{"id":1741984,"date":"2022-11-17T06:30:24","date_gmt":"2022-11-17T11:30:24","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1741984"},"modified":"2022-11-17T08:48:14","modified_gmt":"2022-11-17T13:48:14","slug":"techs-wild-ride-looks-to-be-about-over","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/techs-wild-ride-looks-to-be-about-over\/","title":{"rendered":"Tech\u2019s Wild Ride Looks to Be About Over"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftechs-wild-ride-looks-to-be-about-over%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1741984&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/11\/46e8b940-b39a-4ee9-8661-dba2a93fa39a-1110x740-1.jpg\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p>There are some grim signals and muttering noises coming out of what was once the shining haven of the future, Silicon Valley\/CyberWorld. It is very much looking like the tech version of Mr. Toad\u2019s Wild Ride is over, perpetual Fantasy Land is being canceled, and a return to Earth is ordered for the high flyers who inhabited that once sacrosanct realm. Tech types on both sides of the equation \u2013 the firms and the venture capitalists who\u2019ve been on firm buying and investment sprees \u2013 are finding out in the rudest way possible that cheap money is not forever.<\/p>\n<p>At the beginning of the month, tech firms reporting results began to spook the markets, as<a href=\"https:\/\/time.com\/6226927\/tech-stocks-slump-economy-forecast\/\" target=\"_blank\" rel=\"noopener\"> the first real cracks <\/a>in the once-thought-unassailable tech juggernaut started to appear.<\/p>\n<blockquote>\n<p>With a slew of technology companies reporting financial results this week, all eyes are on how investors will respond after a series of recent disappointing results from the biggest names in tech\u2014including Alphabet, Microsoft, Meta, and Amazon\u2014rattled investors about the industry\u2019s outlook.<\/p>\n<p>As tech stocks continued to take a beating this week, Wall Street analysts warn that could be bad news for the broader economy, as lackluster earnings results likely signal that inflation and high interest rates are squeezing households and businesses more than expected.<\/p>\n<p>\u2026This quarter\u2019s earnings season will go down in the history books \u201cas one of Big Tech\u2019s worst\u201d and could be a \u201cfork in the road moment\u201d for some of the biggest companies, wrote Wedbush Securities analyst Dan Ives in a recent research note.<\/p>\n<p>\u201cIn this softer macro and a recession likely on the doorstep, Big Tech management teams needs to quickly adjust to a much different backdrop or risks losing its luster for investors that have bet on these tech thoroughbreds for the past decade,\u201d he said.<\/p>\n<\/blockquote>\n<p>In their attempt to \u201c<em>quickly adjust<\/em>\u201d to that \u201cmuch different backdrop,\u201d many of the biggest tech firms have gone on a lay-off binge, from Amazon to Twitter <a href=\"https:\/\/hotair.com\/tree-hugging-sister\/2022\/11\/06\/evil-empires-collapsing-report-meta-announcing-large-scale-lay-offs-monday-n508612\" target=\"_blank\" rel=\"noopener\">to Meta<\/a>, and so forth. Additionally, some have instituted cost-cutting measures for remaining employees on their campuses intended to relieve pressure on the bottom line. That in itself exposed just how much loose money was being blown through at any given moment (as witnessed <a href=\"https:\/\/hotair.com\/tree-hugging-sister\/2022\/11\/11\/holy-smokes-youve-never-met-a-perk-til-youve-met-a-meta-perk-n510041\" target=\"_blank\" rel=\"noopener\">in my story<\/a> about Meta perks). Word coming out of the 2022 Web Summit Tech Conference, being held in Portugal this week, is that <a href=\"https:\/\/www.cnbc.com\/2022\/11\/15\/tech-leaders-reckon-with-higher-interest-rates-down-rounds-and-layoffs.html\" target=\"_blank\" rel=\"noopener\">things are fixin\u2019 to change<\/a>, and change fast.<\/p>\n<blockquote>\n<p>Once high-flying tech unicorns are now having their wings clipped <em>as the era of easy money<\/em> comes to an end.<\/p>\n<p>\u2026\u201cWhat\u2019s for sure is that the landscape of fundraising has changed,\u201d Guillaume Pousaz, CEO of London-based payments software company Checkout.com, said in a panel moderated by CNBC. <\/p>\n<p>Last year, a small team could share a PDF deck with investors and receive $6 million in seed funding \u201cinstantly, \u201d according to Pousaz \u2014 a clear sign of excess in venture dealmaking.<\/p>\n<p>\u2026Private tech company valuations are under immense pressure amid rising interest rates, high inflation and the prospect of a global economic downturn. The Fed and other central banks are raising rates and reversing pandemic-era monetary easing to stave off soaring inflation.<\/p>\n<p>That\u2019s led to a sharp pullback in high-growth tech stocks which has, in turn, impacted privately-held startups, which are raising money at reduced valuations in so-called \u201cdown rounds.\u201d The likes of Stripe and Klarna have seen their valuations drop 28% and 85%, respectively, this year.<\/p>\n<p>\u201c<em>What we\u2019ve seen in the last few years was a cost of money that was 0<\/em>,\u201d Pousaz said. \u201cThat\u2019s through history very rare. Now we have a cost of money that is high and going to keep going higher.\u201d<\/p>\n<p>\u2026\u201cI think every investor is trying to push this to their portfolio companies,\u201d Tamas Kadar, CEO of fraud prevention startup Seon, told CNBC. \u201cWhat they usually say is, if a company is not really growing, it\u2019s stagnating, then try to optimize profitability, increase gross margin ratios and just try to just lengthen the runway.