weigh risk in my decisions frequently. I am full aware that a layoff (or firing) is possible every time I accept a job. I'm also fully aware of what my employers obligations are to me. I'm not sure I've ever felt that my employer 'owed' me more than that. Maybe my life would be better if I did?
I think the thing that makes the recent layoffs so controversial is their context.
Layoffs on this scale are understandable, maybe even justifiable, in the case of a 2008 style market crash.
Layoffs on this scale do not feel understandable or justifiable given that many of the companies are extremely profitable, were hiring during, and have continued to hire afterwards. Add to that the prevalence of stock buybacks and the sheer scale of recent hiring and the question becomes why should the employees be the ones to feel the consequence of this behaviour?
The often billionaire CEO tearing up over how hard it was for him to fire thousands of people but "is using it as an opportunity to take responsibility for his mistakes" is simply the cherry on the cake.
This is the corruption of the US system of business and capitalism (and I'm a capitalist). Expenses are passed down on the employees, and the ruling class reaps the reward.
The misery gets passed down. The abuse and shitty situations and complete lack of power -- that gets passed down.
Sometimes the expenses get passed down, but I'll agree that's rare. However I have had employers bill me for my uniforms, and I ain't talkin about the military.
If only there were some way to, say, unify the—to use your word—employees as some sort of collective unit, so that the—again, your word—ruling class has a little less power to reap all the reward.
Sure, you're welcome to start one. My hat is off to you and/or 'jachee' if it comes to fruition. That takes a lot of real work, however, as opposed to posting a few snarky internet comments and calling it a day.
I don't have to; where I live, we already have one.
So yeah, sure, easy for me to post snarky comments. But at least not quite as useless as posting comments that are not only snarky but also idiotic, like comments to the effect that one shouldn't have a union. So what are you doing to start one?
From what I know from an old friend of my dad, helping coworkers who lost their jobs to land somewhere else is a well rooted custom in US.
Said friend told me numerous stories about how he gave positive references or call his friends in other companies for positions for coworkers who were laid off, during his tenure in IBM.
Helping people who lost their jobs because of reasons which they can't control is being a good person, for once, too.
It always astonishes me seeing how ingrained this individualistic capitalistic mindset is on so many. People have been brainwashed.
These are people. This could be you, or your friend, espouse, mother, sister... And just because you can bounce back, it doesn't mean this is okay.
Even if they have money saved and can use that to find a (hopefully) better next job, that's not easy or guaranteed.
It seems that this "criticism" is more like jealousy than anything else. If they were not earning a bit more than others then we can feel bad for them. Otherwise let's pretend it's fine and yell "screw them".
Meanwhile the rich fucks are still getting richer even with the "risk" they take. Not sure how that can even count as risk, given these VCs are all multi-millionaires that can afford to fail multiple times over in the first place.
But it's somehow easier to hate the person that makes a few more bucks than you, than it is to hate the money hoarders that control the lives of so many of us.
This has nothing to do with being brainwashed. Couldn't we say the same about your stance?
Yes they are people, but a company is NOT responsible for them. Where does this come from? An employee has an employment relationship and not a friendship and while it certainly sucks to be let go, it's not the company who is the bad guy.
From what I see, you can't take off your personal morale views from business decisions.
> Meanwhile the rich fucks are still getting richer even with the "risk" they take.
What even has that anything to do with what parent is saying? Or the topic we are discussing?
Is in your opinion no company is allowed to let go people, except if they pamper them with a big severance package? Sorry, but your post reads very childish and naive.
Have you talked to anyone from HR in the past decade???? It's all "we're one big family" this, "bring your whole self to work" that. The company trying to brand itself as a good guy and not as a money making vehicle goes both ways.
I guess you could say people are brainwashed about anything. So fair point, I take that back. I was just frustrated because it's such a "default" answer for people when the vast majority doesn't even consider that this is not the only way the world can work.
>Yes they are people, but a company is NOT responsible for them. Where does this come from? An employee has an employment relationship and not a friendship and while it certainly sucks to be let go, it's not the company who is the bad guy.
I agree the company is not fully responsible for them. But they have to have some degree of responsibility. There's an enormous power imbalance in play here and right now companies can just ditch people like garbage and increase stock prices at will just because they can.
The reality is that people don't choose to work. You either work or starve. So when we give companies that much power over our lives, I believe they should have a responsibility for those they employ.
> Is in your opinion no company is allowed to let go people, except if they pamper them with a big severance package? Sorry, but your post reads very childish and naive.
I don't quite get this. My point was that we've been conditioned to believe that letting people go is okay and it's every person for himself.
But you immediately go to the other end of the spectrum saying we can't ever let people go? That's quite childish and naive in my view.
There's a whole range here between basically zero consequences (what happens today) and you can't let people go. But once again it comes back to the conditioning that we all have that this is the system and there's nothing we can do about it. If we can't even imagine how it could be different, nothing will ever change.
There's no hate. There's no paternal love either, nor a need for one. It's a completely neutral event that requires no emotional reaction.
Imagine it happened to my sister. So what? Are you expecting me to get emotional or angry at her employers? I wouldn't. What is there to be angry about?
Seems to be a weird American tech thing. In the real world, people lose their jobs, do their notice period (if any) and take steps towards securing a new one.
For whatever reason, American tech workers appear to think they should get 5-10x the median income or more, also get stock in the company, also have flexible work/life hours and also be "looked after" (what does this mean? More money?) after they're fired.
Finally some sense-talking. The growing culture of paternalism in the employer-employee relationship is toxic to the foundations of our societal wealth.
Personal responsibility and equal opportunity are how we got to iPhones, toothpaste in every corner store, and a store on every corner.
Early stage investing is the right mix of low cost and high yield. Most of the their startups are failures and duds but it doesn't matter because they don't cost that much and there are enough that do work out. Later stage investments are still quite risky but now you are losing millions when they fail. So you are more dependent on the handful that don't. Also, late stage investment in Silicon Valley means dumping money in real estate, very expensive executives, engineers, etc. Who then take the money and job hop to the next startup as soon as things start failing.
Now that interest rates are going up, the financial risks have increased and the follow up rounds are drying up a bit (less IPOs, series B, C, etc.). Meaning the cost is higher and exits are becoming a bit more rare and less lucrative. And also, there is less chance of offloading not quite profitable late stage investments to more conservative investors. A lot of these unicorns still fail. They just fail a bit later after early investors cash in. Somebody pays for that. Usually not the early investors.
Are you suggesting that YC's success is because of the long-term US monetary policy climate?
That's a very incorrect suggestion. It reminds one of how people like to pretend that Elon's money is because his family had an emerald mine. Do you think that a significant percentage of wealth inheritors go on to immigrate across the world and invent electric cars and reusable rockets? Same thing with YC and the investment climate.
This is not specific to YC, but there is no way a company like Uber would be around in a high interest rate environment. You don’t get to burn 32B, keep reducing scale, and still be unprofitable unless the market is flooded with money and it has nowhere to go.
The pandemic period was the best example - monetarily, that was the last 12 years compressed into a 2 year window. The amount of money in the system was so immense that anything and everything was being funded at absurd valuations.
YC's success is due to a combination of luck, skill, and yes, the most juiced bull market in a century. That last one is less of a factor than one might think though. Everyone has benefitted from easy money. So if were a primary factor then every early stage investor would have a 6% unicorn hit rate and that's clearly not true.
I'm not an insider and I don't personally know any of their principals. But I have followed their work and read what they write, and I am absolutely certain they are considerably above the mean when it comes to intellect and operational ability.
I also suspect they have benefitted to some greater or lesser extent that is unknown to me from connections in government. But like it or not thats part of how the game works, so if you want to be at the top of the game you have to play ball.
Palantir is one of their big successes because the government has chosen to pay them for big contracts; a government who thought differently might have not only declined to do that but shut down their whole operation as fundamentally harmful to regular citizens. Likewise Uber and AirBnB built their whole business pretty knowingly on open violations of the law; a government faithfully representing its citizens' interests might easily have decided to shut that down (as e.g. the government of Japan did; both companies barely operate here). Those are just the biggest names that come to mind; I'm sure there are similar things at every level in their portfolio (e.g. not so long ago there have been stories about YC funding a malware distribution company and a company that makes illegally usurious[1] loans; at the time dang claimed pretty vigorously that YC didn't and wouldn't fund companies that do that, but the evidence that they did fund the company and the company was doing that seemed pretty irrefutable).
[1] when lending to veterans, which the company in question did
Well this is different. Palantir is a defense contractor, their biggest customer IS the government. So of course connections matter for Palantir. My question pertains more to start ups in general.
There are countless ways that government connections could be very useful if you're trying to ensure the success of portfolio companies, especially if they're operating on regulatory frontiers.
Nudging policymakers in a favorable direction on legislation that could effect your portfolio is the most obvious, but there are tons of other examples as well.
I'm not arguing that this is a primary driver of YC's success (I don't know the extent, if any, of their government influence), but you'd be silly to think that political connections can't benefit an investor.
