Q2 Snapshot: The Startup Ecosystem

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Startup Success: A Podcast for Founders & Investors 20 min 2 speakers 8 chapters transcribed 15 days ago
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What does Steve Lord say about the overall uncertainty in the Q2 startup ecosystem?

Unknown 0:01
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Kate Adams 0:17
Welcome to Startup Success. Today we have one of our favorite guests in studio, Steve Lord, who is the Chief Operating Officer and Chief Knowledge Officer at Birkland. Home Company. Hi Steve.
Steve Lord 0:33
Hey, how are you?
Kate Adams 0:34
Thanks for joining us again.
Steve Lord 0:36
Thank you for having me.
Kate Adams 0:37
We love talking to you because Steve comes on and it's one of our most popular episodes and gives us kind of the status of the startup ecosystem and where we are. So it here it is, the end of Q two. Can't believe like it's I yeah. I know. So every time I talk to you, things seem to get more and more uncertain instead of the other way. Yeah, I know. Yeah, I know. We keep waiting. We keep waiting
Steve Lord 1:00
for it to end and it doesn't seem to be doing
Kate Adams 1:02
it. Yes.
Steve Lord 1:04
I think that's kind of the the big takeaway. We meet periodically and we look at where we are and I kind of take a macro view of the whole thing. And what she said about the uncertainty is really the watchword for the moment. With everything going on in the federal government, the administration. The news headlines we all see, not just about the economy, but a whole bunch of other stuff, right? Immigration, trade policy, all the way down to which law firm, Iran, you know, we started dropping iron on people's heads out of the blue. There politics left or right, there is this. non-stop drumbeat of wow, look at that. And that is causing this veil of uncertainty that we've been talking about, hopefully dissipating now for three quarters, to persist.
Steve Lord 1:53
And I can't stress enough the impact macroeconomically that has not only on the VC and startup ecosystem, but the economy as a whole. It's a big deal. Um, people delay hiring, they delay investments. No one really knows what's happening with this whole tariff situation. So does that mean I build my new factory here? Do I take the hit on the labor cost or do I try to find a tariff advantaged country? Do I wait and see if all of this blows over? Because a lot of the stuff that the the current administration likes to do is a lot of bluster. And at the end of the day, um history has shown that it isn't as long lasting as initially feared, that key thing, weight, is starting to really have an impact. The other thing I wanted to call out is
Steve Lord 2:47
We don't know yet what the tariff impact will really be. No, for two reasons. One is the tariff impact may be dissipated by deals, quote quote deals. Some of the countries where quote deals have been made were actually the deals we already had in place that have been packaged again and turned into new deals. But regardless, right? And The markets have an interesting ability of discounting what they think is going to happen and they're usually pretty good. So, you know, you have these dual effects of the deals that aren't really deals, and in some cases new. trade relationships will get

How are current geopolitical tensions and tariff debates affecting startup hiring and investment decisions?

Steve Lord 3:24
worked out, but the real downstream hit or impact of those things are six to twelve months away. So everybody doing a happy dance in looking at the May and June inflation ratings are not paying attention. That's too soon. We won't see it in inflation, we won't see it in jobs, we won't see it in any of these other things until the fall at the absolute earliest. Wow, that's a long time. You're starting actually one place I will say we may begin seeing it is a little bit like the pandemic in that you are starting to see supply chain bottlenecks that could be related to the tariffs. For instance, there are some PC manufacturers that have stretching into six week back orders now, right now. May not be that, may not be directly related to tariffs, maybe more related to the uncertainty we're talking about.
Steve Lord 4:20
But it's there. It's something to watch.
Kate Adams 4:23
Interesting. There's really no way to predict this lead time in the fall if it's going to be positive or negative.

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