This !insane tech hiring market

Aright, Gergely, you’re back for what is now I guess the third annual appearance on The Changelog. Welcome back, friend.

It’s great to be back. Always great to be back.

Good to have you back.

Well, we first had you on recently after you left Uber, talking growing as a software engineer; a lot of your learnings from inside that particular tech giant were now freed and able to be talked about, and you began doing that… And then last year - gosh, we were having an insane tech hiring market. This was recorded in early October 2021, and shipped in mid-October, but not much had changed between recording and shipping. In fact, it was like the best of times to be a software engineer, and we were talking about everybody should go out and renegotiate their contracts, or shop around, and this was like huge leverage. And I think the peak of the market, the overall markets, was around November of ’21, ish.

It was around November. I think a little bit later as well. I think it was in January…

Yeah, in January there was a precipitous drop…

There was still a spike, and February was still pretty decent, and then things got really bad, really quickly.

And here we are, a year later, as you said before the show started, a 180… It’s pretty much the opposite of last year, isn’t it?

Very much so, in many ways. Yeah, I think that was an unexpectedly quickly heating up market. I was also very surprised to see just how quickly things have changed… And I guess now, hindsight is 50/50, but we should have known that if things can heat up quickly, they can also cool down quickly… And it has cooled down very surprisingly quickly. And we’re hearing news – there’s obviously news about layoffs, but it’s not just about layoffs. There’s the hiring freezes, there’s – looking ahead, some companies, some of big tech is not looking to hire, and a lot of the news is focusing on VC-funded companies and big tech; there’s also a silent majority that we’re not really hearing too much, but there’s the more kind of traditional companies, or companies that were not paying the top for the market… And there’s actually some good news there as well; it’s just, as with any news, bad news usually trumps out good news or no news, really.

A lot of anxiety out there in this market here for that. What about this silent majority you mentioned? What are the details? I know you’ve got – The Scoop is part of your newsletter, but then you also scoop things on Twitter… So for lack of better terms, what’s the scoop for this silent majority? What do you know there?

Well, the interesting thing is that the news has been dominated by layoffs, because they are a big deal whenever they happen, and now they’ve just been happening, initially a few, and then some more… And now every week there’s so many companies, small or sometimes large, doing it. But the companies that are not really affected, they’re kind of hiring as always, and in fact, some are hiring more, are the ones that are honestly just not - they were never the most desirable companies to work at, but I think this might change just a little bit.

I’ll give you an example - there’s a major bank in the Netherlands, which saw huge attrition at the end of 2021, because of this crazy market; maybe also because of my articles, I’m not sure… Because a lot of people from that company went and they took offers at the likes of Twitter, or big tech, or venture-funded startups… They just got a big pay increase, and this bank couldn’t move up with the market, because that’s not how they’re structured. They cannot respond quickly, and they typically don’t. So they lost a lot of people. And they got us contractors, and they have a huge headcount to fill for 2022. I talked with a hiring manager there, and they’re like “This is great. Finally, we might actually be able to hit our headcount, but probably we won’t. We’ll probably still have empty headcount.”

[06:10] So the good news is that there are a lot of companies hiring. And I’m also seeing – I’m running a job board where companies can pay to access either candidates or post jobs, and I vet these jobs, but I’m also seeing growth there with a lot of venture-funded stuff. So there’s a lot of venture funding, especially at early stage, going on. And those companies - they want to hire they; they need to hire good people.

And then there are the companies that are a little bit more conservative. So a good example is iGen. Not many people know about iGen, but if I say Stripe, you’ll know what I’m talking about. iGen is the B2B version of Stripe. They’re based in Amsterdam; actually, they’re headquartered there. They’re a publicly-traded company, and they were trading at about like $50 billion market cap. I’m not sure where they are right now; maybe like 40, or something like that. So they’re big, and they process about as much as Stripe in terms of merchants. At Uber, for example. Partially, we used iGen, and I think they power eBay, and Booking.com, and a lot of the sites that you just don’t see behind the scenes… And Stripe announced that they were doing 14% layoffs. Meanwhile, iGen, because they’re a publicly-traded company, you can see their financials - they’re just passively profitable. For every dollar, they make 60 cents of EBITDA profits; that’s not fully profit, but it’s a very strong signal… This is actually more profitable than, say, Google even, in terms of the percentage amount. And they just announced that they just sent out a memo to their staff that they’re – not that they’re not laying off, they’re actually investing, because their fundamentals are strong.

And the headcount is also very different. This company, iGen, even though the price is about the same as Stripe, and they have a bit lower cut rate, so their ROI will be a bit lower, but they have a lot less staff; they have half the staff as Stripe, and at lower cost locations.

So all I’m saying is, these are some of the companies that I know about who are kind of just doing fine, and there will be a lot of these… But we should acknowledge that it’s not the top of the market. So the companies that used to pay the best total compensation packages in terms of high base salary, great equity, all that - those companies are now struggling.

And then they are still hiring. I just talked with someone who got an offer from Google in London, and it’s a really good package… So there’s all that going on, but I think the noise of all this bad news is really on top of people’s minds.

And then one last thing - if you look at what is actually happening in the market in terms of numbers, it is a correction, but when we look at – let’s say there’s big news that Meta laid off 13% of staff, or 11,000 people; it’s a huge number, 11,000 people. But when we look back at how quickly they hired those people, just this year they hired 20,000 people. They’re 87,000 people right now. So by just laying off, they’re kind of back where they were in March… Which is bad, right? But it just shows how much all companies actually hired. I rounded up between Meta, Microsoft and Google, I looked at their public filings of how many employees they have now and a year ago, and they went from having 400,000 employees, these three companies, full-time employees, 12 months ago, to having 500,000. So they added 100,000 in just one year. And Microsoft is 20-year-old company. Or, sorry, older; like 30-40 year-old. So in the last year, their growth was incredible.

So we are seeing a cutback, but it goes up that crazy - like, that last year when we talked about it. So it seems that it’s a correction, and it is painful, and it’s not happy to see them… And honestly, I think the reason people are just really shocked, most people, and said, “We haven’t seen this”, this whole market reminds me of what we’ve seen in what finance folks have seen in 2007-2008. It’s kind of our version of like a massive market correction in tech. And outside of tech, things are kind of going fine. You talk with other industries and they’re like “Yeah, it’s just like normal. We’re not seeing any panic.”

[10:03] Right. You have the typical supply chain problems, you’ve got the inflation problems, but you don’t have – like, the fundamentals are there, and things are still moving forward as normal. I wonder how much of it is – maybe the unanswerable question, but how much of this was pandemic lockdown-fueled? Because things changed so dramatically. The hiring - everybody went online, we heard tech execs saying things like “This has fast-forwarded adoption by 10 years, or 5 years.” And we kind of expected that to just continue, I guess, even after everything goes – the new normal, right? There was no back to normal; it was the new normal, and it was going to stay like this… And so the hiring did go astronomical, like you cited, at the big tech companies. They needed it, because they had this increased capacity, everybody was using their services, stocks were going up, so they have extra funds to invest… And gosh, we find out that – I don’t know, like, there was no normal, or it’s kind of going back… I mean, it really wasn’t like a fast-forward; it was like a temporary fast-forward, at least to a certain degree.

It’s weird. It feels like the swing just swinged ahead, and now it’s swinging back.

