[ajross]

"Bank failures" are routine. Most banks are small. Small businesses make mistakes and fail all the time. Banks are just a special kind of business with a federally-mandated insurance regime and so fail in specific and spectacular ways. A smaller company that can't make payroll files chapter 11 and gets acquired piecewise over several years. A bank that fails gets instantly seized by the FDIC.

SVB happens to be notable here because lots of HN posters are customers or employes of customers.

And it's notable elsewhere because this is sort of a capstone on the current era of cheap VC money. The proximate cause may have been some questionable investment decisions, but the root cause of SVB's failure is the fact that startup funding dried up.

And... is that maybe a good thing? Over the last few years, the tech community, and HN in particular, has been been almost entirely fixated on funding and not technology. We talk about "founders" and not products these days. Series B rounds and not launches. Companies get acquired before an MVC is ready. No one even remembers "ramen profitable" any more.

[capableweb]

> "Bank failures" are routine

At different points of time, yeah. But not recently. Last "bank failure" in the US before SVB seems to have been October 23, 2020. Not sure you can call something that hasn't happened for the last ~2.5 years is "routine".

[xwdv]

It’s because “ramen profitable” is for losers now: Small bootstrap operations with uninteresting tech trying to not starve.

The days of dorm room wunderkids are over. You don’t build a company like Facebook anymore with one guy and a website. Big tech is always watching and anyone that is doing anything of potential will attract money. If they aren’t, then it’s because the potential isn’t there, so we don’t care.

[ajross]

See, that's exactly the attitude that's prevailed for the past 6 years or so. And what I'm saying is that to me that's clearly a rationalization. It's something the finance bros tell themselves to explain why the stuff they like (dealmaking) is more important than the stuff they don't (making stuff people want).

Interestingly, we've been here before, in the hangover of the dot com boom. And what lifted us out of that mindset was... Y Combinator. Now? YC is maybe the biggest single part of the problem. Just go look at their funding list for the last 3-4 years and genuinely think on how many of those ideas really need the kind of funding you're imagining.

[asimpletune]

Yeah, this is ultimately very much needed. A recession is a great time to start a business of you're smart and focused on solving problems.

[xwdv]

Not sure what you’re proposing. Y Combinator was started for a different era, those days aren’t coming back until there’s a new greenfield catalyst for some engineers to build on, where simple implementation of some new tech can birth huge businesses quickly, with little existing competition.