Predictions of start-up doom have been premature

Our colleague Shira Ovide, the writer of a forthcoming NYT tech newsletter, chimes in …

Sequoia, a prominent investor in tech start-ups, warned young companies last week to prepare for the possibility of a coronavirus-related downturn. The venture firm sounded a similar alarm in 2008 about the financial crisis, which gives it credibility in doomsday predictions. But investors have warned with regularity over the past decade that the start-up boom was about to bust. Those predictions have mostly been wrong. So far.

2011: “Winter is coming. Entrepreneurs should be prepared.” Eric Ries, the author of “The Lean Startup,” sounded the alarm as stock markets were gyrating wildly, in part because of economic problems in Europe. Surely the start-up boom would end?

Result: It did not.

2012: “Lower your expectations for fund-raising.” Paul Graham of Y Combinator wrote that note after Facebook’s initial public offering struggled, and warned that start-up investments would dry up.

Result: Investment did not disappear. And Facebook’s stock price has climbed more than 300 percent since its I.P.O.

2015: “I do think you’ll see some dead unicorns this year.” Bill Gurley of Benchmark, a Silicon Valley investor who is a pied piper of pessimists, warned that many highly valued young companies were vulnerable to ruin.

Result: There was a pullback in venture capital investments, and some start-ups died. But this was more like air deflating from a balloon than a bubble bursting. And then start-up mania grew even more manic.

2018: “It’s time to wait patiently as the air is slowly let out of this bizarre Ponzi balloon.” Chamath Palihapitiya of Social Capital wrote that his firm would “find comfort in the teaching of Andy Grove that only the paranoid survive.”