> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done

ZIRP allowed a lot of "businesses" to exist that wouldn't in a conventional, competitive capitalistic environment. Businesses in quotes because there was never any reasonable potential for profitability, but it didn't matter because VC money was cheap. Building a sustainable business is hard, playing "startup founder" and having that lifestyle subsidized by VCs is easier.

In that case, (over)engineering was part of the performance art that was required to keep your only revenue source: the next funding round. There was never any incentive to "finish" the product because doing that would put your business model (or lack thereof) to the test and stop the music. On the other hand, as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around, chasing the next funding round and using that to pay yourself/your friends decent salaries.

During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. For those that have run out of grifts, they fold or "incredible journey" and get sold for pennies on the dollar to entities like Bending Spoons that do notice there are bloated engineering teams that can be cut.

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refulgentis 7 hours ago | parent [-]

You hold ZIRP caused this, then cite crypto and AI as continuations, both post-ZIRP. Which is it?

> as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around

I lived this in a particular industry firmly inside the ZIRP era. It doesn't begin to describe how things actually worked. Even if ZIRP is synonymous with endless money to you, on their end, they still had to choose how to allocate it, and it was finite. You're not going to a bank for a loan, you beg people with experience in software to believe you're trending up.

> During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI.

Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?

Your argument requires believing that engineers collectively ran a con that no investor, board member, or executive noticed for a decade, and the only people who figured it out were PE firms after 2022. That's conspiracy theory dressed in finance vocabulary.

The leveraged buyout model you're praising as "normal capitalism" is itself subsidized by cheap debt. You've correctly identified that cheap money distorts incentives. You've just misidentified which side of the transaction is the distortion.

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Nextgrid 6 hours ago | parent [-]

ZIRP was the era of where any tech startup was seen as a good investment no matter how stupid. Take any stupid business that doesn't work, say you do it with tech, get millions thrown at you. Then it was blockchain - same story, conventional business that doesn't work, but with blockchain - boom, instant money. Now the same with AI.

> you beg people with experience in software to believe you're trending up

Considering how much stupid shit I've seen funded (that quietly "incredible journey'd" away or folded by now) I don't think much begging was involved. Capital was desperate to find a place, no matter how ill-advised. Everyone in the startup food chain enjoyed it.

> Do you genuinely believe DAUs/MAUs stopped mattering once crpyto, then AI, arrived?

What started mattering is a clear path to monetize said DAUs/MAUs. You can't just show up with (potentially flawed) analytics saying you have DAUs and you're gonna figure out monetization later. Now you need to actually figure it out now and show up with analytics + proof of actually monetizing those users. Well, except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later.

> collectively ran a con that no investor, board member, or executive noticed for a decade

"Investing" in a Ponzi can still be profitable as long as you get out before it collapses. There was a lot of passing around the hot potatoes between VCs too, so a VC can rightfully determine something to be a scam, but still invest if they believe SoftBank will happily hold the bag (and those guys ended up taking a lot of bags).

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refulgentis 6 hours ago | parent [-]

> "except if you're selling AI - then it's ok to sell inference at a major loss and figure out monetization later"

So the dynamic you attributed to ZIRP is alive and well, just wearing different clothes. Your original framework was "ZIRP allowed this, now real capitalism is correcting it." Now it's "this is permanent, it just rotates themes." These are different arguments.

> "Investing in a Ponzi can still be profitable as long as you get out before it collapses... a VC can rightfully determine something to be a scam, but still invest"

You've just moved the con from engineers to VCs. If investors knowingly played hot potato, then engineers weren't running a grift, they were employees doing jobs while capital played musical chairs above their heads.

So which is it: were engineers "deadweight" padding out finished products, or were they ordinary workers caught in a game VCs were knowingly playing? Because "VCs knew it was a scam but invested anyway" is a very different story than "engineers tricked everyone into thinking the product wasn't finished."

You're retreating into "everyone knew it was fake."

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Nextgrid 5 hours ago | parent [-]

I'm making the argument that past bubbles like ZIRP, blockchain and now AI have given many engineers the illusion that "engineering" the same product forever is a sustainable endeavor.

Turns out that's not the case and with each bubble popping more and more people get a rude awakening. Some are able to jump on another bubble and keep the gravy train going, but might be left in the dust in the next one and so on.

If anyone was conned, it's primarily the younger engineers who started their career in those bubbles, were never exposed to the financial realities or even forced to think about it, and now get a very unpleasant wake up call.

You may disagree with my argument - but in that case I suggest taking a short position on Bending Spoons & their competitors who appear to be making the same argument and putting their money where their mouth is.

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refulgentis 4 hours ago | parent [-]

You've fully retreated:

You started by calling engineers "deadweight" that Bending Spoons correctly cuts. Now they're victims who were "conned" and given "illusions" and deserve sympathy for their "unpleasant wake up call."