Yeah…

Because there was a fast-forward for a while, where the whole world was locked down, and digital became a lot more important… But I think a good example that I think of, and I have a bit of insight into, is this company Hopin. Hopin is this video events company; so they do digital events. And they were founded in 2019, so a year before the pandemic. They raised I think like a few million dollars of funding, and then the pandemic started, and right as the pandemic started, they raised a bigger funding, to scale the scene, because it seemed okay; like, digital events will now be a thing, because there’s a lockdown… And they saw huge demand in both 2020 and 2021 for their solution.

I actually organized – you could organize online conferences with their tool. And I actually helped organize a digital conference, I think it was the fall of 2020, or something like that… Because it was lockdown, I didn’t have anything to do, and I was like “Let me do this.” And we looked at vendors, and we chose Hopin in the end; I think we paid like a couple thousand for their license, or whatnot… They had this licensing. And we ran the event, and it was a success, and people liked it… But what I noticed is – and then the company kept raising more money, and at some point they were valued at 7.8 billion, or something; I think that was the peak, as I recall. And this was like two years into the founding of the company.

And then what happened is – well, first of all, just from my personal perspective… I’m not gonna represent all their users, but I just really got burned of digital events. Like, I went to a couple of these digital-only conferences, and after a while I just started hating it. I was doing Zooms all day, every day… So I just didn’t want to go there. And as soon as the world started to open up, I’ve just been to my first proper conference. I love the normal conference format, and I would not – okay, maybe I would jump on to watch a video online, but I don’t think it’s really important.

And then with this company, Hopin, they saw their growth just first stall… And the thing that might save the company is they actually bought a bunch of different companies. They bought StreamYard, which is a streaming company, and they bought a few other video streaming companies… And what I’ve heard from people who work there is their events revenue, their flagship thing is just going down, because it’s really hard to sell right now. People just don’t need a digital-only solution anymore.

And my point is, they’re a bit of an outlier, but they’re a typical pandemic company, where it seemed the whole world would change, a lot of money went into there, and if the whole world would have changed and we would now be doing a digital-only conference, it would make sense, because they would probably be market leaders… But the world has gone back, and I think we’re seeing this backswing a lot of times.

I’ve seen a chart about e commerce adoption, where it spiked, and it did look like it’s jumping up ahead by 5 years or 10 years, but then it came back, and now we’re just on that normal growth. So this growth is back to where it was before, which means that everyone who expected that in 2022 or 2023 you’re gonna have similar growth as 2021 just over-hired, and now they’re all correcting, because – well, because also, don’t forget, there’s a second part here, which is not just the COVID is shrinking, but the interest rates are up, which means it’s a lot more expensive to borrow any sort of money, which a lot of tech companies had been doing… So they can’t borrow money, so they need to rein in their costs if they’re not profitable.

[14:29] And those are just a few things. We’re not going to be able to figure out exactly what’s happening, but the pandemic was – it’s just so strange, because for the rest of the world… Take an industry like hotels, or hospitality, right? You’re kind of working in a hotel, or managing a hotel… The pandemic was terrible, right? You got shut down, you had no revenue, you were trying to survive. For tech, it was the opposite. It was amazing, and it was great that time, because we had more jobs, more money… There were people quitting, because they – people had a lot of options, and it was a great time to be in tech. Now it’s the opposite. If you work in hospitality, things are great. More and more people are traveling; it’s going up. You’re gonna get more – hopefully, you’re gonna be earning more, getting more tips, whatnot. And now in tech it’s the opposite. It’s just not great if you’re in tech.

I mean, it’s not great to see the news… This is impacting people. There’s a question of how many people are really impacted in the sense of not just being laid off, but not finding a job. And I think that’s where we’re gonna see a long tail effect, or like a double down. People who are software engineers, experienced engineers who are being laid off at well-known companies - I think it’s hard. I don’t want to trivialize this. But they will have options to work somewhere. It might not be as great though as their current company in terms of maybe culture, or compensation, or both. But they will have options.

The problem is that all of this will trickle down. We’re now seeing thousands of really competent software engineers being on the market, so startups are really happy, these banks are really happy… I have some friends at Uber, former friends, who… I used to work – one of my first jobs was at JP Morgan, in London, an investment bank… And at the time, I really liked that job, because it was one of my early jobs, and it was a great place to be… But when I got my next job at Skype, I just realized JPMorgan was totally not a tech company. And I was so happy to finally work at a tech company, and I said i would never go back to a place like JPMorgan.

Uber also had a really good engineering culture, in the sense that it was one of the best places I worked at… And now I have some friends and colleagues who work at JPMorgan; and I talk with them and I say, “Dude, why did you kind of take a step down?” And he told me “So here’s the thing… Two things. First of all, it’s just really, really stable. They have super-profits. I get all my compensation in cash. None of that stock going up and down, and mostly down. Second of all, they actually want to create a tech culture, and finally, they can hire the people into this; they have a lot of these greenfield projects where it’s full of – they have ex-Facebook, ex-Google, ex-whatever people, and it’s actually pretty good.”

So I think the world is changing a little bit, and people are realizing that pre-IPO companies, or even any form of companies that give you stock - it has a massive risk. So traditional wisdom the past 10 years was if you are a publicly-traded company, you get like half of your compensation, if you’re a senior engineer or staff engineer, half of your composition in base salary, and the other half in equity, and that’s great, because equity will always go up. Well, equity for some companies has collapsed by let’s say 70% or 80%. And I talked with people who on paper they were earning $500,000 in Silicon Valley, and now it just went down to like 350k or 300k. And they’re saying “What should I do? Should I interview somewhere else? But now there’s fewer jobs… Or should I just stick it out?” There’s no good answer. But the point is, now you’re really seeing those banks - one of the reasons that people are going to these banks is they might pay, let’s say, for a similar skill, maybe they pay 350k or 400k, or less, or more; it doesn’t really matter. But it’s fixed. It just doesn’t move. And the people who I know who have families, and they just want stability, they’re like “You know what - it’s a good trade-off. It’s a rocky time, I’m gonna sit it out here.”

[18:09] And you know what - it’s kind of nice, because now those companies can hire people who would have never considered working there. So we might see the industry transform a little bit from the unsexy companies becoming a bit more sexy, and the sexy companies… Let’s give an example - Coinbase. Coinbase was such a hot company to go on and work for a year ago. They’re doing crypto, and if you’re into that - I’m not that much into it, but again, they’re doing something really interesting in that space, trying to give new financial instruments… And they were paying really, really good. Like, they were giving ridiculous stock packages to people who were accepting it. And now the company is not doing that great, the space is kind of – it’s unclear what the future will be, and their stock is not doing that great… So that company, or some of these hot startups have just gone from being one of the best places to work at, to “Oh, it’s a risky place.” We’ll see if they’ll be able to grow. And I’m not just talking about Coinbase, I’m just talking about the hot companies in 2021.

That was my fear with last year when we talked, was this insane tech hiring market and people jumping ship, or not so much not being loyal, but sort of focusing on the opportunity to increase their dollars. And then that comes with the value trade of, okay, I’m gonna be with a startup, or a high-growth, or an innovation-focused company like Hopin, or Coinbase, as you mentioned, that are paying these high compensation, equity, and like you said, on paper it’s a lot of money… And they jump and they – not so much leave their teammates in a lurch, or whatever, but like look out for themselves and earn more money. And then now, the flipside is the market has now shifted, and I don’t know if that is necessarily bad for the reputation, but… That was my concern, was like this sort of jump because you can, because you can make more… Is that the reason why you leave a team? Is that the reason why you pursue a new job?

