With another year almost in the books, we take a look back at some of the notable events and lessons learned in 2022 + discuss our predictions for 2023 and suggest ways founders can navigate the near future.

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Transcript (this is an automated transcript):

MPD: Welcome everybody. I'm Mark Peter Davis, managing partner of Interplay. I'm on a mission to help entrepreneurs advance society, and this podcast is part of that effort. We're doing our normal run through of the pod today. The one twist is we're gonna be focusing on review and recap of 2022, and we're gonna be looking forward to 2023.

So we're gonna hear perspectives from all the different partners who participate in. Weekly chat, so hopefully you enjoy that. Before we jump into that though, I wanted to share my thoughts and then make one little announcement. So my predictions for 23, which I'm sure we'll watch this again in a year and think how wrong we were, is one, I think cannabis is gonna be legalized federally.

I think that is gonna tip there's a lot of really interesting business implications. For those who don't know, all of the states right now are essentially are vertically integrated. The suppliers and all the way to the retailers are all working on one in-state supply chain. If they sell across state lines, they can get them in trouble with, cuz then it's like a federal transaction and it's not legally federally.

So when it becomes federally legal, we open up these 18, 20 plus markets across the US and merge them into one market and a whole bunch of competitive dynamics are gonna en. The second thing that's really interesting that I think's gonna happen is, look, we've had open AI has taken one giant leap forward from mankind.

I believe we're gonna start very quickly seeing rapid application development, application layer technologies, things that we can actually use that will start to integrate the AI into our workflows. My intuition is that those applications are gonna have about as much impact. On the way we work and white collar jobs in particular as Covid did when it opened everyone's eyes to remote working.

So I think there is a tsunami of behavioral change coming behind that technology and it may be a very significant moment coming up in this coming year. The last thing I wanna announce and just make sure everyone knows, is we're gonna take a winter break. So this is our last pod for the year and we'll be picking things back up in January.

So if you don't hear from us between now and then, enjoy the holidays. Take this time to reflect. Think about what you're working on. Take a breather. It's important to slow down and buckle your seatbelt. We're gonna start the show.

All right, Mike, you've always got some weird fashion statement going on. You're wearing a beatie now. What's happening? It's cold. It's not cold in the office. 

Mike: It's cold everywhere. I'm cold. I just did a week on the beach and I came back and it's 30 degrees outside and I'm not happy. 

MPD: Is it a bad hair day?

It's not my best hair day. All right. That's a good reason. Okay. Yeah. All right. Today's pod conversation. We're doing a, starting with the retrospective on 22. Looking back, what were like the big insights, personal learnings about the way the world works? What did you take away that was the ah, moment for you?


Mike: I think the easy one for 2022 is that market's always. And that eventually, no matter how out of whack prices get, eventually they will come back down to equilibrium or long-term average. What, some semblance of fair and rational which is what we saw this year. We can't live in a zero interest rate world forever.

I think a lot of people had been stuck in that mindset thinking that the party would last forever, but eventually last call comes and the party ends. And, we saw this year was a significant fall in, in venture activity and valuations. And while a lot of those valuations haven't corrected yet, because these companies are sitting on large pools of.

Just cause you priced it last year at a billion doesn't mean it's actually worth that. I think my big learning last year was that, eventually price is correct. And I think the other piece of it is this is healthy for the market. I think we are in a better place now than we were last year.

And while people might not feel as rich, I think the long-term trend is fantastic and I'm still super excited to be a venture capital. 

MPD: It's when these markets are up for so long and that's the pattern, it's a escalator up. It takes five to 15 years, 10 years, whatever it is, and then it's an elevator down and it crashes in these up periods, especially when it gets to the euphoria stage.

A lot of people, and I think it's happens to us, like you really do start to doubt your sanity cuz you know the valuations are nuts. Yeah. You start wondering, All right. Is this the new reality? And we did a pretty good job. We made a couple mistakes. I think there's two companies where we got we got pulled into valuations that I think we rationalized a little too much.

