Startups display many properties of a full blown economy sped up many by many times. You could study many phenomena much faster by watching a fast growing startup from the inside. In governance, how control structures change from flat democratic organization to hierarchical. Stagnation as the number of people increases and efficiency decreases.
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Running a Startup During a Recession
Startups are a microcosm of the economy and we can observe that things are changing quickly towards a recession footing. The effects of inflation on valuations are readily apparent, but we also see that things were too good to be true and investors and late stage companies exploited it.
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Probability of a Recession (2023 Q1)
A Wall Street Journal poll of economists found that the probability of a recession in the next 12 months is 61%, down slightly from 63% from October 2022 and significantly higher than the 2022 Q3 roundup.
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Applications for New Businesses Are up 20 Percent
In 2021, 5.4 million applications for new businesses were filed. This rise in entrepreneurial activity coincides with the Great Resignation and the COVID-19 global pandemic where people are re-evaluating their relationship with work.
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Complacency Comes from Mistakenly Believing Success Is Assured
Companies on a clear upward trajectory can still fail not from external threats, but from complacency of the people running and operating the company. This happens when they mistakenly believe success is assured, but empirically this is not true (plenty of examples of industry darlings getting big and going under).