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The Deja Vu is getting a little stifling...
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jducoeur
Yesterday was a bit disconcerting, when I put two elements together.

First, I was meeting with my accountant, and we got talking about Querki, and my moderate aversion to taking VC money. I've been through a *lot* of startups (Querki it, depending on how you count is, about the eighth one I've worked for), and The Money has been the downfall of several of them. This was particularly acute after the Tech Bubble of the late 90s, when the money flowed back out even faster than it had flowed in. I remarked that we seem to be getting echoes of that: pretty much everyone is talking about the amount of Stupid Money being poured into tech right now, with VCs investing tens of millions of dollars based on Powerpoint decks and precious little due diligence.

Then in the evening, I was listening to Marketplace on NPR, and they had an article on the fact that programming is basically the one field that is paying well and reliably right now, so people are diving into it left and right. It is, once again, no longer a craft for those who are passionate: since the industry needs programmers desperately, loads of people are starting to get into the field, and are being hired for handsome salaries. I am reminded of some of the "Architects" I used to work with who had about as much experience as I had as a junior software engineer.

And y'know, this is all beginning to sound disturbingly familiar. I haven't dug into it enough to know how deeply history is repeating itself, but it is beginning to feel a *lot* like 1999 again to me. Mind, I doubt that we're going to see another Pets.com Superbowl incident -- people don't tend to make the *same* mistakes with millions of dollars on the line -- but the broad sense of a bubble inflating is getting overwhelming again. Having lived through the nuclear winter of 2002, I hope that I'm wrong, but I suspect I'm at least partly right.

What's your sense? Does it look sustainable to you, or is this another capital-induced bubble driving irrational euphoria?

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I'm not sure.

On the one hand we have ridiculous sums being paid for companies with very small staffs and properties of ephemeral value.

And rampant speculation, this time largely being carried out with the endless money-factory (401k's); this is upsetting because it disconnects the decision-makers from the downsides, and also because it impacts lots of people's retirements (including mine). So that's scary as heck.

On the flip side, I feel like companies better understand how to extract money from the internet than they did in 2000. In some regards the valuation back then reflects a too-early insight into the value companies could have *now*, now that online money is ubiquitous and the niches for gathering and redistributing it have been occupied.

We're also not seeing the random "it sounds internet-y! buy buy buy!" style of investing. Just having a .com isn't enough to draw fire from investors; there's a lot more pick-and-choose. There have been some big price-gambles (the recent Clash O' Clans ad blitz, and the ~billion $ investment made in its parent company), but they may be well-founded--the Freemium-model hits are as successful as casinos, and for the same reasons. That feels different than the day when Akamai was, with 12 people on staff, valued larger than Apple.

But you mention two bubbles: a capital bubble, and a staffing bubble.

There are plenty of jobs that are offering good, steady pay right now, but they don't make headlines. Plumbers, carpenters, electricians--these fields are _seriously_ underpopulated right now, and worse, take years to populate--trade school, then required apprenticeships, then ideally some years as a junior, before becoming a full-fledged tradesman.

But there may be a similar situation with good programmers. And yeah, title inflation is a thing. I _still_ chafe at being a "Senior" XXX, even though at this point, yeah, I kinda am...but I was a Senior Scientist when I had 2.75 yrs of professional experience (and a PhD). It's hard to make those things mean something, and I sometimes wonder if we do need to borrow a page from the Electrician / Master Electrician model. The problem is that programming is much more varied than most trades, so we'd need validation in each subarea...or something.

One of the other pressures I've noticed is that there are many more "easy" programming jobs out there. The hard ones are still hard, and require the exceptional folks to do them--cryptography, high frequency trading, and large-data analysis all spring to mind, along with data-intensive interface design--but there's a huge category of grunt work that needs to be done. Login pages; so many login pages for code monkeys to write.

This means employment for a huge swath of people who don't need the skills or experience to fill those other more selective roles. And, frankly, they don't need to get paid as much. I'm just not sure we're seeing the ability to talk about these roles differently--they're both just "programmers" and title ends up based on years of service plus negotiation, except at the most exceptional companies.

So that's two problems. :-/

I could see the bubble when I was finishing up undergrad in 99/00, when fistfuls of people around me were dropping out to enter the programming ranks, and there didn't seem to be any sustainability plans at the places they were going to. Perhaps why I ended up on the systems side.

But now what we are seeing is that a company like twitter can have massive reach and value while having far -fewer- employees than companies of the past, so they can afford to pay a lot of money to true talent.

So there might be a bit of a 'hire a ton of people, put them in the meat grinder, see what we get out in terms of product and in terms of employees we want to keep'.

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