And I think what you described there was the opportunity to have stability, but then also the opportunity to innovate. Like, what engineer, what developer doesn’t want to play with the fun stuff and do the fun things? And sometimes that is a Coinbase; sometimes that is a Hopin, or these future innovative places where they’re really pushing the boundaries with frontend frameworks, or infrastructure, or just new ways of doing things… And sure, that’s fun. But that was my concern, was this jump - was it worth it, is it worth it? Do you talk to anybody that made those jumps that’s like “Man, I kind of regret doing that, because now… This.”

Yeah, so I actually talked with – I have a few stories here. First off, I think jumping for doing something fun is good. And if you take the money out, and you’re doing it not because of the money, that’s a great thing, because that’s more of an interesting motivation. The problem is if you were doing it mostly for the money, I think what was missing until now - and I think this has been corrected… I feel every ten years there’s like some sort of event in the world that kind of shakes things up a little bit… And in tech, there was a little bit of contraction in 2008. It was bad, but not as bad as potentially now. And I heard in 2001 - I wasn’t around, but I heard it was really bad… But then tech was a lot smaller. Tech has become massive since 2001. But what I think people forgot, or they just didn’t see, because they only saw the positive stories, is the risk that any startup has. The fact that these are super-risky. And they’re so risky because they can absolutely go bankrupt, that your equity will probably just not be worth anything… And this is, by the way – it is interesting… I’m based in Europe, and in Europe, people were always super-skeptical about stock. At Uber, when we were hiring people, we told them “Alright, here’s this much stock”, and they’re like “Could I just like get half of it or no stock, and can I get like 5,000 more in base?”

Right…

And we’re like “No, no, no, you don’t understand; this could turn into a lot of money.” And they’re like “I know what I know. It’s money. That’s not money.” But now that’s actually turning out to be very much true. Take Hopin… A lot of people were given options at later-stage companies, and if you’re given like stocks, like double-trigger RSUs, or something like that, it might be worth still something, even if the company is worth little.

[22:14] With options, they’re just worth nothing, because it’s all underwater. And I think people thought that because a company raised a lot of money and they’re worth billions, it must be something valuable, and they were already assigning a number to it.

Going back to specific stories, I do know people who left publicly-traded companies and they were offered a similar compensation package at a private company, which was just a startup that had a high or medium valuation, and they thought that it would 10x.

A good example is Fast. Fast was a company that I covered; they were the company who famously raised $100 million in 2021, and then 12 or 14 months later they burned the whole thing, they spent it all, and they went bankrupt, and they closed shop. And I’ve seen the chart on how they closed it; they hired people from everywhere - from Uber, from Google, from Facebook… You name it. Like, all the companies. And the way they hired these people is, first of all, they paid the same or a little bit higher base salary than let’s say Facebook did for the same level. And we’re talking about Silicon Valley people, and people based in the US, New York, or these things. So they paid a little bit more in cash. But the big part of the compensation package was stock. And then they show people, they’re like “We’re giving you like this much stock, which today, on today’s valuation is – or if the company grows by 10% or 20%, it’s going to be worth as much as your current stock.” But I think they were saying that Fast was valued something at maybe – I think it was valued at close to a billion, but if it’s valued at 13 billion, which is how much their competitor Bolt was valued at their latest valuation, basically you’re gonna be millionaire, or even bigger. And they just showed those numbers in a spreadsheet that showed it. And they were telling the truth, in the sense that if this happened, that stock package would have been worth… And most people in their minds calculated that, “Oh, it’s going to be for sure worth 13 billion.”

Right. Counting chickens that didn’t hatch.

And then a lot of people just left a lot of real money on the table to join the risky thing, but this risk was not really added there. So if you ask me, just from a pure financial perspective, if you join a startup that’s early stage, you might actually just want to ask for – like, rationally, you might want to ask for a premium. You might want to ask for more base salary, because it’s a risky place, which could shut down, and this could be worth nothing… Which is obviously not what’s happening, but that would be the rational thing to do. But we forgot about this risk.

So there’s a big risk with the startups… And one story of a software engineer who just got really unlucky, because they misread the market - so this person was working… I think it was – I don’t want to say the specific name of the company, but this is a real person, and they were working at one of the… Okay, I’ll just say, like, one of these three: DoorDash, Roblox or Pinterest. I just don’t want to like narrow it down. So one of these three companies, they were working there. And they joined in the middle of 2021, where – I think it was a new grad, or maybe a software engineer, too. So someone with a pretty early in career. And they got a package where it was base salary, and then a bunch of stock; like a pretty good stock package.

And six months later, by the end of 2021, the stock has already gone down for all of these companies by about 50% from just the middle of 2021. There was like these six months where – so their stock package was worth like half. And I think it was down even like 55%. And this person was like “Oh man, I’m only six months in.” I haven’t even vested my first vest, which will be at a year… But you know what - I didn’t sign up for this. My composition went down.” And here’s this cool thing called Web 3, that is doing really well… So this person joined the Web 3 company and negotiated his original package, but in Web 3 tokens; or maybe not even tokens, but equity in that Web 3 company.

[25:57] And then this person got really unlucky - and this is the actual true story - so four months later or five months later, around April 2022, the Luna token collapsed. There was this stablecoin, which was an algorithmic stablecoin, which somehow, some bad actor exploited, and as a result, there was this Anchor protocol that yielded something like 8% or 10%, or I think 18% interest, supposedly risk-free… And the startup of this guy held all their treasury in this Anchor protocol. And so they just went bankrupt overnight.

So there was this guy who left the company that the stock was going down, and it was a rational thing to do; like, why would you stay, when you can just make more money taking a bigger risk? Took a bigger risk, which went absolutely to zero, and I don’t know what actually happened with them; if they went back, or if they went somewhere else… But it was just a chain of bad events.

And then another person – these people find me online… There’s a person who was at Fast, which went bankrupt, and then joined the competitor Bolt, which then had layoffs, and I think they managed to miss that… But it just shows that it is now hard to find the company that will definitely not be doing any layoffs. And yeah, it’s a market we’ve just not seen. I don’t think anyone has been used to – the most common question I get these days… Like, a year ago it was “Hey, which company should I join that pays the most?” Now the most common question I get is “How can I evaluate companies that don’t have [unintelligible 00:27:31.14] layoffs?” And this last question is hard to answer, because I for example really thought for a long time that Meta will not do layoffs, because I looked at their bottom line, their profits… They’re a money printing machine; they still are. And they still did layoffs, because – I mean, we can go into that… But their profit was just dropping, because their revenue was flat, and their costs were going up, and shareholders will not take any of that, and their stock price was collapsing… Which - if they would have not done layoffs, they would have seen a lot of attrition. Because a lot of people are just – people I talked with at Meta, they’re just really unhappy, they’re gonna make a lot less money in 2022 than they did in 2021 because of their outside stock packages.

