I found this particular quote from the article interesting.
> Margaret Quigley, 27, a techie with some coding experience, is on the hunt for a job in San Francisco.
> Quigley, who previously worked at a popular consumer start-up, has been job hunting for five months. She recently rejected one start-up's offer, a one- to two-month tryout — without pay. Quigley said she has also rejected multiple sales job offers and an offer that was in the right field but came in too low.
I'm sorry but... what? Not everyone can do software development. This bit makes it seem like any person who is considered a techie can now land a cushy job.
If you don't know what you're doing, expect really bad offers. Maybe take an internship and make a name for yourself. I had to work basically minimum wage for about six months at my first startup gig and that propelled me to what I'm doing today. Not sure what that bit was about.
> It's a tough time to be job hunting in Silicon Valley, and things are about to get a lot harder for individuals with certain skills.
I just got a job in the Bay Area so again, I don't think these are valid points in this article.
Knowing what I make now I would consider 3 months without pay nothing to have my foot in the door. That being said I would never work three months without pay, but it's a risk some people are willing to take.
I don't see any reason why it has to be without pay. "Under market" maybe but not without pay.
Nobody should ever take unpaid internships. The whole concept is ridiculous and exploitation. Contributing to Open Source instead is a much better foot in the door and you don't end up working for free for others.
The problem with unpaid internships is those opportunities skew in favor of those with privilege (and can afford to work, say 3 months without compensation).
>Knowing what I make now I would consider 3 months without pay nothing to have my foot in the door.
can yin define this; this means that knowing that you now make a lot or you don't make enough??
also, the above, regardless seems to me to only apply to those newly entering the workforce as opposed to those that, like me have 20 years in tech and three kids....
no way would I think three months "trial" was anything other than shady slavery
I did think it was a little odd that her programming skills would be described as "some coding experience." That certainly doesn't make her sound like a developer and if that's the role she's looking for then the results are unsurprising.
I know her and don't believe she's after a role as a developer. But there are a lot of roles where those skills can come in quite handy even if that's not the primary job.
I get labeled a "techie" often simply due the fact that I'm in startups (co-found, growth lead). I try to make it clear that I'm the biz/marketing guy, and I do not own the skills nor the experience to be categorized with the programmers I work with.
Even if "we" (meaning HackerNews users or engineers) come up with a better term (e.g. "a company"), it won't get picked up by the media. Old media has schadenfreude for technology companies failing and they use "startup" as a code-word for their tone that tech companies are irresponsible, lazy, out of touch, and not doing "real" work. They have no idea what we do, how we do it, and they want to sell to their audience and themselves the idea that we'll get some comeuppance. It's telling the horse breeder that the "whole auto-mobile thing" is just a fad by people trying to ruin "honest work." It's gross.
For examples, I didn't even have to leave the linked article:
- The link off the article: "Silicon Valley's reality: The party is over"
Yes, the whole 16 hour work-day for potentially valueless-shares "party." Excuse me if I'm not wearing my party hat. You'd never see "Coal miner's reality: The underground rave is over", nor would you see them taking a shot at executive compensation in the banking industry.
- From the article: "Margaret Quigley, 27, a techie with some coding experience, is on the hunt for a job in San Francisco...there is literally Airbnb — for cats!...'Do I see value in the platform?'.. she has also rejected multiple sales job offers"
Ah yes, the non-programmer vague "sales techie" living in the modern day political and corporate Gomorrah and a trivialization of the tech industry. Yes, quip about some startup no one has heard of and avoid talking about a company like SpaceX that is inarguably changing the world by doing things at the scale of NASA.
- "The candidate wanted more money, the opportunity to work from home three days a week and to set the hours. Six months ago the company scrapped free in-office yoga and massages."
Again, trying to paint tech workers (with these demands, he/she was likely an engineer) as spoiled, pampered children.
The rare/uncommon perks exist because it's hard to find people capable of doing the engineering work, and once you find those people, it's very easy for them to be ground down to a nub. Funny that CNBC isn't brave enough to talk about the perks that politicians receive from lobbying groups.
As much as I love your response, in my experience, the craziest perks correlate strongly with candy-a$$ed brogrammer frat houses that do little more than string together rickety MVPs of open-sourced code and very weakly with attempts to attract real engineering talent. The latter is best achieved with $400K+ annual compensation or 2% or higher post-SLP equity wherein they can afford to purchase their own perks and the expected return on a sensible startup gamble is higher than working for $400K+.
For I find the perks exist less to attract engineering talent and more to achieve that perfect blend of easy party money and college party life that serves as a nearly 100% efficient system of wealth redistribution from the top 0.01% to the top 10%. That said, I think the disappearance of facebook and twitter from the Internet would be approximately as inconvenient as a philosopher's strike.
"Script kiddies new reality: amateur hour is over."
The media calls these large companies "startups" because the companies themselves do it. Because it makes them sound hip and trendy and worth investing in.
No doubt there are companies like SpaceX doing notable stuff. No doubt they are a minority. AirBnb for cats exists. Vessyl exists.
Well, remember what working in the media is like. It's an industry where writing opportunities are contracting, advertising is stronger than ever, pretty much all but the top tier of newspaper is writing clickbait, it's perceived that there's little prospect of it getting better, and they compete with Congress for major institution least respected by the public.
I wouldn't consider schadenfreude a paranoid theory, I'd consider it the expected outcome. It's hard to avoid wondering how much of the general tone of opinion in the media is a direct reflection of the fact that they aren't doing well. (Are they worried about the "1%" precisely because a couple members of the .01% are buying up their entire industry, and they see the .01% showing up in the reporting chain? I've seen people similarly wonder if part of the reason academia is so pessimistic in their writing is that their world really is in terrible shape and the sense of immanent collapse is scaring everybody.)
You're bringing up a good point, I'm not sure if it's paranoia but it does seem like deliberate diversion. I mean if we can paint nerdy engineers as true evil then focus won't be on the real "evil". I'm wondering if that's the reason why they were harassing Google engineers at their homes. It's not like engineers were selling junk bonds as AAA rated.
