Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The tech sector teardown is more catharsis than crisis

ft.com

Post reply on HN
Print view View original

11–20 of 258 posts

Re: The tech sector teardown is more catharsis than crisis

#11

Post by version_five »

JCM9 wrote: post #5

There’s a whole generation of tech employees that have never seen a down market. All indications are that these folks are woefully unaware of what’s on the horizon now. It’s going to be all about cash flow. If you’re burning cash and not making much of it from operations then it’s going to be a bumpy road ahead. Buckle up.

In the dotcom boom in Canada there was a sub-boom in fiber optics and related stuff in the Ottawa area. Nortel et al were hiring and paying big salaries right out of school, and people got used to it and thought that was how much money they could earn.

For years afterward there were people who had mentally anchored themselves at a certain salary bracket that couldn't find anything (especially in Ottawa) that paid anywhere close.

I always assumed this will happen any time with machine learning, I don't think it will be as bad for software overall though.

Re: The tech sector teardown is more catharsis than crisis

#12

Post by LewisVerstappen »

plaidfuji wrote: post #9

My biggest question behind all of this is how interconnected is the tech bubble, and how self-perpetuating will a downturn be? The venture-backed startups that I’ve worked at have themselves utilized tools built by other venture-backed startups. It seems like there’s an entire cottage industry of SaaS tools designed to make it easier to scale up small companies. What will the effect of a startup downturn be on compan…

Yeah, the same applies doubly-so for crypto markets (the other area where VCs have been going crazy). A drop in the price of BTC and ETH has massive ripples in the rest of the crypto ecosystem.

Re: The tech sector teardown is more catharsis than crisis

#13

Post by kqr »

SemanticStrengh wrote: post #10

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

This goes for any social construct, and is just about meaningless to say.

The only reason you have a family is because you believe you have a family.

The only reason you have a manager is because you believe you have a manager.

The only reason you're in a soccer team is because you believe you're in a soccer team.

The only reason you have a grocery store is because you believe you have a grocery store.

And so on.

Re: The tech sector teardown is more catharsis than crisis

#15

Post by tluyben2 »

JCM9 wrote: post #7
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.

That was a factor, but more fundamentally it was companies with wild valuations and no realistic prospects of becoming a profitable and self-sustaining business. There is some of that out there right now. Market corrections exist in part to flush those companies out of the system.

Some of that? There are a lot of companies that raised 20m+ without any hope of ever paying that back and actually heavily depending on new rounds of funding to survive at all. This was all wrapped up as ‘pump everything in growth’ which works as long as it works and that was no different in 1999 when companies were also just buying users (one of my clients at the time gave away free groceries the first month of your membership; guess what the retention was after that month) with investor money. When that dried up, all users left in a a few months and the companies were gone. This will happen again. Everyone I know (business and personal) uses a lot of freemium services from startups they will never pay for; they will simply leave the second they have to pay or when ads appear. And that has to happen for these companies to have a chance at all.

Re: The tech sector teardown is more catharsis than crisis

#17

Post by SemanticStrengh »

kqr wrote: post #13
SemanticStrengh wrote: post #10

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

This goes for any social construct, and is just about meaningless to say. The only reason you have a family is because you believe you have a family. The only reason you have a manager is because you believe you have a manager. The only reason you're in a soccer team is because you believe you're in a soccer team. The only reason you have a grocery store is because you believe you have a grocery store. And so on.

wtf you are totally 100% missing my point, the current recession is a self-fulfilling prophety that is auto-amplified in mediatic echo chambers and by sell feedback mechanism on stock values.

Re: The tech sector teardown is more catharsis than crisis

#18

Post by SemanticStrengh »

chillingeffect wrote: post #16
SemanticStrengh wrote: post #10

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

Ppl believe there is a recession bc of specific macroeconomic conditions. Iirc you specifically described them a few days ago!

the base reasons do not matter much, the effect we will observe is order of magnitudes higher than the original reasons, because of the self fulfilling prophethy of autoreinforcing feedback and mediatic echo chambers. Every media that amplify the fear is responsible for an amount of suffering on earth. The 2008 crisis was mostly an absurdity that hurts the brain in retrospect. Thankfully I will make some money by buying now, afterall under those circumstances, economy is an intelligence market.

Re: The tech sector teardown is more catharsis than crisis

#19

Post by chrisseaton »

version_five wrote: post #11
JCM9 wrote: post #5

There’s a whole generation of tech employees that have never seen a down market. All indications are that these folks are woefully unaware of what’s on the horizon now. It’s going to be all about cash flow. If you’re burning cash and not making much of it from operations then it’s going to be a bumpy road ahead. Buckle up.

In the dotcom boom in Canada there was a sub-boom in fiber optics and related stuff in the Ottawa area. Nortel et al were hiring and paying big salaries right out of school, and people got used to it and thought that was how much money they could earn. For years afterward there were people who had mentally anchored themselves at a certain salary bracket that couldn't find anything (especially in Ottawa) that paid any…

> and thought that was how much money they could earn

But they were right.

Re: The tech sector teardown is more catharsis than crisis

#20

Post by idealmedtech »

SemanticStrengh wrote: post #17
kqr wrote: post #13

Earlier quoted context omitted.

This goes for any social construct, and is just about meaningless to say. The only reason you have a family is because you believe you have a family. The only reason you have a manager is because you believe you have a manager. The only reason you're in a soccer team is because you believe you're in a soccer team. The only reason you have a grocery store is because you believe you have a grocery store. And so on.

wtf you are totally 100% missing my point, the current recession is a self-fulfilling prophety that is auto-amplified in mediatic echo chambers and by sell feedback mechanism on stock values.

I think it's clear from the pandemic that stock values do not correlate with the economy.
Post reply on HN