So there’s a phenomenon in inflation, I think it’s called spiral inflation… I’m not sure if that’s the term, but it’s this idea of rising prices, and when you’re running - let’s say you’re running a convenience store, and regardless of whether or not your supply costs are going up, which they probably are if there’s inflation going on, you see everybody else raising their prices, and so you say “I’m gonna raise my prices.” And then the next person sees you raise, and so they raise… And so there’s kind of this spiral effect. And I wonder if there’s something like that going on with the layoffs; like, perhaps it’s a timely opportunity to also do layoffs, even if you don’t really need them, because you’re never going to get a better opportunity, and everybody’s doing it. Do you think there’s some of that going on?

[30:07] Oh, totally. Absolutely. So the first few layoffs – I think Fast was the first big layoff story. And it’s interesting how it impacts people as well… So Fast shut down, and it was a big story, because it’s also a very – it’s just a very… Like, you can imagine yourself being that CEO, and every person who’s listening would think that they would do a better job with $100 million than just burn it over a year. So it’s a sticky thing, even though I’m sure there’s a lot more nuance to it… But they were the first one who just let the whole company go, and this was extensively covered by the press. I actually covered it a lot, because it was just an interesting story, where “Hey, can we learn some lessons?” And there were some lessons… But I talked with the engineers who were laid off, and they were bombarded with so many messages, and every single one of them got a better job, or a similar job. Most of them got actually a higher base salary than they did at Fast, which already paid very well… And I talked with someone who said they got about 100 reach-outs, and they talked with - -they just narrowed it down. They were like selecting; they’d only start with 20 companies, they only got five offers, and they negotiated and took the last one. And this was the first one, and everyone paid attention.

Not everyone paid attention to the next few layoffs… This is when I actually – on Twitter, I started to cover some of these layoffs, because they were so rare. And now, they became so common that I think there’s a layoff numbness. I stopped a week ago on my Twitter; I just said that I’m not going to cover any more layoffs as they happen, because I’m getting a lot of these – people reach out to me and they say “Oh, my company’s doing layoffs. Here’s all the details, please don’t share anything that could identify me.” But they’re now so frequent that first of all, it’s just – I’m bringing attention to so many companies having pain, and it’s just a bit of a negative thing to do…

But as you said, people, at least in tech, are kind of checked out. The first few months you could tell exactly the few companies that did layoffs, because they were all over the news… And as a CEO, it’s a very convenient way to just put it in there, because you don’t even need to justify it; you just say “economic conditions.” Half of the announcements from CEOs come and say “Oh, macroeconomic conditions.” And when you look around, a lot of the layoffs are not big ones. They’re not like companies fighting for their life. They’re just conveniently laying off between like 6% to 15% of staff, often usually not many software engineers; some companies do, but at this point, even employees are not really surprised, or they’re a lot more empathetic.

This is a comment I read on Hacker News… There was a comment of Meta doing layoffs, because that was a huge layoff. And someone on Hacker News said “Hey, I’ve been around for the dotcom bust, and here’s what I can tell you… If you’ve been laid off in this round, know that you’re the lucky one, because you got a really good severance package, and companies are still paying a lot of attention. But I can tell you that the layoffs will keep happening, and the next round they’re not gonna be as generous, because no one’s gonna pay attention, so…” It was like “I know it’s counterintuitive, but you were actually – companies still pay a lot of attention, and they want look in good color.” So that’s a little bit of the depressing news, that this might keep happening for a while… Which actually, I guess it does bring back to what are the things that you might be able to do personally to get on the better side of all of this.

Yeah, so… Gosh, that’s the kind of a weird silver lining there, is your severance package might be better than other folks who get laid off later… Also, I guess you’re first one back on the market, so maybe you have more opportunities than later on…

That as well. The market is still better than it will be likely in, let’s say, six months, just the way things are trending, honestly. So when Fast laid people off – the first companies actually to layoff, they get bad press, but you don’t know until you look back, but it is usually a good market, and people pay attention. All the fast alumni got hired, every single person. The only people who had a gap is the people who wanted to get a gap. It’ll probably be a little bit harder for people now, and if this cycle continues – it’s hard to predict the future, but I don’t see why it would stop for the next, let’s say three to six months for sure, while interest rates are high, and VC money is tight… Inflation is going to hit, so consumers and businesses are going to start looking on how to save… So everyone’s tightening the belt, and eventually everyone will kind of feel it somewhere.

[34:26] So probably our listener is in a few different situations. The first one is “I haven’t been laid off, but I know that cuts are coming. What can I do now, perhaps, to help avoid the axe?” And then there’s also like “I have been laid off, and now what do I do? What’s my next best move?” So maybe, do you have advice for people? And you can’t say, “Don’t make fun of Elon in public, because you’re certainly going to get axed if you do that…”

Yeah…

But aside from Twitter, whose offings are quite public, a lot of these companies I don’t know. I don’t know how they make their decisions. Again, lines of code… That’s another easy one. But what can you do to avoid being laid off at this stage of the game? Can you impress a certain person? Can you change the way you act now? Is it inevitable, it’s just going to happen? What do you think?

Yeah, so on the layoffs, actually, one of my good friends, Karthik Hariharan.

I know Karthik I used to work with him.

Really?

Mm-hm. Pure Charity.

Awesome.

Yeah, Karthik is a good friend.

Yeah. Well, we know each other from Uber, mostly actually after Uber. We talk a lot… And he’s now a senior engineering manager at Roblox; he was an engineering manager at Uber as well… And he has some really good career advice… And he actually had one of the best advices; he actually said, “Alright, here’s my advice for everyone who’s not been laid off, but knowing that things are happening…” And he said three things. We can find the tweet and we can add it to the notes here. I’ll find it. So number one is just cut your expenses. Now is not the time to buy the new car, to go on a holiday… Build up a nest egg. If you’re working in tech, you’re probably making more money than some of your peers who are working in other industries. Just cut your lifestyle; start saving up. Because the reality of layoffs is that you cannot control it fully. It can hit you; you can do your best job, but if you’re at the wrong team, or your CEO decides you’re not going to do it… So just prepare for that; like, have a few months of savings, build that up. Maybe now for holidays, again, just be a bit conservative… Because this is a little bit of inconvenience right now, but it could actually make a big difference later for your mental health, knowing that you’re there.

The second thing that he said, which I absolutely agree with, is just work to be in the top 25% in terms of performance. Now is actually the time to do great work and put yourself in there, because when people are laid off, unless it’s a massive layoff, like 50% or something, the crazy stuff that we’ve seen at Twitter - most of it is not like that. They’re gonna lay off 10% or 20%, and they’ll typically look at the people who are just not doing great work, so the lower-performers; they might look at teams who they can miss… But the rarest thing to lay off is the high-performers, the people who are like “These are doing great work, and they’re flexible.” Now is the time to do great work, to say yes to additional things… It’s a little bit like when you’re new at a company; you want to prove yourself. Now is actually the time where if you want to guarantee this, then prove yourself.

The third one, I’m not sure what he said, but my third advice is just be a little bit aware; look around, figure out, are you in a profit center? In companies, every company, including tech companies, there’s cost centers and profit centers. The profit center is the one that brings the money in. For example at Google, it’s the ads team. If you work around ads, you’re generating money. If you are working at customer support, it’s a very important thing to do, but it’s a cost center, which the company typically wants to minimize its expenses on. And actually, Google historically does not have that much customer support.

[38:02] For example, at Uber this was the same thing. I was working in a profit center, I was working on the – well, some part of the profit center; I was working on the payments team, which is a little bit of both, but when my team owned projects, we shipped it and we made more money for the company; that’s the profit center. And if your work is about like minimizing costs, or like compliance, or those things, that’s a cost center.

