I used to work in downtown Palo Alto near the Hewlett Packard garage. The birthplace of Silicon Valley they called it! The beauty of it is it’s really not that impressive. It’s just a garage that could be plopped at the end of any driveway in America. Except now it’s surrounded by arguably the nicest suburb in America. Kind of because of what came out of that garage. The reason I bring it up is that there is a famous quote from one of the garage’s workers, titan David Packard, reflecting back on the meteoric growth of his time period where he said “more companies die of indigestion than starvation”.

Over the last decade + there have been over 1,200 unicorns minted across the world from their venture capitalist proprietors. Another era of predictable cyclical over exuberance. The current reality of this climate is that some of the unicorns are sick. Some raised too much money, tried to do too many things, and don’t have the growth or forward looking prospects to live up to their lofty valuations. Ever.

If you’re trying to figure out the signs there are a few. You can usually start with companies that have raised a massive amount of money. Think at least $100M+. Maybe $250M+. The funding announcements might be followed by news of layoffs. Slumping Glassdoor reviews detail high turnover, false promises, and struggling management teams. There might be an executive shuffle.

This is happening all over the world. From Boston to Bangalore. Discerning employees and managers will have to be hyper disciplined about evaluating existing + new opportunities in the quarters ahead to parse trash from treasure and figure out whether there is a path through to the other side.

The last few years have certainly been financially bountiful. Now that winter has come we get to see who has allocated their resources effectively for a couple leaner years ahead. Gotta stay vigilant.