I. But that's two out of 30 or 40 or 50. We did in that timeframe where I think we did a really good job of kind of sticking to our guns and thinking logically about reasonable multiples and exit potential and outcomes. So it's hard though because you're, you have to be a contrary in those euphoric periods to stay rational on valuation.

And that's, everyone else thinks you're, I 

Mike: said to someone today, I said to one of our portfolio founders actually, that I think looking back on it, we were irrational probably about 10% of the time maybe five to 10% of the time. I think that the market was probably irrational 40 to 50% of the time.

And because of that, I do feel quite strongly that we'll have really good performance in the fund and we'll be what? We'll, we'll be fine, but it just shows you that even someone. Who tries to stay sane in, in a crazy market like that, every once in a while, you're bound to make some sort of of error.

MPD: Yeah. And it's it just takes a lot of discipline. I really, I do think our team was a very powerful part of it, leading on each other, keeping each other sane, when people will get drawn into things they're excited about. But we had a good discipline through all of it, but it's very hard.

It's very hard to stay. To your method when you feel like you're on an island. But in Yeah, in hindsight we were right, you, you're crazy if you're not doubting yourself at some point. Totally. And 

Mike: this is a partner meeting format, right? So I think what we say to each other in the partner meetings in the day, venture Capital two, it is a competition, right?

We are stack ranked against our peers. Yes, the industry as a whole has to generate returns, but within the industry, LPs, our investors are looking at us and saying, how do they do versus their peers? So when I say we did, we acted irrationally. 10% of hiding the market was 40% of the time. That means the market was exponentially more rational than we were.

And hopefully that leads to returns that are far superior to our peers. 

MPD: Exponentially ir, less rational, 

Mike: exponentially less rational, or 

MPD: more irrational. Yeah. Yeah. I think we came outta that pretty well, but that was one of those moments where, we stuck to it. But you have to ask yourself, am I crazy?

But we always talked our way back to fundamentals. I think that's an interesting thing about us and we talk about too often publicly, is that we view ourselves as fundamentals investors in this new age market. And that cross section doesn't happen as much as people would think on the.

Anyway we're digressing. Okay. 2022 retrospect. Thank you. All right. We're about to start the new year. Everyone's gonna start making their predictions. I threw some probably in fast forward 12 months, and I'll look back and think what an idiot, the ones I threw out earlier in this pod. What do you got for 23?

What do you think is gonna happen? How's the world gonna change? Yeah, I think 

Mike: my first 23 1 is, And this is, I'm gonna say this on a limb. It's a bit of a hope as much as it is me. It's something, a trend I'm starting to see. And also something that I really hope comes to fruition is I think that we're starting to see, I hope that founders get more rational around what a realistic and good outcome is.

We've talked about this on the podcast already. I think we lived in a world for the last two or three years, more, more recently, but maybe more like five years where anyone starting a company was not happy unless they had a billion dollar outcome. And everyone came into every meeting saying, we're gonna be the next multi-billion dollar company.

And I think that mentality's really special, but it's very unrealistic. So I think my prediction is this is the year where founder rationality returns and Bec, and with that pricing of rounds returns. So again, back to just simple math for you. If you're a founder and you raise a five to $7 million series A in the 30 to $50 million post money range, It's a great outcome.

You, you continue to hold optionality to sell that business and generate great returns for everyone. If you exit in the 250 to 500 million range, a very reasonable and unbelievable return, right? If you raise an 80 or a hundred on the A, your outcome has to be a billion dollar plus for those investors to do returns.

They wanna see extremely unlikely and extremely unrealistic for, 99.9% of the company. So my first hope slash predict. Is that we see more rationality, return to founders and VCs, right? We are just as culpable, if not more culpable in this situation, 


MPD: To the market. But this is an interesting one.

You, you've heard me say this a million times. You know my phrase, the TechCrunch punch. Everyone's drinking the TechCrunch punch. When you're seeing these articles and the headline story are not the 1% of outcomes, the 0.1%, and. All obsessing over these people who have had these fabulous outcomes and their household names and everything else.