So try to figure out where you are, and if you are going to move – if you have an opportunity later to move into a profit center, think about that. But that’s something that might be out of your control.

And finally, switching jobs is a lot more risky, because tenure is also important in layoffs often. It’s rare to have the longest-timer person be laid off… So plan your steps carefully if you do it. And this goes back, I guess, to one last advice, which is your network. If you have a strong network, you’ll be fine. Even if you’re laid off, you can talk to people who know you, and then they’ll probably refer you. Now, this is something you cannot change overnight. It’s not a month or two. But just show up every day and do good work, help people, even when you don’t need to. If someone is having something tough, help them. Just be a great colleague, because this is the stuff that – this will come back years later. It’s not going to be right now.

So honestly, it’s just going to be a bit of a tighter market. I think everyone’s going to be more paranoid… The number one thing that you can do is – I think the biggest thing here to control is get a nest egg. Get those savings going if you don’t have it. If you have six months of savings or a year of savings, you’re going to be way more chill. The reality is if you have experience on this market, you’re not gonna have trouble finding another job. The question is, will you find the job that you’ll want, or will you settle midway?

And one last thing is just be realistic. Now it’s not a good time – now is a time where you probably just want to sit out the storm. There’s always cycles coming and going. We’ve seen there was this amazing surge of tech, now it seems there’s a downturn, or a winter, or however you call it. This will also pass, but it’s a good time to just wait it out at a place where you feel secure. This might be your current team, it might be your current company, or if you have to change companies, this is where the previously non-sexy companies are becoming sexy, because stability is actually a really good selling point right now, on which company to join.

Stability is sexy.

Stability is sexy. And again, if you’re 20, maybe you don’t care as much about it. But when you have a family or when you’re in that stage of your life, stability is now becoming a selling point.

Like I said, that was my fear with last year, was just that movement, and the tenure you mentioned; like, if you made those moves during that time, which was great if you made it for the right reasons, the right circumstances, and you didn’t burn bridges, and you maintained your network… Or maintained being a good person during the process, then… That still doesn’t change your tenure.

You know, this just reminded me so much – like, you did say this, by the way; I think I wasn’t paying as much attention to how things could – I was really just focused on how well things are going. I was really happy actually that the market was there… But it reminds me of like, if you did not burn bridges - so there’s a Silicon Valley episode when they go fundraising, and initially no VCs take their call, and then Erlich starts to just insult them… And the more he insults them, the more they take their calls, and the higher offers he gets. And then there’s this final scene where they just walk out and they’re like “Did you really put your privates on the table?” And then they get the biggest check from there. And this all looks really good until, fast-forward I think just a few weeks later in the show, their funding falls through, and no one wants to fund them, and now they need to go back to all of those VCs… And they get the exact same insults back, including in the last meeting the VC says like “I remember what you did here last time. I’m going to use this exact same thing to you.”

[41:59] So going back to burning bridges, in the good market, for example, if you – this is not the biggest one, but I now hear a lot of people trying to go back to (well, some people) older companies. For example, they join a start-up, from let’s say Google or somewhere, and now it didn’t work out, they want to go back to stability, which is Google, or some other companies… And if they left on a good relationship, sure; that’s probably no problem. [unintelligible 00:42:20.17] But not everyone did. Like, some people did burn bridges. Or when they negotiated their offers, how respectfully they treated hiring managers when you had multiple offers open, and you rejected - let’s say you got three offers and you rejected two… Did you leave on a good foot, or were you just really snotty about it? Because if you’re snotty when you’re going back, or if that company is still hiring, you don’t really have a contact.

So I think it’s a great reminder that no matter how the world is, especially when it’s really good, you really want to treat people with respect. And this goes back to your network. If you treated those hiring managers with respect, and when you turned it down, you actually told them all the things that you liked about them, you were open about – you didn’t try to do all sorts of sneaky things, you probably increased your network. The hiring manager might now remember you fondly, like “Oh, I remember. It made perfect sense that the person turned us down. It wasn’t just for the money; he was a better fit when they chose this other company.”

Be a good person… The shoe is always swapping feet, you know? Roles reverse. And I think above all, just do your best to be a good person, in any process, treat people with respect, explain – you know, defend your reasons for your change, or whatever, but do it respectfully. And my gosh, do not burn bridges.

See, when you’re younger, it’s a – I did this when I was young. I burned a few bridges when I was younger, and I learned “Gosh…” In hindsight, that was the worst way to do these things. Like, why would you do that, now that I understand that the shoe does move to the other foot, and things do change. But do your best to learn that lesson; learn it from me, or not at all, but do not burn bridges the best you can. Maintain relationships, leave on good standings, be kind… And somehow, someway, you’ll get a chance to serve them again in the future, or have them serve you, if you’ve been generous, kind etc.

It’s short-sightedness, and this is just, I think, a natural thing, but when times are good, it’s easy to think about today and tomorrow, and not think about down the road. I had grandparents that went through the Great Depression, and like just the way that they looked at life after having that experience was way different than beforehand, being born into it, or going through it as an adult. And like you said, Gergely, we’ve never been through this. If you entered the tech industry in the last 15 years even, if you don’t count ’08… I mean, ’01, like the dotcom bust was really the last major, major correction… And it was so much smaller back then.

It’s been good times for at least a decade, probably 15 years, and then you have the pandemic outlier, it turns out, right? You had the lockdown, which looked like it was going to be a new normal, but it turned out a statistical Black Swan event that kind of reverted… We hadn’t seen this before, and so you tend to think differently when it’s always been up and to the right, pretty much… And it’s not always going to be that way.

It’s also really interesting, because the last decade, like from 2008, which is actually when the financial crisis ended - and it did hit tech a little bit; it depends on what region, but for the most part it wasn’t as bad as it is now… But that was combined with the revolution of – there was still the internet boom going on, the internet was still spreading… I remember the stats every year, more and more people were on the internet… And the mobile smartphone revolution started. So those things drove – companies like Facebook, where… Facebook was founded in 2004. Snap was founded later. Dropbox, Pinterest… Sorry, maybe not Pinterest, but Airbnb - they were all founded around like 2008, and there’s this wisdom, I think Paul Graham likes to say that the best time to start a startup is during a recession… And he kind of referred to how many great companies were born… Y Combinator was also, I think, started around that time, or started investing…

[46:06] But I think what everyone conveniently forgot is that there was a technology revolution going on, and there was a whole new host of companies. Uber was actually started in like 2010, off of iPhone. So there was this huge demand to get people to build things that did not exist at a new scale, distributed systems, mobile, web - you name it, it was on fire. But what I’m a little worried about is I look ahead for the next 10 years… Do we have a similar technology revolution? And internet is everywhere, mobile phones are everywhere… The Metaverse, actually, and augmented reality is there… I think they’re investing so much, because they hope that this will be the next revolution, but it seems it will be a lot smaller, if anything. There’s AI that’s kind of spreading, but it’s not taking the whole industry by as much force as we’ve seen… So I’m kind of wondering, if we’re gonna look back, are we gonna say that this was the golden decade for employees in terms of - there’s such incredible demand that just being an employee and taking very little risk, you could make outsized income, if you’re at the right place, at the right time, at the right companies, but even working at these big companies… And we might see, now that the market is cooling, that there will be just fewer of these opportunities, and it’ll be more niche areas.