The media's skadeglädje for tech could be because tech made media worthless. Easier than ever for anyone to publish stuff and block ads.
"Old media has schadenfreude for technology companies failing and they use "startup" as a code-word for their tone that tech companies are irresponsible, lazy, out of touch, and not doing "real" work."
I think you have a very misaligned perception of the general world. Most people don't even know what a startup is unless your in a major city and the perception is pretty positive overall.
Unicorn has always been the perfect name. In the beginning it conjures pictures of a majestic, beautiful, and rare animal. And then later you realize it's just a pretend fantasy.
Doesn't exactly roll off the tongue. My vote is for "wisps". So fragile, the slightest disturbance in its reality distortion field and it ceases to exist.
At least "startup" is more specific than "tech industry" which a lot of other articles (and this one in the actual body) are using. As if the frightful 5 aren't powering along.
Any kind of JavaScript, iOS or Android engineer getting laid of will get a job within a month if they want. Competent backend developers, devops, ML engineers also will have no problems finding a job. I recently went through a job search in the bay area and only applied at places I wanted to work and got a job at the first place I applied with phone interviews and in person interviews scheduled at other places.
The job market is really great right now. If you're getting laid off, now is a good time.
I'm not seeing a great hiring market right now for engineers in the Bay Area, at least as a high demand JS engineer. I took a look at testing the waters within the past month, I found the offers/opportunities a little wanting, and I am now debating whether to stick around at my job for a while even with some of its faults. The market looked a lot better a half year ago.
Getting hired is not a problem - getting a really nice job though is much more difficult, especially due to all of the companies that like to talk a nice game but are disguising weak aspects of the company such as leadership/management, quality engineering, work-life balance, etc.
An aside, that popup iframe with video on the top as you scrolled down is one of the most annoying dark UX patterns I've encountered in a news site. It is one of a handful times where I used Chrome's element inspector to set display: none.
> I'm not seeing a great hiring market right now for engineers in the Bay Area, at least as a high demand JS engineer.
Can you explain this further? If by "high demand JS engineer" you mean "front end" and not just node (which is not bad or anything btw), and by "high demand" specifically you mean you are:
* you understand JS well, doesn't mean we get to grill you on all the weird corner cases - but you understand the language
* want to work with a modern stack (i.e. react, flux/redux/whatever, backbone, that sort of thing)
* are mature and want to help grow a team, can communicate with PMs and all that effectively
we'd kill to hire you (250-300 person company.) Every friend of mine that has started a company asks me every time they see me if I know a good front end person (that isn't busy counting their RSUs at Uber, etc and isn't going anywhere.)
Our company (in general) and team has more than one designer focused on bringing a good experience to the table, before it even gets to the code level. To translate, that doesn't mean our reqs go from sales person to "make it do this now, code monkey", but rather we want to make good, long lasting products, in a thoughtful manner. And still, finding someone is tough.
So I find it hard to believe the hiring market for what you describe isn't great.
Personally, my experience is all back end. I consider myself a good engineer in general, and feel I could ramp up to being a decent front end engineer in 3-12 months time depending on how much depth we're talking, but think that things are specialized enough now that that would be a waste of effort, and plenty of people would still be better than me. However, from what I've seen, being a F.E. eng that understands CSci and what's happening under the hood should make you SUPER in demand right now.
I'm not trying to make this a hiring post, but if you'd like a fun job with a decent company trying to expand its front end capacity on this coast, with a relatively green field project (i.e. you get to build new stuff), and at a place making real money, not just selling to other startups, and not in a moon shot social space, PM me. If not, I'd still be curious why you think being a "high demand JS engineer" isn't a good spot to be in in the current market.
I do Node.js as well, although it doesn't show nearly as strongly in my background due to every company I've been at wanting my frontend skills. I get pinged heavily due to being a major non-Google contributor in the Angular community (code contributions to Angular.js, Angular 2, Ionic, and am involved in the teams for Universal Angular, UI Bootstrap, and UI Router).
Finding a job is still pretty easy - I don't dispute that. Finding one that pays competitively, respects work-life balance, and focuses on quality of engineering & getting product right, even if it means pushing deadlines a little later is much harder I've found, unless you look to the Google/FB/Netflixes. My current job meets most of those bars (a little less on the salary side, but I was willing to accept that for everything else), but only dissatisfies me on wanting to move faster & having more influence on tech choices.
While there are no shortage of companies that want to hire, most haven't put their best foot forward I've found. The market is still good for software engineers, but it's noticeably not as compelling as it was just a half year ago - I feel like the balance has tilted a little more to the employer's side in the employee/employer dynamic.
I live on the east coast and one of my colleagues is being flown to the Bay Area to interview for a JS position at a very popular company. But that's just one data point.
That's interesting to hear. I've seen a very sharp drop off in unsolicited emails lately from recruiters (50 per month to ~2). I already have a job so I'm not looking, but the silence has been noticable.
Because they fired all the recruiters? Sorry that was mean.
I honestly hope these companies start culling these non essential employees. When I left the valley, they were one of the biggest reasons. They were affecting the local intelligence culture in a very negative way.
I feel like you are being harsh. Recruiting seems like a pretty essential part to a fast growing company. And to say they affect the “local intelligence culture”, well there’s a lot of locals in SF who say that about all of tech and there’s many a way to define intelligence.
As a developer, I appreciate the role recruiters play. Reaching out cold to people isn’t easy and the fact someone else spends time on this while I write code is great. And the fact that my LinkedIn has multiple leads from people about job opportunities should I want to move is fantastic. Are we so spoiled to scoff at people offering us jobs when so many people can barely find quality work.
