Surviving and Thriving in Tech's New Winter
pirate wires #83 // mass layoffs, vanishing cash cathedrals, how tech lost touch with reality, and back to america's garage of myth for cover
First of all, I work hard in the meme mines all day so you don’t have to, and it is literally free to subscribe to Pirate Wires. So why on earth would you not simply do that?
Secondly, there are no actual mines, I am mostly just spending way too much time on social media. Thank you, and onward!
Tech is dead, long live tech. Last week, Meta — the parent company of Facebook, Instagram, and WhatsApp — laid off more than 11,000 employees. As early as this week, Amazon is expected to lay off as many as 10,000. In double digit percentages, workforce cuts have been made at Snap, Lyft, Stripe, Robinhood, Opendoor, and of course Twitter, with smaller but significant layoffs at Salesforce and Netflix. Over in the world of ‘Web3,’ almost forgotten by the broader public after the ‘cryptographically-secure links to monkey jpegs’ market burst, a bombshell report from Coindesk alleging misuse of funds at the world’s second-largest crypto exchange catalyzed the $14 billion company’s overnight evaporation. Brother, if you were expecting a roaring twenties 2.0, I’ve got some bad news.
While tech’s new winter is no dot-com crash, the industry does appear to be entering an era of uncharacteristic austerity. Where teams aren’t already gutted, hiring is frozen, and budgets are slashed. Climbing interest rates have increased the cost of risk, which means 1) easy venture funding is no longer something any company, at any stage, can rely on, and 2) the future profits of high-growth tech companies are now discounted in a way most young professionals — who came of age after the 2008 housing crash — have never seen. For nearly fifteen years the game was scale at all cost, and the costs were considerable. Now, to the chagrin of Boomers everywhere, businesses will have to make money. Like, today if possible.
Despite all midwit criticism to the contrary, the freedom to plan five or even ten years out has been an incredible boon to both the industry and world. There’s no short-term path to profitability for something like cold fusion, for example. It either works, and you’re the trillionaire savior of humanity, or it doesn’t, and you’re guzzling gas until we all run out and go extinct from mass starvation. Spending lots of money to take your time while you thoughtfully work on important, difficult problems is (when possible) a good thing, actually. But even the most die-hard apologist for the last ten years of cash glut has to admit, mixed in with all this very serious planning for the future, there has been significant bullshit.
Earlier today, Casey Newton reported several Twitter employees were fired after "criticizing" Elon, their boss, in public Slack channels:
Multiple contacts of my own shared screenshots of these "critiques," which included such language as "petulant man child." Shocking, really. It’s getting to the point you can’t even tell your boss to "fuck off" anymore. What is this country coming to?
I think what’s happened is something like this: in an era of endless, easy cash, productivity expectations naturally decoupled from compensation expectations, and tech workplaces gradually became identities. As working at a place like Twitter is now less a job than it is a kind of nationality, it is perfectly understandable why the remaining Twitter malcontents who haven’t yet been fired responded to their new boss, and everyone close to him, as if he were trying to kill them.
Twitter was their home. Elon broke into their home. Then he kicked out their friends, and told everyone left to do their laundry. Fuck that guy!
Commentary, both in the press and among the broader public, has bizarrely confirmed such feelings, and treated them uncritically. Every change to Twitter’s culture has been scrutinized, no matter how commonplace in every other industry, in both this and every other country on the planet. Employees will have to go to the office? How dare you, sir. Without unlimited paid time-off? Why, this is an outrage! Without exorbitantly-priced free meals and alcohol?
Back up. Is this man actually trying to kill us?
Ten years ago, ridicule for the "coddled" life of tech workers constituted an entire tech press beat. Objectionable displays of excess included bean bag chairs, ping pong tables, and, at some companies, a daily free lunch. Today, sprawling campuses evocative of Walt Disney’s most ambitious dreams for E.P.C.O.T. come equipped with everything from on-site barbershops, massage, and laundry service to arcades, and pools, and ball pits. Unlimited PTO is common. 100% remote work has been, until the last few months, expected. Pay is exorbitant, benefits are best in class, and if you want a kid? Your bespoke fertility procedures are on the house. To be clear, all of this is technically speaking awesome. The perks are not the problem.
The problem is, despite historic spending, the last ten years of tech weren’t defined by explosions of innovation. The last ten years of tech were defined by a lot of ten- or twenty-year-old monopoly products simply getting bigger. Monopoly growth is not necessarily a bad thing. In fact, in many cases it’s a good thing. But it’s not the kind of thing we’ll see in history books.
More concerning than the world of diapered adults in giant baby daycare doing nothing all day are the well-meaning efforts at real innovation still being made at places like Meta, where goals have unfortunately fallen entirely out of sync with the reality of most Americans. There, as revenue declines, Mark Zuckerberg has plowed another $10 billion into his Metaverse, the virtual world he expects most Americans to spend significant portions of their lives inside. For me — okay, for me — such a vision of the future would be concerning even were it popular. But it’s not popular. In fact, it’s not even popular at Meta.
A friend of mine who works at the company recently told me he discovered a consulting firm was training new employees in virtual reality. "Cool," I said, "why?" "That’s what I was wondering," he responded. "Why would they do that?"
He wasn’t kidding. My guy was genuinely confused. This man works in marketing. It’s his actual job to sell this product.
On further prodding, my friend made clear his sincere belief the Metaverse would eventually "happen" — certainly, absolutely, there was no escaping this fact of reality. It just wouldn’t happen today.
