Insider Finance - Business - Silicon Valley 'extinction event'

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June 29, 2023

Hello, Insiders. Matt Turner, editor in chief of business at Insider, here. It’s a rough time to be a tech startup. Outside of the buzzy AI space, many young companies are running out of cash with little chance of fresh funding. That’s leading to a “Darwinian moment” for Silicon Valley. More on that below.

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We’re also covering:

Wagner's chaotic attempt at an armed rebellion is starting to (kind of) make sense.
A passenger was saved after falling overboard off the 10th deck of a cruise ship.
The CDC says if you have a mystery fever this summer, it could be malaria.

— Matt Turner

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THE BIG STORY

‘Darwinian moment'

Arantza Pena Popo/Insider

The party may be over for Silicon Valley — and the hangover is likely to get much worse.

The tech industry is bracing for a “mass extinction event” among startups. In the wake of a pandemic-era boom, experts say startups are now facing a drought in venture capital — and data suggests a blood bath is coming.

With more startups in the market than ever before, huge numbers of them have less than 12 months of runway in the tank.

Zume, Plastiq, and Neeva are among the companies who have already flamed out in 2023. Many of the startups left standing have been forced to adapt. Headcounts have been cut and focus has shifted to profitability — but it still may not be enough.

As one general partner at the early-stage investment firm January Ventures put it: "I do think that this is a Darwinian moment for startups."

TOP READS

Wagner, Titan sub, & more

Feodor Larin/Getty Images

Wagner's chaotic attempt at an armed rebellion is starting to (kind of) make sense. The aborted rebellion in Russia was a chaotic mess. As Insider’s Kieran Corcoran writes, it initially didn’t make much sense as to why the Wagner boss Yevgeny Prigozhin would stage an uprising that way. New reports now suggest he had a better plan — but couldn’t properly enact it.
Microsoft’s former head of HR says you should leave your job immediately if you’re put on a performance-improvement plan. Chris Williams says surviving a PIP is “like a sign on your back.” He says they’re rarely a plan to help someone recover, and you’re better off getting a fresh start elsewhere.
Lawless seas let the Titan submarine slip through. The realm of international waters, hundreds of miles from shorelines, is often thought of as an ambiguous legal zone, Insider’s Sindhu Sundar writes. Governments don't have intensive regulations or requirements for new vessels like submersibles in the first place — so experts say the ocean is a Wild West.
Beware of a mystery fever this summer. It could be malaria, the CDC says. Malaria is circulating again in the US this summer. Five local cases have been diagnosed, which is striking as malaria was declared eradicated from US shores in 1951. The disease is easy to prevent and treat — but not on the radar of US doctors, so the CDC is cautioning doctors to watch out.
Betting on weight-loss drugs. Ro, a digital-health startup, launched a weight-loss program to prescribe drugs like Ozempic. Former employees say there are signs it could be the fastest-growing bet ever for Ro — but some patients are facing communications delays, drug shortages, and insurance snags.
A cruise-ship passenger was saved after falling overboard from the 10th floor deck. The 42-year-old woman was a passenger on a Royal Caribbean ship bound for the island of Curaçao. She was miraculously saved after a dramatic, nearly hourlong rescue.
Millennials and Gen Z in the US are finding it hard to break away from the bank of mom and dad. More than half of US millennials and Gen Z are still financially dependent on their parents, survey data shows. However, many millennials also said their parents were bad financial role models.

WHAT ELSE IS GOING ON

Fed, mega-trends, & watches

Fed economists just rang the alarm on the historic percentage of distressed US companies — and it could worsen the fallout from the central bank’s inflation fight.
BlackRock says these five mega-trends are about to change how to invest. The firm said traders should pay attention to tech, geopolitics, and more.
Prices for luxury watch brands have fallen near two-year lows on secondary markets. It’s a sign that the global economy is slowing down.

TAKE A LOOK

Titan wreck

Debris believed to be from the Titan submersible

Paul Daly/The Canadian Press via AP

Large pieces of apparent debris from the Titan tourist submersible that imploded as it descended to the wreck of the Titanic — killing all five people on board — have been pulled up from the ocean floor.

WATCH THIS

Wildfire smoke

Smoke from wildfires in Canada has traveled 2,000 miles across the Atlantic Ocean toward Spain and Western Europe. Canada's worst-ever wildfire season is also impacting air quality in US cities including Chicago, Detroit, and New York.

CAN'T GET ENOUGH?

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This edition was curated by Matt Turner, and edited by Hallam Bullock, Lisa Ryan, Diamond Naga Siu, Jack Sommers, and J.R. Stacey. Get in touch: insidertoday@insider.com.

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Insider Finance - Business - Silicon Valley 'extinction event'

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