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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

#141

Post by itsoktocry »

matwood wrote: post #122
itsoktocry wrote: post #74

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? 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 So what? Last year COIN made $3.62B earnings. They may need to shift at some point, but I think it's incorrect to act like 1-2 bad quarters means a company should completely shift their plan. If anything, it's more important than ever to hire top people - which requires a decent salary.

>If anything, it's more important than ever to hire top people - which requires a decent salary.

These are not "top people", they are average people. This isn't Lake Wobegon, where all the kids are above average.

>So what? Last year COIN made $3.62B earnings.

Only in Silicon Valley do people say "so what" to profits and quote revenue numbers. We're literally talking about high costs. Selling dimes for a nickel is simple, but not sustainable.

Re: The tech sector teardown is more catharsis than crisis

#142

Post by onlyrealcuzzo »

robbomacrae wrote: post #140
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…

"cannot possibly provide the value necessary to keep their job." It's actually very much possibly for software engineers, at least, to justify high valuations. As an example when I joined Reddit my first task was to remake a data engineering server in scala that cut down the needed AWS machines by 70%. That cost saving already covered more than my salary in perpetuity and I was only 3 months in.

The vast majority of startups aren't doing anything remotely complex enough to be able to save money on electricity by paying for developers to write more efficient software. Or if they can - the instances are few and far between.

The vast majority of startups are also heavily cash-flow negative - so anything you do likely won't pay for itself.

It's almost always a bet on a rosy future.

Re: The tech sector teardown is more catharsis than crisis

#143

Post by slavoingilizov »

crate_barre wrote: post #62

Someone needs to explain to me why our tech companies are so tied to interest rates. Are VCs borrowing with home mortgage equity??

The whole economy is intertwined. This is a very simplistic way of looking at it, but if you can park risk-free capital somewhere which generates high interest, the opportunity costs of investing in tech become higher, so VCs stop investing. Also - you're committing money in a business with a higher risk of not returning them given the economic outlook of their customers and revenue. Tech isn't isolated from the world.

Re: The tech sector teardown is more catharsis than crisis

#144

Post by [deleted] »

SemanticStrengh wrote: post #97
boringg wrote: post #95

Earlier quoted context omitted.

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…

[deleted]

Re: The tech sector teardown is more catharsis than crisis

#146

Post by Apocryphon »

kbos87 wrote: post #38
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…

The idea that there’s money to be made not in industry X, but supporting industry X has been taken to the extreme in spaces like crypto where that’s pretty much all the space consists of. I can’t think of more than a few examples of successful, scaling companies that are actually using blockchain as a means to an end that doesn’t come back to “building the infrastructure for the use of blockchain” in some way.

We’re experiencing a glut of shovels.

Re: The tech sector teardown is more catharsis than crisis

#147

Post by boringg »

SemanticStrengh wrote: post #97
boringg wrote: post #95

Earlier quoted context omitted.

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…

I didn't respond to you argument because it was incoherent and unrelated:

Why are you even discussing VATs? Politically infeasible and not a tool at the disposal of the Fed - its at the disposal of the legislature. Also it doesn't solve the problem that the Fed has - which is reducing money supply / offloading its balance sheet and reducing inflation without tanking the labor market.

Re: The tech sector teardown is more catharsis than crisis

#148

Post by fnbr »

dasil003 wrote: post #76
neill wrote: post #67

Earlier quoted context omitted.

This is extremely out of the ordinary- Levels.fyi lists a salary of $224,000 for a Staff level SWE at Google

The coin base is almost certainly total comp, especially since they give annual (rather than the standard 4-year) equity grants.

Yeah, no way that Coinbase is paying $380k salary.

Re: The tech sector teardown is more catharsis than crisis

#149

Post by Apocryphon »

ctvo wrote: post #46
nemo44x wrote: post #39

Earlier quoted context omitted.

I think a month ago was a totally different time than today. I know of a few companies that froze most hiring (including in cases where an offer was about to go out) temporarily with the last couple weeks. Of course I haven’t sampled every company. Just a very sudden defensive position springing up more and more.

Meta very publicly announced a hiring slowdown, Netflix is introducing levels and slowing down hiring, Coinbase is slowing down hiring, etc.. Even with the above names slowing down hiring, I would guess big tech uses this opportunity to stockpile even more engineers to come out of this stronger. I don't see the competition for engineers that can pass those interviews slowing down. Startups? Yes, the cohort that raise…

Meta ran into signs of trouble months ago, when the report in February announced they were shedding users for the first time. They’re ahead of the curve. Netflix use has also dropped, and the stock price has followed. Coinbase is experiencing a crypto crash.

Not that any of that are disconnected from larger economic trends, but they’re also unique to each business’s segment.

Re: The tech sector teardown is more catharsis than crisis

#150

Post by kqr »

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.

It might be the case that I just haven't communicated my point clearly enough. To a surprising extent, "self-fulfilling prophety that is auto-amplified in mediatic echo chambers and by feedback mechanism on X, Y and Z" describes a large portion of the human social condition.
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