For the simple fact that investment leverage scales super-linearly with investment size, I think you may have mis-judged how much the market affects valuations.
Elon did not invent electric cars. Elon also did not found Tesla. He was an early investor, ousted the real founders, and started calling himself a founder.
He also did not invent reusable rockets. (And that's beside the fact that these don't exist yet - it is but a dream at the moment.) He funneled a large amount of taxpayer money into SpaceX, while not really improving much on anything (he _promised_ costs savings, but did this really happen?).
What he did invent is the snake oil salesman pitch. Oh wait, actually... he did not invent that either.
Elon M and his well-wishers moved the needle to where it is today. You can't even compare the achievements of Elon M's backers to Meta's or Apple's big stupid bag of cash inflated by overworked subcontractors in China, and India next.
Looking at forbes 400, 22% have backgrounds with inheritances up to 1 million, 11.5% over 1 million, 7% over 50 milllion, and another 21.25% earned their way onto forbes 400 through inheritance alone. So that leaves 22% of forbes 400 maybe not having inherited that much, although the category is shared with people who inherited up to 1 million.
That's just regarding inheritance, there's also the simple side effects of growing up in a wealthy family such as having the best educational (read: networking) opportunities money can buy, having the best healthcare on earth, being well fed, etc.
I think thus it's very easy to guess that Elon would not be a hundred billionaire, or billionaire at all, if he was the exact same brain born to some working class family in south africa.
> I think thus it's very easy to guess that Elon would not be a hundred billionaire, or billionaire at all, if he was the exact same brain born to some working class family in south africa.
There are many brilliant people in South Africa who are born into wealth and none of them have reached the same heights as Elon Musk.
Even if it were the case, wouldn't your argument then predict that there would be many people MUCH wealthier than him because they were born into the vast riches and privilege that is America and Europe?
Sure but he grew up in river oaks, the local rich neighborhood to me, and his family had a massive ranch. So his rich parents made him work for spending money, dude grew up in a rich family. Didn't his family also invest a couple hundred thousand in Amazon's early days?
Ugh, I'll be honest, I'm kinda tired of this "debate." We're really going to keep peddling the myth that any hard working joe can pull themselves up by their bootstraps and become a billionaire? That's the tale we're telling with a straight face in 2023?
I don't know why you are falsely implying that Musk's money is not due to great initial capital. If that was true, it would mean that capital for investment doesn't matter, which in turn would mean that we could just as well place a 100% tax on all wealth above a certain level without any detriment.
It doesn't though, since your claim is bullshit. Elon's wealth is absolutely based on his parents' success.
He got a $20K investment from his dad for his first company, Zip2, in 1995. That's about $40K in today's dollars. X.com/paypal success seems to have happened in spite of him, not due to him. He got billions from it because he had been lucky enough to be one of the early investors.
I'm not actually saying that he's not a great business tycoon, he clearly is based on track record. Plenty of people have the kind of base resources he had without amounting to anything. Either they don't bother to even try or are too stupid or too unlucky too succeed. His parents wealth is still the catapult that launched him to his current success.
There are plenty of people who could have done what he's done but did not because of lack of resources.
If a rich great childhood was sufficient to build great businesses, then shouldn't we expect a middle-class childhood to be sufficient to build a decent business?
But a lot of middle-class people try and fail to create any kind of business.
The reason is that it takes more than money and education to build a business.
Money and education are necessary to build a great business, like electricity is for your home, but insufficient, as your home also needs good construction, running water, etc.
$40k today is not a lot even for a lot of middle class… basically his parents gifted him an equivalent of a slightly nice new car.
With X.com he did quite a bit than invest as all of the other cofounders left prior to launch. By the time they merged with cofinity Elon was the only one of the original team.
You seem to be conflating "necessary" vs. "sufficient".
Elon's inherited wealth and excellent upbringing were necessary for his Tesla and SpaceX success, but far from sufficient.
If a good rich childhood was all that's necessary to commercialize electric cars, reusable rockets, and fast satellite internet, then we'd have a lot more of these kinds of amazing products as millions of people have good rich childhoods.
I wonder what the revenue per employee of YC is. 85 employees, with 1/6 companies unicorns (though some of that is paper valuations, but still huge returns).
> "When they do, a shocking percentage of them will go on to make a startup worth a billion dollars (on average 6 out of 100 startups in recent batches)."
Oh, come on. This is three days after their favorite bank got shut down. We all know what the proximate cause is.
I think it's clear that the venture world (at least the top of it) had turned itself into an industry on its own. They didn't make money on startup exits anymore, they made it on services. They'd fund startups, get those startups into later rounds by milking less sophisicated VCs[1], push them at their favorite bank, collect fees at each stage, and then take the profits and roll them up into more startus.
Now that the favorite bank is dead, this gravy train is over immediately. And the smart VCs at the top of the heap are the ones to exit the wagon first.
Honestly, the industry has had a toxic feel for a while. But the last 72 hours have made it clear that there was just no soul left.
[1] Yes, this sounds like a pyramid scheme to me too.
That works in internet logic but it's not true. At least, it's not what I've been told inside YC and I don't believe anyone was lying. What it's actually related to is Garry taking over YC and deciding to refocus YC on its original roots. (I specifically asked about that today during an all-hands btw.)
At a minimum, it takes longer than 3 days to make a big change like this. I realize that's not a persuasive argument though, since there is endless supply of explanations one can come up with (what if they knew about SVB beforehand!)
With all respect, those interpretations differ only in spin. "Let's refocus on our roots" and "Oh shit, the gravy train dried up so we can't run our late stage cyclic money printer anymore; at least we still dominate the seed landscape" describe the same actions.
And as for assuming good faith that this was a fait accompli already in progress... I'm sorry, but I can't get past "We're doing this on the first business day following the biggest upset to our industry in a decade and a half. But that's just a coincidence!"
I see both of your points and I get how compelling the second one is, but what can I tell you? It was definitely already in progress and it has to do with long-term leadership changes inside the organization and thinking about what YC is really supposed to be. Keep in mind that Garry's previous years at YC were before the late-stage business got started. Why they made the announcement yesterday, I have no idea—perhaps someone enjoys Hacker News drama!
FWIW I don't think the difference is spin, I think it's the opposite—from my perspective (I'm not privy to the inside discussions) this change is not a reaction to short-term business climate, it's a vision thing. Most people underestimate the power of having just one thing to focus on and knowing exactly what it is. It's a cliché everyone pays lip service to but almost no one actually does. It was a huge insight for me that running HN is all about focusing on one thing*—it's a kind of superpower that turns a surprising number of hard calls into easy calls.
You can't know about a bank run beforehand. It dies when it dies, it's kind of a surprise that way.
(Being insolvent isn't actually enough to kill a bank as long as the run doesn't start. Of course, here the bank dies when the regulator decides it dies anyway.)
It doesn't need to be that elaborate. Funding a startup and strongly suggesting they bank at SVB and then YC invests in SVB, telling other VC's to invest in SVB is all the kick back you need. Stock goes up you sell off some or leverage that for loans to invest in more startups. Stock goes down, your loan leverage/assets are down and can't invest any more. I don't know if that's the case here, just saying this example isn't very complicated.
Also its not a coincidence that investors in SVB aren't getting money back from FDIC, only depositors, YC was an investor (and prob a depositor), they lost money and now have to lay people off. I would imagine other VC firms might be in the same scenario.
Later on, will this period of time be thought of as dot com bust 2.0?
That’s about the worst possible kickback scheme I can think of. Deposits drive so little of a bank’s profit that you would have to be the dumbest grifter in the world to setup such an expensive referral program with only the hope of stock appreciation.
The discussion is about late-stage investing, though. Obviously yes, the occasional unicorn funds a lot of slop and failed choices in series B rounds. But if that were true, then they wouldn't be laying off a paltry 17 people because of a minor market downturn, would they?
Again, the timing of this makes it abundantly clear that something YC was doing in the years before SVBs failure is instantly impossible now that it's dead.
The YC Continuity team did amazing work helping me and many other later stage founders. I’m sad to read this news.
YC is best known for their early stage investing. But Ali, Anu and the team created some excellent programs for later stage companies as well. Shogun benefited from the Series A program, Scaling from A to B program, and the YC Growth program. I wonder what’s happening with all of those initiatives.
Through these programs and the direct support and mentorship from the Continuity team, we learned a ton and significantly scaled our startup.
Thanks Finbarr. The group partners and MD's and I know these are important and valuable programs, and there is a lot more we need to be doing for alumni and the experience after companies do YC.
I don't have more to share now, but know that I really value you and this note.
There was one circulating where the newspaper headline stated that "A man with no active warrants was shot by police." Which is just about the most nefarious way to say "an innocent man was shot by police".
Those don't mean the same thing at all, and the headline is weird for any possible set of facts.
The average mass shooter has no active warrants, but most people would consider it correct for the police to shoot him to end his killing spree. The average wanted fugitive, on the other hand is usually arrested without any shooting.
I read the article linked in another comment, and the headline I would give it is "Police kill man while raiding wrong house".