People aren't getting their head around the real distribution of exits. Yeah. A lot of the exits are sub a hundred million. Yeah. That's not how people think about it. They think it's like a billion or bust, and those are outliers of outliers. Totally. Not saying they don't happen, like often 

Mike: those founders are making more money than the founders who are selling their businesses for 

MPD: multiples.

It depends on how they finance for sure. Yeah. But yeah, it's a it's a big thing. So coming in with a little bit of sobriety, getting und drunk on the tech crunch punch, I think is a good thing for everyone in the market. We can get back to the, found the fundamentals of building innovation and improving society a little bit.

All right. What else you got for 23? What else? What else do you think is gonna happen? 

Mike: I do think that this year we start to see consumer demand. So far this recession has been driven by market repricing, but not actually consumer demand destruction. We saw a really strong holiday sales, really strong Black Friday.

Consumers are still spending money now. We're starting to see some really signs of, balance sheet, consumer balance sheets, worsening. They were at the best they ever were. So getting worser is, natural. But I do think in q1 Q2 we'll start to see that true consumer demand slow, and that's what the Fed has told us they wanna do.

The only way to squash inflation is to slow consumer demand. So my prediction is that we will see a bit of a consumer recession in the early months. I think that will stop the fed from raising rates. I think eventually it will lead to a slight loosening cycle. Not massive. We're not going back to zero interest rates probably towards the end of this year, maybe early next, and I think that will help us enter our next bull market run and we'll see what that takes us.

MPD: What's the biggest new technology that's gonna show up in 23? That is gonna be tectonic. It's been create a market shift. We had the AI pop just happened. What's the next thing where it's yeah, the AI pop. I know your 

Mike: prediction was round the AI stuff. I think the AI stuff is still really early. We're seeing people already launch companies based on chat, G P T, which is cool, but it's still a long ways off in terms of Yeah.

MPD: Yeah. It's not what's the next big tech thing that's gonna be seismic? I don't know, man. 

Mike: I think we've got, 

MPD: if you knew we'd be investing right. Yeah, 

Mike: we'll be investing. It's, I think this is a good thesis piece for you because I think we, we've always been really good at saying, Hey, innovation comes from the entrepreneurs who are doing the hard work.

So we're gonna go and find those entrepreneurs who are doing that hard work and back them, and we're not gonna prophesize around what we think the next thing's gonna be. I think that the AI will be really impactful this year, I think was the first year we'll really see big, multi hundred billion dollar companies get built.

APIs like chat, C p T and other companies technology. They're not the only one out there. By the way. You're gonna see a wave more come out in the next six months or so. And I do think it'll fundamentally change the way that we work and write and listen and read and live our lives. So I think it's gonna be like iPhone step change for the average consumer.

Unsure. But I do think that some people are thinking about it in that sort of way. 

MPD: Thank you, Mike. All right. Now Fong's gonna give us a business update for the week. Fong, what are we doing this week? 

Phuong: All right. Hi everyone. For this last episode of the year, I've been doing a lot of reflecting.

On the past year and thinking about what's in store for 2023, and I know that we've had a lot of discussion about what's going to happen next year. There's a lot of speculation around the market and whether we'll get into, we'll enter into recession. I'm not gonna really talk about that today. I think regardless of what actually happens, The one thing that we can all be sure about is there's going to continue to be a lot of uncertainty over the next few months, and that's really gonna impact founders across all aspects of their business.

So I think that it's really important that founders spend some time over whatever downtime they have over the holidays to gear themselves. Up for the new year. And in doing so, giving some thought to one, how to position your company to weather that uncertainty. And then two, how to best position yourself to weather that uncertainty.

How do you give yourself a mental fortitude to get through the months ahead? That will probably be tougher and more stressful than founder life normally is even. So let's first talk about positioning your company for a potential downturn or whatever is gonna happen. Even though it's uncomfortable, I think now is the time if you haven't done so already, to really look inward and assess the help of your business and figure out where you really.