\u201d<\/p>\n<\/blockquote>\n<p>In other words, quit spending money you don\u2019t have on perks and pipedreams (because no more funding dollars are coming in the door), and try to run your operation efficiently\u2026like a business. There\u2019s a concept.<\/p>\n<p>The venture capitalists who finance these private tech firms have already shifted to talking but not investing\/buying. Nobody wants to be seen as not \u201cplaying,\u201d but, then again, <a href=\"https:\/\/techcrunch.com\/2022\/10\/29\/venture-capital-will-soon-be-brimming-with-ghosts\/\" target=\"_blank\" rel=\"noopener\">no one wants to play<\/a> incautiously in this environment.<\/p>\n<blockquote>\n<p><strong>Venture capital will soon be brimming with ghosts<\/strong><\/p>\n<p>\u2026The tech industry loves generalizations \u2014 and don\u2019t worry, I enjoy my fair share too \u2014 but as the downturn continues to play out, it\u2019s increasingly important to think about the structural changes that may be forming in the venture capital landscape. Venture firms, unlike unicorns, often don\u2019t have hundreds of employees to cut. Instead, venture firms cut costs in quieter ways.<\/p>\n<p>At TechCrunch Disrupt last week, General Catalyst\u2019s Niko Bonatsos said that venture firms have to go through natural selection cycles and that it will be \u201csurvival of the fittest.\u201d<\/p>\n<p>\u201cIt\u2019s a very painful activity for anyone who has gone through that stuff,\u201d Bonatsos said on stage with Coatue\u2019s Caryn Marooney. He talked about how the hundreds of new VC firms will either decide to merge with each other to \u201cbuild a more enduring franchise,\u201d saying some will leave the VC profession and others will lose senior partners to retirement and have tp figure out what the future of their firms will look like.<\/p>\n<p>\u2026Marooney, a GP at Coatue, says that firms \u201c<em>have to earn the right<\/em>\u201d to survive. \u201cThere was the path where you did some investments and made money. It\u2019s like, no, you\u2019ve got to earn the right and not everybody is going to earn that right \u2026 and I think that is healthy,\u201d the investor said.<\/p>\n<p>\u2026I\u2019ll end with a term we\u2019ve been dancing around all through the intro, which is \u201cquiet quitting.\u201d Bloomberg Beta investor Roy E. Bahat posted a thread describing how seasoned venture capitalists may be quietly going into \u201ceasy mode,\u201d aka, becoming a less active, minimum viable player of the team\u2026.<\/p>\n<\/blockquote>\n<p>According to tech leaders gathered at the Web Summit, the <a href=\"https:\/\/www.cnbc.com\/2022\/11\/15\/tech-leaders-reckon-with-higher-interest-rates-down-rounds-and-layoffs.html\" target=\"_blank\" rel=\"noopener\">prognosis for the immediate future<\/a> is pretty bleak, especially for these privately held tech firms, or \u201cunicorns\u201d as they\u2019re known, unless they can quickly shift their operating model. Stave off disaster, if you will..<\/p>\n<blockquote>\n<p>\u2026Venture deal activity has been declining, according to Kadar. VCs have \u201chired so many people,\u201d he said, but many of them are \u201cout there just talking and not really investing as much as they did before.\u201d<\/p>\n<p>Not all companies will make it through the looming economic crisis \u2014 some will fail, according to Par-Jorgen Parson, partner at VC firm Northzone. <\/p>\n<blockquote>\n<p>\u201c<em><strong>We will see spectacular failures<\/strong>\u201d of some highly valued unicorn companies<\/em> in the months ahead, he told CNBC.<\/p>\n<\/blockquote>\n<\/blockquote>\n<p>All those app developers who got funded\u2026<\/p>\n<blockquote>\n<p>\u2026As a result, apps promising grocery delivery in under 30 minutes and fintech services letting consumers buy items with no upfront costs and virtually anything to do with crypto attracted hundreds of millions of dollars at multibillion-dollar valuations.<\/p>\n<\/blockquote>\n<p>\u2026now have to make them pay off. The \u201cor else?\u201d <\/p>\n<blockquote>\n<p>\u2026\u201cI do expect a certain number of late stage companies basically disappearing.\u201d<\/p>\n<\/blockquote>\n<p>Is \u201c<em>buh-bye<\/em>.\u201d <\/p>\n<p>People who are squawking about being \u201cstarved\u201d by Elon need a reality check.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">He fired 3\/4 of the employees. Now he\u2019s planning to starve the rest of them. He\u2019s failure incarnate. <a href=\"https:\/\/t.co\/elL8N3D2CB\" target=\"_blank\" rel=\"noopener\">pic.twitter.com\/elL8N3D2CB<\/a><\/p>\n<p>\u2014 Andrew Wortman (@AmoneyResists) <a href=\"https:\/\/twitter.com\/AmoneyResists\/status\/1591275540475936770?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">November 12, 2022<\/a><\/p>\n<\/blockquote>\n<p>Where this is all headed, you should be delighted you still have that J.O.B.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are some grim signals and muttering noises coming out of what was once the shining haven of the future, Silicon Valley\/CyberWorld. It is very much looking like the tech<\/p>\n","protected":false},"author":1,"featured_media":1741987,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1741984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1741984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1741984"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1741984\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1741987"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1741984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1741984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1741984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}