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The tech sector teardown is more catharsis than crisis

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Re: The tech sector teardown is more catharsis than crisis

#91

Post by SemanticStrengh »

boringg wrote: post #65
SemanticStrengh wrote: post #10

The only reason there is a recession is because people believe there is a recession

The Fed is hitting the breaks on demand in order to slow down inflation. If they slow the demand side too fast then we enter a recession, if they manage to do a soft landing the pull back demand enough that supply can catch up bringing inflation back down to a 2% range with many a small downturn or short recession. The goal is too slow down the aggregate demand in the market - whether or not we believe that it is a r…

> The Fed is hitting the breaks on demand in order to slow down inflation.

Are we watching the same news? The measure to slow down demand is to increase the VAT https://en.wikipedia.org/wiki/Value-added_tax I don't remember what the Fed/SEC did the last months but it was a measure that had for effect to reduce investment in stocks (would appreciate if you could point out the name of the tax fee) Deincentivizing/diminishing investment in companies result in what? In a reduction not of demand but of production.. Enterprises will downscale their productions and are subject to auto amplifying panic hysteria. The panic sentiment do reduce demand from people (non linearly).

The gap between demand and production, which is an absurd inertia that should have been anticipated during covid, is mild and most importantly is reducing quickly as time passe, unless of course media hysteria induce panic buys.

most importantly, the salient absurdity of the thing is the non-locality of the discourse and of the measures. Only a limited set of companies have a deficient offer/demand ratio, e.g. a company can distribute 1 billion software copies just fine. However the panic mediatic fear of market subinvestment affect even the enterprises that have no issues matching demand, which are in fact the majorities of companies (although yes some key fundamental companies might be limited), moreover the FED/SEC measures affect them equally, and therefore the VAT measure I propose to reduce demand ( which seems incredibly more logical) should be applied locally and proportionately to how much a specific company demand/offer ratio is affected.

either I'm wrong either the system is just doing absurd suboptimalities and I'm betting more on the latter than the former but please share your thoughts.

Re: The tech sector teardown is more catharsis than crisis

#92

Post by jen20 »

lupire wrote: post #58
neill wrote: post #56

Earlier quoted context omitted.

The issue they are raising is specifically that, $380k standardized salary band, what role is this? That number seems unsustainable.

And they gave that number out before they assessed candidate level. But maybe that was recruiting BS as the pay for the max plausible level.

Usually positions are based on reqs rather than who walks through the door. The req will have a level attached, the level will have a salary band attached. I don’t understand what you’re trying to say here.

Re: The tech sector teardown is more catharsis than crisis

#93

Post by htormey »

itsoktocry wrote: post #74
rco8786 wrote: post #68

Earlier quoted context omitted.

Why? Because it’s higher than you’re used to seeing? You don’t even know what role that person was applying for. Is your position that 380k is just “too high”, period? That number (or higher) has been the norm at a huge swath of stable and profitable tech companies for a decade+. I am making an assumption that 380 is total comp and not base salary. I don’t believe that Coinbase is paying 380 base salary for any non-e…

> Why? Because it’s higher than you’re used to seeing? You don’t even know what role that person was applying for. Is your position that 380k is just “too high”, period? Perhaps because the company lost half a billion dollars last quarter and is in a controversial space facing regulatory scrutiny? > That number (or higher) has been the norm at a huge swath of stable and profitable tech companies for a decade+. Yeah,…

"Perhaps because the company lost half a billion dollars last quarter and is in a controversial space facing regulatory scrutiny?"

Wouldn't you expect people to be paid more for working in a risky space? Also, please not Coinbase just announced a hiring freeze.

https://blog.coinbase.com/employee-note-an-update-on-hiring-...

Re: The tech sector teardown is more catharsis than crisis

#94

Post by fatnoah »

gitfan86 wrote: post #32
bearjaws wrote: post #22

I think this is just the correction that was inevitable as hiring had become a cargo cult. Everyone was hiring so everyone felt compelled to hire, creating a feedback loop of insane wages and offers. Now its time to pay the bills and many organizations realize the engineers they hired cannot possibly provide the value necessary to keep their job. I know one individual who got hired as a Sales Engineer for a platform…

I has a phone screen at Coinbase and they just threw out 380k as the salary without me saying anything as far as expectations. This reminds me of the dot com bubble. In 2000 people who had no software background and were making 50k would get offers for 80k, just for showing up at an interview and saying they know Java or HTML

> This reminds me of the dot com bubble. In 2000 people who had no software background and were making 50k would get offers for 80k...

I accepted a $54k SW Eng job offer in 2000. To be fair, I had a Masters, but only 6 months work experience. I didn't break $80k until late 2003. Now I feel bad. ;)

Re: The tech sector teardown is more catharsis than crisis

#95

Post by boringg »

SemanticStrengh wrote: post #91
boringg wrote: post #65

Earlier quoted context omitted.

The Fed is hitting the breaks on demand in order to slow down inflation. If they slow the demand side too fast then we enter a recession, if they manage to do a soft landing the pull back demand enough that supply can catch up bringing inflation back down to a 2% range with many a small downturn or short recession. The goal is too slow down the aggregate demand in the market - whether or not we believe that it is a r…

> The Fed is hitting the breaks on demand in order to slow down inflation. Are we watching the same news? The measure to slow down demand is to increase the VAT https://en.wikipedia.org/wiki/Value-added_tax I don't remember what the Fed/SEC did the last months but it was a measure that had for effect to reduce investment in stocks (would appreciate if you could point out the name of the tax fee) Deincentivizing/dimin…

FED / SEC are completely different entities with completely different roles and market functions. It's like apples and oranges. And has nothing to do with a VAT tax.

