For portcos, you'll definitely see the focus on costs. That means restructuring/layoffs, contraction from non-key markets, and reduced growth initiatives.

PE is going to be loathe to sell at a loss, though you'll see some horse-trading between some firms. So that would be a last resort, though we are already seeing some write-downs, like Vista/PluralSight last month[1].

More broadly, you'll see lower valuations and tightening in the credit markets that may affect macroeconomic slowdowns.

Most of this isn't exclusive to PE: interest rates and other drives are affecting non-PE similarly in the form of increased borrowing costs, tighter credit conditions, and general economic uncertainty. The contrarian view may be that PE portcos are better able to navigate those waters given the focus on business fundamentals and operating maturity.

[1] https://www.axios.com/2024/05/31/vista-equity-pluralsight

PE is fueled by interest rates, and the entire thesis has flipped from revenue/growth to EBITDA. The shift is exposing some dogs: both PortCos that can't hide fundamental business model issues behind cheap capital and PE firms that can't lead operations and financing in a new environment. The correction is well underway.

Planning is important, and avoid committing to targets or deadlines until you have your arms wrapped around what needs to be done. This can be wide-ranging, and include: product parity, contract management, internal asset development (project plans, test suites, customer training, etc.), customer change management, and team throughput.

You have few clients but large impacts. You likely want to pick the friendliest one and give them generous terms to be the "test case". Expect it will take 2x longer than your estimate.

Do as much work on parity as you can: what are the differences between v1 and v2, and how will you bridge them? If data migration is involved, you will need tooling and team training.

Inevitably you will find that customers move slower than you like and are using v1 in ways you did not expect.

Comments URL: https://news.ycombinator.com/item?id=40600427

Points: 2

# Comments: 0

It's not that it's too easy—it's that it's too impactful.

The real answer is social safety nets. If you want to protect people, address the root problem that your life is dependent on having an employer. Proper unemployment or UBI plus universal healthcare makes losing a job annoying ("ugh now I have to find another one") vs. terrifying.

Jack up the corporate tax rate (on revenue) to pay for it—which should be a wash after reducing the load of severance, healthcare benefits, etc. that companies are paying today.

Better worker protections like the UK/Europe are mechanisms too—notice periods, guaranteed severance, etc.—but have their own chilling effects.

This has the added benefit of reducing the barriers of entry for individuals: people are more likely to leave bad jobs or pursue their own opportunities, which in turn should drive subsequent job creation.

In short: words change meaning. Addition as a term includes a history of positive definition in the 17th century of "devoting oneself to another person, cause or pursuit", to being "associated with excessive alcohol use" in the early 1900s, to "linked almost exclusively to excessive patterns of substance use" in the 1980s, to the modern medical definition—not made until 2013!—of "the most severe degree of the addictive disorders, due to pervasive/excessive substance-use or behavioural compulsions/impulses".

Indeed, for most of the late 20th century, no one could agree what it referred to! "The word addiction was deliberately omitted from four consecutive editions of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders [...] because it was considered a layman’s rather than a scientific term, pejorative, stigmatizing, and too difficult to define. There were simply ‘too many meanings’ (Alexander & Schweighofer 1988); the term lacked any ‘universally agreed upon definition’ (Buchman et al. 2011); the result of using it was ‘conceptual chaos’ (Shaffer 1986, 1997)."

So it hasn't been redefined to mean anything because it was never fully defined to begin with. Only in the last decade has it truly been formalized, and yes includes both chemical and behavioral dependency.

[1] https://www.tandfonline.com/doi/full/10.1080/16066359.2018.1... [2] https://www.tn.gov/content/dam/tn/mentalhealth/documents/FIN...

I'm recalling that they did run both models in parallel, but couldn't find a reference in a quick search.

Regardless, the 25% stock price jump would indicate that from a "voting with their wallet" perspective, subscriptions were a rather unequivocal winner.

There are certainly pay-once-use-forever models out there, though my perception is that they're niche pricing models for a reason. (And still not outright ownership!)

