5 ms·

I went through it, and started a company soon after it crashed and then a couple more during the downturn. Ironically a lot of money can be made in downturns i

I went through it, and started a company soon after it crashed and then a couple more during the downturn. Ironically a lot of money can be made in downturns if you know where to look and how to approach it. What I saw and experienced was enterprise devs basically just kept doing what they did. Startup devs that could went into (or back in some cases) to enterprises. Enterprises used it as an opportunity to snag up good devs at a bit of a discount in many cases. To be fair, true developers were not really negatively affected at least not more so than other professions. One nice side affect I thought was that the crash cleared out most of the people claiming they were developers but had no real experience or talent. Most of my friends and people I worked with were fine and at worst might have gone back to an enterprise gig or in many cases were already there and didn't really miss a beat. IMHO, if we have a crash this time (versus just a softening market), it will be similar as the need for quality software devs won't disappear. It will take longer to find a position in general and there won't be as much money floating around but decent developers are not going to have a hard time putting food on the table or finding work. Remote work will suffer, pay will suffer and VC dollars will drop dramatically, but the average developer will be fine.

henrikschroder 7y ago
> To be fair, true developers were not really negatively affected at least not more so than other professions. That was my experience as well, all the weird roles got cut in companies, all the crazy extras removed, but the companies that had working business models kept on trucking and hiring competent developers, and competent developers at unsustainable businesses had no trouble finding new work. Because at the end of the day, the dotcom crash was about the crazy financial expectations of internet-enabled companies, not a rejection of the internet itself.
- H8crilA 7y ago
  Austrian school of economics believes that occasional recessions are useful because they destroy bad ideas (not exclusively bad ideas, but many bad ideas) and therefore free up resources for new ideas. Some of which will be good, some bad. For a huge example: Madoff was only discovered because of the 2008 crisis. SEC had plenty of evidence against him for years before that, including the fact he did not actually trade! The guy didn't even trade securities and posted consistent double digits returns! The SEC did not investigate. Only when clients started asking for funds has the scheme collapsed.
  - zxcvbn4038 7y ago
    I that is the SEC for you. At one if the firms I worked at we had an algorithmic trader who did hundreds of thousands of naked shorts (selling short a stock he didn’t own). He always canceled the order, bought shares, or swapped internally but was still a no-no, and he would do this thousands of times a day. He got caught and we put together a report of his activity that required a hand truck to deliver. The SEC took one look at that and made the firm promise to increase their internal oversight and that was it. They didn’t even open any of the boxes.
    - H8crilA 7y ago
      Naked shorts are still legal if you're a market maker, for example. They're not entirely bad, it's sort of like credit - it's only bad when you fail to deliver. If you do deliver then it's great as it lubricates the system. See "Regulation SHO": https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm Not sure if this was the case at your company, i.e. if they had the permission to do so. If not then I don't know why they didn't prosecute that trader. Most organizations cannot do naked shorts and have to pre-borrow securities.
  - deleted 7y ago
    [deleted]
  - JohnBooty 7y ago
    occasional recessions are useful because they destroy bad ideas (not exclusively bad ideas, but many bad ideas) and therefore free up resources for new ideas. Some of which will be good, some bad. I feel this was absolutely true for the world of internet applications. The stuff built in the early dot-com era was typically garbage from a technical standpoint. Heaps and heaps and heaps of spaghetti code written in PHP, Perl, and ASP Classic. You could theoretically write maintainable code in those technologies if you were truly dedicated but this was decidedly not the norm. Think of literally any basic best practice for writing either the server or client portions of a web application that we might follow in 2019. In, say, 1997 those best practices hadn't been invented yet and even if you traveled back to 1997 in a time machine you couldn't implement some of them since the technology hadn't been invented yet. From a technical perspective, roughly 2002-2006 was when things started to get really good from a technical standpoint. - A lot of untalented folks (people calling themselves "developers" but with no real coding ability) were filtered out of the industry. - A lot of lessons had been learned about how to build this stuff. - More and more people were getting high-speed internet access. - The use of AJAX to build responsive client-side applications became a thing, thanks largely to... - ...Google, who released two absolutely world-shaking web applications in Gmail and Google Maps. These became something of a guiding light in a number of ways. Both from a technical showcase of what could be accomplished with web standards, and a design perspective... it showed a lot of pointy-haired bosses that what people wanted was minimal design and maximum usefulness, not a flashy multimedia experience. - Other "Web 2.0" tech like RSS matured and enabled LOTS of cool demos (sadly we've moved away from this...) - Pressure from Firefox forced Microsoft to finally embrace some more web standards and we edged away from the brink of a Microsoft-ruled internet