Certainly there are some shady players, but not really more than I’ve seen on the Engineering side, and my main issues have been less with recruiters and more with the hiring managers who the recruiters work for. “Oh, your rocket ship hasn’t grown revenue for 6 months straight yet you told me 100% YOY growth.” It was two directors of engineering and not a recruiter that lied to me about growth at a well respected YC startup. I blame the people crafting the message more than the messenger.
I'm not speaking specifically on recruiters, whom I also believe play a valuable role (possibly second most valuable to actual engineers, given their importance on bringing in talent), more on middle managers, marketing and sales orgs. I had a general sense of ennui with the way they shaped self-obsessed materialism in SF, and their insistence on packing 5 at a time in apartments they couldn't afford, driving out families with fewer income earners per head just to be part of something they didn't help make. To me, that brand of person gives Baby Boomers a run for their money.
i would argue it takes a more special person to think perpetual growth and bloated companies are realistic. Nobody's wishing misery on others. Just natural culling cycles.
Good recruiters are essential for building a good team. I have been happy to know many of the great recruiters I have had the pleasure to be on the same team on. Hiring is a complex topic involving marketing the company, searching for candidates, understanding the needs of the company and the legal terrain and helping everyone through the process.
Possibly a timing issue? People often leave jobs after 2-3 months if it's not a good fit, otherwise they generally stay until they hit their year mark. Looks like you're at six months.
A sudden flood of engineering talent on the market has other problems. Salaries could go down and given how expensive The Bay Area is then that could be problematic.
Given how hard hiring has been, I doubt it. The current talent shortage could absorb a huge number of engineers. A lot of startups are well funded for many years anyway. People are predicting doom and gloom but I really don't see it. Home prices falling is also probably not a terrible thing, even on an engineer's salary homes are hard to come by, and rents are extreme. A small correction is probably a good thing. I bought my house at the bottom of the housing market in 2011 and its value has nearly doubled since then which is ridiculous to me. I also have enough savings to last me years. Lots of companies are also doing just fine. This really isn't the earth shattering dot com bust some of you want it to be.
The out-sized "demand" is largely coming from yield hungry investors and Chinese investors looking for a bolthole.
Both kinds of demand could easily be clamped down upon by raising property taxes - the victims of which would be wealthy foreign investors and people who have sat on one of the largest increase in property values in history.
Likewise, supply could be increased if local government were at all interested in doing so just by building 10,000-20,000 low income apartments.
If the government announced both, the cost of San Francisco housing would plummet within days.
You might try local Realtors (especially those who specialize as buyer agents) that advertise in Chinese (or that they speak Mandarin or Cantonese) to see if any recent transactions fit the bill.
Also, sales are open record - you might look at buyers with Chinese surnames that lack Americanized first names.
In the short run, sure. In the long run, what happens when many of the Chinese business owners who have been parking their wealth on the coasts of America face a liquidity crunch and suddenly need that money to keep their companies going?
We've been here before: back in the 80s, Japan was buying up most of the real, tangible assets in the U.S.
The cause was the same: strong export products, an undervalued currency, and easy-money policies. The first signs of trouble were the same: high inflation, crony capitalism, and poor transparency in the market. Let's see if the rest of history plays out the same way.
It's probably just like vancouver, lots of money, no place for it to go, you can launder foreign money basically legally into a house in the US. You should search for vancouver and see the ycomb story on it earlier this week.
They certainly did go down. I was personally at a company where the CEO came in one morning during late 2001 and announced a cut of 10% across the board. No-one left as a result either, until 2003.
"Average annual wages in high-tech rose sharply between 2001 and 2008 compared with overall average wages in the Valley. For the Silicon Valley, the average annual wage in high-tech industries rose from $97,344 in 2001 to $132,351 in 2008, an increase of 36.0 percent. (See table 2.) In comparison, average annual wages rose only 21.7 percent across all establishments in the area"
Good reference. But I wonder what the trend was between 2000 to 2003 inclusive, which is the time of interest. At most flat, probably. The Valley started to come back by 2004 and by 2008 was in good shape.
No, as an industry, wages absolutely did not go down. Your salary went down because your company and some others were in trouble, but most companies did not have salary cuts, and salaries were not cut whatsoever.
If a company goes bankrupt and it lays people off, it doesn't mean that salaries all fell, it just means those employees' salaries dropped to $0. This is what happened to you. I got modest salary increases during the same time.
"wages absolutely did not go down" being followed by "Your salary went down because your company and some others were in trouble" makes me wonder how well this line of logic was thought out.
Not sure what you mean. Anecdotal evidence is valueless. Sure, some companies cut salaries, but as a whole, the wages did not go down. It's not all of a sudden the going rate for a programmer went from 100k down to 85k in general.
As already pointed out this covers 2001 to 2008. I'm interested in 2001 to 2003/4 inclusive. Tech salaries obviously went up between 2001 and 2008, everyone in the Bay Area knows that.
If the data for this specific range is available, I'd love to see it. Perhaps I missed it.
This is not what happened to me. I kept my job, but my salary went down.
Various companies also enforced extended shutdowns (over Holiday periods). If you had no vacation left, you didn't get paid. This is effectively a wage cut.
I am aware that wages are "sticky" and companies would rather lay off than cut salaries. But the statement that "wages did not go down" is not correct.
Yeah, @pfarnsworth is stuck on some weird point. Wages in the tech industry went down during the dotcom crash for those that had jobs. And some people lost their jobs and couldn't get new ones. And there were some people who did not have their salaries change, like me. I was not in the bay area, that's probably why mine didn't go down. My stock went did go down in value :-)
No, as I said, as an industry, wages did not go down. Sure, some companies cut their wages, but that was the minority. The salaries for programmer didn't go for $100k to $85k for example. Either the companies died, or they survived and kept wages the same. The vast majority of companies that survived didn't cut wages. They either laid people off, or kept the status quo.
The reason why they didn't is because they didn't want to give an arbitrary pay cut to their best employees, who would leave as soon as things got better. They would rather cut the fat and get rid of employees they didn't want.