And a helpful framework for doing that is this concept of being default dead or defaults alive, which were terms that were developed by P Paul Graham, one of the founders of LY Combinator. Now, what does that mean? So being default alive means that even if you're not profitable today, your growth rate is strong enough that you'll get to profitability before you run outta.

So then that means that being default dead means you'll run out of money before you become profitable. So you'll probably have to depend on outside funding to stay in business. So if your defaults alive, you know you're in good shape. If funding slows down or drives up in 2023, you're self-sustainable and you can get yourself through until things get back to normal, whatever normal.

If you're default dead, you've got some difficult decisions to make, right? It's not ideal to be default dead during a time where it may take longer or be harder to raise money. So maybe it's time to start thinking about what it's gonna take to get to break even, and then from there, what it's gonna take to get to profitability.

Some things to really think about is, get your team together and come up with ideas for everything you can do to cut costs and then everything you can do to make more money. And I know that's easier said than done, right? So in in terms of cutting costs, the two biggest buckets to look at.

R one headcount and that's not something that anyone ever wants to think about, but it really is one of the biggest cost drivers. So really be honest with yourself here, and you know you have to make some hard decisions. I think the best way to avoid this is to just always make sure that you're thoughtfully hiring and to avoid building a team too quickly just to hit some crazy growth targets, right?

And then secondly, which is interesting is ad spend. So this is another place where startups tend to overspend to show investors that they're growing fast. If you're spending a lot on ads, like it's not a sustainable type of growth because it leads to a high burn. So then you've gotta ask yourself, do you, would you rather keep money, keep spending money to fund this growth, and then hope that someone's gonna give you more money, but then risk the, risk not surviving because no one ends up giving you money.

Or would you rather cut the spend now, take the growth hit, and then be able to get to defaults alive? And then, you reset your business even though you're growing not as fast as you were before. But you're running a healthy, sustainable business and you're around to talk about it in a couple years.

I think, and then you can raise in a better environment. I think you have to answer these questions for yourself, but I hope you choose wisely. And then I think in addition to assessing the health of your company, it's important that you do so for yourself to assess your own health, especially your mental health.

We all know how difficult and isolating and stressful being a founder can be. No there's studies that say that over 70% of founders reports some mental health struggles. And I think it's safe to say that the added uncertainty in the market will only make it even more stressful.

So it's really extra important to be vigilant about focusing in your own mental health. It's really the best investment you can make in your own business. So really take the next couple weeks to figure out how you're gonna do that for 2020. Some things to think about is to connect with other founders.

Being a founder can be really isolating, so sharing your experience with a peer group can counterbalance that. And then at the same time, keep your connections with friends that have nothing to do with your business. Don't let your whole life be about work. I think having these friendships that can offer you support outside of your identity as a founder is super healthy and really important.

And then, last thing, sleep, exercise, eat right. Don't drink too much. Seek help if you need it. It's all the basics that apply to regular, normal humans also apply to superhumans like founders. Keep that in mind. Take care of yourself. And yeah, those are my thoughts as we head into the holidays.

I hope everyone has a great one. 

MPD: This is a terrific set of topics and I think relevant not only now, especially the second half, but always for founders, it is I view founders, myself, others as business athletes, and you have to have this mindset that you're training to perform in your role.

And so this taking care of your body and your mental health is actually align. With getting you to your business goals. I used to think they were in they were in a fight with each other, right? I, am I working out, which is taking me away from my work? Or am I maximizing the amount of time I'm being productive now?

I, it seems like a 

Phuong: luxury that you can't, don't have time for, 

MPD: right? Right now I view exercising as an investment to help me be more effective mentally, physically. When I'm working I wanted to come back. I think a lot of people, I wanna touch on everything you said. A lot of peop founders out there when they went through the last couple years were told to be fair grow.

Because that's right, there was a lot of capital. The measure of investability was for many VCs, growth. And that the key thing to take away is that has changed and A lot of people are doing layoffs now. It's not pretty, it's not fun. No one wants to think about it. No one wants to talk about it. But we are advising our companies to have the option, if they can, to raise their next round in 2024.