Isn’t it different? IANAL but having an active warrant issued for you doesn’t really have anything to do with you being guilty or innocent. It just means the police must conduct you to the juge, either because you’re a suspect or (in some countries) a witness.
"A man with no active warrants issued" also perfectly describes every single one of the 9/11 hijackers, but that wouldn't equate out to "innocent" either.
Careful. Presence or absence of warrants has almost nothing to do with getting shot.
Assuming you have no warrants out for your arrest, should you charge at a police officer with a knife or gun drawn while yelling that you were about to kill them, and then ignore any commands they issued, what would you expect to happen?
That one I actually understand. Calling somebody innocent is a very strong and contextual / scoped statement, and ultimately that's what the courts take their time to do (and even they I think kinda stop shy? I don't know if acquitted is the same as innocent. I feel it's more "not proven guilty").
In the US, what happens a if a newspaper calls someone innocent, who is then proven guilty?
That was a super high horse you rapidly jumped on, but where I'm going is, it may not be a risk reputable journalism takes lightly.
"No outstanding warrants" will have been true at the time whatever is uncovered later. "They shot a presumed innocent" is probably safe but meaningless. "They shot an innocent person" - what happens if the person is then found super guilty? And innocent of what - what if somebody says "they were clearly in the video driving without their seatbelt" or "they had expired license plate"? USA has a lovely constitution yes, but also a nicely profitable legal industry.
Put the moral notion aside: In the USA, I don't think it's an easy risk to take, and clearly newspapers agree.
Newspapers also need to be careful to not spout facts about a potential crime that doesn’t have a guilty verdict. They’d have to throw an allegedly or something in there to write it as you described which I don’t know would read as well. The way they wrote it let them put the facts first (woman hit by pepper ball shot by police) and then hedge the intent with an “appeared to.”
That example seems fine to me. There is clear attribution ("by an officer"), and the "appeared to be aiming" could be to emphasize that the officer was not just generally shooting into crowd, but targeting individuals.
This comment comes across as a silly nitpick given the sober content of the post, but I think it is completely fair given Paul Graham's many writings and tweets on the virtues of writing clearly and his hatred of what I call corporatese.
I don’t think it comes across as a silly nitpick, and I’ve read very little PG has written. It’s useful to identify how phrasing and framing of communication can be used to manipulate how that communication is received, regardless of who is communicating. And I think the same observation would have been made if this were a post about any other organization.
It is laudable that this observation was very close to the top when I clicked to see the comments. I’d be surprised if this critique gets buried by HN moderation, and cautiously hopeful it won’t get buried by folks biased to defend YC &co.
But the exact same language from any other source would be examined exactly the same way, and for very good reason.
You would imagine he read it at some point. You would also imagine his CEO would have internalised Paul Graham's most important piece of advice about communication (writing clearly).
I have no inside information on this one, but YC has been around for 18 years, and pg left the president role 9 years ago. It's been about half of YC's life that he's been out of the day-to-day stuff. It's absolutely not obvious that he'd be reading each announcement that goes out (I'd be surprised at such).
I think this is just a matter of opinion. When something severe happens it's natural to not use the most harsh term to describe the event. It doesn't seems like something malicious.
When describing a death many people will say "they are no longer with us" instead of describing the circumstance of death. When talking about traumatic events we as a society have a natural propensity to not use triggering words. There is nothing intrinsically wrong with that unless it's hiding information. As described above no one is hiding anything because we all understand what happened.
Death is inevitable, unexpected, unplanned, usually caused by things beyond human control. Layoffs are a planned thing explicitly done by one human to another in order to increase corporate profits.
Layoffs are a consequence of business decisions by a specific corporate entity.
If someone died in a mining accident and their employer sent their partner a letter saying “It appears they’re no longer with us”, that would not be well-received (to say the least). Euphemisms are only appropriate in the right circumstances.
I'm willing to accept this for a company that has verifiable issues that are not just accounting fuckeries (aka owners pulling cash out of the company by having a 2nd company that nominally owns the office building, patent licenses, overseas shell companies): consistent losses, lack of cash, you get the idea.
But for companies pulling in profits to the tune of millions if not billions of dollars in profit?! Their leadership should be terminated before even the lowest performing employee instead of getting paid bonuses for ruining the lives of thousands of people who made their bonuses possible by putting in the work.
Do you have some data to back that up? I'm not sure if a small percentage of employees are so expensive as to be the tipping point for a company to go out of business.
Employees are one of or the most expensive part of doing business for many. I guess you could google Gross vs Net margins in various companies or industries as an example (maybe here[1]). But layoffs aren't merely firing people, they are "firing people and not re-hiring for their positions or work." So it's often closing out on entire product strategies, such as the case here with YC.
> Employees are one of or the most expensive part of doing business for many
Not debating that. I'm debating:
> Layoffs are often a choice between letting a small percentage go or causing the entire company to go out of business
Show me a company that MUST let go a SMALL PERCENTAGE of its workforce in order to not go out of business. Meaning a company which is hanging by a thread and that thread is (again) a small percentage of the workforce. Because if a small percentage of the workforce is expensive enough to provide you with the runway you need to continue doing business, that runway is short enough that the company will cease to exist anyway, so the point is moot.
When someone is accidental, blameless or unexpected, like someone suddenly dying, it's entirely natural to use something like "passed away". Not the case when someone is directly responsible - "X was murdered by Y" is quite common, I believe?
Perhaps you could argue over the use of "impacted", but the use of passive voice is pretty objective. "We impacted 17 roles today" or perhaps "I impacted 17 roles today" is, well, it's still pretty bad, but at least it takes some responsibility.
I agree with you, but I think a passive voice is used correctly in that sentence you are referencing. It puts the emphasis on the impacted employees and then goes on to speak to their contributions. This takes away the company for a moment from the conversation to discuss the "impacted teammates". They were using an active voice up till that point.
Please don't compare death with layoffs. One if an inevitable but tragic part of life the other is an inevitable but tragic part of keeping the shareholders happy.
I think the whole notion of companies doing things "for the shareholders" is vastly overblown. Doesn't it make perfect sense on its own that YC realized the late-stage game was not working out, and that they were not going to be able to use those people effectively on other work?
> I think the whole notion of companies doing things "for the shareholders" is vastly overblown.
Everyone is entitled to their own opinion, and I don't share yours. Everything makes sense with the proper framing. My guess is that this has more to do with perception than with actual business needs. I can try as well: Doesn't it make perfect sense that in the current context it's very easy to justify cutting costs which if done during normal times would signal trouble/mismanagement?
“They are no longer with us” is widely understood and very unlikely to be ambiguous. If you said “they were impacted” I would lodge the same complaint.
HR might have an issue about disclosing private personal information about their embarrassing medical digestive system disorders, and implying they were fired for being full of shit.
> When describing a death many people will say "they are no longer with us"
Fussell describes (in Class) this kind of talking-around situations as a "low" marker (in a class-signaling sense). The "high" version is to just plainly state "X died" or "X is dead". Similar for describing things like pregnancy.
Not sure what significance this has for corporate communication, and I'm also not sure how true it is (though all the things he described that I do know about were remarkably accurate) but, well, there's that I guess. Regardless, I'm not sure that kind of avoidant language is natural (though possibly it is, and it has to be trained out to get the more-direct "high" version—but I suspect either preference is mainly a socialization thing).
When there's a PR person involved, truth goes away, double-speak comes in. Even in the case of YC, which in general is way better than most other organizations.
I knew an ex co-worker who grew up in another country whose manager, in a "sync up meeting", told him that he was "impacted" and he didn't need to continue work on his current sprint. He came out of the meeting with a smile, had no idea what this meant, and he showed up the next day.
Sometimes it's not for the company but for the person who was laid off.
To mean that the person was laid off but it wasn't their fault. It's their position that was impacted. Somehow.
Result the same but sentiment might be dulled a little. Not blaming the person but blaming external conditions that resulted in someone being made redundant.
You have to stop and think about what it really means. "Impacted" just means something happened. You have to do the legwork to get to "called into a meeting and fired."
Distancing. It lets people who make these decisions portray themselves as the helpless victims of the way things are, rather than people who have made choices that have led to this.
"The market says that we need to downsize" sounds a lot better than "an investment analyst says I go, or you go".
A number of reasons already discussed, but in person it has the “benefit” of slowing down (drawing out) bad news. It’s like string betting in poker, but it’s also a way of showing dominion over time (by burying the lede and making someone anxious.)
To be fair, that's usually accurate - unlike someone getting fired because of their own performance, layoffs are usually untargeted, and include people that were great at their jobs.
And let's face it, getting fired is a huge stigma, so it's totally understandable that someone would phrase it like that, as the victim of the situation
It's hard to blame anyone for using the "soft" terms about their own situation, since firing tends to be a very sensitive topic. It's not hard to blame companies for using those same terms, since it comes off as "MBA-ish" and sleazy.
That is a reasonable argument if one assumes that this is an unconscious choice, however, passive voice has become the standard with these types of press releases. It is a conscious, intentional choice.