- davismwfl 7y ago
  One thing I will add too, is if you do go back to the enterprise or at least out of tech, make sure you don't allow yourself to stagnate or miss the upswing. I saw that happen to friends who got salary stuck making half what they would had they joined the broader market during the recovery. Enterprises can rescue you in some instances, but they are not usually great for salary growth outside of a few key places and people. So I'd only caution people to pay close attention the whole time so you can know when to jump back into the market and to capitalize on that next salary increase.
deleted 7y ago
[deleted]
shinteao 7y ago
>Ironically a lot of money can be made in downturns if you know where to look and how to approach it. Can you expand on this? I'm honestly curious about what machinations begin once a company dies or the market sinks.
- jen_h 7y ago
  Start a new company. Lots of talent available and investors look for heads-down new things. Classic Namazu stuff.
  - mlyle 7y ago
    Capital's harder to get, but personnel and real estate is cheaper if you get funded. And then while you develop, hopefully the market recovers, and there's cash available for subsequent rounds and with customers to buy your stuff.
    - jjeaff 7y ago
      And it really depends on who your customers are. The amount of cash available during a recession doesn't change. It just gets more sluggish and people tend to be more reluctant to let it go. But it's there all the same.
      - jen_h 7y ago
        I don't know if people tend to be more reluctant to let it go, they just change where it goes. As an example, a company I worked at during the dot.com crash made a lot of bones in regulatory compliance until 9/11...at which point, redundancy and high availability became the money machine.
  - emddudley 7y ago
    What is "classic Namazu stuff"? I have never heard that phrase.
    - 7y ago
erikerikson 7y ago
> To be fair, true developers were not really negatively affected at least not more so than other professions. I did fine in 2009 when I was laid off, getting a job in a month, but hiring can be random and I knew some great people that struggled to find their next role. Some developed issues as a result that raised the bar yet higher. People are crazy and irrational so never take these things personally. Deliver good work and keep acting in good faith to find a place that will treat you well. Smart people don't want to live in contexts of misery.
- davismwfl 7y ago
  Yea, I think this is the normal thing that happens to good people that do their work and contribute to the team. And you are so right, don't take it personally because that can eat you up and it was almost never personal.
michaelt 7y ago
> To be fair, true developers were not really negatively affected at least not more so than other professions. My anecdote is the opposite: My father was an engineer at a company that made machines for semiconductor manufacturing. They had a physical product, customers liked them, they sold each machine at a profit - none of the obvious-with-hindsight folly of companies like Pets.com. However, when the dot-com bust happened they went out of business anyway. Turns out the collapse of the likes of Pets.com dropped the demand for semiconductors from the point where every wafer manufacturer wanted to expand capacity to the point where no-one wanted to. Boom, no orders. And of course, some investors when they see 'tech stocks' are falling, will sell your stock even if your business is much less speculative than the likes of Pets.com. There were three lessons I learned: 1. Your business may be nothing like Pets.com and may seem to have strong fundamentals - but if the bottom falls out of tech stocks, you can end up unemployed anyway. 2. When the going gets tough, satellite offices get hit before head office. 3. If you have car/mortgage/credit card payments, you can get insurance that covers the payments if you lose your job. A lot of the time this isn't a good investment - but once the company started laying people off and everyone could see the writing on the wall, people with debt brought gold-plated insurance and were glad they did.
- dsr_ 7y ago
  One more note for your first lesson: you might have a hot product that you sell at a product, but your own salespeople can kill you. Lucent (AT&T spun them off to commercialize things from Bell Labs) had the absolute best product of the late 90s/early 2000: the Ascend MAX DSLAM/modem bank. Before that, an ISP needed T1 phone lines (24 channels) plugged into a CSU plugged into 24 modems plugged into a chassis that would emit serial that would be plugged into a router, along with a server that would do authentication and logging for billing and IP assignment. The Ascend MAX turned all of that into one box: phone connections to ethernet and all services provided and remotely administrated. Insanely great. The problem was that Lucent's salespeople were very good, and the market for new ISPs was huge -- everybody was starting one or expanding their available markets -- so Lucent started offering financing. When you finance your house or car, your loan is backed by the asset: the house or car still has some large percentage of the loan value at any given time, even with depreciation. When you finance your ISP equipment purchase, Lucent assumed that they could always repo the MAX and sell it at a discount to some other growing ISP. They didn't count on the ISP market collapsing.

