Big tech has become the new oil and gas industry. Boom and bust cycles that leave a trail of destroyed companies in their wake, eye-popping salaries for junior workers without any experience, long hours. With two big differences: oil is a finite resource. Software is inexhaustible. You can always make more of it. And you can work remotely.
It's not though. The big money in SW is in hyper growth industries that get a cut every time consumers earn/spend money on your platform or click on ads. The more consumers you onboard and the more they make/spend, the more you can make.
I have developed SW for cars, trains, elevators and security access systems and those gigs pay significantly less than those web gigs targeting consumers, despite being indispensable to modern society, since they're sunk cost products and vendors don't get a cut every time someone takes the elevator, enters the building, starts their car or takes the train.
Flipside is this means as a laborer you are competing potentially with laborers over the entire planet for jobs instead of people physically in key locations.
You could also afford a 2 bedroom on that salary. But you aren't in "poverty" if you can't afford an extra room. You would have lots of extra money to save or eat out in this scenario.
I think bay area is formally about 115k for 4 people to be low-income... So more like 30k/person. More relevant to HN crowds, if that didn't work, Stanford & Berkeley PhD students wouldn't exist. I took a founders paycut for years to be at around 50-60k and still saved money while having fun eating out etc.
We pay our local team multiples of that because that's the local market. However, it's clear the local market is driven by monopoly positions of Google, Facebook, Apple, etc., and the last 5-10 years of crazy capital markets + crypto wave for smaller co's, not COL.
Edit: And apparently by gov standards, local gov doesn't think 25% of SF folks qualify to live there with these kinds of numbers... and yet they do. The standard sets individuals at 80k. That'd be amazing for a lot of people, as it's the diff between housemates / your own 1-2br.
It’s called a recession. This party isn’t over, these people who have been experiencing FOMO are just hoping for that. Tech will continue to be extremely profitable and innovating industries. That’s not going anywhere. These doom and gloom pieces are comical cringe.
For those who didn't experience the dot com bubble: how long did it last? I remember that I was studying computer science in university back in 2005, and everyone agreed in that time that that was a career with future. I knew some software engineers back then who were making good money and jobs (although not as much demanded as nowadays) weren't scarce precisely.
Enrollment probably lagged recovery a bit. Without studying graphs and so forth, I'd say things were getting back to a fairly even keel by 2004 or so in general.
>learn to code MOOCs
The VC phase of MOOCs and any great hopes for rethinking education access already pretty much flamed out. What's left is an often good and inexpensive educational resource but it's not much of a business anyway for the most part.
I graduated ‘07. Computer science was seen as a reasonable, but sub-optimal, career path in terms of money and job opportunities. If you were optimizing for career you did pre-med. The CS classes were small (30 students) and consisted of people who were passionate about the field irrespective of making less money than doctors or other engineers.
Today the same school has huge classes (300 students) and many don’t have much talent or passion for the subject, but have been told that “people who want good jobs do CS.” It’s true new pre-med, in other words.
I graduated from highschool at this time and I checked the Bureau of Labor Statistics in order to help pick my degree. Computer disciplines and health disciplines dominated the top 10 most projected growth and top salaries at the time.
If I recall correctly, "Computer Systems Analyst" was one on the top of the computer-related jobs.
CSA was a high paying well respected job as I was growing up in the 80s and 90s.When I graduated and for a few years after it was still at the top, though software jobs had been moving away from CSAs, so you ended up with a bunch of people who couldn't get decent paying jobs in the field.
Back then the meme was L2Web Design.
It quickly overtook CSA and became the hot new fad, but the bubble burst fairly quickly, and now again you have people out of work and all competing for the same few jobs.
I watched so mamy web designers, real estate agents etc scramble to find some kind of work they could do that would pay close to what they'd been making.
In the end, most made career changes.