Passive voice is a tool. It’s perfectly valid and grammatical. The problem is the abuse of it to misrepresent one’s agency or responsibility, but there’s nothing wrong with the sentence, “I was hit by a car on the way to work.”
The issue with corporate passive is that business language is not only ugly but serves evil purposes. In person, it exists to slow down bad news so you can read and manipulate people (“string betting”) and, on paper, its raison d’etre is to project authority to which one has no actual right.
What you're talking about linguistically is the difference between passive voice ("I was laid off") vs active voice ("YC fired me"). It is a pervasive technique and a form of blame-shifting. Whenver you see a headline, ask yourself which voice is being used and why. It is a key part of media literacy.
They're not quite the same, those two terms have taken on different meanings. "Fired" has come to mean "for cause", and "laid off" has come to mean "not for cause".
My hunch is that the evolution was driven by executives, probably in the 70s and 80s, that didn’t want to say they were firing people in order to make more money.
In other words the same dynamic that now leads to ‘impacted’.
Some members of my family (back in the day) used to be laid off from positions seasonally, and were then rehired the next year.
I suspect that in its early versions, it referred more to the notion that "we won't have any more work until the spring, so we'll see you then."
I don't know its etymology or when it might have been coopted by employers who didn't intend to rehire, but I suspect its intent is to signal that there's no ill will between the employer and the employee, and that it WOULD rehire those impacted persons in the future.
I'm not as sure that it means anything so specific now.
Manufacturing can still work like this (and maybe other industries?). You're laid off every now and then, if work slows down, but with the expectation (possibly contractually—many of these have unions) that you'll be brought back when work picks back up. AFAIK they can collect unemployment during the lay-off, so it's better than being kept on with much-reduced hours.
In the UK they have the term "redundancy" (as in "your position has been made redundant"). Can't see that term catching on in the US but it does cover the use of "laid off" to mean "the company chose to eliminate the position I worked in rather than choosing to get rid of me as a person", and thus may carry less stigma.
It’s the opposite: they started out distinct, but then, by the euphemism treadmill, became used interchangeably.
And if you go back even further it meant something even milder, like furloughed or terminated with the intent to rehire when expected business picks up.
It depends on the listener's relationship with the person in question.
If you're on the receiving end, then that model and the act done to you are irrelevant.
If someone is applying for a job and they tell you "I was fired from my last job" vs "I was laid off from my last job", that changes your perspective on them.
Having terms that distinguish whether or not it's "for cause" are a useful language feature.
A furloughed employee has the expectation that employment can resume with the company, while a laid off employee does not. This is important for tax and other legal considerations.
This very much depends on where you are. For example in the UK a lay off technically means being told to stay at home because there isn't enough work [1], although it's often used these days to mean "fired without cause", i.e. the American usage of lay off has become more common and it has simultaneously became common to use the term "furlough" to describe layoffs during the pandemic.
I think of it more like the protagonist (or antagonist, one could argue) of a movie holding on to the hand of someone (employee) about to fall off of a cliff (the descent, ultimately, to poverty and homelessness) just to make the metaphor as vivid as possible.
Fired still semi-exists. Let go seems to show up for insufficient performance, e.g. semi-amicable “it’s not working out”. Fired shows up when somebody really screwed up, e.g. laws were broken or products failed.
Fifteen years ago I remember my last employer saying in a division meeting that they had "reallocated a number of roles to the mobility pool". A round of confused "what's that then" from more or less all present forced them to be less euphemistic.
Playing around at the online etymology dictionary, it appears dismiss is the oldest—early 15th century. Sack and fire are from the 19th century, and laid off in this sense isn’t until the 1960s. Terminate, as in dismiss from a job, is first attested in 1973.
Depends on the circumstances. I associate “fired” with a negative reason (e.g. performance, theft, harassment). “Laid-off” doesn’t carry the same connotation.
Assuming legal signed off on the basic message, I'm guessing it's out of a sense of 'politeness' in a delicate situation. Consider how someone might publicly communicate a relationship breakdown with language like "we're parting ways" or "we have made the decision to end our marriage." Sometimes you get plain, direct language but people might infer acrimony from it.
My sense is that in the particular case of layoffs, companies are hesitant to actually use the phrase "laid off" because it triggers a sense of implicit shame in those affected. There is definitely an unspoken assumption that folks who get laid off are underperformers, and the extent to which we talk about how untrue that is (see: LinkedIn) shows how pervasive the assumption is.
Exactly the point - passive, weak, blameless terms makes it nebulous on what has happened. Just say you want you need to say - you're the captain of the ship.
Oh c'mon, there's no way this is it. If they hadn't been laid off there wouldn't be an external announcement. You don't post something like this merely to announce that you're retraining some employees.
They were 100% laid off. The wording is intentional and standard for the industry.
You aren't "impacted" by changing roles or retraining, you're impacted by losing your job.
"we want to acknowledge and express our appreciation for their substantial contributions" translates to "these people will no longer be contributing as they are laid off effective immediately".
There isn't even a need for a public blog post about this change in business strategy. This reads fine as an internal email, but I've never worked at a company that publicly referenced their layoffs.
I actually believe he put out a 10/10 example of how this should be done. We all know what he meant, he was concise and then reminded you of the mission and that this is all about the mission.
If you’re laying people off, say it straight and with a backbone. The language is passive, weak and makes it sound like a mere consequence of a slight breeze upon a dainty leaf causing it to gently fall from a tree.
17 people lost their jobs. Likely many of those have families to feed, houses to uphold and bills to pay. In this economy, the same will likely happen to many of us and a statement like the above would feel like a punch to the gut.
The uppercut that follows is:
> we want to acknowledge and express our appreciation for their substantial contributions.
Saying you want to acknowledge and express something is not the same thing as acknowledging and expressing something. A statement would struggle to get more generic than this.
While those examples do use the passive voice, the passive is not the real problem. "These events impacted seventeen of our teammates" is the active voice, and it is no more forthright. "Mistakes were made by Bob, Sean, and Susan, who have been fired" is (if accurate) quite clear about assigning blame while using the passive. It's true that some people overuse the passive, and for those people noticing and considering whether to rephrase can produce better writing, but insisting on forgoing the passive entirely probably won't. If we want to prevent evasive writing, we should look for and call out evasive writing, whatever voice is used.
Right, the active construction does grammatically require we put something there, where in the passive we get to omit it, which is why the passive is sometimes used for evasion. But if you're interested in whether someone is being evasive, just... look at whether they're actually assigning agency appropriately. Grammatical form doesn't answer that.
Why is it the corporation's fault though? We live in a society and governance structure which encourages corporations to consider revenue over everything else. Why would they act differently? What should Google do? Sorry I understand the human cost of layoffs. But it is a reflection of what this society values. If you want corporations to consider the human cost, you need to make it feature in their financials. Or the government should offer better protection to unemployed people.
> Unfortunately, this means we will no longer need some of the roles on the late stage investing team. Seventeen of our teammates are impacted today.
I hate this passive voice. It implies there was nothing that could be done, that this was just a force of nature. That it wasn't an active choice by YC, but rather just some eventuality.
Most of us understand the necessity of hard decisions. Own the outcomes. It's ok to say, "We fired 17 people, because their roles were no longer needed by us".
If you think that looks too bad, then don't do the thing -- find other opportunities for the people in the company.
When I'm looking for my next thing to do, I don't really want a blog post out there that says you fired me.
I get that ambiguous, passive language may allow the CEO or whatever to view themselves in their own choice of lighting, and there's a desire to see them much more uncomfortable because of just how unfortunate the reality of losing your job is for the people on the other side.
But it also allows "those impacted" to tell their perspective.
From my experience these things are an after thought, the people writing this stuff are disconnected from the people making the actual decisions and I guess the typical audience that reads it. The people who do the marketing, HR, or "run socials" tend to be from the demographic that over values safe corporate speak. CEOs occasionally write these but usually it's some pre-written stuff that gets signed off on.
We all review these like a ton of thought went into some blog post, and maybe it should, but often it's just a lower end employee who is asked to translate things into an announcement when they played zero role in the hiring/firing part.
Considering how much these posts always bother people [1] maybe higher ups should care more about the blog posts too.
[1] At least a few in every HN thread, whether most people actually care/read it might be different.
> The people who do the marketing, HR, or "run socials" tend to be from the demographic that over values safe corporate speak
I don't think their behavior comes from demographics, but from the incentive structure in these positions.
Press releases are more often defensive than offensive, so the staff who write these face far more risk than reward. This incentivizes them to avert risk and play safe.
That's a good point. Even if the marketing/copywriters dream of their own "Great American novel" or are legitimately talented communicators, in reality it's a pay checks that 100% values safety and checking boxes over ability.
> If you think that looks too bad, then don't do the thing -- find other opportunities for the people in the company.
The needs of a business change. Sometimes roles are eliminated and other times roles are added. This is normal and healthy process of every business. Can we get away from infantizing the individuals affected like they're some children whose family disowned them? It's unfortunate and you can certainly empathize with those that no longer have a role in the firm, but it's a business, not a family.
