STORY INLINE POST
The bubble has exploded, or maybe it wasn’t a bubble but, certainly, something exploded and I’m not talking about the real estate market. I’m talking about tech companies and the venture capital industry.
In the last few weeks, a series of massive layoffs at startups have been occurring daily. Every day, a fully funded tech company (some of them in the range of hundreds of millions of VC money) is announcing massive layoffs. Also, VC firms have stopped announcing big check investments in new companies.
What happened? Are we experiencing a 2022 dotcom crash? Or in this case, will this be a “growth at all costs crash?”
For years, the VC industry has been pouring money into companies with no clear path to profitability, hoping the “growth at all cost” strategy would someday pay off. Well, I think this strategy will never pay off, or at least not in the foreseeable future and not in this current economic climate.
2022 changed everything. The war in Ukraine changed everything. The upcoming recession and climate change effects we are starting to notice now will continue to change everything. But as a human race, our best and innate skill to adapt and overcome will take us forward, maybe in a few years or decades, but it will happen and we will create a new normal. This new normal is already in the making; it started with the aforementioned “crash.”
In this new normal, the “growth at all cost” strategy doesn’t fit or work anymore. The way people consume and spend their resources will be on the conscious side as the new generations, which will be the economically active population of the future. focus on the economy of “being” instead of “having.”
As many scholars have studied, all revolutions that have led to advances in society have started in turbulent times, where industries and institutions were broken. Some people lose, some people win but in the long run, society moves forward with a new set of rules as industries and institutions adapted to the post-revolution “new normal.” As the old Roman saying has it, “hard times create strong men, strong men create good times, good times create weak men, weak men create hard times.”
During these turbulent times as old economies and industries collapse to provide space to new ones, scarcity of resources appears and shapes how society reacts, lives and adapts to this revolution. That’s exactly what's happening with the tech and VC industry nowadays and the big layoffs are just the beginning of systematic change in the tech industry.
This is a huge opportunity for entrepreneurs. Scarcity will be a big issue in many aspects of our daily lives, which is where the opportunity resides: the opportunity to switch from a business model of “Growth at all costs” to a model of “Democratize everything,” where technology can help us to gain access to resources previously reserved for just a few. The future is bright and technology will lead us to this bright future. In fact ,the future is here, but it’s not evenly distributed. If you want to become a billionaire, solve a billion-dollar problem, and scarcity will be a trillion-dollar problem.
Democratize everything. Democratize the future!