Google, Yahoo, Amazon, Cisco, Oracle, etc, none of those companies instituted pay cuts, and wages did not go down in those companies. Some of them had layoffs but they cut salaries.
So we've reached the point where you say the (presumably average) salary for programmers didn't go down between 2000 and 2004. And I am at least one data point that shows that it did (and I know of plenty others).
I wish someone actually had data for the time in question, as opposed to anecdote. I find the question quite interesting, and would like to know the answer.
Seriously? You're going to use the impact on Silly Valley tech salaries that a glut of engineering talent would cause as an argument against minimum wage laws?
If technology professionals ever find themselves in a position where minimum wage regulations are relevant to their incomes, we'll have been through something far worse than a few layoffs.
The myopia of tech people is really mind-blowing sometimes...
Like, for example, corporations preying on people who have no choice but to take any job that's available, and offering wages that are below a starvation level?
There's a difference between getting any job and getting a "good" job, even in tech. There are tons of startups and other tech companies with enough funding to continue hiring, but I wouldn't personally waste my time in 90%+ bay area companies I see hiring these days.
Yeah, no. As someone who hires on the east coast, and has a pretty extensive network of professional peers in generally "high" positions -- all these general assumptions about applying the SF market to anywhere else in the country is complete non-sense. And rightly so.
It's an age old-question but I still don't have a good sense of the answer:
When leaner economic times come around and tech companies downsize their work forces, they speak about culling "nonessential" employees and "growing smarter". How do they deal with the political problems of admitting to having hired a sizable number of "nonessential" employees to begin with, and, moreover, the obvious implication that their previous growth strategy was indeed "stupid"?
Let's say you have a company with 10 employees, and a revenue of 50 million. If you hired an extra web designer you could optimize your website and squeeze out an additional 1% = 500k. Worth it!
Times go bad, revenue drops to 10 million. You fire the non-essential designer and take the 1%=100k revenue hit. If you had fired an essential employee, your revenue would have dropped some double digit percentage, so those you have to keep around.
You expand/contract the business to the point where the marginal employee costs you the same as the marginal revenue they can bring in.
Well that's the theory for stable profitable companies. For startups I guess you'd have to think of the marginal expected future revenue.
There are many, many metrics in the startup/tech industry that are discussed for running a successful company. Marginal productivity increase/employee is not, and never has been, one of them. Then again, maybe that's why layoffs are taking place.
Ok, how does this work in the situation where you have hired management, the managemet gets paid the most, and their performance can't be accurately measured. Also you're not familiar with the marginal returns of the employees they manage.
I think it's a valid question whether that's still a valid approach in a modern, high-value knowledge economy (and yes, I'm including oil well operators in there).
Honestly interested from companies that have been through grow-shrink-grow. Is it as clear as that, re: being able to find new people when the time is righr? Or is there enough of a ramp-up time for new employees that the equation is more complex?
The usual estimate of ramp-up time for employees at a startup is considered to be a month or two, but the business cycle is measured in years, so if you expect a secular downturn, firing people makes sense.
I think oil is actually complicated and rare enough that it might actually be an example where you don't want to lay them off, since finding replacements may be quite hard if you lay off those positions for a few years, so you may want to try and weather the storm while the Saudis flood the market with oil.
Having said that, companies make bad decisions all the time since making good decisions is a lot harder than everyone seems to think.
Sure you can be productive after a month or two, but having the same in depth knowledge of a product will take a lot longer. My last place claimed they couldn't afford to give me more money, yet they are now employing two people to do my job (and I doubt they will be as effective as me).
This is very specific for people who work on systems, such as programmers.
I have a devshop and have sent his over and over again. The actual cost per employee isn't really paying them salaries to do stuff, but rather the salaries you pay them to learn stuff and get acquainted with the system. We call it ROL (Return on Learning). We've learned that on average it takes 3-8 months for an intelligent person to become fully productive within any system.
Since we started hiring for the capacity to learn and culture fit, rather than existing technical skill, it's changed our business for the better.
That said, turns out even if you're in the Bay area with all that great talent pool, chances to find local people who just happen to want to work with you are practically nill. Once you truly internalize this concept of ROL, there is no other way but to work globally with remote people and teams. Without that, you can't access a sufficiently large talent pool.
I think the ROL is actually the leverage factor people have in mind when they say "10x" engineer.
In my experience, the more specialised the work, the more one has to select for a balance of capacity to learn with a certain amount of objective skills and experience present today. I tried the strictly-capacity route in the past (it was all I could afford) and, while these people had all the potential in the world, the ramp-up time was simply more than the business could sustain when customers expected high-end knowledge and expertise now. It was aggravated by a lack of time and resources typically found in a woefully undercapitalised startup, of which a consequence was inability to properly structure and manage the learning process.
I also think "having someone already in the company with X knowledge, who will be working closely enough with new hire to share it" is a huge multiplier in ramp-up rate.
The amount of un- or poorly-documented things in decade+ legacy systems can be a minefield, but so easily solves with a quick "Oh, X, we always do Y because Z."
Because you learn and adapt over time. Things that look stupid in hindsight needn't have looked stupid at the time. In particular, specialists are good when it looks like you're growing, but if you have to scale back, you prefer generalists. Knowing the right balance in advance would require a crystal ball.
An employee is more than just cash - you may onboard employees anticipating future growth or projects. You may have hired them and just kept them for future reasons. You may even keep them on the payroll to just keep everyone's morale high.
I've heard of companies doing the opposite. Instead of laying off, they hired more. Sure, you cut shot term cost by firing, but you also lose the human resources to develop any long term value. What of your product? If every of you competitor is laying off, and you decide to actually hire more and double down, you might be able to get the competitive advantage.
You are guided by your VCs and your advisors to hire expecting growth. They want you to accelerate your company as quickly as possible, so that you can be bought by Yahoo, Google, Facebook, etc. So you plan to double headcount, etc, but once revenues flatten, or drop, you need to start cutting costs, because you didn't achieve the growth that you planned for.
