QOTD: How it ends

lots of startups are forming and hiring. The main and obvious beneficiaries right now are real estate owners. They are turning crappy Class C and Class B space into sought after incubators and co-working startup spaces. Vacancies are down. Rents (or memberships) are up. WeWork is valued at $5B. If and when VC and angel money dries up, the operating leverage the landlords and owners get on the way up will hurt on the way down as startups without funding lay off people, downsize and can’t pay rent. Shockingly, this scenario took place 15 years ago and landlords went from taking equity in their startup tenants to demanding 6 months cash up front in case they weren’t good for it. Things got messy quickly.

Today we are in the dispersion phase. Every experiment is being tried. Many will do amazing things. Most will fail. But the byproduct of their detritus will be the fodder for the next wave to recombine into more useful things.

At some point, many will abandon their adventures and head back to the safety, security and predictability of motherships like McKinsey, Goldman Sachs, JP Morgan and Deloitte. Sadly the pressure of significant others and in-laws often demand it.