And for many, that means making pretty deep cuts into the team and not optimizing for growth, but optimizing for operating metrics. and stability of the business. So that's that on that piece. Yeah. Just to share the internal interplay messaging with other folks out there. And that's awful, right?

But I'm hoping we can help start new businesses with coach, hire some of the people who get released. Cause very often they're incredibly talented people. The second thing I would, that you touched on, that I would reinforce is the mental health piece. I think it is the single cheapest investment you could.

No matter what it costs if you have good mental health and you make decisions just a little better, it's r o ROI all day. Let's, there are programs out there that people can join. We're supporters of Ven wise, for those who don't know it, it's probably the largest community of entrepreneurs in the country.

It's been around for over a decade and they do really. High Cal. It's high caliber. Founders almost all have raised substantial amounts of money. It's a lot of the big name companies that people know are in there. And it's the kind of the private space where founders talk to other founders to get advice in very structured, insightful environments, typically with, executive coaches moderating it's the real deal.

So if you can get into that, no brainer. The thing to know about tho the venny and other types of any type of mental health community. Is, it doesn't matter what it costs you if you make one hire a little bit earlier, one layoff a little bit earlier, you've already paid for the entire program for the year, and the reality is you're gonna get, typically get 10 x that in value.

So it's literally the best investment you can make as a founder, in my opinion. So yeah, I think there's a lot to this. I think this is the time for everyone to do a reset. I'll add one last little bit of advice on this for mental health. In my earlier, younger days when I was ex, exclusively a founder before I was doing BC and now, a whole platform and a whole ecosystem, I used to try to work my tail off through the holidays and my thinking was, I'm gonna get ahead because I'm willing to do.

The problem is no one else is working. And so your productivity, because you're trying to interact with other people, most times it's like you're sending an email, you're not getting a response is really low and it will drive you mad. So I think the better investment for folks is to take this time, unless you have specific things you can actually achieve.

Or customers that need support to really take this time to while everyone else is like a social contract that everyone's. Invest in your mental health. Think big. Think about who you are. Think about mistakes you made, things you did right, people. You're, you're grateful for what they've done for you, and reset on all of that and come in fighting in January.

Phuong: For sure. I find this week that kind of the week before Christmas and New Years, one of the most productive weeks of the year, not productivity in terms of how many emails I get answered or anything more traditional. But really being able to take the time to step back, you're in the details every day of your business, and really give yourself time to step back and think big picture both in terms of business and your life and your personal life in general.

MPD: This is a good one. Thank you. Fun. All right. Now we're gonna jump over to Chris who's gonna give us a 22 retrospective and some thoughts about the world going into 23. What do you got, Chris? 

Chris: Thanks, mark. 2022 has been such an eventful year for all market participants. I think. Let me preface this by saying that there are obviously a lot of things that happened, but our perspective and our chat today is really just about events and I think the bigger events are moved at risky assets.

So the first thing is the one that we talk about every week, which is inflation fed interest rate decisions. And the re related strength in US dollars, and of course the broader market pullbacks. Just to recap a little bit we started a year basically with s and p at the historical highs, 4,800.

That march hit inflation became a real worry and negative sentiments started to tick hold. We granted all the way down about 20% to 3,700 in s and p in mid in mid June. Followed by a big July recovery sort of summer happiness time rally back to 43, 40 3%, 4,300 only to be completely destroyed by effectively the Fed coming out, setting interest rate expectations and correcting market expectations for future rate hikes.

Then August c p I came out any sort of remaining hope of transitory inflation. Was gone and Marcus owed off. Again, everything culminated into basically in, in November c p i data that came out last week or this week, in fact. The week of December 12th along with the newest latest edition of Fed interest rate decision.

Long story short, basically C p I headline now finally came out a little cooler than I expected. But as usual, if you look under the hood, the stickier side of inflation or core inflation is still rising. As a result, the Fed hike another 50 basis point, and Chairman Powell basic signaled that there, there's more to come and likely interest rate will peak at a range above 5%.

