You Should Be Worried About What Y Combinator Just Said

Y Combinator just released a message to founders Thursday morning, and it should have you worried.

They released this message to founders because they had so many CEOs reaching out to them about handling the current situation with the economy. Here’s what it said.

The Break Down

The letter is quite long, so I will summarize the main points and leave a photo below if you want to read the whole thing.

Here’s what the letter said.

  1. Cut costs as much as possible within 30 days.
  2. Get money now if you can, and expect to survive 24 months without fundraising.
  3. The Most Impacted companies will be low margin and long road to revenue companies.
  4. Startups that do not have product-market fit should expect not to receive investments.

Here is the entire message if you want to read it.

Y Cominator message to Founders

Source: Twitter

Why You Should Be Worried

Look, I understand the economy is in the beginning stages of depression, and companies will do what they need to do to stay alive, but they are missing one significant aspect.

Y Combinator is missing the human element. Not one thing on their list mentions how to treat employees when they are inevitably laid off.

Their advice to founders is to cut costs instead of how to keep their teams together.

This is a problem I see with many companies in tech. Everything is reduced to numbers, and with people working remotely, there’s a big disconnect between founders and employees.

I feel we are going to see more stories like Better.com in the coming months precisely because of the advice Y Combinator is giving.

If you are an employee at a tech company, you need to prepare for the possibility of being laid off. There’s a lot of panic among founders, and they seem to be gearing up to “cut costs.”

If you are a founder reading this, look, I understand hard times are coming, but let’s take a moment to think about how to handle things in the most humane way possible. Your employees are people, not numbers.

It also might be a good idea to weigh all options. How can you increase revenues first before letting people go?

If you do have to let people go, consider the long-term impact of how that could lower the revenue of your business, and the cost of re-hiring in the future.

Hard times are here, but that doesn’t mean we have to lose our humanity. I’m wishing everyone the best out there.

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