henrikschroder 7y ago

> To be fair, true developers were not really negatively affected at least not more so than other professions. That was my experience as well, all the weird roles got cut in companies, all the crazy extras removed, but the companies that had working business models kept on trucking and hiring competent developers, and competent developers at unsustainable businesses had no trouble finding new work. Because at the end of the day, the dotcom crash was about the crazy financial expectations of internet-enabled companies, not a rejection of the internet itself.

H8crilA 7y ago
Austrian school of economics believes that occasional recessions are useful because they destroy bad ideas (not exclusively bad ideas, but many bad ideas) and therefore free up resources for new ideas. Some of which will be good, some bad. For a huge example: Madoff was only discovered because of the 2008 crisis. SEC had plenty of evidence against him for years before that, including the fact he did not actually trade! The guy didn't even trade securities and posted consistent double digits returns! The SEC did not investigate. Only when clients started asking for funds has the scheme collapsed.
- zxcvbn4038 7y ago
  I that is the SEC for you. At one if the firms I worked at we had an algorithmic trader who did hundreds of thousands of naked shorts (selling short a stock he didn’t own). He always canceled the order, bought shares, or swapped internally but was still a no-no, and he would do this thousands of times a day. He got caught and we put together a report of his activity that required a hand truck to deliver. The SEC took one look at that and made the firm promise to increase their internal oversight and that was it. They didn’t even open any of the boxes.
  - H8crilA 7y ago
    Naked shorts are still legal if you're a market maker, for example. They're not entirely bad, it's sort of like credit - it's only bad when you fail to deliver. If you do deliver then it's great as it lubricates the system. See "Regulation SHO": https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm Not sure if this was the case at your company, i.e. if they had the permission to do so. If not then I don't know why they didn't prosecute that trader. Most organizations cannot do naked shorts and have to pre-borrow securities.
- deleted 7y ago
  [deleted]
- JohnBooty 7y ago
  occasional recessions are useful because they destroy bad ideas (not exclusively bad ideas, but many bad ideas) and therefore free up resources for new ideas. Some of which will be good, some bad. I feel this was absolutely true for the world of internet applications. The stuff built in the early dot-com era was typically garbage from a technical standpoint. Heaps and heaps and heaps of spaghetti code written in PHP, Perl, and ASP Classic. You could theoretically write maintainable code in those technologies if you were truly dedicated but this was decidedly not the norm. Think of literally any basic best practice for writing either the server or client portions of a web application that we might follow in 2019. In, say, 1997 those best practices hadn't been invented yet and even if you traveled back to 1997 in a time machine you couldn't implement some of them since the technology hadn't been invented yet. From a technical perspective, roughly 2002-2006 was when things started to get really good from a technical standpoint. - A lot of untalented folks (people calling themselves "developers" but with no real coding ability) were filtered out of the industry. - A lot of lessons had been learned about how to build this stuff. - More and more people were getting high-speed internet access. - The use of AJAX to build responsive client-side applications became a thing, thanks largely to... - ...Google, who released two absolutely world-shaking web applications in Gmail and Google Maps. These became something of a guiding light in a number of ways. Both from a technical showcase of what could be accomplished with web standards, and a design perspective... it showed a lot of pointy-haired bosses that what people wanted was minimal design and maximum usefulness, not a flashy multimedia experience. - Other "Web 2.0" tech like RSS matured and enabled LOTS of cool demos (sadly we've moved away from this...) - Pressure from Firefox forced Microsoft to finally embrace some more web standards and we edged away from the brink of a Microsoft-ruled internet
davismwfl 7y ago
One thing I will add too, is if you do go back to the enterprise or at least out of tech, make sure you don't allow yourself to stagnate or miss the upswing. I saw that happen to friends who got salary stuck making half what they would had they joined the broader market during the recovery. Enterprises can rescue you in some instances, but they are not usually great for salary growth outside of a few key places and people. So I'd only caution people to pay close attention the whole time so you can know when to jump back into the market and to capitalize on that next salary increase.

