There’s still good news for software startups

The 2022 startup market may feel like a slowly unfolding train wreck, but there’s good news, as long as you’re willing to take a longer-term perspective. Sure, startup layoffs are on the rise, venture capital is slowing, and the stock market is a mess. Beneath every drumbeat of negativity, however, is more positivity than you might expect. And, extracting one more nugget from Battery Venture’s recent quarterly cloud update, the doomsayers are ignoring history. So this good weekend, let’s look for the sunlight between the clouds. Get it? Clouds. OK, no more SaaS dad jokes. To work:

Founders, here’s the good software news

The good news is a variation of the bad news and is often positive thanks to historical comparisons. Sure, this is good news of a sort, but it’s welcome nonetheless:

The bad news: Start-up layoffs are on the rise.The good news: Far less than in early 2020. As Homebrew’s Hunter Walk recently noted on his personal blog, startup layoffs hit a local high last month, reaching 16,000 and change, according to tracker Layoffs.FYI. Given that the same data service effectively recorded zero startup layoffs during the venture boom in the third and fourth quarters, the number is bad. But! It’s also a lot less bad than the damage startups took in early 2020. For example, startup layoffs hit nearly 10,000 in March 2020. And then for months they stayed hot, with more than 25 000 registered in both April and May of the same year. Layoffs.FYI noted just 70 individual startup layoff events in May 2022, far fewer than the 100-plus per month recorded from March through May 2020. Things are worse than late 2021 from a job-cutting perspective. start-up staff, but we’re barely setting records here, even looking at just recent data.

The bad news: Venture capital is slowing down.The good news: From historically record levels.