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I admit that what follows is tangential to the post. However, as a freelance developer who, of late, works for startups, I've been mulling this a great deal.

I admit that what follows is tangential to the post. However, as a freelance developer who, of late, works for startups, I've been mulling this a great deal. Startups are acquiring money from somewhere. While VCs may be raising less funds and funding fewer startups, the demand for technical hires is soaring! In my particular areas of expertise, Ruby and Ruby on Rails, demand seems, frankly insane. So what's going on? If there's less VC money in play, unless people are exiting the software development market faster than new people are coming in, one would expect that we software developers would be suffering employment issues like the rest of the US. And yet I know extremely few Ruby on Rails developers who are wanting for work. Is it perhaps that my perspective is limited? I know a fairly large group of developers. The only ones who are looking for working (and we're always looking for that next gig) are freelancers. Is this the Google/Facebook "brain-drain" effect at work? That these megaliths have hired so many of the talented people that, despite reduced VC funding, startups are still suffering hiring issues? What gives?

bretpiatt 16y ago
Before the majority of the investment went towards capital expenses to build infrastructure. Now most of the invested capital goes towards salaries for the development of the idea. If the idea is successful then cloud computing is utilized to grow the business. If sufficient scale is reached then you'll see companies take large late rounds to build their own data centers and infrastructure out (such as Zynga and Facebook). So while total invested dollars are down, the cost to invest is down significantly and "big money" doesn't need to be spent until you know you have a success. VCs are poised to make much better returns over the next decade if they manage their funds correctly.
- sleight42 16y ago
  Ah, thanks. I hadn't considered just how much cheaper cloud computing is making starting a business -- even though I've actually experienced same myself. Excellent points!
smokey221 16y ago
We need to remember that Ruby on Rails is still a relatively obscure technology in the grand scheme of things. The average CS grad straight out of college does not know RoR. Most of them are looking for jobs with Java, PHP or some other language they learned in school. The demand for Ruby on Rails developers is greater than the supply. I don't think it has anything to do with VC funding.

bretpiatt 16y ago

Before the majority of the investment went towards capital expenses to build infrastructure. Now most of the invested capital goes towards salaries for the development of the idea. If the idea is successful then cloud computing is utilized to grow the business. If sufficient scale is reached then you'll see companies take large late rounds to build their own data centers and infrastructure out (such as Zynga and Facebook). So while total invested dollars are down, the cost to invest is down significantly and "big money" doesn't need to be spent until you know you have a success. VCs are poised to make much better returns over the next decade if they manage their funds correctly.

sleight42 16y ago
Ah, thanks. I hadn't considered just how much cheaper cloud computing is making starting a business -- even though I've actually experienced same myself. Excellent points!

smokey221 16y ago

We need to remember that Ruby on Rails is still a relatively obscure technology in the grand scheme of things. The average CS grad straight out of college does not know RoR. Most of them are looking for jobs with Java, PHP or some other language they learned in school. The demand for Ruby on Rails developers is greater than the supply. I don't think it has anything to do with VC funding.