No more easy funding, startups in Silicon Valley careful not to overspend: Report

There have been layoffs and shut downs, but the big apocalypse that everyone expected this year, doesn't appear to be arriving, so far.


In the past few months, we have been seeing reports on how funding has slowed down, over-valuation bubble has begun to burst and VCs are now looking for growth. There have been layoffs and shut downs, but the big apocalypse that everyone expected this year, doesn't appear to be arriving, so far. In fact, the latest New York Times report, adds that startups in Silicon Valley warned of crash are more cautious and reworking their focuss.

Citing example of Evernote, the report points out how the company that had about $270 poured in by investors and valued at $1 billion has undergone major restructuring to ensure its far from dead as expected by many. And, it has worked.

"Evernote has cut back on staff, eliminated employee perks like free housecleaning services, simplified its product line — and stabilized. The number of customers who pay for its file storage and sharing product is on track to grow as much as 40 percent this year, and the company is hiring again," the report adds.

The report claims that startups have 'hung on'. There were many layoffs and some early startups even shut shop. Engineers still command a big paycheck and some VCs are still pouring in money into popular startups. However, there are evident changes, and its just not like before. The funding won't be easy for everyone, there is focus on growth, no mindless valuation of startups, and companies have begun to adapt to the changes.

"There has been a proliferation of new enterprises in up-and-coming fields like artificial intelligence, robotics and virtual reality, creating potential areas of growth for Silicon Valley technologists to build on next," the report adds.

Furthermore, entrepreneurs who haven't experienced the crash yet also seem to be adapting. The focus is now on making money, and not just growth wherein mindless amount is spent. Many startups have cut down on frivolous spending and are slowly getting on the track again.

Meanwhile, a VentureBeat report points out that the Midwest will have more startups compared to the Silicon Valley.


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