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26.10 / Bill Gurley interview & more

Bill Gurley interview

Bill Gurley has been a long time stalwart in the industry and needs no introduction. A month back, his interview with McKinsey was published and received quite a bit of attention and for good reasons
Some of the highlights
The number-one risk of being outside the Valley was always, ‘Can I get the executive talent?’ Now, with hybrid, maybe you can.

See, that’s the thing. I hate the 5 to 10 percent layoffs. You don’t get any material impact to lowering your expenses. Yet you get all the cultural negatives of having done a layoff. You get 100 percent of the pain and very little gain. And then you’re in retweet land—you end up with two or three of them.

Read the whole piece at this

AngelList Report

AngelList published it’s report on - ‘The State of U.S. Early-Stage Venture & Startups: 3Q22’.
Here are some of the points that caught my attention.
3Q22 was the worst quarter on record for early-stage venture in terms of deal volume and positive activity.
63.4% of startups that raised did so at a valuation increase, a 14.1% decline from last quarter and the lowest markup rate on record.
Median valuations held steady at early-stage, but average valuations declined across all funding stages.
Median startup spend, startup payroll spend, and startup revenue growth all declined in 3Q22 after nearly 2 years of sustained growth.

My take is that although there has been a drop the performance KPIs like valuation decrease and funding decrease is not coming across as bad as the equity markets performance (in some cases SaaS stocks are down by 80%+). Now private markets reporting is always lagged and there is always a question of who is getting funded (the Startup that really needs it or the hype-Startups). Nevertheless, it’s the Q4 report and KPIs which might confirm the downward trend much more.

Tweet / Startup Talent Struggles

Talent is one of the biggest issues for Startups. Especially in the early days hiring the right people, they retaining them and pushing them towards level-up is no easy task. Ultimately everyone wants to grow in their career and if the Talent in one’s startup doesn’t see their growth happening - they might just leave.
Hiring has been hi-lighted a lot as a challenge in the reports. However, my belief (that was also echoed in the poll) is that retaining and developing the talent are the biggest topics. You can hire an excellent talent with maybe 70% skills match, however the startup needs to put the effort together in giving them the right learning environment.

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