Blame the market for changing. Seriously, it's that simple. "Market now values x over y and we're doing the smart thing and adjusting our strategy....."
This question is one that isn't asked. And if it is, history's rewritten to make sure it wasn't asked.
1) any employee who asks runs a good risk of getting fired, so they don't ask. If anyone is crazy enough to do so, what I've seen happen is this : everybody immediately looks at the guy asking, wondering if he'll get his head lobbed off. Everything goes very, very quiet. Management moves to the next question as if nothing happened. The guy is never heard from again.
2) any shareholder who asks approved the stupidity (this, of course, doesn't stop them from blaming others, but generally not publicly).
3) the big shareholders, who make the decisions, control who can film the shareholders meeting and who can report on it, and they make sure reporters who get to enter agree beforehand on what questions to ask. This means that if you go to a shareholder meeting of a large company, you'll see that question asked, and usually it turns the whole meeting into a shouting match (and once, I've seen it turn into an actual fight). Then the next day you open the newspaper or online sites and read a reporter describing a serene and cool meeting echoing almost exactly the press release of the earnings.
Management of long-running companies is stupid. Management that just left long-running companies is stupid. Well, perhaps stupid isn't the right word, but they're looking for very specific outcomes, which don't usually have anything to do with running the business well. Poking holes in how they're running things is easy, because people who do the hole poking are looking at the interests of the business itself, not of the people investing in it (they may want an exit, or even an entry : they want to buy extra shares, so it'd be real helpful if a "medium-size" business disaster happened).
And why not hire smarter management ? Senior management isn't hired (in most cases). They buy themselves in, then get to write the "reason" they get hired. It's never that they paid good money (usually in the form of shares, so technically they loan money to the business). Note that senior managers often don't use their own money to do this, but money of people they represent. Very often risky bank loans come with the string that a board seat and a C-level position must be given to a "to be named" individual.
(If you're working for a startup that got a bank loan and a sudden "weird" executive, I guarantee you this is what's going on. Same for investments. A good thing is that companies like Andreesen Horowitz are pretty forthcoming with that this is a requirement)
So the purpose of management generally isn't to run the business. It's to make the balance sheet look good for the duration of his investment. Making sure a loan is repaid at all costs. Making sure their company gets a good opportunity to buy shares (ie. break out news that kills the stock price, then sudden takeover happens, or at least gets closer)
Also, keep in mind hiring is partly done because open job openings that change regularly is something a lot of investors look at. This is one of the value-investing tricks in the category of tricks that everyone knows about. So it is gamed.
Not every company is running like this of course, but as a general rule, any company older than perhaps 20 years is. Or, more generally, any company whose stock has at some point really stalled is run like this. It'd be more accurate to say that any company that ever needed a bigger loan than their rating would justify is, but that's a very tough call to make.
Read this for an especially egregious example, bordering on fraud (but it isn't fraud. They never lied about the numbers, they just changed them so people who don't dig deep would see a huge improvement that wasn't real ...) https://foragerfunds.com/bristlemouth/dick-smith-is-the-grea...
The interesting thing, to me, isn't so much what'll happen to the employees--it's what's going to happen to all the SaaS and PaaS folks the remaining startups depend on.
When everyone and their buddy is signing up to spew cash into the coffers of services like Amazon, Heroku, and other hosted solutions (instead of doing it themselves), those services can spread and grow.
What happens, though, when that easy cash is no longer available? What happens when, for example, paying a lot for Docker or NPM no longer makes sense?
The outflux of customers has the--in some sense--real possibility of killing those businesses for the remaining users. Look at Github, for example, as a company trying to run ahead of the curve--it can happen.
I'm more concerned with what happens to ecosystems, like Node, that have VC-fueled companies as critical components.
I'd love to hear other opinions on this point of view.
That's a very good question. My guess is that we might see an implosion or two, but I highly doubt we'll ever see a struggling b2b SaaS company cause serious problems for its former users when it goes out of business.
If a company could inflict so much damage in the broader ecosystem by when it goes out of then it can charge high prices for what it offers. As a general rule if you're providing something people sttruggle to function without. then you can always stay in business if you want.
Of course, there are edge cases involving mismanagement, but I suspect they're extremely rare.
Perhaps what might be more likely would be acquisitions where the acquiring company kills the service for some reason - like what happened with Parse.
More seriously, they're trying to move into the enterprise/private space--but they took on a hell of a lot of funding to accomplish that. Not looking great for the good guys.
A very interesting point! Cloud services cost tons of money. For companies running on AWS, a better alternative might be to migrate to Google Cloud or alter cheaper alternatives. Google Cloud lacks some bells and whistles at this point but it shaves off 50% of your AWS bill.
Do you work for GCE? You've made this exact same comment twice on the same link. Do you have any examples or links that back up the 50% cheaper point? As well as the trade-offs for switching to GCE? We run on GCE, Heroku, and AWS.
Monsanto is actively damaging the future agricultural possibilities of the entire world with their business practices and how they sell their seeds. Creating seeds that we can way over dose with poison?
I just like the last point: "There's still going to be major entrepreneurship going. Google itself was counter to the trend of the original dotcom bust."
Startups that are born in or survive a downturn, they are more tight with better survivalism. When things get better they still have an advantage over other startups. Things go from tight to alright, alright and it doesn't affect them.
Tightly run ships, like smart remote companies without as much office space (lower salaries outside SV) or many employees or even generating revenue run will probably not even feel a blip in most cases. It is the ones that are a while from a product and paying the higher tag for office space, salaries and more for the chance to get funding in SV. If that funding isn't there for a while it could be problematic and is the risk with boom/bust cycles.
I've seen a couple of comments where expensive office space or other somewhat optional expenses are cited as reasons for going bust.
I'm curious, as I have no experience in this area, if that's really likely.
As an outsider, it feels like salaries would be the overwhelmingly largest monthly expenditure for most tech startups. Such that things like office space, even a lavish choice, wouldn't really be relevant.