Here we are again and it's worse. Companies infantilzed their workforce, got them to expect pay of probably 10x what they are actually worth, and now they may have to join the 'real' workforce and get an actual job.
The movie Fun With Dick and Jane explores this very well even though it's technically a comedy, it holds so much truth its scary.
It was pretty bad until ‘03, or so, but there were profitable businesses that people flocked to. I worked for a small ISP at the time (the entire bubble/post bubble era) and we bought a lot of equipment and sometimes customer bases off of failed, venture-backed providers.
As an aside, I remember two instances that made me think this is a bubble:
1) We were having some HVAC work done at our data center, and one of the contractors kept asking if I had any “hot” stock tips and shared some he had heard previously about some idiotic .com startup (I don’t remember the exact company, but it was near pets.com levels of stupid.)
2) As a small company that didn’t pay particularly well, we went through a bunch of sales reps, and usually hired people with no telecom/ISP sales experience. One day, we hired two of the best reps from Worldcom. I asked them why they came to work for us and they said they felt like Worldcom was going to implode due to all the fraud going on: sales reps switching their customers between the MCI and Worldcom billing systems every month (which, apparently would trigger a new commission payment) and a coworker of theirs who just suddenly started getting paid $20k per month in commissions, despite not having sold anything. They said the guy tried for months to do the right thing and return the money, but after being told again and again the payments were correct said screw it, bought a sports car and started dating a stripper.
My biggest investing regret is not trading on these realizations — not Worldcom specifically, but the market as a whole. It was like a lightbulb went off about how crazy the whole industry was about six months before the bottom fell out, but I didn’t act on that knowledge at all.
Salaries have been relatively stagnant for most software developers since the late 1990’s boom. Kids straight out of school were then getting 80–100k to start in mid market cities like Atlanta and Raleigh/Durham where you could buy a nice house for $160k. Many Silicon Valley salaries were in the mid 100k range and you could buy a home for 400-500k.
Many other jobs, on the other hand, have seen significant boosts in salary and many business careers have much higher top end potential than software development careers. My main point is that I disagree with the general opinion that software development is a slam dunk for people starting new careers.
I am encouraging my children to focus on their reading, writing and language skills over tech skills for their future, as they can always easily get into tech with the multitude of high level languages and mostly CRUD / web development that dominates the industry now. True CS skills are rarely needed.
Mmmm... getting flashbacks working on Java (generics just came out!) BEA WebLogic projects in Eclipse on Windows XP, configuring cruise control for our ant builds on some ancient Dell desktop in a closet.
Honestly, some things have changed, while others have stayed very similar.
Maybe, but 9/11 had profound consequences which I don't think we fully appreciate yet. For example, you can trace some of Putin's thinking (apparently) to the US response to 9/11 in terms of security and the hypocrisy of the West.
Contrast the effect of the Spanish Flu: it's just...not really considered important compared to what came a few years after. Covid may well be similar. We will see I suppose.
No. Tech was not profitable back then. The only companies running at a profit then were the earlier generation of tech - oracle, adobe, Microsoft. Etc.
I have no idea what is going to happen (like everyone else), what I think is going to happen is that we'll get some more innovation and cool companies/products.
As layoffs or attrition happen, a subset of those people are going to do something else, they are going to innovate and compete with the places they left (since they carry good working knowledge of problems and solutions). Companies started from ~2009-2014 did very, very well recently.
That's the optimist in me, the pessimist says it is over forever and everything is screwed always. Probably some middle ground somewhere...
It's 'comical' to think that an industry that sprouted up in the last 20 years will continue to be expansive and profitable ad nauseaum.
The biggest funds raised are now in Crypto - a segment that so far has created nothing useful at all. Still giant experiments buyoed by Ponzi/MLM sentiment. There is no value creation.
I think it still makes a lot of sense because Fintech/global currency represents 'real opportunity' and we haven't really seen it yet.