These are incompatible framings. Deadweight is culpable. Victims of a con aren't. Which is it?

> I suggest taking a short position on Bending Spoons

Strip-mining is often profitable. That's not the disagreement. The disagreement is whether "profitable" validates your original framing that the workers being cut are deadweight rather than, by your new admission, ordinary people who were lied to by the actual decision-makers.

Note also the lack of understanding of finance, coupled to parroting pop-finance, continues. You're trying valiantly to hammer phrases we all know, into meanings they don't have. They sound epic, and are very "law of nature" feeling. I understand the appeal. Anyways, you cannot short a company without a stock.

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Nextgrid 4 hours ago | parent [-]

I guess that was poor framing on my part from the beginning; I used the term deadweight meaning overhead that can be cut, not implying culpability one way or another.

Which positions are culpable or victims is besides the point here (I have other comments on ZIRP related threads if you are interested, where I do make direct accusations).

> ordinary people who were lied to by the actual decision-makers

Were they truly lied to? They got paid for years of service. Now whether they got lied to by Bending Spoons denying there will be layoffs I don't know (or whether the lie matters - for all we know they got a fair severance package, at least in places where that is legally mandated?).

But for those who started their career in the "good days", I would say they got misled by an environment that rewarded raw engineering without concern for the business outcome of said engineering (and often rewarded over engineering in fundamentally unsustainable businesses). Now the business outcome is suddenly becoming the most important thing and these people are taken by surprise.

---

Now it's clear you have some kind of beef with me; I'm either talking complete shit, or I struck a nerve. Maybe a bit of both. Either way I will not pursue this conversation further - best of luck!

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refulgentis 4 hours ago | parent [-]

I don't have some kind of beef with you. I react personally too in these long discussions, don't begrudge you the impression.

Just saw what I thought was youth, but it was a fellow older fellow*, so chased the interlocution more than I usually would because I was curious and wanted to make sure there wasn't insight I had missed and you were speaking loosely (as is normal, we are not robots)

re: motivation, I took a lot of pride in not taking money back in prime ZIRP, early-mid 2010s and felt it was vindicated by what I saw happen to competitors.

What I saw was proto-"Bending Spoons" behavior. Frankly, Bending Spoons seems ethical and right-headed at its face. i.e. after 30 seconds with their website. but what do I know.

What I saw was private equity rollup iPad-based point of sale software who couldn't justify another round, and let the business owners using their point of sale systems flounder until they got the energy to switch. Explicitly. the rug pull wasn't just on engineering or further development of the system, it was support too. That might sound stupid (who needs support w/software?), but its necessary for point of sale due to credit card processing. Multiple companies, same playbook.

Cheers & apologies, I went too far, I left you feeling like it was a grudge.

FWIW it's also important to me because I want a fellow wide-eyed college-dropout-waiter soaking in HN from a small town to know VCs involved in these messes will continue acting as they have post ZIRP, as you've established.

* via your HN profile, not stalking off site or based on username

	▲	Nextgrid 2 hours ago \| parent [-]
		No worries, all good! It's difficult to convey emotions and tone online. > it was a fellow older fellow ~11 years professional experience only - still got plenty to learn, but unfortunately seen enough shit to be cynical. Started out starry-eyed in the middle of the ZIRP era ~2015 and made some salary off it but no exit money, though something felt off and I never understood the over-engineering at the time. Then as I gained experience, switched to consulting to boost my earnings and looking back at it my (admittedly very jaded) opinion is that a lot of that "engineering" was performative bullshit enabled by cheap money, which continues to be the case in some verticals (blockchain; now AI). Senior engineers of the time would've likely known it was bullshit and were just happy to play with new tech while subsidized by VCs, but unfortunately this "quiet part" was never said out loud to those who started their careers during this period and for whom their only experience of technology was through this distorted lens of cheap money and no financial/business pressures. The result is a lot of very senior people tech-wise but with little exposure to the business side of their craft, who the readjustment hit like a brick wall. The fact my statement about maintaining a (well-built) product requiring much less manpower than building it is apparently controversial suggests many people have yet to experience this brick wall. But for those who looked into the financials, the selling out and subsequent layoffs should've come at no surprise - it was never sustainable to keep paying those tech salaries perpetually. The same thing happened to blockchain/web3/crypto, and the same will eventually happen to AI. There is still and will always be money to be made in technology, but it will be made by applying technology to business problems and approaching every problem as "how much money does this make/save and how big of a cut I can negotiate". Permanent employment is just letting someone else do said negotiation on your behalf in exchange for a promise of stability - well, turns out when the times are tough they don't have to keep that promise: plan accordingly. (btw, this ZIRP-era distortion was not limited to technical roles - there were plenty of "startup founders" and executive roles too who got there because of the cheap money rather than earning said position through demonstrated skill - unsurprisingly, a lot of those people have since quietly transitioned back to the rank & file once the money fueling their little startup escapade ran out)