A reckoning is underway in the tech and financial industries as massive layoffs continue and a new economic landscape emerges. The collapse of Silicon Valley bank sent startups scrambling to map where they stand and what comes next. While some may have been caught by surprise, many tech companies – including the behemoths Google, Meta, and Amazon – were already on edge from widespread layoffs last year.
With palpable uncertainty in the startup community, Benjamin Lee, Managing Partner at Ixora, says that tech workers who are able to adjust to the new landscape and “wean off entitlement” will be the ones who survive.
“In the past few years, funding has been easy to come by. Startups became used to perks such as unlimited PTO, unlimited remote working, gourmet meals, kombucha on tap,” said Lee. “When you’re spending someone else’s money and have a long list of people willing to write you a check – it’s easy to become entitled. People start to believe that companies are obligated to provide these perks and that investors ought to fund them.”
“The current state of markets means that investor appetite has changed. IPO volume is down, so private funding rounds will naturally decrease in size and frequency. Startups are actually going to have to watch their spending – running large deficits every year will no longer be sustainable.”
While Lee’s assessment may seem harsh, many investors and business executives would seem to agree. Earlier this month, Keith Rabois, an early PayPal executive, said that the layoffs at Google and Meta exposed that ‘fake work’ had become the norm in Big Tech. Meanwhile, Twitter has implemented new ‘productivity rules’ under Elon Musk – who has been vocal about the excesses of the previous regime.
“Let’s go back to basics – the whole point of a startup is to be innovative, nimble, and disruptive. It’s like being a pirate, as opposed to being part of a well-established but bloated and bureaucratic Navy. That’s how startups are supposed to win.”
“So if you are working at a startup, you can’t afford to have an attitude of entitlement. You can’t be thinking: ‘Oh, I went to Stanford, so I deserve to live my best life and have someone else pay for it.’ This is especially the case for co-founders and executives – you stand to make life-changing money if your startup gets acquired or goes public. So you need to hustle and perhaps even accept a bit of deferred gratification. When we look at companies, this is the kind of culture that we want to invest in.”
Ixora Ventures LLC is a venture capital firm that believes finance can be done right. Founded in 2019, the Los Angeles-based venture capital firm invests in high-growth, for-profit companies with business models designed to promote positive social and economic impact. Ixora typically invests in early-stage companies with clear proof of concept.