But money as the root of all power, is inherently the type of thing to be regulated for good reason. Regulations cause ugly bureaucracy and regulatory capture - but - really, regulation is necessary. And that doesn't work well with Silicon Valley types.
AI is going to be a big deal, but will be hard to profit from directly.
I don't think the future is as bright for the Valley as it was in the past. I see an inflection point of lesser returns in the future.
I think you are selecting a small subset of tech for your argument.
For example:
- Apple is the one driving stronger privacy, and Apple is tech.
- Microsoft would actually get on my good side if they stopped with their telemetry and ads fuckery on Windows. If they lost all of their ad revenue today, they would still be producing cloud products, Windows, Office, Xboxes, etc.
- The reason why Netflix has lost momentum is because several other competitors built their own streaming platforms. All tech stacks, driven by cloud platforms.
- Amazon will still have their cloud platform, and their store, and their shop platform. Tougher regulation won’t remove Amazon’s edge on cloud technologies, warehouses, and logistics.
- Traditional tech companies, such as Oracle, IBM, HP, and similars won’t be affected at all by tightening of privacy.
- Heck, even Salesforce has its edge on corporate customers and B2B, and wouldn’t feel that much of a hit.
Tech is much, much more than Meta and Google. Google can still push ads based on search queries and webpage content anyway, without violating privacy.
So your argument is essentially about Meta. And that’s true, Meta is under risk. And that’s a good thing. They have created a lot of damage and need to correct their products.
Every tech company you listed has some kind of ad-based revenue. They're all data vacuums, and a lot of their current and especially future value is tied to how much user data they have access to and how they can monetize it further.
“some kind of ad-based revenue” carrying a lot of water in that sentence. Apple, for example, have an ads business, but it’s a drop in the ocean compared to iPhone, or hell even iCloud.
I’ll take oil over their largely useless data. A large percentage of the ad data is tailored toward the same things like “what types of ads are people forced to click on?”.
How do you all feel about you and your employer making it out unscathed?
In my case, I'm 2 years into being an indispensable engineer at a publicly traded midsized company. Unless they decide to shut down our business unit, I should be in good shape.
During one of my internships, a guy talked about his career and specifically one job he had in the IT department of a big French TV channel. His team had a lot of turnover to the point that only him knew everything about the projects and how to make them work. In this context, he asked his boss for a raise and he said: "Cemeteries are filled with indispensable people".
This is the truth OP is burying their head in the sand to avoid.
Everyone is indispensable until they aren't.
Every business is profitable until they aren't.
And these days, with the insane expenses and revolving credit businesses all rely on, damn near any business can end up insolvent in the blink of an eye.
I'm currently working at a FAANG as a vendor and I'm about to apply internally. I'm already seeing a decrease in job postings which mean I'll potentially have to compete against more people but I'm lucky to have several referrals lined up which will help. If it doesn't work, I'll apply elsewhere but in any cases I'll have to surf this wave as a new hire somewhere.
On the other end, I'm lucky to live in a country (Canada) where a good unemployment insurance program exist so if it ever has to come to that, not too bad I guess.
At least I won't have any visa issues as I applied for the citizenship. I can't wait!
I went through 2009 as a young programmer. The whole rest of my life has been built around surviving the next recession. I started interviewing when I saw home and rent prices surge half way above average salaries. A couple things I learned from the last one:
- Government adjacent jobs that are needed are good, especially if part of a requirement contract with a publicly traded company
- Geography ultimately determines impact; recessions move like earthquakes. Cities can bounce back quick.
- Cash is king, but be ready to switch back to stock based comp
- You won't get a home deal right away, it takes a bit for people to give up and sell their home. Bankruptcy takes longer.
- Every 5% of unemployment results in 40k suicides, be nice to folks. Everyone's hurting.
The past six months, I’ve been getting recruiter spam every week from companies that sound increasingly like outright scams. Low base pay, but you’re compensated mostly in their wildly overvalued scrip… I mean crypto. Those emails have (thankfully) stopped… I imagine their crypto platforms imploded. I see this correction as dollars getting directed towards things people actually need.