Obviously a lot of volatility in the middle of all this rhetoric and news headline. And I think likely we're going to continue to see a trend of elevated volatility going forward. Second, biggest story that happened in 2022, the effective market, of course is the war on Ukraine.

350 billion in property damages, 14 million display people, 54,000 injuries. 15,000 missing people and 54,000 sorry. And 52,000 death later. I think market participants and really everyone still in the world who has ability to access information is still left. Wondering what really is the end game here and what's the offer?

Any, there are many questions that I think we should ask ourselves. Things like our sanctions by the West really effective, and do they, or do they just add to the inflation problem we already have? What about food and energy shortages to the rest of the world? And if Ukraine is so hard, if Ukraine is so hardline on getting back Crimea and Russia's willing to use nuclear weapons, not just as deterrent, but also as weapon of less.

To defend what it considers territories. How does the rest of the world really bridge, bridge, try to bridge this gap? Market initially, I think at the beginning of the year really took a hit because of the headline, but over time, people would become, became less sensitized to. To the information flow and headlines and to the point where any incremental news out of the region no longer moves market.

I think that's a major risk heading into 2023 as well. When material, when things, when material developments happen that will swing the risky other way and market participant, all of a sudden will, will realize that that the war is still going on. And with no. So that's a big thing to to look out for as well.

Third and fourth, really, they're combined into sort of one which is Covid and US China relations. There's this dichotomy of responses by the US and China really that started taking shape earlier this year with us. Really a largely opening up the country and China's still holding onto its zero zero co covid policy, really all the way until last.

What we had the world, the rest of the world basically had as a result, major supply chain destructions. And, Chinese economy has materially weakened and there's sign, there're finally signs of discontent and dissonance among the broader general populace. There're also troubles in the real estate market.

There's a real flight or attempted flight of capital away from China, Middleland, China. And at the end of all that, China GDP is now expected to grow only 3% in 2022. And to put that in contact, that's not much high, that's not much higher than a real developed country like the US with real GDP expected in 2022 at 2%, despite all the inflation problem that we've had.

Of course along the way, we've had, Nancy Pelosi's visit to Taiwan Su Jinping, elected General Secretary of China for the unprecedented third term, and all the US sanctions on China for various different causes. So where does that leave us really for 2023 and beyond? Is the question to ask.

That's my quick summary of what happened this year, 

MPD: Of all the stuff going on, I. I think everyone's heard all of this, but just to take a moment and think about the fact that the people in Ukraine, it's not a stat, okay? These are each of those deaths, each of those displacement is families going through real, frankly, fairly unimaginable hardship, I would say largely to Americans and other people who are not in war zones or have not grown, lived in war zones.

Very heavy stuff. It's easy to blush over as a data point. I know. So you're doing that. But it's the real human tragedy with that is unfathomable. Anyway, please continue. So what happy news do we have for 20 awaiting us for 2023 ? 

Chris: It's very obviously incredibly difficult to predict geo po geopolitics and any events that fall out from the internet.

I'll stay with what I know and what I think likely would happen in the financial market. Which is that I think interest rate will likely rise, will have to rise by another a hundred, 150 basis point here in the US to largely to combat inflation and to cool down demand and really reset the bubble that we lived in the past 10, 20 years with free money.

That will hopefully bring down the year on year inflation back to somewhat normal 34%. I know the fed's target is still 2%. I think that is gonna be very difficult to achieve if you do the math. That means it's about 0.1% month on months inflation, all in, including the predictable or less predictable food and energy and more predictable core inflation.

I think that target is is going to take longer to get to because we've got, again, 10 to 15 years of just free money accumulating, and that is gonna take more than just a year to to absorb. As a result of all that unemployment will hopefully will not, hopefully I'm Paul will definitely shoot up.

The question really is whether it's going to be high single digits, which is not end result. People will hold for or even higher. Or would it be more contained in a more mid single digit five, 6%? My my guess and my sort of educated guess is it's go, it's going to be more contained due to the result of this talent hoarding that's still going on.

