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> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done ZIRP allowed a lot of "businesses" to exist that wou

> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done ZIRP allowed a lot of "businesses" to exist that wouldn't in a conventional, competitive capitalistic environment. Businesses in quotes because there was never any reasonable potential for profitability, but it didn't matter because VC money was cheap. Building a sustainable business is hard, playing "startup founder" and having that lifestyle subsidized by VCs is easier. In that case, (over)engineering was part of the performance art that was required to keep your only revenue source: the next funding round. There was never any incentive to "finish" the product because doing that would put your business model (or lack thereof) to the test and stop the music. On the other hand, as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around, chasing the next funding round and using that to pay yourself/your friends decent salaries. During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. For those that have run out of grifts, they fold or "incredible journey" and get sold for pennies on the dollar to entities like Bending Spoons that do notice there are bloated engineering teams that can be cut.

refulgentis 9mo ago
You hold ZIRP caused this, then cite crypto and AI as continuations, both post-ZIRP. Which is it? > as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around I lived this in a particular industry firmly inside the ZIRP era. It doesn't begin to describe how things actually worked. Even if ZIRP is synonymous with endless money to you, on their end, they still had to choose how to allocate it, and it was finite. You're not going to a bank for a loan, you beg people with experience in software to believe you're trending up. > During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived? Your argument requires believing that engineers collectively ran a con that no investor, board member, or executive noticed for a decade, and the only people who figured it out were PE firms after 2022. That's conspiracy theory dressed in finance vocabulary. The leveraged buyout model you're praising as "normal capitalism" is itself subsidized by cheap debt. You've correctly identified that cheap money distorts incentives. You've just misidentified which side of the transaction is the distortion.
- Nextgrid 9mo ago
  ZIRP was the era of where any tech startup was seen as a good investment no matter how stupid. Take any stupid business that doesn't work, say you do it with tech, get millions thrown at you. Then it was blockchain - same story, conventional business that doesn't work, but with blockchain - boom, instant money. Now the same with AI. > you beg people with experience in software to believe you're trending up Considering how much stupid shit I've seen funded (that quietly "incredible journey'd" away or folded by now) I don't think much begging was involved. Capital was desperate to find a place, no matter how ill-advised. Everyone in the startup food chain enjoyed it. > Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived? What started mattering is a clear path to monetize said DAUs/MAUs. You can't just show up with (potentially flawed) analytics saying you have DAUs and you're gonna figure out monetization later. Now you need to actually figure it out now and show up with analytics + proof of actually monetizing those users. Well, except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later. > collectively ran a con that no investor, board member, or executive noticed for a decade "Investing" in a Ponzi can still be profitable as long as you get out before it collapses. There was a lot of passing around the hot potatoes between VCs too, so a VC can rightfully determine something to be a scam, but still invest if they believe SoftBank will happily hold the bag (and those guys ended up taking a lot of bags).
  - refulgentis 9mo ago
    > "except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later" So the dynamic you attributed to ZIRP is alive and well, just wearing different clothes. Your original framework was "ZIRP allowed this, now real capitalism is correcting it." Now it's "this is permanent, it just rotates themes." These are different arguments. > "Investing in a Ponzi can still be profitable as long as you get out before it collapses... a VC can rightfully determine something to be a scam, but still invest" You've just moved the con from engineers to VCs. If investors knowingly played hot potato, then engineers weren't running a grift, they were employees doing jobs while capital played musical chairs above their heads. So which is it: were engineers "deadweight" padding out finished products, or were they ordinary workers caught in a game VCs were knowingly playing? Because "VCs knew it was a scam but invested anyway" is a very different story than "engineers tricked everyone into thinking the product wasn't finished." You're retreating into "everyone knew it was fake."

refulgentis 9mo ago

You hold ZIRP caused this, then cite crypto and AI as continuations, both post-ZIRP. Which is it? > as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around I lived this in a particular industry firmly inside the ZIRP era. It doesn't begin to describe how things actually worked. Even if ZIRP is synonymous with endless money to you, on their end, they still had to choose how to allocate it, and it was finite. You're not going to a bank for a loan, you beg people with experience in software to believe you're trending up. > During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived? Your argument requires believing that engineers collectively ran a con that no investor, board member, or executive noticed for a decade, and the only people who figured it out were PE firms after 2022. That's conspiracy theory dressed in finance vocabulary. The leveraged buyout model you're praising as "normal capitalism" is itself subsidized by cheap debt. You've correctly identified that cheap money distorts incentives. You've just misidentified which side of the transaction is the distortion.

Nextgrid 9mo ago
ZIRP was the era of where any tech startup was seen as a good investment no matter how stupid. Take any stupid business that doesn't work, say you do it with tech, get millions thrown at you. Then it was blockchain - same story, conventional business that doesn't work, but with blockchain - boom, instant money. Now the same with AI. > you beg people with experience in software to believe you're trending up Considering how much stupid shit I've seen funded (that quietly "incredible journey'd" away or folded by now) I don't think much begging was involved. Capital was desperate to find a place, no matter how ill-advised. Everyone in the startup food chain enjoyed it. > Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived? What started mattering is a clear path to monetize said DAUs/MAUs. You can't just show up with (potentially flawed) analytics saying you have DAUs and you're gonna figure out monetization later. Now you need to actually figure it out now and show up with analytics + proof of actually monetizing those users. Well, except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later. > collectively ran a con that no investor, board member, or executive noticed for a decade "Investing" in a Ponzi can still be profitable as long as you get out before it collapses. There was a lot of passing around the hot potatoes between VCs too, so a VC can rightfully determine something to be a scam, but still invest if they believe SoftBank will happily hold the bag (and those guys ended up taking a lot of bags).
- refulgentis 9mo ago
  > "except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later" So the dynamic you attributed to ZIRP is alive and well, just wearing different clothes. Your original framework was "ZIRP allowed this, now real capitalism is correcting it." Now it's "this is permanent, it just rotates themes." These are different arguments. > "Investing in a Ponzi can still be profitable as long as you get out before it collapses... a VC can rightfully determine something to be a scam, but still invest" You've just moved the con from engineers to VCs. If investors knowingly played hot potato, then engineers weren't running a grift, they were employees doing jobs while capital played musical chairs above their heads. So which is it: were engineers "deadweight" padding out finished products, or were they ordinary workers caught in a game VCs were knowingly playing? Because "VCs knew it was a scam but invested anyway" is a very different story than "engineers tricked everyone into thinking the product wasn't finished." You're retreating into "everyone knew it was fake."