I think they are owning the outcomes. Saying "we fired 17 people" would be more disrespectful and not accurate. If I was let go due to a strategic business decision or through the natural course of the industry I wouldn't want my former employer suggesting they fired me.
"As a result of this, we eliminated the roles of 17 people." is also fine, shows more ownership, and is therefore better (IMO) than "Seventeen of our teammates are impacted today."
The way they phrased it is entirely standard in the industry, so it isn't exactly a mark of shame to conform with that (IMO poor) standard. (At least they avoided using an MLK quote.)
To be pedantically clear, the first sentence here is not passive! Both clauses there have an explicit subject (‘this’ and ‘we’ respectively) and neither verb (‘means’ and ‘need’) is passivised. I like Geoffrey K. Pullum’s article on what is and isn’t passive: http://www.lel.ed.ac.uk/~gpullum/passive_loathing.html
(Not that this means the announcement isn’t problematic, mind you. It still feels like it’s trying to avoid focussing on something. And yes, the second sentence does this by means of the passive voice. I just get annoyed when people misidentify it, as they seem to do regularly.)
It's a tricky judgment call and not everybody will receive it the same. But I like learning little tidbits! Crucially, I don't think poster did a "pedantic correction" for the sake of unfairly dismissing the point ; they did it to educate and that always gets credit in my book :)
A lot of the tradition of passive voice comes from lawyers because you can’t always say somebody was fired or transferred or laid off. There can be different standards of local employment law for different employees. Passive voice can be the least risky of defamation or expressing favoritism to those who didn’t get cut.
That said, it’s abhorrent to see YC cling to tradition here, especially in light of the industry-wide layoffs as well as just how insanely rich YC is versus the headcount at question here. This is absolutely a place to question tradition and seek progress.
I don’t want to pick on your post specifically, but I find this legislating and nitpicking over the exact wording of layoff announcements — that follows every single one of them — to be pretty pointless
>> we will no longer need some of the roles on the late stage investing team
> I hate this passive voice.
It's active voice, no? How is it different than we fired, except that firing sounds more tied employee performance, no longer needed more seems like employer fault.
> How is it different than we fired, except that firing sounds more tied employee performance, no longer needed more seems like employer fault.
I think this is GP’s issue with the phrasing here. Passive or not, it sounds like it’s deflecting focus away from something — as they said, ‘It implies there was nothing that could be done, that this was just a force of nature’.
"they were impacted", the passive voice, has the actor eliminated. who impacted? yc. yc leadership made a decision which impacted 17 people. that's active voice.
You shouldn't do X if you don't have the balls to admit that X is what you're doing. Either fire someone or don't, but don't fire someone and try to pretend it's not a firing.
"We fcked up. Sorry. We really did. We're looking to identify the source of the decision. We'll be placing the person, or group of people, responsible on a performance plan (that will include the leadership team if appropriate). If they make continued similar mistakes, they'll be fired, or their compensation will be impacted. In the mean time, we'll be working hard to help the 17 poor souls who were sacrificed on the alter of this mistake".
Did they fuck up though? I understand that layoffs suck, especially for those who are layed off. But I don’t think a failed business is necessarily a fuck up. Should companies not try anything new out of fear of having to lay people off if it doesn’t work out?
To be clear, lay offs can be caused by fuck ups, but not all are.
Sorry to everyone who lost their jobs. It can feel like the end of the world and your worth. But I’ve seen throughout my career people land somewhere better. Someone once wise told me the most important saying in the world is “this too shall pass,” which applies to all things, good and bad.
Also wanted to add: never forget that “the law of averages” is our friend when this happens. It ensures that there is always a good chance to lend somewhere if one keeps trying (submitting applications and giving interviews).
I mean... not even, right? A "livelihood" is one's ability to make money in their career, not specific to an individual job. Surely these highly qualified people will find work elsewhere.
So it's really not worth getting dramatic about. It's sad, but such is life. I wish the best of luck to these folks, but I doubt they're in mourning. I'm sure the YC leadership is helping them figure out next steps as we speak.
Things like this are almost always traumatic regardless. We wrap ourselves and our identity in our jobs, especially ambitious and successful and highly qualified people. While objectively you’re right, it is still unnerving and unpleasant to have to find a new job and learn your contribution and value to the company was worth less than others. It’s also not the best job market for tech focused folk. I think it’s ok to feel sympathy for someone laid off.
I worked with a guy who came up as an engineer in the Soviet Union. Back around 2014 he was laid off from a US tech company that had moved him over from Russia. He couldn't wrap his head around it. Said that in the Soviet Union there was no such thing as a layoff. If they needed to shut down some program they'd move you to another one. The whole layoff was just extremely disorienting for him - especially since the company had moved him over here only a few years prior.
Exactly, the state spent a lot of money (and/or resources) to train an engineer it would be best to keep him/her working as much as possible. Here we lay highly trained engineers off and they could be idle for several months. Lots of disadvantages to central planning, but realizing that it's expensive to keep highly educated resources idle they would try to maximize their usage.
" highly educated engineers were paid like 100 rubles/mo, which is slightly above minimum wage."
I think it's kind of hard to quantify based on salary alone in a system like that. People in more prestige positions like engineers & scientists had access to things that others might not have: a better apartment, better schools for their kids, shops that had a better supply of goods.
Well since by and large you weren't allowed to not work in the Soviet Union being "laid off" normally meant you were being shipped off to a labor camp or being executed.
Lets not pretend they didn't have millions in the gulags....
Unless you’re rich, you’re not allowed to not work in America either. Go ahead and try, you won’t last long. Even social support programs come with work requirements in some places [1].
Let’s not pretend America doesn’t currently imprison over two million people [2]. That’s where you end up if you’re poor and unlucky enough in America (being homeless is also criminalized in many places [3]).
> A dismissed worker shall receive a severance indemnity equal to the average monthly wage.
[...]
> In case of restructuring or liquidation of the enterprise, the worker while seeking employment, retains his or her average monthly wage for up to three months, taking into account the severance indemnity.
It shows that you have never lived in soviet union and happily eat communist fairy tales.
Soviet Workers were exploited and underpaid by state, there was no private property and almost no private sector.
Soviet Union employed highly educated PhD rocket scientists and paid everyone minimum wage, because there was no alternative.
Literally every scientist family had to grow their own potatoes and veggies at home/dachas in order to survive.
Can you imagine Harvard dean growing potatoes just to survive in cold winter months?
Cars were not available, you had to wait for 7 years to be allocated a slot to purchase a vehicle.
Almost no selection of consumer products, everything was DIY, because the only good thing Soviet State was capable of - is building tanks and rockets (that are currently being destroyed by Ukraine Armed Forces)
That’s true. They gave the platitudes as millions starved while Stalin exported food and established the gulags and lay waste to civil society. Yay!
The religion bit is really off kilter, unless you think the impermanence of all things is merely a religious idea and not a fundamental aspect of all reality. After all impermanence didn’t apply in Soviet Russia? Oh yeah, it too passed. Guess not.
All modern societies implement brutal exercises in primitive accumulation. Capitalist nations just exported their brutality to the 3rd world. Was that noble of them? I'm not seeing your point. (See: https://en.m.wikipedia.org/wiki/Primitive_accumulation_of_ca...)
"Impermanence" is not a religious concept, but the vagaries in these platitudes are. Nobody in a capitalist society can rationalize layoffs. The best we can do is rationalize not thinking about them, which is the purpose actually served by the platitudes. Religion does the same.
where did this come from? The person you are responding to didn't say anything about Soviet workers. Also, having recently visited Cuba, while workers in a Communist society may not worry about layoffs, they still need second jobs in the black market to earn a living wage. I'm far from an expert in the Soviet Union but it seems crazy to use this as an excuse to shill the USSR
Heard a story on NPR about someone who recently went home to Cuba from Spain. Said that in the past people in Cuba would ask him to bring electronics (stuff they couldn't get in Cuba), but this time when he asked family back in Cuba what they wanted him to bring they said "Food". When he got there he picked up a hitch hiker on the drive from Havana to his home town (in the past this was very common and very safe). The woman advised him that really shouldn't pick up hitch hikers because they tend to rob you. She was a healthcare professional of some sort and said she had to do several side jobs just to survive.
The question is whether all families can sustain healthy and dignified livelihoods. And the answer is in fact they cannot.
By definition, a capitalist economy has a hard dependency on labor surplus. Remember when the Federal Reserve literally said they were raising interest rates to increase unemployment? That's why.
They couldn’t in Soviet Russia either. I also don’t consider livelihood synonymous with dignity. If you’re going to advocate, I’d fall on the UBI side before I fall on the “meaningless command economy labor for the sake of laboring”
Shame on YC :(. The blog post doesn't even mention that YC even tried to utilized the 16 employees on other roles. YC is sitting on top so much money and profits, why did they decide to lay off people?
There are good times and bad times. If my company is not with me during bad times, I wouldn't want to work with them.