I am sorry, but your comment is almost incoherent - so my response is more of a broad general definition of what the Federal Reserve is doing to help you understand the macro context a bit more. As the Fed actions are intentionally moving the markets / economy at this point.

Short form - the Federal Reserve increasing the cost of money slows down demand in the entire economy as a function of the cost of money goes up. I am not talking only hard goods - we are talking services, investments etc. They want to slow down the demand side of the economy by increasing the cost of money. It's a blunt tool but it works - if it works to well we enter into a recession which is why they are in the hot seat right now. Very challenging as they have a simple lever where there is a considerable amount of factors (geopolitics, other countries central banks etc).

Hope that helps.

Re: The tech sector teardown is more catharsis than crisis

#96

Post by refurb »

RandomLensman wrote: post #8
stackbutterflow wrote: post #6

Earlier quoted context omitted.

I've heard the argument that the dotcom crash was so catastrophic because the Internet as a market wasn't proven at that point. That'd mean a dotcom like crisis is the lowest point this industry can reach. Which in some way is reassuring.

Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted). Look at how the telecoms industry looks now compared to the heights of 2003 or so.

If interest rates go up and inflation stays high then real returns stay low.

I don’t see VC/PE investment dropping as a percent of investments since it’s a unique high risk/high return investment than 5% bonds can’t match.

Re: The tech sector teardown is more catharsis than crisis

#97

Post by SemanticStrengh »

boringg wrote: post #95
SemanticStrengh wrote: post #91

Earlier quoted context omitted.

> The Fed is hitting the breaks on demand in order to slow down inflation. Are we watching the same news? The measure to slow down demand is to increase the VAT https://en.wikipedia.org/wiki/Value-added_tax I don't remember what the Fed/SEC did the last months but it was a measure that had for effect to reduce investment in stocks (would appreciate if you could point out the name of the tax fee) Deincentivizing/dimin…

FED / SEC are completely different entities with completely different roles and market functions. It's like apples and oranges. And has nothing to do with a VAT tax. I am sorry, but your comment is almost incoherent - so my response is more of a broad general definition of what the Federal Reserve is doing to help you understand the macro context a bit more. As the Fed actions are intentionally moving the markets / e…

You are not addressing the fact that their lever deincentivize investment and therefore production, an argument worsening inflation and you are not addressing my point saying that VAT is obviously a direct measure to reduce demand, without impacting investment as directly, finally my VAT locality on the most critically underproducing sector yet non affecting the unaffected companies that produce just fine, is a third argument. This is pretty basic. The answer is more likely to be that the U.S never had a VAT and creating one has tragic political inertia and hence the FED use the wrong tool but the one it dispose.

Re: The tech sector teardown is more catharsis than crisis

#98

Post by htormey »

neill wrote: post #82
htormey wrote: post #73

Earlier quoted context omitted.

No you are incorrect. That 224k is base at google not including equity. Staff engineers at google get a bonus and the majority of their comp is in equity, just like coin. Source, I have a lot of friends who are former/current staff engineers at a variety of Bay Area companies. I also was a staff engineer at coin. Also if you want to earn something like this in cash go work at Netflix when they start hiring again. The…

It's not incorrect, salary does not include equity. Total comp would be a combination of salary, equity, and bonuses. The OP refers to salary, not total comp. I'm using their information to reply in their thread. Happy to re-asses conversation at total comp (a different conversation) if they are referring to total comp instead of salary.

The OP is confused, I work at coinbase and that figure refers to total comp. Also levels.fyi is listing salary and not total comp for the google position he is comparing.

Re: The tech sector teardown is more catharsis than crisis

#99

Post by marcosdumay »

RandomLensman wrote: post #8
stackbutterflow wrote: post #6

Earlier quoted context omitted.

I've heard the argument that the dotcom crash was so catastrophic because the Internet as a market wasn't proven at that point. That'd mean a dotcom like crisis is the lowest point this industry can reach. Which in some way is reassuring.

Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted). Look at how the telecoms industry looks now compared to the heights of 2003 or so.

This.

What happened in 2000 was that interest rates got up and money became scarcer, so there was nobody willing to put any money into more risky investments like VCs.

Today we are in a completely different realm of money availability, but it is becoming scarcer again.

Re: The tech sector teardown is more catharsis than crisis

#100

Post by RandomLensman »

refurb wrote: post #96
RandomLensman wrote: post #8

Earlier quoted context omitted.

Not sure that follows. If (big "if") interest rates go up a lot, then a lot of investors might not reach for VC or PE to enhance their returns at even close to current allocation (and growth would be heavily discounted). Look at how the telecoms industry looks now compared to the heights of 2003 or so.

If interest rates go up and inflation stays high then real returns stay low. I don’t see VC/PE investment dropping as a percent of investments since it’s a unique high risk/high return investment than 5% bonds can’t match.

Quite a few large institutional investors have surprisingly low nominal target returns, so 4-5% can be enough (in mainland Europe, for example)
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