Does that mean prospects and customers were happy about it? Maybe not. But I suspect the only answer that would have really satisfied the majority would be the unattainable "best of both worlds".

Photoshop is an easy example: would you rather pay $400 up front to have version X.X forever, or $10/mo forever to always have the latest version. That's a tradeoff! Consumers have voted with their wallets on #2.

Cloud services are even harder because you start talking hardware. "Owning Photoshop" is easy because it runs on my computer. I'm maintaining my computer for me and only me. What would "owning their software" even look like for, I donno, Github? Are you running your own AWS instance? Are other people running their own instances?

There are ways to build P2P software, or on-prem enterprise stuff... but no one really wants to buy it. They're ok paying $10/mo for the billions of dollars of infrastructure because there's really no other way to do it.

Killer marketing function: when I clicked through, I was immediately looking for a live example. You've got the carousel of screenshots, but show me what the actual output looks like.

Heck, add this as an opt-in in the signup process (or better, as a later opt-in once you've shown value), then showcase 4–5 artists. What artist wouldn't want a little free publicity?

I saw your example in the comments below (https://noise.site/kalume)—yes!

(Other enhancement: auto-link URLs in bio. E.g., on the Kalume page, www.kalume.in/press-kit should be a link.)

Whether it's consumer trends or technical accessibility, it seems to be more of a "wasteland" than it was 10 years ago. [Old man shakes fist at clouds.] Meaning more "small and not very good games" or a focus on simpler concepts à la Wordle.

Did developers move to mobile? Was there something about Flash that reduced the barrier to entry that we have lost? Did consumer preferences change? Is this all anecdote and the indie game scene is thriving?

For those new to the boating world, a slip is just a space to park your boat on a dock. You would then need to, k'know, have a boat to live on.

For example, consider two roles and two applicants, with fit scores as below:

               Role 1    Role 2
  -----        -----     -----
  Applicant A    96%       95%
  Applicant B    95%       50%

You'd think the algorithm would want to maximize outcomes across all roles: the more optimal "best fit" solution would be Applicant B in Role 1 and Applicant A in Role 2 (95% avg).

(I'm assuming the reality here is that Role B isn't available at time of evaluation, so there's no way to evaluate the universe without waiting, which may be sub-optimal.)

I, too, miss...

1. Regular discussions, since it's hard to make virtual meetings happen.

2. Physical workplaces. (We just closed our local office.)

3. Real-time feedback. (Everything takes 24+ hours.)

I, too, see...

1. Work at odd hours and non-work days.

2. A focus on execution over strategy.

And while the author holds the improvements for another article, I see:

1. Dedicated, uninterrupted working time.

2. Self-actualization.

They may have "made out like bandits" in taking advantage of equity holders, and perhaps without duty of care to depositors... but all that is true regardless of the subsequent actions. They did not "make out like bandits" because of the Government's actions. And I think that's important, given the criticism levied against the "bailout".

It seems like SVB was perhaps a little more exposed to interest rate risk than others, and had a pool of depositors that were more likely to withdraw significant funds in lockstep.

Earning a nice bonus last year is a reasonable consolation prize, but I'd wager most execs would rather have had a lower bonus and the ability to continue to manage an operational bank through 2023.

So part of the problem is that SVB had a reasonable-looking balance sheet of HTM bonds, then had to sell some at market, which flipped their entire portfolio to MTM and destroyed their balance sheet.

E.g., a simple balance sheet:

  Assets                   Qty.   Par   Market   Total
  -----
  Mark To Market Bonds     10k    $1k   $0.8k    $8Mn
  Hold To Maturity Bonds   1M     $1k   $0.8k    $1Bn
  Total                                          $1.08Bn

But, oh shit, now all my long-term bonds have to be marked to market, so now my balance sheet looks like this:

  Assets                   Qty.   Par   Market   Total
  -----
  Mark To Market Bonds     990k   $1k   $0.8k    $792Mn
  Total                                          $792Mn