That's a really bad take. YC has a responsibility to the startups they fund to maintain the best team for the kind of work they're focused on. It's also not necessarily the best thing for employees to "be utilized on other roles" within their current company when their roles cease to exist due to business changes. Often the best roles for those individuals is at other companies or in founding their own companies. In truth, most people I've known who have stayed at the same job for a decade were worse off for it, not better.
I'm not advocating for reshuffling your workforce for very short-term needs, but if the longer-term goals change, the team often has to as well.
I imagine the people laid off are highly skilled investment bankers. I think YC laid them off because early stage seed funds do not require the same level of sophistication as late-stage investment.
I believe the employees laid off would be perfectly capable to assist in early-stage seed rounds as well. That way YC could have vetted more projects and invested more.
Imagine that the people laid off were tasked to find and seed environment friendly startups etc. Deep work requires a stable paycheck and job safety. If YC really wanted to make things better, they'd know better.
With these lay-offs, I won't be surprised if all the remaining employees would be yes-sayers lacking any individual incentive.
This is true of every big tech company doing layoffs. They can all easily afford to keep everyone. They choose not because capitalism has no room for humanity.
Does this also mean YC is killing off their YC Continuity Programs:
>> Series A Program: Help founders achieve the best possible outcome when raising a Series A via year-round workshops, fundraising guides and 1:1 support.
>> Post-A Program: Batches for YC startups immediately after their Series A to share best practices for growth: managing a board, building a team, key metrics for a Series B and more.
>> YC Growth Program: Graduate school for startups. We bring together cohorts of CEOs of rapidly growing YC companies to focus on the challenges of company building: the changing role of a CEO at scale, setting strategies and success metrics for the organization, hiring and managing great leaders, and more.
Sorry - the link in that thread is to a tweet, not the article the tweet links, which is what I wanted to link - that article indicates the partners leading the fund (and program) left YC.
I haven't heard specifics about those programs but with the partners leading gone it seems difficult to imagine them continuing - fair point though, no solid news.
Already linked to a source that shows the references to the programs are gone in my original comment; though that page is still there.
Also, might be wrong, but “theinformation.com” as a source is insta ban as a result of it being a “hard walled” content; hard walled meaning it’s not possible to access the content via alternative means. If you have a source that’s not blocked, feel free to provide it, otherwise just see this as promoting a source that’s ban on HN.
Here’s all the dead submissions, though you likely have to have “show dead” turned on from your profile settings:
Oof, I don't lurk here during work nearly as much as I used to - missed the memo about it being a banned source, do you have a link for that? In the past that source has unpaywalled articles specifically for HN readers so I'm saddened (but not really surprised) they decided to go for the full cashgrab.
Not really sure what you want here - the evidence of those programs being affiliated with YC has been scrubbed from the public web, do you not believe in Occam's Razor or are you waiting to find a quote delivered straight from Garry Tan's mouth on the question before you accept the likely conclusion from all evidence?
edit: either way, I don't have a second source - that article from theinformation is the only active story I've found that specifically names the partners leaving.
theinformation.com was de-walling (?) certain articles for HN when they would make HN's front page and we would specifically ask them. I thought it was a nice fit, but they eventually stopped responding to our emails. I never learned if that was a decision on their part or just churn inside the org (e.g. the person we originally arranged that with left).
We comment on bans when people ask us! In this case, yes, it's banned because it's hardwalled, by which I mean there are no obvious workarounds. If that changes (including if they wanted to go back to the way we did it before - https://news.ycombinator.com/item?id=35146525), we'll happily unban them since their articles tend to be good.
Oh, got it! Thank you for scrounging that up I was specifically looking for mention of that site, no wonder I didn't find it. Makes a ton of sense in general and it's lame we no longer get a special exception to their wall.
Id guess that YC has a much greater competitive moat in the former. It's much "easier" to do late stage investing - a few big transactions instead of many many small ones, and everyone's working with the same information.
Very few places have the infrastructure to deal with large volumes of start-ups + a lead flow of small companies trying to join YC, so there's no acquisition costs. Add to that, YC's experience with small start-ups compounds - they can probably predict start-up success way better than competitors at this point. That's almost certainly not true for late stage investing.
A bunch of possibly clever, technically adept people hang out here even if they work for a bank or something equally dull. Some small percentage of them have a latest idea and also decide to explore pursuing it. Where to go?
Everyone here knows YC is one place. What else have you got? Anyone got a list? How do you find out about the people involved, like on a scale of x to y how shonky are they? etc.
I would guess taking over the slashdot space with some incremental improvement to that formula has created one hell of a pipeline that competitors struggle to match. Hence paying @dang full time here and whatever other costs there are associated.
I would think having seed stage investments would offer additional late stage moat. My first thought was that the current down round later stage environment is squeezing a ton of common equity founders/execs. Its tough to be both founder friendly and investing at later stage prices that leave many startup execs low in equity/motivation.
There's virtually no similarity between the two. They are completely different games.
Early stage investing – low cost, high risk of failure, high multiple return, you'll need to make a lot of bets so can cast a wide net, longer term (could be up to a decade or more before you see returns), no established business, so you are betting entirely on the founders.
Late stage investing – high cost, low risk of failure, low multiple return, you can only make a small number of bets so have to be more selective, shorter term, company already has a well-established business, and your decision will primarily be based on how well it is doing.
Not privy to special information w.r.t. this change, but I can think of a few:
1. Breaking focus / competing on multiple fronts. Lots of firms specialize in A-stage or later. By investing in seed and later rather than just seed, the later stage firms see you as a "competitor" for, rather than a "supplier" of, early stage startups. You have that many more competitive relationships rather than cooperative ones.
2. LP fundraising. LPs have to make choices as to who to fund, especially in this economy. Later stage vetting, returns, etc are different than early stage. May not be worth the heavy lift of competing for LPs.
3. Specialization. Once you get into later stages, you get firms that specialize by industry vertical. Not just business (marketplace, fintech, hardware) but even within software (SaaS, dev tools, consumer, enterprise, etc). Might make it harder to make deals. You now have a multi-front problem where each potential counter-bidder for the deal lead has hyper specialization to the startup, whereas YC is a generalist by nature.
4. Competition for deal terms. Most of the time, the deal lead sets the terms. If you can't aggressively bid to lead deals, they may not get the best economy for each of the deals since the lead may have other priorities. This may produce less optimal returns vs just putting more money into seed.
5. Partner / investor preference. VCs compete for partners / investors. If partners in the late stage at YC are limited to only YC companies vs the whole late-stage market (or have other limitations), it may not work for them vs going to a firm with less terms.
Ultimately as a generalist investor, pre-seed/seed/A-and-later are very different markets. With interest rates this high and everyone being more picky, it becomes harder to outperform unless you can operate in that market independently. I suspect YC looked at a model for their returns and came to this conclusion.
My pithy observation - Early stage investors are fantastic at extrapolating from minimal data points. Late stage investors are fantastic at extrapolating from many noisy data points. They screw up because the methods for each of their extrapolation functions are entirely different, so much so that they manifest as cultural differences in investment firms.
I am not VC but I think this is kinda apparent from the get go.
In early stage you are betting on and nurturing a small team with a full-of-hope business plan. They need relatively small bits of help that can go a along way. So both "who you are chosing among" and "how you are helping them" is very specific.
With bigger companies, the team and the business plan is more proven and they need help navigating size and scaling their offering - a very different set of people you are chosing from and what they need from you.
> is so different that the success of YC in early stages doesn't translate
that's not a claim made in the article. It just said the late state was different enough to be a distraction from their core mission of being an early stage investor. A company with just an idea and 2 founders and nothing more is obviously very different from a company with many employees, a revenue stream and a long list of customers. It should be obvious how different that is.
All of Y Combinator startups try follow the same playbook: successfull exit, or successful IPO. YCombinator benefits from both.
Since most YCombinator startups never see any profit, late stage investment becomes a risky proposition since even "top YCombinator startups" lose billions of dollars a year, for years, with no path to profitability or recouping investments.
Well, for one, I imagine the "network" provided by YC is less valuable to late stage companies than it is to early stage, so YC probably found they were not able to bring as much value.
Second, the amount of capital needed to invest in later stages is much higher, and with companies delaying IPO, they would be tying up capital for much longer than they probably expected originally.
I have no insight into YC, this is just my guess as to how it is different.
It costs a lot more to invest in a late stage startup than an early stage one.
In the current economic climate they probably can't afford (or just don't want to risk) to invest large sums, while on the contrary can "take advantage" of early stage startups which will struggle more to get funding.
More upside on the table if you get in early. It’s probably just not an efficient use of their time since the returns from gettin in early are so outsized.
I wish there were some publicly available numbers to analyze here, but it seems likely that YC's late stage funds have lost a lot of money (on paper) doing late-stage investments at sky-high valuations over the years leading up to 2022 that are now down significantly as a result of the current startup downturn.
Folks who are thinking about these YC changes as a layoff are missing the point -- YC is exiting what had been a major part of their business (especially if measured by total dollars invested).
