Personally I think all these posts miss 50% of the issue... I agree it's not AI, but I suspect it's only partially an interest rate story.

Tech changed a lot from 2010 to 2020. Prior to 2010 almost everything built required a huge amount of development effort, and in 2010 there was still a huge amount of useful stuff to be built.

Remember – prior to 2010 a lot of major companies didn't even have basic e-commerce stores because the internet was still a desktop thing, and because of this it really only appealed to a subsection of the population who were computer literate.

Post 2010 and post iPhone the internet broadened massively. Suddenly everyone was online and companies now had to have an e-commerce store just to survive. Only problem was that there wasn't a Shopify or even npm to build from... So these companies had to hire armies of engineers.

Similarly there was no Uber, online banking was barely a thing, there was no real online streaming services, etc, etc, etc...

During this time almost everything had to built by hand, and almost everything being built was a good investment because it was so obviously useful.

Around 2015 I realised that e-commerce was close to being a solved problem. Both in how most major companies had built out fairly good e-commerce stores, and also in how it was becoming relatively easy for someone to create an e-commerce store with almost no tech skills with solutions like Shopify.

I'd argue somewhere between 2010 and 2020 the tech industry fundamentally changed. It become less about building useful stuff like search engines, social media sites, booking systems, e-commerce stores, etc – these were the obvious use cases for tech. Instead the tech industry started to transition to building what can only be described as "hype products" in which CEOs would promise similar profits and societal disruption as the stuff built before, except this time the market demand was much less clear.

Around this time I noticed both I and people I knew in tech stopped building useful stuff and were building increasingly more abstract stuff which was difficult to communicate to non-technical folks. If you asked someone what they did in tech around this time they might tell you that their company are disrupting some industry with the blockchain or that they're using machine learning pick birthday cards using data sourced from Twitter.

I used to bring this up to people in tech but so many people in tech at this time had convinced themselves that the money was rolling in because they were just so intelligent and solving really hard problems.

In reality the money was rolling in because of two back to back revolutions – the internet and the smart phone. These demanded almost all industries made a significant investment in technology, and for a decade or so those investments were extremely profitable. Anyone working in tech profited from those no-brainer technical investments.

Post-2015 the huge amount of capital in tech and the cheap money allowed people to spend recklessly on the "next big thing" for many years. 2015 to 2020 was such an amazing time to be in tech because people were basically throwing money at you to build literally anything.

But time's up now. Companies are realising that a lot of the money they invested in tech in recent years isn't profitable and isn't even that useful. So now they're focusing in on delivering value and building up profit margins.

The tech market isn't broken, it's coming back down to reality. Like railway workers post the boom we must face that most of the core infrastructure has now been built. A few of us will stick around making the odd improvement and maintaining what's already there, but that boom isn't coming back. Many of us will need to seek new professions.

I mostly agree with your assessment of the industry. However, I think there are still more new and useful products to be built. They are not “the next big thing” though. Big tech Management has been screwing this up in a couple of ways though.

1. prioritizing bets for things that could be as profitable as social media or e-commerce instead of betting on more incremental improvement products.

2. Focusing on pricing everything with reoccurring revenue and thus increasing the lifetime cost for end users instead of selling products at a discrete costs and providing end users value

3. Optimizing for growth and controlling the vision of products instead of letting small groups of talented people slowly build products.

4. Treating people as fungible resources and moving them around all the time rather than letting people develop unique expertise skillsets.

As a result, any product that can’t achieve $10+ billion annual revenue within a couple of years with a ship of Theseus team is deemed a failure and scrapped.

Great comment. I’m thinking along similar lines — what is there in tech to build? And the answer is, not much for the current cohort of services.

Big product companies with big products are solved problems in their respective fields. Building an Amazon or a Facebook is quite a lot of work. Maintaining it is much less work.

For a while the industry has done a thing where you do e.g. infrastructure in five different ways across ten different teams across three departments. It created a lot of “work” but it didn’t create much additional value.

Another instance of this was myriad “internal products” with the idea that some of them will be blockbusters because Paul Buchheit built Gmail as a 20% project in days of yore. That didn’t go so well, either.

You get the feeling that all this merry but ultimately futile kerfuffle was done to fuel the hype of growth but the actual job positions were completely uncoupled from revenue growth. For a time this was hard to see while global expansion was happening. Revenue was growing rapidly and so was headcount. It seemed to check out, arithmetically, but it’s not sensible. It doesn’t take twice as many workers to service twice as many employees in this industry.

When the global expansion didn’t have anywhere else to expand to and revenue stopped growing, the workforce-sustaining illusion fell apart. Now those companies are unloading everyone but the skeleton crew it takes to maintain the products. That’s a lot of people.

Brother, the tech market is coming up to reality.

You and your good reasoning, but it means nothing to me.

Many of us will seek new a profession indeed: AI engineer. AI engineers mostly write code, but they are superior to software engineers...from the eyes of investors.

AI engineers mainly build abstract stuff: SaaS. They kill who the investors currently love the most: managers. 90% all managers will be replaced. 100 managers can be replaced with 10 managers and 10 security guards.

Then they kill 70% of the doctors, lawyers, and salesmen.

Then they kill 50% of the software engineers.

Then white becomes blue, and the eyes shift towards energy, transportation, and construction. The AI engineer, writes code like an AI, and notices these giant companies are sick. They can lobby all they want but the AI engineer and the AI lawyer will win.

Everybody who laughs now about software engineers being replaced has become serious, for the AI engineer has replaced the software engineer.

Let's see who is right in 2035. Your intelligence, or my fantasy.