I look through the public reports of Meta, Facebook, Google, and I looked at what is the one thing that they’re all saying that they’re investing in, which is a fancy way of saying, “We’re gonna put a bunch of money and we’re gonna hire people, and we’ll pay them well.” And the only thing that they all mentioned was AI. That’s the only one, but I don’t think AI will be as big as, let’s say, generic software engineering was; there was a mix of – we needed everything. We needed [unintelligible 00:47:38.23] mobile… And also, realistically, those skills, of building large-scale distributed systems, or large mobile apps, or large web apps - they’re a lot more common today than they were like 5 or 10 years ago, and now there’s a lot of infrastructure. You no longer need to build or manage your server fleet; you just use AWS, and use their service that just auto-scales for you.

So I feel there’s definitely been a commoditization of skills that used to be very unique, and it’s going to continue, and the only way I think we would see this golden decade continue after this bounce back is if there was more areas that are just new, that you need to learn, and a few people know it, or you need to hire these people who keep doing it. Data engineering is a little bit of this right now, machine learning, AI… I think it’s only around AI that I’m seeing a large pull right now.

Yeah. Where will that next platform come from, if it will? Will it be Apple’s next entry into the mixed reality space? I think they’re supposed to be launching their glasses next year, perhaps… Will that be as big as a mobile phone? Hard to believe that it would be. The Metaverse, I think even Zuckerberg saying this thing is like five or ten years out, if it ever comes to fruition in his vision of what that is…

Self-driving cars are going a lot slower as well… The one thing that I do see that I think is a little bit more realistic - and again, it’s hard to predict the future, but we can always try… One thing I’m kind of seeing is this sure thing that I think is happening, is these niches, these industries – like, tech is everywhere, but it hasn’t conquered a lot of areas. Online shopping - done. Amazon has done it, with a mix of technology and hardware, logistics… But there’s a lot of industries which are kind of up for grabs. There’s this company called Stedi, who are trying to revolutionize the EDI system, which is this - when you’re ordering parts from each other, there’s like this electronic device (or something) identifier, where these big manufacturers do it… It’s like a super unsexy business, and the person who’s doing it, the founder, only knows it because he ran his own shop, I think, where he sold very specific parts. He was like “This is so outdated”, so they’re trying to revolutionize, bring technology to that sector, and that looks really promising.

[50:06] Wedding planners, or funerals or local restaurants, or all of these businesses that are operating, helping them do things more efficiently with technology… Because that is still there. If you’re gonna go into a restaurant and you’re gonna see “How can we make this run more efficiently?”, either make more profit, or have less costs, technology is still kind of an obvious answer; the question is just “Can you actually put it in place?”

So I think we’re gonna see a lot of these “the real world meets technology” in a way that you have a domain expert, someone who’s – let’s say who’s been a chef, if it’s a restaurant, or ran restaurants, and they have this idea, and eventually they do a start-up… But it’s no longer just a digital-only thing. It’s a real world and a digital thing, which means that software engineers will not be like fully in charge; you now need someone who knows this business… But I think there will be some really good opportunities; they just might not be unicorns, but they will be places that are good businesses, they’re honest businesses… So we might actually just take a step back from this, “Oh, I’m 20 years old, I just graduated, I joined this company called Snap in 2008, and five years later I’m a millionaire.” That probably will not happen as much. But there will be a lot of things where I love software engineering, and I love using it in the real world, and I’m actually helping change this small industry, which actually is really interesting, when you look into it. And I’m helping the lives, or – or I’m helping people make more money, or do things better etc.

And maybe one more thing - just an interesting one that just keeps coming back… I sometimes think of it, and I talked about it… Healthcare. So there is a lot of investment going in, and big pharma has poured a lot of money for like 5 to 10 years to try to bring technology that will help people and result in better care, or better prescriptions, or whatnot… And there’s an aging population, so that is also there.

So I do think there’s a lot – I just gave a bunch of examples here; I think there’s a lot of things to be excited about, but I think we just need to be a bit more grounded, because the whole, you know, from zero to a billion-dollar company is not going to happen. In fact, these billion-dollar companies, in hindsight, were probably highly, highly inflated, and we should just set our expectations.

Yeah, I was talking to Jerod before this call, there was something I didn’t share in Changelog News, because I was skeptical of some of the details behind it, but it was this – the title says “Which one of these will be the biggest unicorn failure ever?” And it cites all these larger companies - Uber was one of them - with little to no profits, and they’re ten years old, twenty years old… And it’s a small swath of them… But there’s also tons of opportunity in the boring business sector. I mean, I’ve been turned on to this more half tempted to just to buy a bunch of laundromats kind of thing… But think about the innovation if you’re a software developer, right? I was telling Jerod this. This is sort of a silly, kind of crazy idea… There’s a lot of boom happening in the RV space, but there’s no Tesla in the RV space, aside from, say, Airstream. And they’ve been around for a very long time, and it’s mainly their quintessential external design, with good taste on the inside. Most RVs are kind of ugly, but almost none of them have a LAN network, almost none of them have high-quality software, almost none of them have a lot of thought put into like people who are younger and into more smart things, or automation things… It’s kind of like an untapped market.

If you can do electrical engineering, and mechanical engineering, and software engineering, and all these different things come to play in these boring sectors; or even recession-resistant places like laundromats, eldercare, healthcare, as you mentioned, storage facilities… There’s a lot of automation that can happen there. Like, if you owned an RV park that was automated fully by software - it takes land which appreciates, software, mostly automated, maybe one operator… Like, if you’re a software engineer, it might be time to follow, I think - what was her name, Jerod? …Ann’s advice from Wired? She was saying in the article you posted…

Amanda Hoover

[54:01] There’s a couple different directions you might go, and one might be just to take that big risk and start your own company… But my advice on top of hers would be consider boring sectors, or recession-resistant sectors that just, like you had said, Gergely, there’s just no one there innovating in the software spaces, because it’s all been kind of laser-focused into these self-driving cars, AI and things, which - that area is growing, but it’s being sort of laser-focused in this online-only space, where maybe the riches that can be found are in this mixed medium; this in-person, brick-and-mortar, physical places where technology just hasn’t been brought to the forefront there. I don’t know what kind of advice that is there, but there’s a lot of opportunity out there, in spaces that you just may not have even thought of.

Yeah, and I feel also that, going forward for the next couple of years, the kind of mainstream advice might apply less. The mainstream advice until now, like if you wanted to have a really successful and profitable career in tech was learn how to code, if you have the opportunity go to university, just because now you have a pedigree, try to get into one of these big techs as soon as you can, and then jump around from there; if you cannot get straight into like Facebook or Google, try to go at a tier lower, like Foursquare, or Yelp, who have really good cultures, but they’re not as well known as some of you others, and then tried to like hop your way up. And once you’re there and you made it to staff engineer at Facebook, you’re probably making so much money that – I mean, if you’re spending it all, you’re crazy, because you should have just saved some of that for a time like now. And then the advice kind of ends there. And I do talk with people who are 5 or 10 years into their career, or let’s say more like 8 to 10 years, they made it to staff engineer at one of these companies, and they’re like “What next? Because I’m now making so much money I cannot go anywhere”, which is not a bad problem to have, but they just feel a little bit trapped, because they went there so quickly. And compare this with people who kind of got there after 30 years, in the past. I know people who retire from similar situations, at the end of their career, as a staff or a principal engineer as well.