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[ 2.0 ms ] story [ 123 ms ] threadI have developed SW for cars, trains, elevators and security access systems and those gigs pay significantly less than those web gigs targeting consumers, despite being indispensable to modern society, since they're sunk cost products and vendors don't get a cut every time someone takes the elevator, enters the building, starts their car or takes the train.
We pay our local team multiples of that because that's the local market. However, it's clear the local market is driven by monopoly positions of Google, Facebook, Apple, etc., and the last 5-10 years of crazy capital markets + crypto wave for smaller co's, not COL.
Edit: And apparently by gov standards, local gov doesn't think 25% of SF folks qualify to live there with these kinds of numbers... and yet they do. The standard sets individuals at 80k. That'd be amazing for a lot of people, as it's the diff between housemates / your own 1-2br.
I wonder if that's what people in 1999 though?
Edit: there's probably some rough times coming for the glut of coding boot camps and learn to code MOOCs.
>learn to code MOOCs
The VC phase of MOOCs and any great hopes for rethinking education access already pretty much flamed out. What's left is an often good and inexpensive educational resource but it's not much of a business anyway for the most part.
Today the same school has huge classes (300 students) and many don’t have much talent or passion for the subject, but have been told that “people who want good jobs do CS.” It’s true new pre-med, in other words.
If I recall correctly, "Computer Systems Analyst" was one on the top of the computer-related jobs.
Back then the meme was L2Web Design.
It quickly overtook CSA and became the hot new fad, but the bubble burst fairly quickly, and now again you have people out of work and all competing for the same few jobs.
I watched so mamy web designers, real estate agents etc scramble to find some kind of work they could do that would pay close to what they'd been making.
In the end, most made career changes.
Here we are again and it's worse. Companies infantilzed their workforce, got them to expect pay of probably 10x what they are actually worth, and now they may have to join the 'real' workforce and get an actual job.
The movie Fun With Dick and Jane explores this very well even though it's technically a comedy, it holds so much truth its scary.
As an aside, I remember two instances that made me think this is a bubble:
1) We were having some HVAC work done at our data center, and one of the contractors kept asking if I had any “hot” stock tips and shared some he had heard previously about some idiotic .com startup (I don’t remember the exact company, but it was near pets.com levels of stupid.)
2) As a small company that didn’t pay particularly well, we went through a bunch of sales reps, and usually hired people with no telecom/ISP sales experience. One day, we hired two of the best reps from Worldcom. I asked them why they came to work for us and they said they felt like Worldcom was going to implode due to all the fraud going on: sales reps switching their customers between the MCI and Worldcom billing systems every month (which, apparently would trigger a new commission payment) and a coworker of theirs who just suddenly started getting paid $20k per month in commissions, despite not having sold anything. They said the guy tried for months to do the right thing and return the money, but after being told again and again the payments were correct said screw it, bought a sports car and started dating a stripper.
My biggest investing regret is not trading on these realizations — not Worldcom specifically, but the market as a whole. It was like a lightbulb went off about how crazy the whole industry was about six months before the bottom fell out, but I didn’t act on that knowledge at all.
Many other jobs, on the other hand, have seen significant boosts in salary and many business careers have much higher top end potential than software development careers. My main point is that I disagree with the general opinion that software development is a slam dunk for people starting new careers.
I am encouraging my children to focus on their reading, writing and language skills over tech skills for their future, as they can always easily get into tech with the multitude of high level languages and mostly CRUD / web development that dominates the industry now. True CS skills are rarely needed.
What career paths fall in this category in your opinion?
Honestly, some things have changed, while others have stayed very similar.
Contrast the effect of the Spanish Flu: it's just...not really considered important compared to what came a few years after. Covid may well be similar. We will see I suppose.
