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No Mercy No Malice

For Business, 2022 is Looking a Lot Like 2000

The stock market correction will fundamentally alter the landscape of tech startups and VCs

Eyes Wide Shut

If you’re under 35, the year 2000 might as well have been the Middle Ages. Which means founder/CEOs are about to add a new phrase to their vocabulary: “down round.”

Tales From the Crypt

There’s no way, short of experience, to appreciate how violently things can turn. I’ve been on this ride: It’s nauseating and, though it’s lightning fast, feels as if it will never end … leverage shifts from ideas (founders) to capital (investors). In a bull market, money is everywhere, chasing ideas and founders. When money becomes scarce, its stewards accrete power. Adam Neumann may have been peak founder; super-voting shares and his investors’ fear of losing face gave Mr. Neumann leverage that garnered him a 10% commission on $12 billion in losses. This fulcrum of advantage, like a clock’s pendulum, is rarely in a place of equilibrium. The asymmetric advantage can and will flip to capital.

The Walking Dead

A host of illusionist tricks will be deployed to obscure what’s actually happening in the private markets. Deals will be structured so the headline valuation stays high, but the terms — liquidity preference, control mechanisms, and deal structures — will radically change the economics and governance. The next step is euthanasia. Expect to see a lot of unicorns bought for undisclosed amounts. The deals will be presented as strategic, but they’ll really be acqui-hires. The best talent gets new options on more viable equity, the lawyers pick over the patent portfolio, and everything else gets quietly shut down. Peace with honor, sort of.

9 to 5

I still shudder at the memory of calling a third of the employees at my first startup into a room and telling them they didn’t have a job any longer. It was horrible, especially because I knew I was the person in the room who’d lost the least that day. But we couldn’t afford them, and if we hadn’t laid them off, we’d have shut the whole business down six months later. Instead, that firm is now a $100+ million business with offices on three continents, employing far more people than we did the day before we fired a third of the team.

Breath of Fire

“Hi, this is Nurse Amanda from Gulfstream School. Your son threw up in class. Poor thing isn’t feeling well — can you come get him?”



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Scott Galloway

Book Author

Prof Marketing, NYU Stern • Host, CNN+ • Pivot, Prof G Podcasts • Bestselling author, The Four, The Algebra of Happiness, Post Corona •

Books from this author

Adrift: America in 100 Charts