The boom times are over. Executives know it. Wall Street knows it. And the story that we’re in a revolutionary moment of technological transformation will run out of gas soon. So the bosses are using that moment to do what Silicon Valley wound up doing when its other big swings didn’t pan out: squeeze labor.
— Hollywood is on strike because CEOs fell for Silicon Valley’s magical thinking
I've been in this business a long time; before I started my own product company — "startup," if you must — in 2008, I spent a decade building other people's. And, believe me, I was always on Safari, always paying attention to what people said and did and what worked and didn't. I was paying close attention during the first dot-com crash even while I was personally unaffected.
Perhaps I haven't seen it all, but it's real close.
That's why I've been saying that startup winter is coming ever since this over-funded nonsense began.
Now here we are…
Startup valuations have collapsed.
VC funding is drying up.
Crypto is dead. (Inevitable.)
The metaverse never lived at all. (Predictable.)
"AI" is an attempt to recapture the frenzy that crypto generated. But the technology isn't there — actual artificial intelligence doesn't exist, and while a fancy autocomplete does indeed have some useful function, it's not nearly as broadly applicable, usable, or trustworthy as they claim. Especially not if you have professional standards. Like crypto, it's most useful for people with bad intentions, as illustrated by the Hollywood dynamics in the first link above.
Unlike crypto, AI can't inherently promise endless riches — you have to work for it, you have to have some business to apply it to — so it will never reach the same heights.
Don't let yourself be tricked into feeling like you're "behind," or "missing out" on these trends; the goal of both has always been to concentrate power and fleece people, in that order. That's why the hype is based on lies.
Nearly the entire "tech" environment we've been swimming in since ~2010 has been a zero-interest-rate phenomenon, and propped up by historic levels of wealth concentration with nowhere else to go.
That last part is crucial: Historic levels of wealth concentration with nowhere else to go.
Rich people and institutions needed a place where their money could make more money… because they were too bored for index funds, and full up on real estate, yet they didn't know how to make things. They had to cast about to find things to buy into.
They trusted the people who claimed they did know how to make things.
Those people — the venture capitalists, the starry-eyed startup founders — talked a big talk and, while they might be able to "build" things, they figured making money was a problem for another day; they could turn the hot & cold running OPM (Other People's Money) tap any time they needed it. Except now they can't.
They didn't know how to make profit. And now it's too late.
(And, in case you've wondered, that's also why these companies have been copycatting each other in such comically obvious ways… their northstar for decision-making was never the business itself, the market, or the work. It was always and ever only about the funding environment.)
That's why the end of the boom times doesn't matter for you or me, not in the long run.
That's why I was unaffected by the first dot-com crash, and the following 2008 financial crisis…
We can build things that people will pay real money to have and use.
I'm not saying the psycho-economic environment doesn't affect sales, because it sure can. And if your customers are mainly profit-free VC-funded startups, well, some things are going to hurt.
But if you can figure out what paying customers need, want, & are ready to lay out actual cash to buy, and give it to them? It's always good times.
The booms will never be as big, but neither will the crashes.
So don't get caught up in FOMO.
Bring it back to business fundamentals.
Make things people want to pay for.
Build yourself a profit.