> 80% of economic activity is unproductive

The parent comment is talking about 80% of companies struggling to raise series A, not 80% of the entire economy or even the entire startup ecosystem.

This is a good point:

global economy>us economy>tech economy>vc backed co's>series A needed co's>series A not avails to co's etc.

And given that proviso:

1. Most of the labor is already in funded startups, because funded startups can afford to hire more labor.

2. Of the 80% of startups that can't get Series A, the founders and early employees can remain in the startup ecosystem. Some of them will eventually hit upon something successful as well.

3. If not, large companies and successful startups never have as many engineers as they need anyway because there is a shortage of engineers. It is not clear whether the pool of engineers stuck in unpromising, unfunded startups is larger than this shortage.

I wouldn't say unproductive. Some of these companies will continue without further funding. A lot of the ones that don't will have broken new ground, educated themselves further for another go or are ending up at a big company either just as an aquihire or actually selling assets to the company.

> either just as an aquihire

I think if there is an 80% death rate, then nobody has to worry about aquihire deals: Companies will simply go back to normal hiring.

I don't think so. Of the companies that fail at series a, a small portion of them will be most desirable for big companies and will get aquihired. There will be plenty of super talented teams with great tech that don't get the product market fit or the market turns out to be too small or crowded to get a series a.

Some of those 80% might be successful businesses and even exits that make the founders rich in the $20M-$50M range, they just don't have enough traction to be venture-scale startups.

Or let's put it this way: 80% of startups will not reach $100M in revenue. Does that sound so bad?