The hidden risk in the startup economy

The startup economy of today is eerily similar to the banking sector of 2007 right before the financial crisis. In testimony to Congress about the causes of that crisis, Ben Bernanke said: “The propensity for excessive risk-taking by  interconnected firms must be greatly reduced.” We’re seeing that kind of dangerous interconnectedness again  this time in the startup sector. Slack, WeWork, even giants like Amazon are seeking to make more money faster off of other startups that are rich with cash and known for profligate spending. Startups are encouraged to go after other startups as customers, thanks to a cocktail of strategies like Lean and land-and-expand, making for an interconnected ecosystem where much of the risk is hidden.