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Here’s how to know if we’re in a recession, and it’s not what you think

KEY POINTS

Most people think that back-to-back negative GDP quarters constitute a recession, but that’s not the case.

The National Bureau of Economic Research is the official arbiter of recessions, and uses multiple other factors in making its determination.

“The NBER would be laughingstocks if they said we had a recession when we were creating 400,000 jobs a month,” said Dean Baker, co-founder of the Center for Economic and Policy Research.

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Everyone who cares knows that recessions happen when there are two consecutive quarters of negative growth — everyone, that is, except for the people who actually decide when the economy is in recession.

For those folks, at the National Bureau of Economic Research, the definition of recession is much squishier.

Officially, the NBER defines recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
The bureau’s economists, in fact, profess not even to use gross domestic product, the broadest measure of activity, as a primary barometer.

That’s important, because data coming Thursday could indicate the U.S. saw its second straight negative-growth period in the second quarter. Even though every period since 1948 of two consecutive negative quarters has coincided with a recession, that may not happen this time.

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Why? It’s complicated.

“The NBER would be laughingstocks if they said we had a recession when we were creating 400,000 jobs a month,” said Dean Baker, co-founder of the Center for Economic and Policy Research. “I can’t even imagine they would think for a second that we’re in a recession.”

Indeed, nonfarm payrolls grew an average 457,000 a month during the first six months of the year, hardly conditions associated with an economic downturn.

Moreover, there are 11.3 million job openings and just 5.9 million available workers to fill them, indicating hiring should continue to be strong.

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The case for recession

But there have been downsides as well.

Consumer spending on a dollar level has been solid, but when adjusted for a 40-year high for inflation it has been much less so. The U.S. trade deficit hit a record high in March, another negative for GDP. Inventories have lagged, which also hurts growth as it is measured by the Bureau of Economic Analysis.

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Here’s how to know if we’re in a recession, and it’s not what you think

 

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How to reinvent your product growth strategy for the tech downturn

 

Why you’ll need to rethink your user growth strategy

Andrew Chen

 

Downturns fundamentally rewrite the industry’s strategy (and expectations) for user growth. In a bull market, the focus is on top line growth. You often want 2-3x YoY for a a new product in its first few years, and even faster when its right out the gate. High growth and high burn are fine. Because if you need to spend a lot of money to get there, whether through paid marketing or partnerships, you do it… after all, you can just raise more money, right?

But in a bear market, the answer changes: No. It turns out, you won’t be able to just raise more money to keep going. No, you can’t just expect to hire dozens of engineers, regardless of progress — particularly when hiring freezes are coming into effect. For startups, the bar for raising the next round just went way up, as many investors are waiting out the turbulent market. This means the strategy for user growth just went from “as much as possible” to “efficient, profitable, productive” in just a few quarters.

What are some ways you should be rethinking your growth strategy? Here’s some things every team should be thinking about:

  • Embrace the new normal

  • Cut your marketing spend

  • Laser focus on your engaged, high LTV users

  • Live to fight another day

I’ll unpack some of these as we go.

The new normal
Efficient growth is now the key focus for product teams. During a bull market, the primary metric that people talk about is just top-line growth — what’s your year-over-year growth rate. Some of the truly eye-popping growth rates might exceed 10x YoY, often subsidized with investor money — as has been in the case with on-demand services.

However, the new normal is focused on efficient growth. Although there’s a floor for how fast a product has to grow to be interesting — probably something like 2.5x — there’s a much bigger emphasis on efficiency. What’s the best way to measure this? One metric that’s been recently popularized by David Sacks is the “Burn Multiple” — he defines it below:

Burn Multiple = Net Burn / Net New ARR

This puts the focus squarely on burn by evaluating it as a multiple of revenue growth. In other words, how much is the startup burning in order to generate each incremental dollar of ARR?

In other words, if you spend $10M and gain $5M more in annual recurring revenue, that’s a 2x burn multiple — which he grades as “Suspect.” The Burn Multiple metric is simple, but it’s precisely useful because it’s so simple. A lot of times, unit economics are hand-waved by product teams because some costs are excluded from the contribution margin or net revenue calculations that maybe shouldn’t be — like headquarters costs, real estate, and so on.

Burn multiple cuts through all that, since it’s just aggregate cash versus revenue, and it’s hard to hide anything with a metric so simple. And with this simple metric, it allows you also compare different companies, and potentially different scenarios for a given company, to figure out how to best reduce it.

