Seeing Reality Clearly This Downturn

Surely you’ve heard. The winds have shifted. Layoffs are ticking up at well known startups across the funding spectrum from public companies on down. You’re likely hearing the volume turned up on sayings like “renewed cost discipline”, “focus on profitability”, “wartime mentality”, or even the dreaded “shift in strategy”. These types of announcements are already sending ripples through teams, organizations, and markets. Is any of this really surprising?

Perception vs. Reality: A Secular Trend

Did you know that as of 2020 90% of assets on S&P 500 corporate balance sheets are intangible assets? In 1975 it was only 17% or roughly $122 billion dollars. The 90% intangible asset figure today represents over $21 trillion dollars. Numerically it’s astounding. Basically, over time, reality has become…perception. At least from an accounting standpoint.

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