Pre-2008 financial crisis we didn't have the iPhone, no app stores, cloud hadn't truly taken off, and my graduating class of 4000 students had only 30 computer science majors. The 2010's were such a golden age for software developers in terms of salaries, employers bending over backwards, never ending funding, etc. etc. Many young tech workers are "children of the summer" and never known any dark days. Although this will be painful, it will also teach people a lot of lessons. A lot of weaker talent, sketchy business models, and fast money investors are going to wash out and the industry will emerge stronger.
For sure. I really worry about the one-trick ponies that know one front-end framework and have had no shortage of opportunities. (In the early 2000s, I knew a lot of ColdFusion devs who honestly weren't cut out to be programmers, but the ease of the language enabled them to earn king's ransoms ... until the jobs dried up and it became a buyer's market)
After the dotcom bust, people with cash seemed to turn to real estate, but I don’t think that is an option this turn. The real of ‘physical’ is a liability.
>> Suppose you're running Perl CGI scripts on Apache. Would AOLserver run 10 times faster? Sure. On the other hand, www.cisco.com manages to sell $1 billion in merchandise annually with Perl CGI scripts. It is always easier and safer to plug in more processor boards than to switch tools.
It will be an unpleasant surprise on a lot of levels, ranging from the big - job opportunities, salaries - to the small. One of the things that happened both in 2002 and 2008/2009 was a sudden swing back to demands for suits, ties, and so on. There are a lot of people who resent their staff flexiworking, wearing jeans, and generally acting like it's not 1962 any more.
Perhaps a more charitable explanation is that as the labour market becomes more of a buyers' than a sellers' market, the buyers can afford to be a bit pickier. All other things being equal, we all want a vendor to do things our way: show up on our schedule, meet our standards for look & message (would you be keen on an air conditioner repairman who shows up in swim trunks and hiking boots, or one with a vile political message on his t-shirt?). When it's a sellers' market (say, there's only a single repairman in town) we can't be picky; when the positions are reversed, we can.
Management can’t stand I have a car park at the elevator like them yet wear T-shirts and hoodies and saunter in at 11am. Those benefits are probably not long for this world, but I do enjoy them while I have them.
>> There are a lot of people who resent their staff flexiworking
But that demographic is more at risk of dying from covid-19. The irony is that they are more protected by everyone working from home and that their younger colleagues will have more career opportunities if everyone comes into the office and spreads it.
Could not agree more. Folks who landed in the job market as star CS majors 5-10 years ago are not ready for that. High salaries, large amounts of funding, massive commercial rent level in San Francisco. This is going to be hard. But as you say a lot of great, lean companies will emerge.
Not just leaner. I predict (fear) extended social isolation will change the nature of work for many employers. Many jobs will be eliminated outright.
Analogy: There was a bank employee who gamed some account resolution process to steal small amounts of money every transaction. But it required him to manually restart the transaction(s), say every three days. Never taking time off, everyone admired his work ethic. Once he finally took a vacation, the whole house of cards fell down and he got busted.
Riffing on David Graeber's bullshit jobs thesis, I think this isolation, more than prior economic recessions, will highlight a lot "make work" that really didn't need doing. All that silly data processing which had no value add. So when the economy restarts, maybe those positions and tasks won't even be missed, and will be eliminated.
True, though there is still a long way to go for software to automate all the various industries. I work in the financial sector where everything is dematerialised, numbers and contracts, and there is still a humongous number of processes that are run manually off excel. I can only imagine how things are in less virtual sectors of the economy.
This is a field that will test that again and again. The way I look at it is we all sacrifice our well-being and free time to get ahead in this industry and get conditioned to believe self-neglect and selflessness equals more money. Generally, a point of diminishing returns approaches and that's when to make a decision. When the market goes south many more people become willing to work for less and do without just to stay employed. The market never readjusts after these shifts usually it takes a transformative technology like mobile, cloud, or new infrastructure to lift itself back up again. This in turn requires more education or learning skills and starting over again. The next move should be learning what's "next" and if you do that things will probably be mostly OK. It's a gamble but if you believe in yourself invest in yourself and don't fall into the trap of using those same skills working a lot more for a lot less. Instead of throwing the towel in consider charting that course to a better place.
There is still money, it's just at large companies now. They're not desperate though, and I'm sure they'll keep the difficult interview processes during the downturn.
> I have heard rumors — and they are just rumors, for now
> We are actively reporting this; feel free to reach out to me or other staffers at TechCrunch if you have tips here.
Basically, "I heard this thing, has anyone else heard it?" Also, what does that even mean that they're "actively" reporting it. It's like they're trying to give it more credence than the rumor it is.
> Third, and this is rarer, some funds have made loans or real estate investments using their management fee income as a way to boost the salary returns of the general partners.
The management fee is just cash for the GPs and they can do with it what they want. In theory it's to run their business until investments cash out but notice how they always force the company they are investing to pay legal fees (i.e. take it immediately out of the LP's new investment)? They just treat it as their income.
The reason for this, that makes sense to me, is that there's typically one lead investor negotiating terms and often many other following investors. If the lead investor was the only one who was paying, then only the lead would take the dilution.
If this is spread out among all investors, it's conceptually more fair since the lead is negotiating for all of the investors effectively. At that point, if you have a 50k legal bill, you can either say it's a 1M$ round where each investor has to chip in their share, or you say it's a 1.05M$ round and the company has to pay.
Oh come on they can manage their own side of the fees. It’s merely petty greed.
Also a $25MM round likely costs about $40K (combined) to do. So does a $5MM round. Shameful. I always cap the total fees at $30K which pisses off the lawyers but the VCs shrug.
I had an investor who had breakfast with me twice a month. He always picked up the tab. Then the firm (with a billion+ fund) sent the company an invoice every quarter.
I had lunch with him the other day (before lockdown) and he paid. I’m no longer at that company so I wonder who might be billed.
This also struck me as odd. The only reason I can think of doing something like this is that maybe it is pre-tax? So instead of paying a salary which triggers payroll and income taxes, they defer the salaries and dump the money into investments?
Requests for people with firsthand accounts are things I see from reputable sources like the Economist, and the New York Times. So I don't think it's particularly unprofessional - maybe asking for "tips" is less professional than "we welcome hearing your accounts of the events".
That said, I don't hold Tech Crunch in very high regard. I take most of their reporting with a grain of salt, and assume most articles are exaggerated to attract more attention.
I believe their entire credibility model is largely based on this, as per the TechCrunch founder himself at Startup School back in 2008 https://youtu.be/HbUnatPfSgg?t=238 (the whole talk is certainly a trip back in time!)
I remember listening to that and thinking, "So.... the info I have on close friends and business is valuable, and I should potentially sell it out to TC in order to curry favor."
I wasn't in SVBA at the time, and even then I felt that it didn't quite match the spirit of the valley (I still believe that to be the case, having been here for 10+ years now).
The BBC has (and has been made fun of for having) a text box at the bottom of a lot of their articles requesting input from readers on how they are impacted: https://www.bbc.com/news/world-us-canada-51949243
A lot of articles these days source their material from various social media posts. There are some articles where the vast majority of the content comes from embedded Twitter posts.
