Startup 2022 The market may look like a slow-moving train wreck, but there is good news to be found – provided you are willing to take a longer-term perspective.
Sure, startup layoffs are rising, venture capital is slowing, and the stock market is a mess. Beneath every drumbeat of negativity, however, there’s more positivity than you might think. And, extracting one more nugget from Battery Venture’s recent quarterly cloud update, the pessimists are ignoring the story.
So this beautiful weekend, let’s find the sun in the middle of the clouds. To find? Clouds. OK, no more SaaS dad jokes. Work:
Founders, here is the good news of the software
Good news is a variant of bad and is often positive thanks to historical comparisons. Of course, this is good news for a to sort, but it’s still welcome:
- The bad news: Startup layoffs are skyrocketing.
- The good news: Much less than at the beginning of 2020.
As Homebrew’s Hunter Walk noted recently on his personal blog, startup layoffs hit a local high last month, hitting 16,000 and changing, according to tracker Layoffs.FYI. Given that the same data service actually saw no startup layoffs during the VC boom in Q3-Q4, the number is bad. But! It’s also far less severe than the damage startups suffered in early 2020.
For example, startup layoffs hit nearly 10,000 in March 2020. And then for months they remained hot, with over 25,000 recorded in April and May of that year. Only 70 individual startup layoff events were noted by Layoffs.FYI in May 2022, far fewer than the more than 100 per month recorded from March to May 2020.
Things are worse than they were at the end of 2021 from a startup downsizing perspective, but we’re hardly setting any records here, even just looking at recent data.
- The bad news: Venture capital is slowing down.
- The good news: From historically high levels.