Last time the stock market was surging, everyone was hiring. This time it's different
Then again, I don't know what I would pivot to. I thought about building a startup. However it is not a good time to be doing that either.
1. Please keep at it. We need more people with experience staying in software. I don’t know your financial situation, but software is huge and something will land!
2. Based on this comment, I highly recommend likely not ever starting a company. It’s fucking hard, and it’s not glamorous. And even though it’s hard times in the macro, it’s actually way harder for many compounding reasons that are not obvious until you do it.
Again, coming from a place of love.
"Fucking hard" compared to what? Things I'd qualify under the category of "fucking hard":
- Agricultural Farming
- Lifetime debilitating disease / health issue
- Being enslaved or a POW
- Living in a 3rd world country
- Moving West in the 1800s
- Fighting in the American Revolutionary or Civil War
This narrative that starting a company is "fucking hard" is all part of the SV/SF mythos that needs a smooth stone straight to the forehead.
What is the point of moralizing?
Because the guy is framing his discouragement as "coming from a place of love" when in reality it takes roughly 2-3 weeks to go from zero-to-[LLC accepting payments on Stripe]. Which means it's really not that "fucking hard" at all to start small and begin the search for paying customers.
I've been on this board for 17 years back when it was originally called "Startup News" and full of new-company founders, sold 2 small SW apps back in 2009, and have also done the F100 corporate adventure. The emotional challenges of starting your own company can be easier than the 9-5.
Also it's a completely different ballgame when you build a company that has employees versus an app.
We don't know what path the parent was talking about or what their business would be. We don't know their financial position.
Regardless, it's hard to build a successful business. Especially on your first attempt.
okay, now tell my how long and how much it costs to g from new LLC to self-sustainable. Even some of the most popular startups aren't profitable for years.
You listed one career choice and agriculture is actually the easiest industry. #2 lowest failure rate in 1 year, #1 lowest after 5 and after 10 years [1]. What you thought was fucking hard is objectively not compared to every other industry from BLS data. Although I'd still say it's a startup and is thus fucking hard personally.
Starting a company is very easy. Building a successful and sustainable one is fucking hard.
I've built a few successful companies but did it while having income (both active and passive). I recommend the same for anyone's first endeavor. I also recommend having a partner or two and maybe ONLY go solo after you've built a successful business. It's not glamorous being a startup CEO and can be very lonely without partners.
50% of businesses fail by year 5
And 80% of small businesses have no employees. Most of the 50% that survive to year 5 are just paying bills and aren't self-sustaining businesses that have enterprise value and can be sold.
If you want to be a one person show, yeah that's not hard in a service business. If you are average, 50% shot to make it 5 years.
If we're talking about building something that kicks off actual profit and has employees, and outperforms the opportunity cost of working for someone else or taking an equity stake in existing business, it is most certainly fucking hard.
To the parent - if you have savings and get a partner or two - I say keep applying but go for the startup too. The best businesses in my opinion are ones that make money closer to day 1 than year X. Figure that path out. Riches in niches. Don't worry about the macro environment.
[1] https://www.lendingtree.com/business/small/failure-rate/
You are pretty clearly defining "hard" differently than the poster you're responding to, as somehow being related only to the chance of a venture failing. But obviously that's not what "hard" means when the other examples include being a prisoner of war.
The context of the entire discussion was NOT for the parent to decide to apply for jobs or become a prisoner of war.
It was to work for the man or do a startup. And building a successful startup is fucking hard.
Furthermore, nobody in SV is using the definition that the parent is irate about when they say building a startup is hard. They're using the one I've outlined.
I guess the silver lining is that I can now better emphasize with the challenges of protracted unemployment.
From the crash of April-ish 2000, it was 6-9 months before the best of the best could even get an interview, and about 36 to something approaching normality.
Never really had trouble finding work on the West Coast since then though. This year, I was unemployed for half a year (after quitting voluntarily) and finally found work with a European company. Guess the boom times are over! It's AI or bust now, lol (and I have neither the skills nor the interest to work in ML).
Keep in mind though I'm also a nobody, some rando self taught web dev coming from the LAMP world into React. We're pretty much bottom of the barrel as far as programmers go, so I'm not surprised I'm not a competitive candidate! I love the frontend, but more for its visuals and UX than coding. It's a very far cry from AI or algorithms or really any sort of non visual coding.
The kind of I stuff I used to get paid for when I was younger, Wix handles effortlessly now (and I recommend it my clients too... don't pay me, just make it yourself on Wix in a few hours). React's probably headed down the same path: https://v0.dev/
It was quite common around 2002 to join a new company after being laid off from one, one to be laid off yet again a couple of months later.
Myself, I was living from savings with salaries delayed by a couple of months, while we were trying to find a new source of income.
