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I'm always surprised that more people can't see the writing on the wall. The startup boom exists because money was so cheap you had to spend it. Then consumer

I'm always surprised that more people can't see the writing on the wall. The startup boom exists because money was so cheap you had to spend it. Then consumer spending started to ramp up again and money was flowing both ways. Worrying about profits was viewed as silly since that would get in the way of maximizing growth under the assumption that you could one day flip a switch and generate profit. With inflation rising consumers have much less to spend (and are already starting to rapidly take on more debt), this alone would hurt tech companies (you see this in cancelation rates rising with streaming services and a drop in e-commerce spending), but the end of cheap money will have disastrous consequences for the startup ecosytem. The number of IPOs is declining rapidly. Investors saw this coming when the pandemic hit and started to get everything together so the could cash out their chips before the casino closed. Massive layoffs are coming in tech as unprofitable companies will be forced to demonstrate that they can in fact make money (if they really can) and even profitable companies start to see their income drop (since their income is primarily other tech companies or consumers who will be increasingly tightening their wallets). What's coming is going to make the dotcom bust seem mild.

trention 4y ago
There is no scenario in which tech declines without the US entering a recession and when the US enters a recession, the "cheap money" is going to be coming back. There is no way the dotcom crash is repeated because today IT is integrated inside every aspect of every business. It will be just another regular recession. The biggest threat to programming jobs in the US is outsourcing (and, in the longer term - automation), not an imaginary apocalyptic event.
- time_to_smile 4y ago
  I'll make sure to check back on this comment in 6 months, certainly hoping that I do so laughing about how much I was overreacting.
  - trention 4y ago
    If you think you will be able to tell by looking at a period of 6 months whether a contraction (that hasn't actually even started yet in terms of total employment) is just a regular recession or the apocalypse you prophesize, I have a brooklyn bridge to sell you.
    - time_to_smile 4y ago
      "Apocalypse" is needlessly dramatic language. I think in 6 months we'll: - Unquestionably be in a recession - Have interest rates higher than they are today (i.e. cheap money does not return) - Major layoffs across the board at tech companies - It will be much harder to find a tech job after layoffs - Inflation still not tamed despite interest rate hikes and declining employment - Clear sentiment that this is worse that the dotcom bust I'm not sure how anyone working in tech, looking at the data behind the scenes, seeing where all the math doesn't quite add up, can possibly think what we're heading for will be a "regular recession". "apocalypse" is a bit hyperbolic, but this is going to be bad and I will be delighted to realize that I'm foolishly wrong on this one. For the record, this is what I thought would happen during covid, but never imagine the insane[0] amount of money the FED would pump into the market. However we've exhausted that option, and I don't see how we're going to print money out of this one. 0. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL
      - danjoredd 4y ago
        I agree. Its not going to be good. My main concern is staying employed for that whole period of time. As long as I can stay employed, I think I can come out on top, since people currently employed get hired easier than people who get laid off, ironically. I don't expect the economy to ever "return to normalcy." Our economy is currently diabetic and we are pumping it full of insulin to offset the years of sugar we pumped into it last decade. It may even out after a REALLY long time...everything does eventually. But until then things are going to be rocky.
      - trention 4y ago
        And I think your hunch is about as correct as your rationale for posting the M1 graphic without reading the note below it or noticing that it jumped 4-fold in a single month.

trention 4y ago

There is no scenario in which tech declines without the US entering a recession and when the US enters a recession, the "cheap money" is going to be coming back. There is no way the dotcom crash is repeated because today IT is integrated inside every aspect of every business. It will be just another regular recession. The biggest threat to programming jobs in the US is outsourcing (and, in the longer term - automation), not an imaginary apocalyptic event.

time_to_smile 4y ago
I'll make sure to check back on this comment in 6 months, certainly hoping that I do so laughing about how much I was overreacting.
- trention 4y ago
  If you think you will be able to tell by looking at a period of 6 months whether a contraction (that hasn't actually even started yet in terms of total employment) is just a regular recession or the apocalypse you prophesize, I have a brooklyn bridge to sell you.
  - time_to_smile 4y ago
    "Apocalypse" is needlessly dramatic language. I think in 6 months we'll: - Unquestionably be in a recession - Have interest rates higher than they are today (i.e. cheap money does not return) - Major layoffs across the board at tech companies - It will be much harder to find a tech job after layoffs - Inflation still not tamed despite interest rate hikes and declining employment - Clear sentiment that this is worse that the dotcom bust I'm not sure how anyone working in tech, looking at the data behind the scenes, seeing where all the math doesn't quite add up, can possibly think what we're heading for will be a "regular recession". "apocalypse" is a bit hyperbolic, but this is going to be bad and I will be delighted to realize that I'm foolishly wrong on this one. For the record, this is what I thought would happen during covid, but never imagine the insane[0] amount of money the FED would pump into the market. However we've exhausted that option, and I don't see how we're going to print money out of this one. 0. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL
    - danjoredd 4y ago
      I agree. Its not going to be good. My main concern is staying employed for that whole period of time. As long as I can stay employed, I think I can come out on top, since people currently employed get hired easier than people who get laid off, ironically. I don't expect the economy to ever "return to normalcy." Our economy is currently diabetic and we are pumping it full of insulin to offset the years of sugar we pumped into it last decade. It may even out after a REALLY long time...everything does eventually. But until then things are going to be rocky.
    - trention 4y ago
      And I think your hunch is about as correct as your rationale for posting the M1 graphic without reading the note below it or noticing that it jumped 4-fold in a single month.