To provide some benchmarks, my colleagues at a16z, Justin Kahl and David George, recently wrote an article on navigating the downturn where they collected some empirical data:

 

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PGF7T crypto info, Web3, NFTs, Dapps 🔴🔴🔴

PGF500 has a token on the Ethereum network, called PGF7T, which you can use to pay for subscriptions and services within the PGF500 platform.

You will need to have Metamask to pay with PGF7T token.

.

We have chosen to adopt blockchain technology for the launch of 2 innovative decentralized Dapps.

.

We believe in Web3 and in the strength of communities.

.

.

.

The token is on the Ethereum smart contract 0x9fadea1aff842d407893e21dbd0e2017b4c287b6 ,

and the code is public at https://etherscan.io/address/0x9fadea1aff842d407893e21dbd0e2017b4c287b6#code

.

QuickSwap smart contract:

0xdd0fDc648a9dbC9be5A735FE4561893a13399Da2

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🔴 It is possible to buy and sell PGF7T tokens on Uniswap and QuickSwap Exchanges.

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Price:  PGF7T

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Our NFTs

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Enjoy the Journey 🚀

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PGF500 Team

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~~~

Posted on

SF Blockchain Week | October 31 to November 6, 2022

 

Surprise! We’re back!

If you remember, SF Blockchain Week is where the crypto magic happened between 2017 – 2020, and we’re excited to bring it back to you in 2022.

Join us for another year of builders education, academic discussions, and networking with the top minds in crypto.

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San Francisco Blockchain Week

SF Blockchain Week is where blockchain startups, enterprise companies, academics, developers, and investors from around the world come together to define the future of blockchain and cryptocurrencies.

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Web3 | summer reads, cool tools 💎

1. Detecting ‘metamorphic’ smart contracts

Michael Blau

Smart contract code is supposed to be immutable once it’s deployed on blockchain, but in practice, you can create smart contracts that “metamorphose” into something else. (Imagine turning a token-staking contract into a token-stealing one, for instance!) Since this could undermine trust in web3 decentralized systems, a16z crypto engineering not only shares how the shape-shifting works, but also built a tool to analyze smart contracts for such “metamorphic” properties. While some metamorphic smart contracts may elude detection (or the detector could raise false positives), this tool is a useful first step for builders to understand and build on.
learn more about metamorphic contracts / use Detector tool 

2. Zero-knowledge information sharing through ‘zkDocs’

Sam Ragsdale, Dan Boneh

Most blockchain transactions are public by design, but this can make them less favorable for relaying private information to institutions. For example: Does your mortgage lender getting your pay stubs really need to know all those details… or just verify that your salary actually meets their loan requirements? This is where zero-knowledge proofs – which allow us to cryptographically prove facts about information without revealing what the information is – come in. a16z crypto engineering (& research) demonstrates how zero-knowledge-enabled documents could improve on traditional, error-prone, inefficient verification workflows — while preserving both privacy and decentralization.
learn more about zkDocs / watch demo 

3. What can web3 (& other) organizations learn from the history of democratic governance?

Porter Smith, Andrew Hall

web3 has created a new “laboratory” for democratic governance — through widespread experimentation; fast iteration cycles; and unprecedented digital participation and blending of civic and corporate, public and private. To date, however, web3 governance has overly relied on direct democracy, leading to low participation and concerns about weak oversight, interest-group capture, and group decision-making. But these are also the same challenges societies and organizations have experienced for millennia… So there’s lots of room to borrow best practices from the history of governance (drawing on both research, and observations of these systems in practice), to build more effective systems today.
read article on ‘Lightspeed Democracy’ here 

4. Decentralized creativity & collaboration

Rob McElhenney, Chris Dixon, Sonal Chokshi

“Decentralized media” and “decentralized content creation” are hot topics, but what does this really mean, how would it work in practice… and does it even need web3?! In this first live taping of our podcast ‘web3 with a16z’ — featuring special guest and longtime writer, actor, executive producer Rob McElhenney (It’s Always Sunny in Philadelphia, Mythic Quest; Adim) — we discuss decentralized creativity, collaboration, community; managing writer’s rooms, creator access; IP and NFTs; metaverse, storytelling across mediums; favorite TV shows, nostalgia, and more.
listen to the episode here

5. Some books we’re reading this summer

Covering everything from algorithms, cryptography, markets, and system design to time travel, space, food, and philosophy – here’s a list of readings that members of the a16z crypto team are personally reading and recommending this summer. Whether you’re looking for vacation reads for education or for entertainment, whether you prefer non-fiction or fiction (or science fiction!)… there’s something on this list for everyone.
check out the list here

puzzling

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summer reads, cool tools

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Posted on

Trending Dapps | Week 28 | 2022

Your weekly update to discover dapps in a variety of categories, including DeFi and yield farms, NFT marketplaces and collections, top play-to-earn games, and much more.