I shared this story with another friend of mine at the company, and mentioned I was skeptical of Meta’s new direction. My friend shared my concern. Then he told me something absolutely wild:
"No one at the company even uses these headsets," he said. "Everyone believes they’re the future, but they just collect dust."
This is the opposite of what we saw in social media a decade back, when there was no one who worked at Twitter or Facebook or Google who wasn’t using Twitter or Facebook or YouTube. I mean, I knew Googlers who were unironically using Google+ (R.I.P.). Hell, I knew Foursquare employees who were using Foursquare, compulsively checking in to become the mayor of their orthodontist’s office. Separate from the question of whether these products would ultimately change the world in a positive way, people working on them at least believed in what they were doing.
How long have we not believed in what we were doing?
There are, of course, many examples to the contrary. In terms of meaningful technological advance that also dovetails with success in business, companies like SpaceX, Tesla, and Palantir come to mind. More recently, we have Anduril. Then, the one vertical venture capital hasn’t run from is artificial intelligence, where we have seen incredible progress. We just haven’t yet seen a huge, successful company in the space. And okay sure, the tech also poses significant existential risk. Eliezer Yudkowsky says it’s going to kill us all, whatever. It’s at least new. This is the technology industry. We are supposed to be doing new things.
But a new piece of enterprise software? Or a new cryptographically-secure casino?
Come on, guys.
I’ve recently watched with surprise as popular "tech positive" influencers turned on Elon for — roughly their position — "destroying" Twitter. Critiques of the man have included his apparent callousness while laying off employees, his dangerous disregard for journalism (a naivety I genuinely thought we’d gotten past), and his "embarrassing" approach to product development. This last piece has been, I think, largely a repulsion grounded in aesthetics. Elon is building in public, and therefore making mistakes in public. The word "clown" has been invoked.
This man has been running Twitter for two weeks. While I do find it odd I have to remind you all that Elon is easily the most successful "tech positive" CEO since Steve Jobs — a pioneer in modern payments responsible for the entire private space industry, rockets that land, the mainstreaming of electric vehicles, a new satellite network connecting the planet — let’s just table the topic. We all love rockets. Hooray for rockets. I want to go ahead and talk about the aesthetics of Elon’s invisible workshop.
The notion all this public brainstorming and building and hacking and shipping and failing and starting over is unseemly, or is in some way a bad look for tech, is also — from a "tech" influencer — just incredible. First of all, what industry have you been working in? But also:
This is simply very fun. Like, I am genuinely having a really good time? And I don’t understand how you’re not.
We’re laughing because it feels like Elon is listening to us, no matter how stupid our suggestions. In fact, this is just what Twitter is, and Elon, the Commander in Chief of Twitter, is showing us how to use the platform. He’s very good at it. But I get it, different strokes for different folks. If you aren’t feeling the show, I suggest you download Mastodon. Then join a cute community dedicated to polite chats concerning the micrometer of length Tim Cook just removed from the 451st new iPhone, and be sure to post screenshots of your conversation… on Twitter.
This is winter now. If you can’t find food you die. Twitter was losing money when Elon took the company. We’re not watching him destroy anything, we’re watching him try to save a product he believes important, and similar battles are taking place across the industry. They’re just happening in private.
Anyway, I’ve been thinking a lot about garages lately.
Bill Gates and Paul Allen started building Microsoft in a garage. Jeff Bezos started Amazon in a garage. Susan Wojcicki, the current CEO of YouTube, met two Stanford PhD students just before they changed the course of history — their names were Larry Page and Sergey Brin. They founded Google in her garage.
Recently, it occurred to me I haven’t met a founder who started their company in a garage for about a decade. Palmer Luckey was maybe the last one. He built his first VR headset at his parents’ house. When did this kind of story become the stuff of history?
When did "scrappy startup culture" start to mean a coworking space with catered lunches and a weekly happy hour for $10 thousand a month? More importantly, with all these added resources, where is the correlating spike in innovation? At any stage of the business cycle?
Man, we have got to get back to the garage.
There are a lot of bright, talented people looking for work right now, and a lot of founders looking for funding. Moving forward into such uncertain times, my hope for the industry is everyone who wants a fat, easy paycheck packs up their bags and finds their way back to finance or consulting. My hope is this industry becomes safe for optimists again, for courageous thinkers crazy enough to risk everything for a company or piece of technology they know, in their bones, the world needs. My hope is, challenged in this new era of austerity, we reconnect with the spirit of progress that built this whole, wild industry in the first place.
In any case, regardless of whether you are building the seventy-fifth consumer enterprise widget or autonomous, nuclear-powered fighter jets, summer camp is over. It’s time to go to work. Why not work on something cool as hell?
Important bonus garage content:
Spot on as always. Only in a frothy market of "effective altruism" can you lose $214M on an investment, cringely stake your reputation it, and still keep your job: https://yuribezmenov.substack.com/p/how-to-lose-214-million-in-one-year
Thanks for a great piece. I had to subscribe to pay tribute to the sheer crackling power of the prose here:
"When did "scrappy startup culture" start to mean a coworking space with catered lunches and a weekly happy hour for $10 thousand a month? More importantly, with all these added resources, where is the correlating spike in innovation? At any stage of the business cycle?"
What the tech economy is lacking now is a hunger to shake everything around. It's a really, really comfortable life, but stagnation is the opposite of innovation. Every industry should have learned that from the pullback from 2020 to 2022. Even attempts to break the paradigm - like Web3 and the metaverse - are withering on the vine when introduced to the public.
I personally think the future of tech is going to be more in-person than out-of-body.