If you were to break it down by "cost per employee" is there really a case where office space, perks, etc, really becomes the driver for failure? Where it is statistically meaningful versus the base salary cost?
If you're in SF paying market rate, with say a dozen employees, presumably your expenses BEFORE office space are in the range of 200K/mo+.
Unless they're gold plated, your "lavish" offices would represent <~10% of expenses.
Space and perks itself doesn't drive failure I don't think, but they can point to aspects that do.
There are plenty of disciplined companies that appear to be "lavish" with space and perks. There are plenty of highly profitable tech startups that really scrimp on space and perks. It's tough to generalize.
I think this depends on the size of the startup. If you've only got ~10 employees, decent office space, furtniture, catering, etc. in SF or SV could be a meaningful fraction of your overall expenditure. The more employees you have, though, the smaller that fraction is likely to be. Even so, I think you're right - downgrading your office space would get you maybe a couple months of extra runway, vs. reducing salaries or staff, which would get you a lot more.
Early 37 Signals (Basecamp now)[1] and github[2] are two examples that started out this way and the former continues this way today. StackOverflow is another[3].
Salesforce, Google, Akamai also survived the dotcom bust and also killed when the market came back.
The conditions that create a company under tighter bands will always have a better indicator of limits than companies that don't. They understand the cutthroat nature of the market. Apple could be considered another initially and on their second rebirth since their second rise was after the crash. They were hustling during that on R&D and exploded out the gate when the market came back, part of the reason they hoard cash and control their ecosystem so much, when they opened it up in the late 80s/90s it nearly killed them.
It's not that clear cut, it can be random due to timing for startups that just raised. Name me some crappy startups you think will fail, I'll name you lots more that make a great product, but couldn't stay solvent either.
Yeah I was going to say good decisions aren't made when investors start to panic. Or consider GM maker of fine crappy cars. They went bust in 2009. Companies are often long expenses and short profits. Meaning they commit to certain level of expenses capital or otherwise, yet their profits depend on near term sales. Business dries up, balance sheet goes red and if they can't borrow money, they go belly up. Rock solid business, gone.
At which point making a great product has become enough? Making great things and having great ideas in business does not entitle you to survival. Investors are particularly twitchy right now, there might be some casualty among the just, but believe me, time is due for wiping the drawing board and deflate the huge egos of productless founders who just hide behind startup jargon and easily raised money.
For startups planning to host their infrastructure on AWS, a better alternative might be to go with Google Cloud or other cheaper alternatives. This can significantly increase the startups runway, by lowering the operational costs. Google Cloud lacks some bells and whistles at this point but it shaves off 50% of your AWS bill.
Edit: Here is why Google Cloud can save 50% of your aws bill
"1X" is AWS
Compute:
VMs Price: 30% less + Per minute billing
Boot time: ¼ X
Network between VMs: Same region: 4X Across regions: 10X
This can significantly increase the startups runway, by lowering the operational costs.
There is an old saying in business: "overhead walks on two legs." People are expensive; everything else is cheap in comparison. This is particularly true for most software companies, where payroll (and other expenses directly sensitive to number of employees) typically dominates every other expense.
There are software companies which do $100 million a year in revenue on $50k a year in infrastructure costs. Bloat that crazily for a B2C startup making, let's say, generous time-to-market and inhouse-expertise-required tradeoffs. Even if you're spending $50k a month on Amazon, shaving off half of that buys you 1~2 extra FTEs.
* Ease of use: Google Wins(Cloud Shell, SSH into instance from browser). Its far easier to spin up an instance and manage it on Google Cloud than AWS with VPC mess.
* Platform Cohesivity: Google Wins (See the comparisio below)
* AWS has 2 storage solutions with different APIS: S3 and Glacier; Compare that to Google. Just one storage solution to serve all needs. You get a backed in CDN for free!
* AWS has two queuing systems (SQS and Kinesis) and still require the developer / admin to adjust the scaling of infrastructure. Google has just one Pub/Sub. You get push notifications on top. No need to tune knobs to get extra scale. It just works.
* AWS load balancers and persistent disks need warming up before high usage. If you are running a website on global scale, you need to use DNS geo load balancing on top. Google load balancers are global (as opposed AWS regional load balancers), no need of DNS tricks. No need of prewarming. Google persistent disks need no prewarming. You can mount a single persistent disk on multiple instance and share data easily.
* Security: Google encrypts data at rest and at wire by default. Try doing that on AWS. Google takes care of SSH key provisioning and management. AWS: You have to do it by yourself.
* AWS NATs and micro instance are known to be unreliable. Google has live migration. If something goes wrong with instance they work their magic behind the scenes so that you don't have to worry about migrating the instance to another physical host.
* Automation: Instance id are not global on AWS. Have fun creating maps and stuff inside CloudFormation templates. Google Cloud resources are global. All resources (images ids) have a global identifier. No more messing with zonal vs regional vs global resources.
Google Cloud can save money by saving your time too!
I don't actually have much of an opinion specifically about Google Cloud vs AWS. I will say for your argument to make sense you have to first prove that 1) these differences make for cost savings that aren't a rounding error when it comes to employee costs and 2) these differences aren't overwhelmed by the smaller ecosystem (tooling, availability of talent, etc) of aws vs google cloud.
Also as a nitpick:
>AWS has two queuing systems (SQS and Kinesis)
This is a feature, they offer different promises/behaviors. In fact, Pub/Sub does not offer one of the important ones that Kinesis does (strictly ordered delivery).
One may also say that Google has a single Global seamlessly scalable durable message delivery service and Amazon has two that are neither global nor seamlessly scalable. Firehose is AWS itself admitting to this argument... And then there's firebase :)
I think dataflow is rad! But can you show me any bit of documentation that shows strictly ordered at least once delivery?
I don't think it actually does that.
I'm not certain, but I'm reasonably confident that strictly ordered durable, globally replicated delivery would have to make extreme latency & availability comprimises.
