2020 is sucks and this will not end yet soon

I still remember they day I scroll my timeline in twitter and read about “mysterious pneumonia” in China [at that time, its not clearly stated where is the location, just somewhere in China], it’s in the middle to end of December, and just like you know, things are going spiral downward fast after that.


I follow Covid-19 case very closely since I read it the first time in twitter, I regularly used several keywords everyday such as “pneumonia” in the beginning, and later I added several more such as “virus”, “corona”, “Wuhan” and many more. When I see the pattern of this news, I know shit are real. So when WHO confirmed there’s outbreak in Wuhan in Dec 31st, I was ready to dig more and start making preparation.

I’m a big fans of zombie story, either movies [Resident Evil, Kingdom, World War Z, Alive, Train to Busan, The Walking Dead], comics or games. One thing that I always remember from every zombie story is about the beginning of outbreak. The pattern is almost same, why the world always end up apocalypses in all zombie story is because people always deny the truth until it show in front their eyes. We’re trained the whole life to be realistic, we can’t absorb something too good, or too bad, until we experience this first hand. It’s not totally our fault, we just build this way.

You cannot save the worlds [or your country] despite on how hard you scream, but you can always save yourself. I still remember, in the middle of January, I start cash out all of my investment in stocks and mutual funds, and start building defensive portfolio [cash, bitcoin and money market mutual funds]. It’s so easy to look back and see “wow I did good” this time, but at that time, its not that easy. The market in Q4 was good, the stock market still looking uptrend in January. I made a gamble of my life and it turns out good.

And now I’m seeing another pattern, which we will not go normal again until 2–3 years. The reason is because the best case for vaccine is still in the next 6 months, the worst case we may never find it and need to live together forever. Even if we found vaccine, we may need years to vaccine 70% of population, we may even need longer time to rebuild the economy. We still have probability this virus will mutate to be more virulent [more likely it will go the opposite, more benign]. Despite whatever optimism your country leader said to you, it won’t happen.


And now, lets be ready for this second prophecy, things are not getting back to normal in the next 2–3 years. Before we go to solution, we need to define the assumption first:

  1. If you work for government, your job most likely will be safe. You may get salary cut off up to 50%, but it’s very unlikely you will lose your job
  2. If you work on direct impact business industry, you will sooner or later lose your job, it’s hard pill to swallow. Industry like travel, hotel, dine-in [bar and restaurant], gig [concert] and many others. Some of it will survive, they will find a way to innovate, and maybe even come stronger than before. But it will be outliers, don’t bet your life on outliers.
  3. Most of the tech startup may end up bankrupt or get merge and acquired by bigger company. Most of it are startup who still don’t find market fit and consistently burn a lot of money before pandemic. If they’re rely their lifeline to VC investment, they’ll die, or they will stay in survival mode [live in bare minimum condition, with lot of lay off and budget efficiency] as long as possible. If you’re startup already can make profit and not in direct impact industry, you’ll be fine. You might get salary cut since the business pie are getting smaller, but that’s okay.
  4. Some tech startup who already in series C and above, backed by big investor and slowly but sure are getting market fit will survive. The fallacy of “too big too fail” will play role here. There might be layoff and bonus cut [salary cut is rare cases], but most of it will survive.

To make it simple, just put this assumption. You either gonna get salary pay cut soon, or you gonna lose your job soon, while it may be hard for you to get another job. Even now you’re okay or you’re not impacted, the storm will get to you anyway. And the basic underline is, despite whatever happen, you need to survive another 2–3 years.

Now lets talk on what matters. We need to define what we can control and not. We can control our income, expense, investment portfolio and insurance. But we can’t control the global economy, government policies and our company performance. So let’s breakdown on things we can control:

  1. Manage your expense, this shit are real and we’re not in the worst yet. Cut your unnecessary expense and start saving.
  2. Re-structured your investment portfolio, start building defensive portfolio and be liquid as possible. You can start to invest in yourself as well, learn new things, join new course etc, it can be your safety net if you lose your jobs.
  3. Buy health insurance to your family member, ensure it covers covid-19 treatment.
  4. And the last and most important things, manage your leverage!

What is leverage and how we can control it?

Imagine you have income 20 million, to buy a car, you take debt from a bank and paid 4 million every month for the next 5 years. This 4 million is your leverage, contribute to 20% of your income. You take your future cash flow to this time and paid it with interest.