So this used to be the traditional advice, and it kind of worked for so many people, because big tech was hiring so many people. This was kind of achievable for most people. And this route will always be there. I’ve seen this in investment banking. When I joined JP Morgan in 2010, I worked on the front office… And banks are really good; they have front office, middle office, back office, and it’s based on how much money you make. The front office is making all the money, middle office is supporting the front office, and back office is just a cost center, like clearing stuff. So I worked with traders, and what I noticed is – I was on a desk, we had like ten traders that we were supporting, and we were building software for them… And when I joined, we had 10 traders; a year later we had 6, and they never got backfilled. And these were the traders who were making dollars in the millions in compensation per year, or at least a million; they were making these outsized bonuses.

And I asked the traders like “Hey, how was it like?” and they were like “Yeah, back in the day this desk used to have 30 traders.” And I asked “What is it like?” “But we’re just kind of getting fewer…” Because when they let people go, they actually hired like two software engineers to do algorithmic trading, or just the same thing, but for cheaper, or similar stuff. And then they told me that to become a trader, it used to be pretty easy back in the day. Or not that easy, but you just needed to go to a good school. But now you have to go to a good school, you need to have the connections, they will tell you what the interview is like, and some of the interviews are ridiculous. Back then they claimed that there were some reflex tests, and all that; they will tell you what it’s like, so you can prepare. So basically, to get that job, you needed to have pedigree, you needed to have connections, often family connections, and then you had a chance at an interview, where you had to do really good, you needed to be really good.

I think this is slowly going to happen with big tech, where they will be hiring, but you will need a pedigree. They’re not going to hire you off of a bootcamp or nothing; or a previous company. And then you’ll also need to do well there. So it’s just gonna be a lower funnel.

[57:48] And the other advice - so this advice will still be there, but it’ll be harder to do… But the other advice that no one will talk about is what you said, is ignore the mainstream and look into interesting sectors. And this will be hit or miss, but there will be some people who will do great at these no-name companies that no one knows about; some will be absolute flops, but some will be just really fun, where you get to grow, you get a pretty good compensation, and you grow with the company, and you’re solving for a really interesting challenge, and maybe that also gives you ideas to potentially start your own company, or partner with something… Or just stay at a company for a long time.

I’m now into the industry long enough that I have these weird kind of reflections… When I worked on kind of industries or areas that I might have like looked down a little bit on, for example the government sector… When I lived in Edinburgh, more than 10 years ago - it was maybe like 12; I don’t even know. It was more like 13-14 years ago… I built an app called Edinburgh Bus Tracker on a Windows phone, because I went every day to work, and there was an app for iPhone, and one for Android, but none for Windows phones, and I was I just wanted to know when my bus would arrive. So I built this, but in building it, I had to reach out to the local council, and they had a tech team who were building this API. And I kind of talked with them, and they made some changes to their API… And I just built it, and I forgot about it… And now, I think just six months ago, a guy wrote to me saying, “Hey–” I think I tweeted about this app that I did, and he said like “Oh, I’m still here, and I’m still building the API, and it’s really cool…” And I was like “Hold on… You’ve been there for 12 years, working at the council, on the API team?” And I started just talking to him and he was like “Yeah, it’s actually really good. It’s just a really friendly place. It kind of feels like family, and we get to experiment a lot when we do these things…”

And in my mind, if you would have asked me – like, I was always someone who just wanted to climb subconsciously a ladder. I always wanted – not climb, but I wanted to prove myself that I’m good enough for the next thing. But now I’m reevaluating of like “Hey, this person - he’s a software engineer, he works at a job which probably pays the bills, it is really important for the community… He gets to have a lot of professional freedom… People are using it… So you know what - there’s not just one way to have a fulfilled professional life” and I think that’s what a lot of the career advice focuses on, like “Just go higher, and higher, and higher, and more, and more, and more.” And that person is definitely not afraid of any layoffs, right? Like, everyone else who’s stressing – that’s gonna be the last place that is impacted, for obvious reasons.

So I think one thing that I’ll take away from this is try to talk with other people outside of your bubble, other software engineers, or if you’re an engineer manager, other engineering managers, and just approach those people with curiosity, because I think this is how my worldview is changing a little bit - I get more empathy - and you also just build up a better network, right? You just get to know those people, and I think you’ll be a bit more grounded. Tech is still really big, and there’s so many people doing so many different things… And by talking with different people, this is how you might find out that absolutely boring industry that is actually really exciting, and now’s a good time to jump into it, now that big tech is just really – everyone is focusing their attention right there.

I always say, if you’re going to take on risk, take it on your own terms, you know? That’s kind of one thing as well; if there’s gonna be risk in the market, take it on your own terms, and don’t be afraid on that front. But at the same time, I do have a lot of empathy for people with change; change is super-hard. Jerod, we’ve got the mention - -I’m not sure if it’ll make it onto the air, because I’m not sure where we talked about it at, but we mentioned Who Moved My Cheese recently, when we were in the hallway track at All Things Open… And this is the time of change and resilience. If things are moving and changing, you’ve got to change with it… But at the same time, a lot of people just want to have impact, and maybe the best way to have an impact is with people you enjoy working with for 13 years; with no concerns, or no stress… And maybe you’re not getting paid the most, but maybe that’s not even a concern for you, because what you’re optimizing for - which I think is a big key for a lot of people; they’re not really sure what they’re optimizing for. Like you had said, you were optimizing for personal satisfaction, and the fact that you could grow, and you could do, and you could reach… Which is great; there’s nothing wrong with that. If that’s what you’re optimizing for, then you take the path you took. But if you’re optimizing for enjoying the people you’re around, the impact, maybe even community, maybe don’t jump around like most people do every two or three years to different companies; or even less than that. That’s also a market condition, but also a personal condition you choose to take on. So what are you optimizing for?

What you optimize for - there’s this really interesting mental model that one of my former colleagues at Uber, she’s a really, really good engineering manager, and now she’s actually a VP of engineering [unintelligible 01:03:56.07] We were just having dinner the other day when we got back together with some of the engineering managers at Uber, and I was just talking about this, on how there’s money, there’s also career… And she said “I’ve got a really simple framework, that has worked really well for me. It’s three things: challenge, environment, compensation. Figure out which one is the most important to you, and which one is the least one.” Because what that means is if two of these are good enough, then you’ll actually take that position or opportunity.

So for example, let’s say if you’re someone who cares about – a lot of software engineers will care about interesting problems, which is challenge, and then you need to decide “What is the next most important thing? Is it the environment, that you’re at a friendly place, and all that? Or is it the compensation?” If it’s a challenging compensation, then you’ll probably go for places that have kind of go-go-go cultures, but they pay well and it’s a really interesting challenge. If it’s environment, then you might be okay taking a pay cut or something that is a lot less competitive, or maybe more local, but they are working on this really interesting thing, or potentially even - depending on where you put compensation, or how much you might consider a nonprofit, etc. And it’s really interesting… And this changes over time. So it can change based on – obviously, compensation is a big one, because that’s the only one that you can really quantify. I think that’s why people focus on it. You talk with people, you can compare your compensation, and you’re above or under, but you cannot really compare your environment or your challenges, because it is subjective at all times.