And from the outside it seems likely that the reason for the layoff is probably less that YC is in troubled financial straights and needs to cut costs on its operations, but because their late-stage investing business was losing money and YC has decided to give up on it and no longer has work for specialists in that work.
YC made a decision about the value of one of their departments, and HackerNews generally accepts it as given that companies can make these kinds of self-determinations. The reasons for the decision were given. As a result of that decision, 17 people no longer have jobs with YC.
All that’s really left to debate is how YC phrases it. “17 teammates were impacted” is weasellier than the average layoff announcement so it gets the criticism.
As an aside, there seems to be a general but informal understanding that fired means you did something wrong while laid off means you’re alright but the company no longer employs you. Other terms like “impacted” have to be matched to one of these two cases. Probably a lot of benefit for everyone from formalizing this distinction. The military uses “honorable discharge, other than honorable discharge, dishonorable discharge” https://www.zero8hundred.org/types-of-discharges for example.
Sticks and bones may break my bones, but words can divert me into hours and hours of endless hairsplitting and bickering until I die of being bored with myself and doctors gather and marvel at the inexplicable fact that I am still complaining in the absence of a discernible pulse
Clarity and technical honesty are very important in technical work; especially so in a startup: you want people to focus on solving technical issues, not translating corporatese to human.
Plus, if a group tries to hide behind the wording for an inconvenient message what else would it sweep under the rug? YC is usually way better than this, which may be the reason there is so much attention to the wording which reads like the standard PR spin. My 2c.
Probably because there’s not much new in the layoff story that hasn’t been covered in tens of thousands of comments on previous layoffs. But this is the first time a lot of people have had an outlet to discuss the frustrating linguistic phenomena that have been on display this cycle.
not only that but it's the exact same top-comment subthread that appears at the top of literally every story involving corporate comms. I wonder if it's the same people every time or if there's a constant influx of new commenters who feel strongly about corpspeak.
Man, total amateur hour. A layoff post without talking about how it's the hardest thing the CEO has ever done, or saying the responsibility lies with me? No mention of how deep he cares about those departing? And delivered on a Monday? Why didn't they use ChatGPT to compose this like everyone else?
Leading venture capital innovator, YCombinator, is delighted to announce that over 80 percent of our team remain unimpacted by recent employment-related issues, while other team members will be exploring exciting new opportunities going forward
I don't think that'd be accurate - YC is exiting the business of late-stage investing, and that's the main news. It sounds like they had 17 people who were working on that part of the company who they laid off as part of this transition, but given the major role that YC Continuity played, it's significant news that they're no longer doing that.
I don't know of a title edit that would satisfy everyone, and pretty much any of the standard edits we'd make would generate accusations that we were censoring or whatever to protect YC, so in this case I think we probably need to go by the default.
Only if you're not fluent in corporatease. Whenever I see an e-mail entitled "Changes in [some organization]", I assume that one or more of the following is true:
1. The leader is leaving.
2. People are getting laid off.
3. They're exiting a line of business.
4. They sold the company.
Haha, same here, whenever I see some random meeting called "[whatever] chat" being scheduled, like "Engineering chat" or "Quick eng all-hands", you know it's
1. Someone's leaving or is getting fired from the department
2. More people are getting fired
The point is that this, along with "*changes" is always bad news. :D
I mean if the company is pivoting and closing the entire division because they no longer need to, eg, make film cameras or make buggy whips, why would you keep anybody from there around? You don't need their expertise any longer. Even if they were the best at their job, if you're not doing those things any more, what would you keep them around for?
Any company where the execs and decision makers are so far removed from the people they're judging, where they won't even truly understand or care what the person does, let alone who they are.
Google and Twitter and two very recent large companies that have done just that.
I’m not sure why YC is an example of something that has scaled well. There’s so many companies now in each batch with 95%+ never amounting to much success. It’s not clear how the scale is helping anyone.
I will say that large % of the batches turn out to still be good companies later, sometimes much later. The journey of being a founder sets people up to do a lot more: YC alums are often great C-level executives at other fast growing startups, and/or just because their first startup doesn't work doesn't mean they don't go on to create great companies later.
The key thing about networks is Metcalfe's law: the power of a network is the square of its nodes. This is also what makes the Internet more and more valuable over time.
Those things together mean scale increases value for founders, and what we've learned is those effects are most potent early.
No no, clearly it is just a coincidence that lay-offs are happening everywhere at the same time. YC must have made a fully independent assessment and decided based on spreadsheets and algorithms that this is the correct business strategy by using past data and developing predictive metrics. Just looking which business unit to cut loose based on cost reductions cannot have been a part of this process.
They did not state the growing economic concerns as reason for layoff like other big companies. They stated a business unit is not valuable enough and they are laying off 17 people. YC is beyond wealthy and successful. They laid off 20 percent of their staff. Not a good look.
I’m surprised that even an innovative, creative organization like YC wasn’t able to create other positions for these folks. I guess that just shows how hard business is even for people who are good at it.
When I saw the March "Who is hiring?" I couldn't help but think "truly, who is?".
My friend is on the lookout for a new role and his experience so far is that it's mostly CV hoarders who approach him on LinkedIn. One case we all but confirmed because I used to work for the company which was supposedly hiring, but I asked a person from there and nope, not very actively, no.
Many Japanese companies have worked hard over the last several decades to find new positions for people who would have been laid off. The result: they dominate a lot of international industries in manufacturing and certain kinds of high tech
Eg, I'm buying a Japanese car this week because I don't like the reliability of most North American brands
> Toyota continues tradition of a ‘No-Layoff’ policy for its full-time workers
However it's not all a net positive either. One issue that comes from the Japanese style of work culture is that seniority often trumps merit - which, while also common in the US, tends to cause more problems in Japanese companies when someone is shifted to a new department and given more control than they should have over something they have little experience in.
It also leads to it being significantly more difficult to change careers or even employers, as leaving ones job where it's difficult to be let go can much more easily be seen as a red flag.
(As a side note, I am a Toyota buyer for life as well)
> Creating a position for employees that aren't needed is generally not a business priority.
Sure, I guess I was using too much of a shorthand in my comment. What I meant was, I’m surprised a company with such a high talent density didn’t generate enough new business quickly enough to be able to anticipate near future needs for these folks so that it would make sense to keep them.
I would think YC would have a lot of opportunities to deploy capital, and so a lot of opportunities to gain value from a variety of employee types.
If I knew more about the internals of YC I might be able to make more specific suggestions.
By the way, any company out there, I’d be willing to brainstorm (for free) about how you can repurpose and keep your people, or find other creative solutions. I’ll check for replies to this comment later today and tomorrow, and maybe I’ll edit it to add a throwaway or alternate email shortly.
Email: jmorrow977 at gmail. I’ll check tonight and daily for the next couple days or week.
> Creating a position for employees that aren't needed is generally not a business priority.
You are describing the status quo quite correctly.
That is probably consistent with the textbook form of capitalism.
However, it does not HAVE to be this way. If you have smart, well-educated, experienced staff in roles that are no longer needed, how about thinking hard about how you might deploy them in new beneficial ways? The result could be increased loyalty and a new line of business, a social (yet still profitable) venture. Does anyone have examples?
So where is the bailout for these impacted people? Wasn't it just recently that YC posted a plea to bailout so that people wouldn't be fired? And then they don't do one themselves?
You mean like a fund where corps like YC pay into on the regular and then people who are laid off get back some of their salary for a portion of time? It would be like insurance but for being unemployed, just like we have insurance for your bank failing.
Depositors received a benefit beyond previously promised insurance and benefits. Calling it a bailout or not is based on one's personal biases or semantics.
> Depositors received a benefit beyond previously promised insurance and benefits.
?? The FDIC has always made all depositors whole. They have never stuck to the 250k I don't know why people have the impression they are doing something different then they have always done in this case; I just it's just extreme ignorance?
As I have already pointed out to you elsewhere, this is a falsehood. The FDIC is not permitted to pay out beyond the $250,000 except if a "systemic risk exception" is made.
If you click on random banks in receivership, you can see the dividend payments made to depositors above $250,000.
They usually manage to facilitate a bank takeover which does that, or sacrifices only some portion of uninsured brokered deposits, but there are certainly plenty of cases where that is not the case.
I'm not necessarily pro-bailout but there's a clear distinction between job losses due to money trapped in a failed institution versus job losses due to a business deciding to eliminate those jobs.
In an already difficult economic climate, it's heartbreaking to hear that these individuals will be impacted by this change in strategy. I hope that YC will do their best to support these team members during this transition.
Is "impacted" the euphemism of the 2020's? In the past I've seen "affected", but maybe that's passé now. So hard to keep up with all the progress in our language ...
I find it almost impossible to not see them as related. Take a look at [0]. Long-term this could be a good decision, I believe early-stage investing really is different to late-stage investment, but of course the moment to make this decision makes it evident there are other factors at play that influence this.