Among the biggest companies. You see headlines come from the tech companies and now also the banks folks trying to cut jobs, let's say in operations and back office. But still, in management and in a lot of the key positions, hirings are still continuing. So I think that's likely a trend that's going to continue into next year.

There's no bra based layoff as of yet, and I really don't see that happening given the cash reserve given where the economy's at currently. Beyond the us I think China, there will be a real recovery in China now that finally Covid zero is in the past obviously a lot of unrest due to neo virus infections and potential death and hospitals getting run over.

But I do think given China's response in early period of the Covid. I think these things will be eventually resolved maybe with temporary solutions, temporary, 10 temporary hospitals and emergency supplies sa sort of easings in the government. So I do think in a on the broader economy, things will recover.

It is short term positive for China for sure. The war is, I think, the biggest question mark, and that's going to remain the biggest risk events in 2023. There is no offer ramp yet. There's no. A date, which every party has to come in and decide something that's continued to be dragged on till, and my view is potentially for the remainder of company three as well.

So I hope something will get resolved. But the lot more likely scenario is that's going to draft on in potentially the smaller scale in into 2023, deep into 23.


MPD: sounds the common throughput on your 23 prediction is an unwinding. We had a whole bunch of buildup for a long period. Things snapped in 22, and there's an unwinding of too much capital, zero covid policy, unknown war dynamics, so they're just it's gonna be a play out year.

Now the wild thing is those are the dimensions we know. There's always the black swans around the corner, but all of those I agree with you, I think are not overnight playoffs. And I also really appreciate you touching on the job issue. There's two narratives in the market and it's hard for folks to reconcile them that it's really hard to find talent and everyone's laying everybody off, and those two don't really go together until you think about it as two labor markets, right?

Yeah. For some jobs it's hard to find talent and other jobs. I think a lot of companies are gonna keep cleaning house as much as they can. There's politics in the labor market, right? If you're a public company ceo, you don't wanna spook your investors doing a layoff. When you're the only company in town doing a layoff market's hot.

Yeah. No one else is letting anyone go. And you do a big riff, it's gonna shake your price, your share price. You might lose your job in this market. Yeah. Anyone who's been sitting on the sideline thinking about doing it, they look smart. They look disciplined doing layoffs now. And so I think there's gonna be, again, an unwinding of a lot of potential, over hiring.

Any decisions that were made at around growth economy layoffs that maybe companies wanted to do a while ago, I think are gonna be all coming to bear in Q1 two q2. I think we saw tech lead a little bit of a vanguard strategy on this, but other industries are here to follow is my. . Yeah. 

Chris: To add to your point too, I think when we talk about unemployment, a lot of people tend to focus on layoffs, but, and, but forget about, there's another way to, to cool inflation and be more fiscally responsible, which is to cut salaries.

I, that's the tr that's historically a more difficult thing to. Yes, I think it's stickier. It's harder to cut salaries than just delay off people, but potentially that's a more sensible thing to do in the current economy where talent is still hard to find, real talent's, really hard to find. So you want find a way to keep them, but help them sort, help talent.

Also adjust mentally or reset expectations on earnings, or at least temporary earnings. And and just cut bonuses across the board. That's what we're already seeing that from headlines this week coming outta Goldman and Morgan Saline. It's not just about laying off people.

It's resetting salaries and really resetting salary growth. That's potentially what will happen 

MPD: next year. Again, another confusing paradigm, dialing salaries down while inflation goes. Yep. That's that's the way to, that's a profitability. Squeeze for future and pledge.

Exactly. Employers or employees. . Lots to come. I have a feeling you're gonna be all right about a lot of this but we will see. Thank you Chris. Quick reminder for everybody. Chris is an s e c registered R raa, so nothing he has said. Should be construed as financial advice. All right everybody.

That's a wrap. Hope you enjoyed today's pod. We are reminder gonna be taken the holidays off, so we'll see you back in January. If you need anything in between, hit me on Twitter at M P D.


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