Dataflow is a fault-tolerant deterministic processing framework, engine, and service, not a messaging queue, so it doesn't "do that" by definition.. wrong product :)
That said, one may order and dedupe the message stream with Dataflow using message metadata, time windows, watermarks and triggers.
Sure. I think it is fair to say that AWS does not offer a "Global seamlessly scalable durable message delivery service". What doesn't seem fair to me is to complain that AWS offers too many products, or to ding Kinesis for making normal/understandable engineering trade-offs.
It turns out that while AWS doesn't offer a single "Global seamlessly scalable durable message delivery service", Google doesn't offer a single strictly ordered, at least once delivery message delivery service.
Personally, I think thats ok, as a variety of solutions is great for all of us, but its hard to say one decision is better than the other when they are solving different problems.
I agree with you, but re-reading the original commenter's argument, he was saying that with AWS services you don't get seamless scalability, even though there's SQS, Kinesis, Firehose. I don't think he was complaining about the number of products, I think he was making a point that most AWS services don't seamlessly scale the way Google Services do.
There's an interesting blog in the works by one of our customers, who "surprised" PubSub with 4.5 million messages per second, and kept on this test for about a week. One hell of a load test :)
And this is especially true when looking at the product I work on, BigQuery.
Google Cloud has MySQL for RDS. Agree that its lacks Oracle, MSSQL and Postgres. You can use managed Postgres by Enterprise if you like. If you are startup and running Oracle in AWS / Google Cloud, that's probably not a wise choice (You don't get the benefits Oracle, which is performance in AWS / Google Cloud). A startup using MSSQL in cloud? May for a niche purpose. If you are a big company with lots of legacy apps built with Oracle / Postgres / MSSQL, AWS makes more sense in short run.
But but what about all the articles 3 months ago that were saying we're definitively not in a tech bubble ?!
It reminds me of 1999 or 2000 were I saw at my local book shop a book titled something like "are you ready for the next 20 years of uninterrupted economic growth ?" written by 2 Nobel price winners, no less ...
Then there was the (should I say first ?) tech bubble pop one or two years later ...
The NASDAQ plunged from over 5000 in March 2000 to about 1100 in two years. That was a bubble. People getting laid off is not a bubble, if so, then we will keep having these 'bubbles' every year making the whole term meaningless.
The very fact that 20 people jump in and warn us at the slightest hint (like this) that this is a bubble tells me that we are not in a bubble. Even if people get laid off they will find work else where. Funny thing is that this article talks about laid off tech workers finding work in Finance, which as we speak is getting decimated.
How do you know if this isn't March 2000 all over again.
A tech bubble would look different than in 2000 because companies didn't go public the same numbers as last time. That blunts the impact a bit. But it also hides the impact. If VCs go into panic mode you won't know about it until start ups start failing in high numbers from running out of runway.
Hah! Every article I read for the last two years has been gleefully predicting this for a year now. Most SV companies (including some of the much maligned "unicorns"), I know started buckling up and becoming profitable far before this. Some frivolity will end no doubt, but the gleeful anticipation with which some people have been awaiting a bubble pop might be disappointed. This still just looks like a correction compared to what happened last time.
Interesting viewpoint from Bischke: "startups doing something genuinely different just because there is no one paying them just to be another Uber for teddy bears".
This betrays a lack of trust that VCs are able to judge the value of a company. That they really only invest in companies because others invest in them. Or that they invest in something they are very familiar with and are unable to recognize technological disruption.
I've a startup so I've never been on the other side of the table, but I can't imagine that there is not also a survival of the fittest on the VC side. Perhaps being very early in a company doesn't pay off in an extraordinary fashion? How would the system not be autocorrecting for VC failure?
70% of what they are funding in SV is absolutely nonsensical, while 70% of what makes sense is not even located in SV. This percentage is bound to keep going up. SV will not remain the center of the technology startup world for much longer.
Just goes to show that sound financials in a startup without lots of outside investment expecting outsized returns are often smarter choices.
What sucks is that many companies that are healthy and not facing layoffs are going to use all this doom and gloom news (that really seems to be trying to feed off itself and spark a downturn that is smaller than they want it to seem) to ride their employees harder, depress salaries, etc.
I strongly advise anyone with any power over salaries and such to consider strongly that if your business is healthy, continue paying a fair market wage. The job market is still strong, and your employees loyalty will disappear overnight the moment you start trying to knock down their pay if you are clearly not in the same boat as over-funded/valued startups and just trying to take advantage of the situation.
Geographically, that may be the case. But because it's lumped in with a clique of SV startups, I don't think being in Seattle detracts from what's going on in SV is also affecting software companies in the rest of America.
(To be clear, I think "SV" implies the style of software companies found in SV that may be found elsewhere in America.)
Oh noes, they'll have to think about office space in Fremont or Milpitas... the horror and, and the workers will have to contemplate moving and paying a low 2,000 for a 1BR in the lower East Bay, the cost savings horror...
But seriously, some trepidation like this in the market is probably good for stabilizing some of the office space and housing prices [employers being more fiscally responsible when leasing and employees renting more affordable places in the suburbs anticipating instability and reining in extravagant housing spending --I wanna be able to walk from my flat to the baa that charges me 16 per drink]
>employers being more fiscally responsible when leasing and employees renting more affordable places in the suburbs anticipating instability and reining in extravagant housing spending --I wanna be able to walk from my flat to the baa that charges me 16 per drink
This statement seems excessively judgemental. What exactly is wrong with someone wanting to walk from their flat to a bar to pay X for a drink, and pay what housing cost they are OK with for that privilege? And what's wrong with companies paying to be in the same environment?
EDIT: rewording
Wrong? Nothing. Sustainable? Except for Hollywood; not very; something's got to give. It's not as if most are getting paid millions per movie and could afford a year or two without a job [or hit for an actor] The point is, it's a bit short-sighted. If the rents were a slight premium, sure, ok. But when they are exorbitant as they are it makes little fiscal sense [except for those who hit paydirt] but those likely bought houses and aren't renting.