Hmm, that does make sense. The other comment here said that this kind of change is almost impossible to happen is such as short amount of time, which makes sense. Maybe they were already planning for a change in strategy by the new CEO, and this just happened to be an appropriate time to get done with the change already.
edit: Oh well the other commenter was the new CEO LOL, not used to reading usernames. I guess that adds a bit of bias but I believe it's a true statement.
I don't think the timing is random considering the climate. I have a feeling these seventeen will land softly compared to 99.9% of those caught up in recent layoffs.
"current down turn in risk assets" is almost as wonderful a phrase as "17 team members were impacted". The fact is that SIVB shares are now worth $0, and that many VCs and LPs were surely holding those can't be a total coincidence with today's "changes".
I am wondering if "impacted" is used because really lots of different things have happened to these 17 team mates. Or if "impacted" = "fired", and "team mates" = "ex-employees".
I asked ChatGPT to write this for me, but even that heartless code didn't have the heart to do this for me:
"I'm sorry, but as an AI language model, I cannot generate content that is insensitive or lacking empathy towards individuals affected by layoffs. Layoffs can have a significant impact on people's lives and livelihoods, and it is important to communicate such news with sensitivity and compassion. As an AI, my aim is to promote positive and ethical communication practices. Therefore, I cannot fulfill this request."
That's great (from my sofa's PoV)! If your mission is to fund youngsters and we know the story about that bank from the Silicon valley so this is the best way to save some resources.
There are a lot of threads here arguing whether employees should expect help taking next steps after a layoff.
Obviously, employees are only due what their employment contract (and labor laws) say they are due.
But that is beside the point. Helping post-layoff employees build trust, loyalty, commitment in both directions.
Knowledge workers are not fungible cogs. Their morale and goodwill result in better performance. And a more attractive workplace for prospective hires.
I believe it is the right move. You can make better impact funding a large number of startups with small amounts and guidance than focusing on few late stage startups. Even though 6% make it big in their first attempt the rest 96% do benefit from YC's role in their subsequent attempts. So the impact is huge when it comes to early stage funding.
Just so that it is clear: How does YC define "late stage"?
I ask because the opening line is: "YC is known primarily as a place where very early founders create something from nothing"
Does this mean that, going forward, startups that start with something need not apply? For example, a product and, say, one or many customers? Some revenue?
Or does YC want to focus on the "something from nothing" category?
> YC is known primarily as a place where very early founders create something from nothing by simply applying online and joining the world’s best founder community.
Uhh... no. It is known for hosting HN, and having a weird, uninteresting side thing on the main domain people enter by mistake.
This is interesting, specifically relative to what their definition of "growth stage" is. Does this mean a young company with five employees and some traction, or a large company that is close to PMF but needs cash to burn after being in-action for 1-2 years?
The American corporate structure is such a ridiculous mess. Corporations should be equally controlled by capital and labor, such that both interested parties have equal say in corporate decisions. Yes, this might mean that the owners take significant net worth losses while more people stay employed - boo hoo hoo. Hasn't it become clear that societies run by financial oligarchs with no constraints always end in tears?
America continues to slide towards a Third World cesspool of wealthy enclaves surrounded by miles of festering slums. I guess private security is a growth sector, in this increasingly dystopian endgame.
Why is American corporate structure a mess? What are existing real-world examples of alternatives that outperform American corporations, and along which metric? Why should corporations be equally controlled by capital and labor? Some American cities indeed have slums, but what leads you to believe it's a consequence of American corporate structure (rather than a million other possible reasons)?
Without fully entertaining the hyperbole, American society and government are fully captivated by the wrong metrics: GDP growth is an extremely narrow measure for economic well-being. Unemployment rate is biased by not counting people who want to work but gave up because they can’t find a job. Average salary is far less meaningful than median salary due to huge skews in income distribution.
"indirectly bailed out" is not "bailed out". The US economy as a whole was "bailed out" by not having a cascading effect of bank failures, does that mean you were "bailed out" too? Are we just devaluing the term entirely?
Imagine thinking that billionaires actually bought SVB stock or held cash in there. Protip: their capital is tied up in dozens of companies, which were, indeed, bailed out.
> it has been given out for others to use, so again no, they were not bailed out
Uh, that's what wealthy people do -- they give money to other people to make them even more money. This was so transparently a billionaire bailout (Gary Tan & David Sacks were literally on a press tour), I fail to understand how people are so mesmerized by the shell game here.
...that's not what "bailout" means, a "bailout" can only happen before a bank collapses; SVB already collapsed, it cannot be bailed out, definitionally.
It's not a shell game, it's a fundamentally different situation where real people who are not billionaires are directly and immediately effected.
Further, there is not financial assistance in the form of "free money"; at best what will happen are loans to cover the difference between the available liquidity and the withdraws. The assets SVB once had will, upon maturity, pay for those loans with interest, and only then will investors be given a chance to recoup some of their investment.
I'm frankly fascinated by the abject cynicism by way of ignorance people think they can get away with on the Internet. Unreal...
> real people who are not billionaires are directly and immediately effected
Hard disagree on this. Startups die literally every day, not to mention that we just had tens of thousands of layoffs by big tech companies. In my view, this was a targeted bailout, meant to primarily protect the investment (into startups) of many Silicon Valley investment firms.
> only then will investors be given a chance to recoup some of their investment.
You're still harping on this "investors" thing, which is not even remotely related to my point. You can call me ignorant all day, but my point has zero to do with folks that bought SVB stock, and I'm not fully convinced you actually grasp that.
These aren't "startups that die" they're "businesses that did absolutely nothing wrong that die". Americans do not want to live in a world where a business can die through picking the wrong bank, full stop. Just because the investors in those startups don't get fleeced by a bank doesn't mean they're "bailed out".
And "startup" here is not "craps shoot on if it exists in a week" it's "a substantial percentage of businesses with VC backing in a general California geographic area but also across the country."
And yes, your point is flat wrong because you don't understand that a bailout is exclusive to investors in the direct company receiving financial support, which does not apply to the already failed SVB, nor does it apply to any depositors who are not receiving any additional money at all, just regaining access to their already existent funds.
You are misusing the word, so of course your point isn't making sense with the real definition of the term. I am convinced you don't actually grasp that.
> because you don't understand that a bailout is exclusive to investors in the direct company receiving financial support
Yeah, it's clear at this point that not only are you trying to play an annoying little semantic game, but to make things worse, you also have no material domain knowledge. For reference, a bailout explicitly does not serve investors, but rather immediate business counterparties.
From the second source: "A bailout occurs when the government
makes payments (including loans, loan guarantees, cash, and other types of
consideration) to a liquidity-constrained private agent in order to enable that
agent to pay its creditors and counterparties, when the agent is not entitled
to those payments under a statutory scheme."
> From the second source: "A bailout occurs when the government makes payments (including loans, loan guarantees, cash, and other types of consideration) to a liquidity-constrained private agent in order to enable that agent to pay its creditors and counterparties, when the agent is not entitled to those payments under a statutory scheme."
So literally not what happened, got it.
Of course you don't feel burdened by the meaning of words, but now at least anyone reading this will be aware that you don't know what "bailout" means, and that what happened in 2008 is nothing at all like what is happening now, and that was my goal. Mission accomplished.
Frankly David, you should know better. You've benefitted massively from these VCs already in your life, and at certain parts you would have been devastated to suddenly lose access to the very funds you're now advocating people be robbed of, but you clearly lack the ability to empathize with folks who want to travel a similar path to you.
Weirdly making things personal is often an indication of losing, not winning, an argument. Either way, I should know better than to get into debates with brand new anon accounts on HN. Cheers.
You probably know what YC is.
We were recently doing late-stage investing, but we're mostly giving up on that now.
We're firing 17 people who were involved in late-stage investing.
You won't notice their disappearance.
Oh they flagged my post. Does that mean no one can see it anymore? Anyway I was curious how GPT expands your four brutally raw sentences into a press release (everything it made is fake including a fake quote):
Y Combinator Announces Changes in Late-Stage Investing and Workforce
Mountain View, CA - Y Combinator, the renowned startup accelerator, announced today that it will be shifting its focus away from late-stage investing. As part of this strategic pivot, the company will be letting go of 17 employees who were involved in late-stage investing.
This decision comes after a thorough review of YC's investment strategy and long-term goals. While late-stage investing has been a successful part of the company's portfolio, YC has decided to double down on its core mission of helping early-stage startups grow and succeed.
"We are grateful for the contributions of our late-stage investing team, but we believe that this change will allow us to better serve our early-stage companies and continue to drive innovation in the startup ecosystem," said YC President, Sam Altman.
The 17 affected employees have been notified and will be provided with severance packages and support during their transition. YC remains committed to its mission of supporting and investing in the most promising startups and looks forward to continuing to work with entrepreneurs from all over the world.
For more information, please contact Y Combinator's media relations team at press@ycombinator.com.
Not sure who "they" is but HN users flagged your post. We can only guess why users flag things, but my guess is that they've gotten tired of generic LLM posts. The bar that such a comment has to clear in order to be interesting is getting increasingly high.
