Startup Offense and Defense in the Recession

This post is by Elad Gil from Elad Blog

Multiple economic indicators suggests the economy is getting worse. Like Wiley Coyote suspended in mid-air and not yet realizing he is about to plummet to the ground, the US economy is magically suspended by wishful thinking and unsustainable monetary policies.

Emily Cunningham Twitter वर: "Oil demand peaking in 2020s means ...
^Current image of the US Economy (source: US Fed)

A number of economic measures to give a sense of the situation.

Unemployment claims at all time highs:

Retail sales down dramatically.

Factory output down to lowest levels since post-WW2.

Restaurants in a mass shut down. OpenTable data for restaurants.

Hospital systems are losing large amounts of money due to a lack of elective procedures.
Revenue at many non-profit hospitals has fallen 50% or more in the last few weeks.

Cities and municipalities are heading towards large budget deficits due to drop in tax receipts.

China data does not lend much comfort to a fast recovery. Production is down 10% and consumer demand is down 30%, despite China "unlocking". China is still grinding back to baseline and has a long way to go. We should expect the same of the US economy.

Economic shocks and cascades
It usually takes 3 to 6 months for an economic shock to wend its way through the economy. Like dominos slowing falling over there is a cascade of hiring freezes, purchasing freezes and layoffs. The companies whose customers did purchasing freezes or cost cuts suddenly find their own revenue dropping, so they too need to decrease costs in headcount and/or purchasing.

Right now big (Read more...)