The Kids Are Not Alright: The Repercussions of ZIRP Era 2018-2022

I invest in people and early stage startups. At least that is what I did for the last 10.5 years. 

I’ve been doing this for a long time and gotten lucky along the way. I love the business of finding and investing in the brightest and most ambitious people and ideas. 

But somewhere and sometime in 2024, I just wanted to take a break. After the craziness and stupidity of 2020-2022, I thought we would see a return to sanity and basics. But the Gen AI boom only seems to be an exact repeat of the Crypto/Web 3 or the Metaverse or most of growth stage silliness. It’s like investors have learned nothing from those days. 

I thought there would be more humility in founders and investors. And definitely less entitlement especially as fundraising and tech employment at large has gotten so much harder. 

Unfortunately this is not what I see. This only happens after massive pain in the market and we aren’t there yet. Nowhere close. We haven’t seen the write downs and write offs of the many so called Unicorns. We haven’t seen enough VC funds shut down yet. 

But this is coming still. Mark my words. Many of these Unicorns are not run by their original founders anymore. Many founders were able to take out 10s of millions of dollars of secondaries in the 2020 & 2021 mania. Unlike in prior downturns, these folks have FU money and are now doing the chairman of the board thing. 

Why stick around in crap times, when you have to fire half your staff, you have no business model and probably have to take a down round (or more). Easier to chill out cuz you have the cash, join the board, promote your COO to CEO and chillax. I mean, my god, if Frank Slootman of Snowflake, wisely known as one of toughest CEOs in SV quit, most founders will definitely not stick around. 

I also feel for the founders of 2019-2021 era who learned all the wrong things in startup land, aided and abetted by even more clueless VC investors. They all learned bad habits or basically all the wrong things on what makes a startup or business. Add the incredible arrogance and entitlement which has bled into most tech workers at large. Remote work. Paid lunches. Gym memberships and answering emails only during work hours. Summer Fridays off.

They got used to easy fundraising, milestones and valuations that were frothy and that have been resetting hard in the last 2 years. It’s like you grew up rich but then your parents lost their fortune and now your whole family has to move out of your 50 room mansion and into a small studio apartment in the not so good part of town. 

It’s reminds me of folks who win a massive amount of money from a lottery ticket or betting on an NFT or Crypto Sh-tcoin. The easy money breaks your brain and you cannot adjust to reality, especially as they inevitably lose that money. However, this loss allows them to quickly see the reality of the real world. One where good things take time, immense hard work and unrelenting commitment. That extraordinary results require extraordinary effort. 

I admit I was one of these clueless, deluded idiots back in 1999-2000 & it took the dotcom bust and near destitution to reset my brain. As Jensen Huang of Nvidia said in a speech: “I wish upon you ample doses of pain and suffering.”Maybe only then will you be able to wake up and get to the real work of building.