It’s not age discrimination per-se, but it’s because you're actively dragging your heels on the technologies that companies are hiring for. You can probably find a job doing maintenance on some PHP or Rails app that hasn't been updated since Obama’s first term, but the pay is likely also going to come from that era.
You will have to stomach finance or the military industrial complex though.
The rents are no joke, but if I had to be out of a job and in tech, NYC or SF would be top picks (maybe Denver, Austin, DC, or RDU after that).
* web dev - today the majority of the jobs are very heavily ts/js, react, next.js, vercel, etc.
* data engineering - AI/ML is very hungry for clean, organized, and accessible data. so we're talking sql, data warehousing, spark, beam, kafka
* infra/devops - nearly every tech company needs these people: docker, kubernetes, terraform, ci/cd, gitops, metrics and monitoring tools like prometheus and grafana
because only AI, cloud, and startups are hiring? What a weird interpretation to make of someone based off of a comment history on the internet. We don't even know what domain they work in.
Or I can give tactical suggestions, which may be a bit hard to stomach, so he can improve his odds at landing a job.
It’s fairly easy to infer his job domain from comments. He mentions web technologies and SQL often. He refers to himself as a dev, not as an engineer, and he mentions running numerous websites. He probably got his start working in “IT” (nobody says IT anymore, but he still does) in the 90s in support or technician roles and moved into full-stack web developer roles around dotcom.
He also comes across as low self-confidence due to “I've almost always gotten good to great performance reviews” instead of telling us why he’s an excellent dev. That likely comes out in interviews and further hurts his chances.
Regardless, I don't exactly see the good faith when saying "well you don't like AI, just find some crusty old phpjobs and take the cut". Which is both over-presumptuous (we don't know the domain they work in) and not very helpful anyway ("old" companies may not be laying off thousands but still aren't exactly throwing jobs out like candy).
>It’s fairly easy to infer his job domain from comments
Even 20 years ago. Web has so many pieces of tech (some that didn't survive) that I wouldn't assume. Could be IT (which no one says because it evolved into its own separate domain. A 2000's IT engineer wouldn't really be doing what SDET or DevOps do today), could be old style vanilla JS website development, could be flash. Or something entirely different.
>He refers to himself as a dev, not as an engineer, and he mentions running numerous websites
Titles don't really mean much. My domain calls people developers, programmers, or engineers as the company sees fit (also, it's awkward to say "game engine engineer"). The terms are almost as flexible as "senior" these days.
Personally haven't had to deal with Cloud. My domain leaves that to network engineers on the product and probably devops for the company servers. It's there but Ive never been expected to touch it.
I should, but I find it draining.
Due to some GREAT legislation you can no longer write off engineers as an expense... it makes SWEs a tax liability instead of a write-off.
Due to some GREAT legislation
One of these changes was Section 174, set to come into effect 5 years later, in 2022. These parts deliver the blow by making it clear that software development costs need to be amortized over 5-15 years. Most experts expected Congress to push back the Section 174 amendment to a later date, or simply remove it. But Congressional negotiations to repeal the changes fell apart at the last minute in December 2022, meaning it became law. "
Yes, but then the stock price would go down, which obviously isn't allowed.
or? are you being sarcastic about c-suit not wanting 'stock price to go down'? which could be a consequence of issuing new stock?
The value of the existing company "before" remains the same, and the sale of the new shares brings cash into the company at the selling price, so those new cash assets exactly balance out the dilution of ownership.
If anything it might increase the value of the company if shareholders believe that the same "profit multiplier"/ROE will be applied to the new cash, for example if a profitable restaurant chain sells new shares to get the cash to open and operate new restaurants in new locations. Of course, changes to the share price are due to changing expectations so that will occur as information about the pending transaction is incorporated into the hive mind and not necessarily at the moment of share sales.
think about it the other way -- why would a company ever do a stock buyback if changing the amount of issued stock didn't change the price? there's a reason buybacks are considered essentially the same as dividends.
Buy low/sell high maybe? They buy their stock when the price is low and they think it is undervalued so that they can sell it later when the price more accurately reflects the value or even better when the price is overvaluing their stock.
But demand does change, because the company is expanding its balance sheet. You end up with more slices of a bigger pie.
Compare to a stock split, which keeps the pie size constant.
> why would a company ever do a stock buyback if changing the amount of issued stock didn't change the price?
The company used its cash to buy its own stock. Fewer slices of the same pie == each slice is bigger than before.
Put another way, if prospective investors wanted to buy more shares at the current asking price, they could, from an existing owner. The people who want shares but haven't bought, demand a lower price for them.
