Agreed. As engineers we build context every time we interact with the codebase. LLMs don't do that.
A good senior engineer has a ton in their head after 6+ months in a codebase. You can spend a lot of time trying to equip Claude Code with the equivalent in the form of CLAUDE.MD, references to docs, etc., but it's a lot of work, and it's not clear that the agents even use it well (yet).
Another factor with the vibes being off (at least in the US): mass outsourcing of jobs thanks to remote work. You used to have to be a multinational company with global entities and offices. Now you can be a 10-person startup with half your people outside the country.
When the world went remote many folks were happy with the better work-life balance. But it means that we compete in a ruthless global labor market.
That's why companies rejecting remote work is good for the American worker in some ways.
"remote" can just mean "far enough from the financial district that I can afford a little space" as it turns out. You're not WRONG but just being in the same time zone as your coworkers gets you 90% of the in person benefits and, realistically, it's too hard to work with a team that is on a vastly different tz.
Local can still be better than global while still allowing people to work from home and convene in meat space as needed
> companies rejecting remote work is good for the American worker
It's good for American real estate owners, who end up with more money as a result of this, both from offices and from staff who have to live in nearby high COL areas.
I believe an important reason for why there are no LLM breakthroughs is that humans make progress in their thinking through experimentation, i.e. collecting targeted data, which requires exerting agency on the real world. This isn't just observation, it's the creation of data not already in the training set.
Maybe also the fact that they can't learn small pieces of new information without "formatting" its whole brain again, from scratch. And fine tuning is like having a stroke, where you get specialization by losing cognitive capabilities.
Data labeling has been moving to onshore / higher paid work. There's still a lot offshore, but for LLMs in particular and various specialized models, there's a massive trend toward hiring highly educated, highly paid specialists in the US.
But as other commenters have warned: beware of labor laws, especially in CA/NY/MA.
I've had a front-row seat to this...our company hires + employs contract W2 and 1099 workers for the tech industry. Two years ago we started to get a ton of demand from data labeling companies and more recently foundation model cos who are doing DIY data labeling. Companies are converting 1099 workforces to W2 to avoid misclassification. Or they're trying to button up their use of 1099 to avoid being offside.
I do agree. But the thing I would add though is that at least when I was there (W2012 - we were in the same batch!) YC and PG in particular were vocal about principles they believed in, especially the idea that naive young founders get kicked around in Silicon Valley and ought to be treated fairly. PG talked about this constantly and of course it’s a big theme of his essays. I remember one particular instance where a potential investor was behaving questionably and PG offered to step in and talk to them if they crossed a certain line (which they did not in the end). He was clear about what he concerned acceptable and unacceptable and why. And we were nowhere near the cool end of the batch.
Yes YC acts in its interests but in my experience they live by good principles and that makes all the difference. The Chaos Monkeys anecdote is an example of that. So I don’t agree with the article’s framing that they throw their weight around to simply exercise whatever power they have over others for financial gain.
Maybe this is a dumb question but I thought valuations had fallen a bunch since mid 2022 and now lots of VC firms are struggling with companies (especially mid-to-late stage) who raised at much higher valuations than they can now get in the market. But this firm is saying that current valuations are too high to make new investments. Would it not be a good time to invest in later stage startups? Or is the issue that the forward growth potential of these companies is lower now for some reason.
Valuations have "fallen" but not actually fallen: there are very bad consequences to raising what's known as a "down-round"(1) so no one is actually doing that unless they are absolutely forced to. So no company is interested in actually allowing an investment at that lower valuation. They only do that if they are absolutely forced to, because they desperately need the money.
So while yes, when the valuations go down seems like a perfect time to buy (buy low, sell high!), in these closed markets it is difficult to find someone to accept your money when it is down. This is a big difference from the publicly traded market, where you can essentially always buy stock. But in these private markets, everyone agrees that the value of a share of company X is lower than before, but no one is willing to sell you a share today at that price, so you can't actually invest your money.
1: Where the top-line valuation is below the previous valuation. This is extremely bad for a company because investors almost always have protections for a down-round, so the loss generally is felt entirely by the workers and the founder.
There are several strategies companies can employ. One common approach is to raise an extension or bridge round. Many startups are adopting this method, with estimates indicating that approximately 40% of current funding rounds fall into this category.
In these cases, companies raise funds at the same valuation as their previous round, often labeled as Series A+ or Series C+ or Series B Extension.
Another, less common strategy involves using a SAFE (Simple Agreement for Future Equity), which will convert to equity during the next priced round.
That is possible, or hit break even. You'd be surprised how quickly a company can go from -50% margins to positive margins when their job is on the line.
About a year ago my org made shaving costs our highest priority. Our infra team spent half a year slashing our cloud spend, and we've been pushing hard to become cash flow neutral.
I have to imagine this priority shift is in part due to the money markets being what they are.
private valuations are weird. There's some abstract idea that 'valuations have fallen' for sure - people are saying things like "I don't think COMPANY_BLAH that raised $100M at a $1B valuation is actually worth $1B"
But it was never officially 'worth' that much in the same way as a market cap of a public company anyway. If they do a downround, where they raise money at a lower valuation than the previous one, that's generally bad for everyone, so there's a strong tendency to try to 'wait it out' and just pretend they're still worth $1B and hope the market recovers and no one has to write down their investments.
I was part of the W12 batch of YC (which was a lot smaller, ~60 companies, back when Paul Graham was still leading YC).
YC funds a lot of companies and has always had super high variance in the companies it funds. Entrepreneurs are a wild bunch of people. There have always been companies where the founders turned out to be BS artists or sociopaths. Companies that folded immediately after the program started. Companies with messy cofounder breakups already brewing at the beginning of the batch. Companies that turned out to be slightly scammy. Some of the founders that were in those companies pivoted and became successful.
Picking on Pear AI (which I don't know anything about) as evidence of YC failing is silly. It's also a super early stage company and you really have no idea what they will do.
The test of YC to me is, can they keep attracting and picking some of the best founders (which you can't really tell for years). And providing the inspiring, warm, but pushy environment that best sets up founders for success, and in turn keeps them coming to YC. I'd apply to YC again in a heartbeat if I were ever starting another company.
It takes time to build a company to significant revenue. I'd be curious to rule that out as the primary explanation before reading too much else into this.
A good senior engineer has a ton in their head after 6+ months in a codebase. You can spend a lot of time trying to equip Claude Code with the equivalent in the form of CLAUDE.MD, references to docs, etc., but it's a lot of work, and it's not clear that the agents even use it well (yet).