deleted 7y ago

[deleted]

shinteao 7y ago

>Ironically a lot of money can be made in downturns if you know where to look and how to approach it. Can you expand on this? I'm honestly curious about what machinations begin once a company dies or the market sinks.

jen_h 7y ago
Start a new company. Lots of talent available and investors look for heads-down new things. Classic Namazu stuff.
- mlyle 7y ago
  Capital's harder to get, but personnel and real estate is cheaper if you get funded. And then while you develop, hopefully the market recovers, and there's cash available for subsequent rounds and with customers to buy your stuff.
  - jjeaff 7y ago
    And it really depends on who your customers are. The amount of cash available during a recession doesn't change. It just gets more sluggish and people tend to be more reluctant to let it go. But it's there all the same.
    - jen_h 7y ago
      I don't know if people tend to be more reluctant to let it go, they just change where it goes. As an example, a company I worked at during the dot.com crash made a lot of bones in regulatory compliance until 9/11...at which point, redundancy and high availability became the money machine.
- emddudley 7y ago
  What is "classic Namazu stuff"? I have never heard that phrase.
  - 7y ago

erikerikson 7y ago

> To be fair, true developers were not really negatively affected at least not more so than other professions. I did fine in 2009 when I was laid off, getting a job in a month, but hiring can be random and I knew some great people that struggled to find their next role. Some developed issues as a result that raised the bar yet higher. People are crazy and irrational so never take these things personally. Deliver good work and keep acting in good faith to find a place that will treat you well. Smart people don't want to live in contexts of misery.

davismwfl 7y ago
Yea, I think this is the normal thing that happens to good people that do their work and contribute to the team. And you are so right, don't take it personally because that can eat you up and it was almost never personal.

michaelt 7y ago

> To be fair, true developers were not really negatively affected at least not more so than other professions. My anecdote is the opposite: My father was an engineer at a company that made machines for semiconductor manufacturing. They had a physical product, customers liked them, they sold each machine at a profit - none of the obvious-with-hindsight folly of companies like Pets.com. However, when the dot-com bust happened they went out of business anyway. Turns out the collapse of the likes of Pets.com dropped the demand for semiconductors from the point where every wafer manufacturer wanted to expand capacity to the point where no-one wanted to. Boom, no orders. And of course, some investors when they see 'tech stocks' are falling, will sell your stock even if your business is much less speculative than the likes of Pets.com. There were three lessons I learned: 1. Your business may be nothing like Pets.com and may seem to have strong fundamentals - but if the bottom falls out of tech stocks, you can end up unemployed anyway. 2. When the going gets tough, satellite offices get hit before head office. 3. If you have car/mortgage/credit card payments, you can get insurance that covers the payments if you lose your job. A lot of the time this isn't a good investment - but once the company started laying people off and everyone could see the writing on the wall, people with debt brought gold-plated insurance and were glad they did.

dsr_ 7y ago
One more note for your first lesson: you might have a hot product that you sell at a product, but your own salespeople can kill you. Lucent (AT&T spun them off to commercialize things from Bell Labs) had the absolute best product of the late 90s/early 2000: the Ascend MAX DSLAM/modem bank. Before that, an ISP needed T1 phone lines (24 channels) plugged into a CSU plugged into 24 modems plugged into a chassis that would emit serial that would be plugged into a router, along with a server that would do authentication and logging for billing and IP assignment. The Ascend MAX turned all of that into one box: phone connections to ethernet and all services provided and remotely administrated. Insanely great. The problem was that Lucent's salespeople were very good, and the market for new ISPs was huge -- everybody was starting one or expanding their available markets -- so Lucent started offering financing. When you finance your house or car, your loan is backed by the asset: the house or car still has some large percentage of the loan value at any given time, even with depreciation. When you finance your ISP equipment purchase, Lucent assumed that they could always repo the MAX and sell it at a discount to some other growing ISP. They didn't count on the ISP market collapsing.