Let's say you have a company worth $2 and you have two shareholders, each with one share. So that's a dollar a share, right? Now you sell a third share for a dollar. The company that was worth $2 is now worth $3 because it has its old assets that were worth $2, and it has NOW has a dollar in cash that it didn't have before. Now it's a $3 company. This is not advanced analysis, this is simple counting. Trust me, I know how it works, I got a graduate degree in it, and you're simply wrong.
what you may be thinking of is when the company issues shares and gives them as incentives/rewards to officers/directors/employees. That does dilute ownership, but sale of shares does not.
This is a huge "when" (it should be more of an "if"), and one upon which the entire theory rests. But we can't just assume infinite demand for shares at any price. So: will people buy the new shares, at the current, pre-new-issue price?
No, they won't. The current price is too much for those people to buy shares. If those people wanted shares at the current price, they could buy them from an existing holder. They didn't, indicating they don't want to.
Thus: no people buying the newly-issued shares; means no cash going into the company; means no increase in company value. The company would need to offer less than the current price (thus decreasing the price) in order to get anyone to buy the new shares.
>Let's say [I] have a company worth $2 and [I] have two shareholders, each with one share. So that's a dollar a share, right? Now [I] sell a third share for a dollar (pronouns edited to respond)
Who would you sell it to? Who would buy that share for a dollar? I could have bought it from one of the 2 existing shareholders for a dollar. Offering a third share says to me that you're on shaky financial ground, and that your company is probably worth closer to $0 than $2. In fact, I suspect you might apply my third dollar towards executive compensation, rather than towards increasing the value of the company, and that's why "the company" needs my cash in the first place.
This is basic demand theory: there is no marginal demand for a share of your company at a price of $1. Only 2 people were willing to pay that, and they already did. I bet the new-issue antics are giving them pause, too: they'll probably offload at a loss, if anyone will buy at that point, even for pennies on the dollar. But I'll tell you what: I'll offer you 30 cents. Take it (and lower the share price to 30 cents) or leave it. Trust me, I got two graduate degrees in this ;)
A lot of people exited the labor market (disabled or killed by COVID, pulled the trigger on retiring, etc.). Unemployment was very low and it was very difficult to hire. And companies had opportunities for growth, but taking advantage of those opportunities required workers, which were hard to get.
So companies responded by hiring whenever possible and keeping more employees around than they normally would. If there was less work to do, they'd reduce hours instead of letting employees go. Better to pay more labor costs now than to be stuck unable to get employees later. You pay a cost (larger payrolls) to reduce a risk.
Hoarding can be kind of self-reinforcing because as everybody grabs what is available (job seekers), it becomes more scarce, so people want to grab up even more.
But hoarding tends to stop eventually. Companies don't want to pay more for payroll if they don't have to. Once they feel the risk is gone, they'll aim to adjust things back to normal.
Once layoffs start, they could have a domino effect on labor hoarding. If a bunch of companies do layoffs, then other companies think, "Well, if we did need to hire, we could get some of those laid off workers." And then they reevaluate their own situation.
If this is what's happening, then it will take some time for it to play out. Eventually all the hoarding-related layoffs will have been done.
Big tech fuels R&D via very low-interest loans. This is what everyone in the financial community has been saying for a long time.
Of course I know the economy doesn't work that way, but it is fun to think about.
Fear of depr/rec-ession means the products you build might see 0 traction as the economy contracts and the funding to survive dries up.
I don't think this really matters all that much to small biz. It really has a lot of effect on the middle, where taking a $50/yr effectively leaves you having to deal with $40m you can't treat as an expense this year. It's a great way to cause unemployment.
Actual text: Emphasis the "be allowed" portion. From: https://www.law.cornell.edu/uscode/text/26/174
(a) In general - In the case of a taxpayer’s specified research or experimental expenditures for any taxable year—
(1) except as provided in paragraph (2), no deduction shall be allowed for such expenditures, and
(2) the taxpayer shall—
(A) charge such expenditures to capital account, and
(B) *be allowed* an amortization deduction of such expenditures ratably over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F))) beginning with the midpoint of the taxable year in which such expenditures are paid or incurred.
Imply, the taxpayer "may" take a 20% amortized distribution. Similar to MtG cards that say "a player may look through their library" or similar. You don't have to (my reading).
But if you compare peak (Nov '21) to peak (Jan '24) we're essentially flat at 1.4% annualized.
If a business accustomed to double digit growth every year instead saw 1.4% growth annualized over 2 years then the numbers simply can't work out to keep doing what they've always done.
The fact that equity valuations are WAY better than they were in Oct '22 doesn't really help because nobody was raising money during the down turn in the first place! Everyone is priced in on pre-pandemic valuations, which for the most part are unchanged.
Note: I used the NASDAQ-100 Technology Sector, ticker NDXT to calculate these numbers [0].