📉😨 A Lot Worse Before It Gets Any Better
Happy Sunday everyone!
I’ve created a second YouTube channel where the sole focus is to cover insightful stories in business and economics.
We plan to cover topics such as the economics of Casinos, Golf Courses, Amusement Parks, the rise & fall of certain companies, and anything we find insightful. If you are up for business-documentary style content in your home feed, make sure to subscribe! One of our featured stories today is on Amazon and we’ve made a corresponding video!
Big in Tech This Week
Well, it looks like the drawdown in the markets has also begun to affect the world of venture capital and startups.
Startup layoffs start as tech stocks get a crushing reality check (Bloomberg)
Y Combinator advises founders to ‘plan for the worst’ amid market teardown (Tech Crunch)
In Y Combinator’s letter to its portfolio founders titled “Economic Downturn”, the message was clear, the main goal is to survive.
“The safe move is to plan for the worst.”
Your fundraising experience was most likely not normal and future fundraises will be much more difficult.”
“Remember that your chances of success are extremely low even if your company is doing well.”
“You can often pick up significant market share in an economic downturn by just staying alive.”
Bloomberg found that “global fundraising has slowed, with the number of megarounds ($100m or more) and the total amount raised declining in the first quarter, the first time in two years”.
PitchBook found that just 5% of completed investments during the March quarter were down rounds, meaning the company accepted a lower valuation than it had in previous deals, signalling that this could just be the beginning…
Needless to say, both the public and private markets are feeling the heat.
In Other News…
Hyundai to open $6.5b EV factory in Georgia (Tech Crunch)
Amazon’s Open Secret
When you think of Amazon, you think of the shopping website that has almost everything available within a couple taps and swipes.
But, would it surprise you if I told you that they don’t make that much money with online shopping?
When you add in subscriptions, physical stores, advertising, and e-commerce, that makes up just 25.5% of Amazon’s operating income and has an combined operating margin of just 1.56%…
So where does Amazon actually make their money from??
Well, the secret to Amazon’s business is AWS, or Amazon Web Services. With AWS Amazon increases to an operating margin of 5.3%, despite only accounting for 13.24% of Amazon's total sales…
Crazy right??
To learn more about Amazon’s unique business strategy, check out our video on Amazon featured on the BRAND NEW channel, Out of Office.
In this new channel, we’ll talk everything business and economics!
Make sure to like and subscribe!
Charts of the Week
Value has stayed resiliant relative to growth.
Even after losing all its gains during the COVID era, ARKK is still receiving net inflows…