Nah, the problems lied here, in good times, when economy was ok, the risk looks so small, sometimes people can take leverage up to 50% of their income, or even more! sounds crazy right? yes, this is real case and it’s happen. Now we back to question, why people take this risky move?

  1. They believe their income will increase in the future, either by internal promotion or move to another company. Even at the worst case, they can get salary adjustment every year [3%-10% depends on performance, or even more].
  2. They believe the price of their assets will increase [for land or house] or decline in normal speed [car], and their assets are liquid, they can sell fast when they need money.
  3. They believe they won’t lose their job, even they lose it, they can find another job, with better or similar pay, as soon as needed.

All of this assumption now are going opposite. Income will decrease or lost, asset price will decline and not liquid and if we lost job know, we might not get it soon. And there is one thing that make things worst, tech startup bubble!

Why tech startup employee are facing more problems in this time?

Recently in the past 5 years, we found new trend. People moves to tech startup industry and get much more in salary and bonus, 2x increase are pretty sounds normal, I even witness 3x or more increase when people moves to this industry. Lets get back a step back once again, why company in this industry pay so much compare to others?


One of the reason is this industry have all the money in the worlds, the opportunity is huge, a lot of company try to be the next Google, Apple, Amazon or Tesla. Money are flowing from Venture Capital, investment firm and angel investor.

VC money come with cost, which thats something we called growth at all cost! growth here means user base growth, not revenue. This user base will be used as valuation basis for the next funding round. One funding round can last 10 years at maximum for LP [Limited Partner, rich people or institution who put money in VC], that’s why VC prefer to exit in the 5–6 years [so they still have room to maneuver if things go wrong]. Statistically, from 100 series A investment, only 1 end up well, either IPO or acquired with good valuation from bigger company. So do the math why they expect their investment to grow > 10x in a very short time. It’s a very high risk and very high return business.

If you see from tech startup perspective, things are more complicated. Startup series C and below usually only have runway [maximum cash they have before another fund round] for one year, some good and prudent are having 2 years. Since the time is short, they need to find a really good employee to achieve their moon shoot target, and good employee are costly. This risk tech startup take because the value opportunity is huge in the future, top 5 US company are now all tech industry [Amazon, Facebook, Microsoft, Alphabet, Apple], this is only can be achieved because tech industry have opportunity for huge scale of scale-ability level, you can see this in their financial report, all of them have net revenue% up to 70% — only Amazon have 30%ish since they combine physicals and digital quite much.

Now, think from the good employee perspective, some new startup are try to hijack you from your old good company when you have a good and steady career for years. You know this is new tech startup, the products is not product / market fit [people come back to use your products], even some are, they may not business fit[people not willing to pay at your price, not yet profitable]. So why you need to sacrifice your career for some new startup? big lump some of money it’s always the answer, it compensate the career risk you take.

The second reason, some role are still very new, digital marketing, product manager, data analyst, data science engineer, machine learning engineer, AI researcher, system architecture etc. Startup need to compete in the job market with other startup all over the country [or the world], so they burn the money for good and prospective employee, since they don’t have time to nurture fresh graduate.

After all this year, we start taking things for granted. Because everything was good, business are keep growing since the money flow never stops, we see a lot of innovation are coming and changes people life to be better [or worst?]. We start saying “they pay us more because we’re more smarter than people outside this industry, we made impact”. Wrong! or at least, it may partially true. A lot of people out of this industry also smart, or maybe even smarter than us. So this argument are depends on any individual. You maybe smarter, or you maybe are not. But the real reason why they pay us more is because this risk. We’re working in startup who’s most of them are not making profit yet, they’re solely rely on the money of investor to survive. We’re here, and get a lot of money, compare to people outside of this industry, because this is risky. The industry was risky, the company was risky. the career path we make was risky as well. And now the risk start showing his true face, in the face of pandemic, we even see the series C startup go bankrupt [Sorabel — Sales Stock are one of the case in Indonesia] and a lot of small startup as well, and it only 7 months after pandemic start!


So imagine this, people take for granted the extra money we get from this industry, we take leverage to live our lavish life [buy car, apartment, credit card]. And now, suddenly all of this are change 180 degree, your source of income are under threat [or already?], but we can’t stop our leverage. If this not scare the hell out of you, I don’t know what will…

Things are already happen know, we can’t turn back time. For you who still have time, please be ready and prepare for the worst. Remember, we only have to survive, and survive only. Hope all of us who work in this industry can learn and be a better and responsible persons in the future.



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