What I read this week (week of 08/01/2022)

Startups that hired rapidly learn the virtue of slowing down

• Premature scale is the the leading cause of startup death
• Have a zero cost of capital is something firms should really know — in contrast, they just had money thrown at them during the easy money years
• In a market that declining, you just hard to find that balance — between going too fast  vs not going too fast to miss the opportunity

How to Evaluate a Potential Employer in a Downturn

• The article suggests a series of questions that could be asked to HR as well as hire manager - a part of it is related to their hiring plan which indicates whether a layoff is being planned.
• Also, some tips about how to conduct company research, how to compare the similar companies in the industry.

How Will Amazon Approach U.S. Primary Care?

• The article argues that Amazon strength lies in simplicity, experimentation and combination of businesses. And how Amazon can apply these principal onto one medical, the primary care industry.

Startups have to pay back all that equity compensation someday

• There's a reason for this buy back from Snapshot and AirBnb, a "payback" to internal employee who was compensated by stock based compensation.
• However, arguably, is it because they don't have positive NPV project to do, to fundamentally increase share value instead of just using up these cash (especially, AirBnb's $2B).

Tech companies age in a timeline that goes something like this:

• The startup is born, often raises external capital and focuses on growth over profitability.
• As the startup matures toward IPO scale, it tends to clean up its spending somewhat, but still leans on equity compensation to juice adjusted profitability and conserve cash for growth.
• Post-IPO, tech companies that reach the next stage of maturity begin to buy back their shares with sporadic campaigns, paying back investors for the money that the company effectively borrowed from them (investors paid dilution, employees were paid stock, and the company got to pretend all along that it wasn’t effectively going into debt to shareholders that it would later need to repay in the form of share buybacks).
• And, finally, once the company reaches platform scale, it combats dilution with ongoing buyback programs, rewards shareholders with regular dividends, and likely has a kick-ass ads business that helps keep all the numbers tidy.