In other words, save your money, maybe you'll have to commute and maybe the bar won't be as close or have all the cool people, but it's worth having money for when there is a collapse.
General macroeconomic scare mongering has an upside in that perhaps some fat will be trimmed. Those with a product or service with real value should remain standing.
I wonder why http://MatterMark.com isn't covering more about this. I'd be interested in seeing what they have to say since their entire business is monitoring these trends.
They laid off a bunch of people and went through a massive restructuring themselves. I'm sure they don't want to talk about it and draw attention to that.
@w1ntermute We are not the kind of company that will 'disappear when the boom turns to bust'. Despite what you and others may think, we do not just serve startups or various types of investors. We have many enterprise level B2B customers. Our business is NOT built on the backs of small, early stage startups, which we likely won't even sell our product to. Also, if there is a but, it'll be us reporting the trends on it.
@askafriend I work at Mattermark and we have not gone through a 'massive restructuring'. As with any growing startup, some people don't work out, traditionally more sales people vs. other types of employees. We are on a steady hiring trajectory and we have no problem with being transparent as a company. Where did you here we went through a 'massive restructuring"?
I wonder if this will temper the growth of so many 'hacker dojos' or 'code schools' churning out entry-level developers/designers with promises of near 6-figure salaries.
I want to read more news about startups, venture capital, Silicon Valley/SF on HN - 29 news on HN frontpage are about other topics (interesting for sure, but the balance is off).
Can you give some examples of stories that you feel should be discussed on HN, but weren't?
I see a lot of startup stories here. I fear that part of the problem is that stories get posted, have good discussions, and fall off the front page before many readers see them.
> I fear that part of the problem is that stories get posted, have good discussions, and fall off the front page before many readers see them.
That's it, and I share your fear. I don't know how to solve it. Maybe it's what the majority wants on the top, maybe it's what a vocal minority with high karma points doesn't want (flagging/whatever negative news). I just see the end result. I would just like to get the big picture on the frontpage and not have to rely on algolia search for that.
One thing I realized is that HN front page has very different topics depending on which time I check HN. It shifts its focus depending when people tend to visit HN from east cost, west cost, europe, asia. A useful function would be to check out the HN frontpage how it looked at a specific time. Let's say I would like to see HN as it looked like 8am Pacific timezone yesterday. I know about https://news.ycombinator.com/lists , maybe add another filter to that list.
> A useful function would be to check out the HN frontpage how it looked at a specific time. Let's say I would like to see HN as it looked like 8am Pacific timezone yesterday.
sigh, kids these days. first of all, i'm sure this exists somewhere on the internet. start with archive.org and go from there. if not, witness:
for bonus points, version control it with github so everyone can see it. even better, send it into elasticsearch. hint: curl -X -F -H
you could implement a website that does this in literally an hour with today's tools. hell, you could even run it through some basic tools like python NLTK and matplotlib and twilio to text message you a fucking color-coded n-gram frequency pie chart every time it runs. you don't need ruby on rails, rabbitmq, redis, and a huge sql schema to do this, just a few lines of bash and python.
this would be more useful than 85.1% of startups operating today, which is probably part of the problem. feel free to steal it.
And.. no-one was really that interested. I used it every now and then to catch up but when HN moved to the new API I didn't bother updating it (although it would be trivial to do so if anyone were interested).
okay, then take it a step further. train a bayesian classifier to automatically notify you of things you teach it to find interesting. this can be done in probably ~200 lines of python and 2 or 3 dependencies -- i did it at a previous job. they are remarkably effective at simple tasks like "you might like..."
About the "fall off the front page before many readers see them" problem: that's a serious problem, as the discussion is what makes HN such a great place. Maybe reduce the options to "downvote" a news. It should be enough to upvote a news. If a news fall of the frontpage because certain members don't like it, they shouldn't be able to downvote such news in the first place.
Good point. There's clearly at least a little added value in making this info available from HN itself; I wonder how much.
Other ideas we've pondered for surfacing good content: letting users mark posts as favorites and share their lists; or letting people nominate posts as "good but overlooked" and assembling lists of those.
Yup, I use hn.algolia.com for that too plus some advanced search to filter my interest around startups and SV.
Though, if more users of HN could see insightful news, some news would have more comments. And HN is all about comments. I often find out about a news like 8 hours late, and rarely users check back the next day to follow up. (the "threads" link on top definitely helps)
> the best startups, like Google, come out of a period like this
Google isn't a startup. In fact, a company ceases being a "startup" once it finds a business model with which it can sustain itself. If a company can layoff a percentage of it's employees, slow growth, and still make money, they aren't a startup.
We really should stop putting ourselves in double binds with stupid statements like this and reject them when we hear others parroting them.
I'm well aware of Google's history and the dotcom bubble that occurred from 1999-2003. I'm also aware that Google made $19M in revenue on a loss of $14 million in 2000 and I'm saying the company Google was at that time can't be considered a "startup". It's a contentious point, clearly.
> Margaret Quigley, 27, a techie with some coding experience, is on the hunt for a job in San Francisco.
> Quigley, who previously worked at a popular consumer start-up, has been job hunting for five months. She recently rejected one start-up's offer, a one- to two-month tryout — without pay. Quigley said she has also rejected multiple sales job offers and an offer that was in the right field but came in too low.
I'm sorry but... what? Not everyone can do software development. This bit makes it seem like any person who is considered a techie can now land a cushy job.
If you don't know what you're doing, expect really bad offers. Maybe take an internship and make a name for yourself. I had to work basically minimum wage for about six months at my first startup gig and that propelled me to what I'm doing today. Not sure what that bit was about.
> It's a tough time to be job hunting in Silicon Valley, and things are about to get a lot harder for individuals with certain skills.
I just got a job in the Bay Area so again, I don't think these are valid points in this article.