Your comments about 2008 and the shift of interest from finance to tech are really spot on.
I’d put the timeframe a bit later, around 2013 or so, at least in my experience. I started working at a large well-known tech company in 2010. When I joined, the company had surprisingly few employees, and they were definitely on the quirky side, with a number of people who were holdovers from a more freewheeling, “hippie-inspired” Silicon Valley of the 80s and 90s. For whatever reason, at some point around 2013, the hiring floodgates opened, but the people who came into the company were different. They were decidedly of the Ivy-League-educated, would have gone to Wall St. In my generation type, people who were maybe more career oriented rather than people who wanted to “make a dent in the universe.”
So you end up with, let’s say, 3 problems: first, just straight-up overhiring, with too many people doing too many things, and fighting each other for the tastier scraps of work; second, a bunch of people who aren’t fundamentally aligned with the core purpose and culture of the place; and, third, (and this is the most important pice, i think) a sense amongst the people who *did* get the core purpose and culture, that there were a lot of people free riding on their effort, which, even if these core people are very well compensated, is demoralizing.
My company was better than others, I think, in that it hired less aggressively and had a stronger core culture. But the dynamic was a problem. And I’ve seen it at a lot of other places, much worse. This is especially true (my impression, as an outside observer) with companies that were once-hot startups: they go through this cycle where they see incredible growth, they hire aggressively, they reach a natural equilibrium for their core “hit” product, they keep hiring, the core creative people get bored/rich and leave, the remaining people (born on third base, wall st in a different era-types) try to restart growth by creating new products that never really hit, they keep hiring... You end up with a very odd company – there’s kind of this “oil well” with incredibly talented people sitting at the core, generating all of the revenue, and then these surrounding (metaphorical) amusement parks and universities, major league soccer teams, and all of the other things that you see emirate states doing with their excess cash.
When Elon Musk bought Twitter and laid off all of those people, the news media were horrified – “How will they keep it working?”. My friends in SV had a very different reaction: “how the hell did Twitter have that many employees?”
I wouldn’t be surprised if we saw a retrenchment in tech, with the “oil wells” being extracted from the bloated organizations. Fewer free cafeterias and complimentary dry cleaners, but overall a healthier, happier tech sector.
The real climate change is on Wall Street. Great job by Allison Schrager explaining the minute course corrections of the Fed now cannot have the effect on an economy that they altered to such a degree. The government's rudder is out of the water (meaning the market doesn't care about their interest rate changes) and now market forces are independently directing inflation, tech growth and available venture capital.
Really not surprised by the younger generations desensitization of risk. They were raised by video game consoles where they spent most days jumping off buildings & dodging bullets.
Your comments about 2008 and the shift of interest from finance to tech are really spot on.
I’d put the timeframe a bit later, around 2013 or so, at least in my experience. I started working at a large well-known tech company in 2010. When I joined, the company had surprisingly few employees, and they were definitely on the quirky side, with a number of people who were holdovers from a more freewheeling, “hippie-inspired” Silicon Valley of the 80s and 90s. For whatever reason, at some point around 2013, the hiring floodgates opened, but the people who came into the company were different. They were decidedly of the Ivy-League-educated, would have gone to Wall St. In my generation type, people who were maybe more career oriented rather than people who wanted to “make a dent in the universe.”
So you end up with, let’s say, 3 problems: first, just straight-up overhiring, with too many people doing too many things, and fighting each other for the tastier scraps of work; second, a bunch of people who aren’t fundamentally aligned with the core purpose and culture of the place; and, third, (and this is the most important pice, i think) a sense amongst the people who *did* get the core purpose and culture, that there were a lot of people free riding on their effort, which, even if these core people are very well compensated, is demoralizing.
My company was better than others, I think, in that it hired less aggressively and had a stronger core culture. But the dynamic was a problem. And I’ve seen it at a lot of other places, much worse. This is especially true (my impression, as an outside observer) with companies that were once-hot startups: they go through this cycle where they see incredible growth, they hire aggressively, they reach a natural equilibrium for their core “hit” product, they keep hiring, the core creative people get bored/rich and leave, the remaining people (born on third base, wall st in a different era-types) try to restart growth by creating new products that never really hit, they keep hiring... You end up with a very odd company – there’s kind of this “oil well” with incredibly talented people sitting at the core, generating all of the revenue, and then these surrounding (metaphorical) amusement parks and universities, major league soccer teams, and all of the other things that you see emirate states doing with their excess cash.
When Elon Musk bought Twitter and laid off all of those people, the news media were horrified – “How will they keep it working?”. My friends in SV had a very different reaction: “how the hell did Twitter have that many employees?”
I wouldn’t be surprised if we saw a retrenchment in tech, with the “oil wells” being extracted from the bloated organizations. Fewer free cafeterias and complimentary dry cleaners, but overall a healthier, happier tech sector.
This is overstated. Post 2008 the major investment banks either collapsed or required a bailout; Citi is still 90% down from where it was pre-bailout.
In 2023, the big tech companies are printing money.
The real climate change is on Wall Street. Great job by Allison Schrager explaining the minute course corrections of the Fed now cannot have the effect on an economy that they altered to such a degree. The government's rudder is out of the water (meaning the market doesn't care about their interest rate changes) and now market forces are independently directing inflation, tech growth and available venture capital.
Really not surprised by the younger generations desensitization of risk. They were raised by video game consoles where they spent most days jumping off buildings & dodging bullets.
Why does the Fed continue to think that it needs to set or guide interest rates rather than simply letting the market dictate?
Rethink asset allocation? I’m generally skeptical when someone says that this time is different. It seldom is.