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The blockchain is full of dapps that are under constant development. At DappRadar we track thousands of them across more than 20 different blockchains.

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Every week DappRadar dives into the ecosystem to uncover the dapps that are attracting the most users, upcoming, trending, and interesting to discover. No matter whether it’s DeFi on Ethereum, an NFT collection on Wax, or yield farming on Avalanche, we got you covered.

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Posted on

PGF7T crypto info, Web3, NFTs, Dapps 💥

PGF500 has a token on the Ethereum network, called PGF7T, which you can use to pay for subscriptions and services within the PGF500 platform.

You will need to have Metamask to pay with PGF7T token.

.

We have chosen to adopt blockchain technology for the launch of 2 innovative decentralized Dapps.

.

We believe in Web3 and in the strength of communities.

.

.

.

The token is on the Ethereum smart contract 0x9fadea1aff842d407893e21dbd0e2017b4c287b6 ,

and the code is public at https://etherscan.io/address/0x9fadea1aff842d407893e21dbd0e2017b4c287b6#code

.

QuickSwap smart contract:

0xdd0fDc648a9dbC9be5A735FE4561893a13399Da2

.

.

🔴 It is possible to buy and sell PGF7T tokens on Uniswap and QuickSwap Exchanges.

.

Price:  PGF7T

.

.

.

.

Our NFTs

.

Enjoy the Journey 🚀

.

PGF500 Team

.

~~~

Posted on

Web3 | summer reads, cool tools

1. Detecting ‘metamorphic’ smart contracts

Michael Blau

Smart contract code is supposed to be immutable once it’s deployed on blockchain, but in practice, you can create smart contracts that “metamorphose” into something else. (Imagine turning a token-staking contract into a token-stealing one, for instance!) Since this could undermine trust in web3 decentralized systems, a16z crypto engineering not only shares how the shape-shifting works, but also built a tool to analyze smart contracts for such “metamorphic” properties. While some metamorphic smart contracts may elude detection (or the detector could raise false positives), this tool is a useful first step for builders to understand and build on.
learn more about metamorphic contracts / use Detector tool 

2. Zero-knowledge information sharing through ‘zkDocs’

Sam Ragsdale, Dan Boneh

Most blockchain transactions are public by design, but this can make them less favorable for relaying private information to institutions. For example: Does your mortgage lender getting your pay stubs really need to know all those details… or just verify that your salary actually meets their loan requirements? This is where zero-knowledge proofs – which allow us to cryptographically prove facts about information without revealing what the information is – come in. a16z crypto engineering (& research) demonstrates how zero-knowledge-enabled documents could improve on traditional, error-prone, inefficient verification workflows — while preserving both privacy and decentralization.
learn more about zkDocs / watch demo 

3. What can web3 (& other) organizations learn from the history of democratic governance?

Porter Smith, Andrew Hall

web3 has created a new “laboratory” for democratic governance — through widespread experimentation; fast iteration cycles; and unprecedented digital participation and blending of civic and corporate, public and private. To date, however, web3 governance has overly relied on direct democracy, leading to low participation and concerns about weak oversight, interest-group capture, and group decision-making. But these are also the same challenges societies and organizations have experienced for millennia… So there’s lots of room to borrow best practices from the history of governance (drawing on both research, and observations of these systems in practice), to build more effective systems today.
read article on ‘Lightspeed Democracy’ here 

4. Decentralized creativity & collaboration

Rob McElhenney, Chris Dixon, Sonal Chokshi

“Decentralized media” and “decentralized content creation” are hot topics, but what does this really mean, how would it work in practice… and does it even need web3?! In this first live taping of our podcast ‘web3 with a16z’ — featuring special guest and longtime writer, actor, executive producer Rob McElhenney (It’s Always Sunny in Philadelphia, Mythic Quest; Adim) — we discuss decentralized creativity, collaboration, community; managing writer’s rooms, creator access; IP and NFTs; metaverse, storytelling across mediums; favorite TV shows, nostalgia, and more.
listen to the episode here

5. Some books we’re reading this summer

Covering everything from algorithms, cryptography, markets, and system design to time travel, space, food, and philosophy – here’s a list of readings that members of the a16z crypto team are personally reading and recommending this summer. Whether you’re looking for vacation reads for education or for entertainment, whether you prefer non-fiction or fiction (or science fiction!)… there’s something on this list for everyone.
check out the list here

puzzling

.

summer reads, cool tools

.

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