Now it's programmers who are overpaid and in demand flavor of the day.
BSG- 'all this has happened before, and all this will happen again'
But here’s a reference. Notice the tech companies.
https://money.cnn.com/magazines/fortune/fortune500_archive/f...
As layoffs or attrition happen, a subset of those people are going to do something else, they are going to innovate and compete with the places they left (since they carry good working knowledge of problems and solutions). Companies started from ~2009-2014 did very, very well recently.
That's the optimist in me, the pessimist says it is over forever and everything is screwed always. Probably some middle ground somewhere...
It's 'comical' to think that an industry that sprouted up in the last 20 years will continue to be expansive and profitable ad nauseaum.
The biggest funds raised are now in Crypto - a segment that so far has created nothing useful at all. Still giant experiments buyoed by Ponzi/MLM sentiment. There is no value creation.
I think it still makes a lot of sense because Fintech/global currency represents 'real opportunity' and we haven't really seen it yet.
But money as the root of all power, is inherently the type of thing to be regulated for good reason. Regulations cause ugly bureaucracy and regulatory capture - but - really, regulation is necessary. And that doesn't work well with Silicon Valley types.
AI is going to be a big deal, but will be hard to profit from directly.
I don't think the future is as bright for the Valley as it was in the past. I see an inflection point of lesser returns in the future.
For example: - Apple is the one driving stronger privacy, and Apple is tech.
- Microsoft would actually get on my good side if they stopped with their telemetry and ads fuckery on Windows. If they lost all of their ad revenue today, they would still be producing cloud products, Windows, Office, Xboxes, etc.
- The reason why Netflix has lost momentum is because several other competitors built their own streaming platforms. All tech stacks, driven by cloud platforms.
- Amazon will still have their cloud platform, and their store, and their shop platform. Tougher regulation won’t remove Amazon’s edge on cloud technologies, warehouses, and logistics.
- Traditional tech companies, such as Oracle, IBM, HP, and similars won’t be affected at all by tightening of privacy.
- Heck, even Salesforce has its edge on corporate customers and B2B, and wouldn’t feel that much of a hit.
Tech is much, much more than Meta and Google. Google can still push ads based on search queries and webpage content anyway, without violating privacy.
So your argument is essentially about Meta. And that’s true, Meta is under risk. And that’s a good thing. They have created a lot of damage and need to correct their products.
You ever hear the phrase data is the new oil?
An end to absurdly cheap money and all the market distortions it brings will be a good thing in the long run.
In my case, I'm 2 years into being an indispensable engineer at a publicly traded midsized company. Unless they decide to shut down our business unit, I should be in good shape.
Everyone is indispensable until they aren't.
Every business is profitable until they aren't.
And these days, with the insane expenses and revolving credit businesses all rely on, damn near any business can end up insolvent in the blink of an eye.
I'm currently working at a FAANG as a vendor and I'm about to apply internally. I'm already seeing a decrease in job postings which mean I'll potentially have to compete against more people but I'm lucky to have several referrals lined up which will help. If it doesn't work, I'll apply elsewhere but in any cases I'll have to surf this wave as a new hire somewhere.
On the other end, I'm lucky to live in a country (Canada) where a good unemployment insurance program exist so if it ever has to come to that, not too bad I guess.
At least I won't have any visa issues as I applied for the citizenship. I can't wait!
- Government adjacent jobs that are needed are good, especially if part of a requirement contract with a publicly traded company
- Geography ultimately determines impact; recessions move like earthquakes. Cities can bounce back quick.
- Cash is king, but be ready to switch back to stock based comp
- You won't get a home deal right away, it takes a bit for people to give up and sell their home. Bankruptcy takes longer.
- Every 5% of unemployment results in 40k suicides, be nice to folks. Everyone's hurting.
Is this the type of advice people are getting from VC’s? The precision of the statement is overwhelming. Of course, it is a CNN article.