Well, Gergely, it must be kind of a bittersweet time for you, because while you’re covering all of this downer news, and a lot of your friends are seeing layoffs, and cuts, and there’s just lots of bad going on, you personally - it seems like your business is booming; your efforts with the Pragmatic Engineer, there’s lots going on there… A year ago now is when we last talked, and you were kind of forging this newsletter, this business around it… I don’t think you had a job board back then… Maybe give us a quick rundown, as it seems like you’re doing very well, which is awesome. Tell us what’s been going on.

[01:05:58.25] Yeah. So it just comes to show that doing your own business can – well, first of all, starting my own business was a little unexpected, or how I started was unexpected. And maybe I dodged a bullet here, because my plan was - when we talked to a year ago, I had already started my newsletter, but my plan was originally quit Uber, live off my savings for six months and finish a book, because as we know, books don’t really make any money, but I wanted to get that book out. It’s called “The software engineer’s guidebook”, and is still not ready, by the way. But I wrote some other books. And then my plan was to raise venture funding and start a company, and do a start-up, and do some cool stuff around platform engineering. I had a bunch of different ideas to do. And in the end, that didn’t happen.

When I got to the decision time of like “Do I want to raise venture funding and start a company, or do I want to keep doing what I’m doing?”, which is writing, and it actually started to make some money online, and it seemed that just writing books would be able to cover my basic cost of living, I decided, “Alright, let me try to give this a go, and let me just try to do a paid newsletter.” And this turned into a very viable business very quickly, which is - it turns out there is a demand for people to pay for more in-depth insights into how software engineering works at big tech startups. And then later I just expanded that.

So over the past year, I iterated on the format of the newsletter, I now have two articles. One is a more timeless article of how different things work in software engineering, from engineering efficiency, to let’s say how you deploy to production, or how certain companies do this or that. And then there’s more of a reflection that’s called “The scoop of what’s going on in the tech world”, where I try to stay away from covering most of mainstream, although I do slide into that every now and then… But I’m trying to like just give a sense of like “What are software engineers talking about, or caring about?” Unfortunately, a lot of it has been layoffs, but I’m also trying to look for more positive things are happening.

And as you said, this business is doing great. More and more people are signing up, both in terms of – there’s a free mailing list, there’s a paid one… The paid one, actually - I was giving out badges, and I’ve just crossed 10,000 paid subscribers, which is an incredible milestone, and now they’re advertising it everywhere with the verified badge…

Very cool. Good for you.

Do you pay eight bucks a month for that, or how does that work? [laughter] Where you’re verified…

Yeah, exactly… It’s the opposite… But it’s absolutely booming. And there’s a job board that I also started, which despite all of this gloom and doom, more and more companies are signing up, who I vet; so I don’t approve all of them. I need to keep it high signal-to-noise. So that’s also going up in the middle of a market that shouldn’t be.

So my business personally is going well; it’s probably a mix of timing, or demand, or maybe this is a timeless demand… It feels like it was probably a niche that was waiting to be filled, potentially, by someone… But it’s one of those things where – so I don’t like to talk specifically about my business as much, because this is just one specific business. And I find software engineers love to pattern-match, and a lot of people are asking, “How can I do exactly what you’re doing?” and I don’t have an answer to that. But what I can do is give some generic things on what helped me build this business and actually run it pretty well.

There are two things that actually helped me with this. One is I always had side projects on the side. I posted on Twitter, I have a spreadsheet of all the side projects I’ve started since I left college, like on the side of work… And there’s a lot of them. At some point I had this flashlight app that had 14 million downloads on Windows phones; it was the most popular flashlight. And I built apps, and I built websites, and I launched – this is my third blog, actually, my current software engineering blog, that kind of grew into this…

So I just did a lot of things on the side, and I just got a bit of a sense… I had this intrapreneurial spirit, so I got a sense of building, and I got a sense of figuring out what works and what doesn’t at a small scale. I made some money online… Like, with the flashlight app I sold some ads… So I had a sense of like making my own kind of income… But all of this was, I guess, [unintelligible 01:09:44.17] but it was practice. So now that I’m growing my own business, I take a lot of the lessons that I did back then, that I kind of learned the hard way… Because I think it’s relatively easy to start a business, but just like – when someone is second, or third-time founder, VC’s are more likely to give them money, because they learned on someone else’s expense.

[01:10:02.25] There’s this, joke of “Why does Adam Newman get another investment round?”, which I think a16z gave him another I don’t know how many and there was a lot of outrage on that…

100 million, or something like that. It was a lot of money.

Yeah. But there’s a point there… First of all, yeah, it’s not really cool that they don’t fund a lot of really capable entrepreneurs… But there’s a point that he spent - I don’t know, like a few billion off the other investors money’ learning how to actually run an empire, or a big company, making a bunch of mistakes, that assuming he’s intelligent, he’s not going to do those same mistakes… Which you cannot say for everyone. So anyway, I’m giving a bit of benefit of doubt. I still think it looks very poorly on a16z for putting a lot of their money into these ones… But there is a point there.

So going back to my point, like by doing side projects on the side, even if they’re just absolute side projects, you kind of build that entrepreneurial muscle, which you need to do to run your own business.

The other advice is – just my advice is forget about this whole creator economy thing. Everyone’s talking about the creator economy, and everyone’s fantasizing about having an audience of so many people, who they will – I don’t know, everyone wants to build an audience, even when they’re at a… Like, I meet people who are like “Alright, my plan is I build an audience, like on LinkedIn, or Twitter, etc. and then I can leave my job.” And well, I mean, audience is a distribution channel, and distribution channels are important, but making that your main goal is kind of like a bit of a moot point.

I happened to, I guess, build an audience, because what I was doing was writing, and I started sharing my writing. My main thing was I was writing, and it kind of helped that I was sharing this out… But the way I look at what I’m doing is I’m running a business, and for a business things like distribution matter, things like who are your customers are matter. What I find misleading is like just copying what you think is successful, because I know some of these people who are making YouTube videos and I have millions of views, and they don’t have a business. They have sponsors, they’re stressed all the time, because it goes up and down, but it’s not a stable business. My business is actually pretty stable and pretty honest, because people pay for value. I actually don’t have any sponsors.

Your business is a good example as well, where you also have a business that is very viable. The Changelog will have a mix of sponsors, a mix of people paying for the premium etc. So treat it as a business, that’s my second one. First one is do side projects, second is like when you do a thing, don’t think of creative economy, think about it as a business. And I have an article on that.

And the last one is, this is a little bit – if you want to do something a little bit similar to what I’m doing, which is I think I’m educating people in many ways, work in industry, and do interesting things in places where it’s hard to get into. Because the reality is the reason a lot of people pay attention to what I say is because I’ve done it. I’ve done a lot of the things that are not as trivial. I happened to be there when we rewrote the whole Uber app in three months. And I was one of the very many people, but I kind of was part of that experience, and it was a rare thing to do. But I really went and worked in industry. I didn’t go there and work there because I wanted to this, it was the opposite. I worked there and I made a lot of – I just learned a lot, and I became good at certain areas… And it’s a lot easier to just teach once you’ve done it. And so a lot of the thing I do is teaching.

So that’s kind of generic advice… It’s counterintuitive, but be good at your job; be really good. Because if you’re not good at your job, you’ll have a hard time launching a business that has to do with something mature. And you might be able to launch something else, by the way, and then just do side projects as you’ll figure out what you do. The Pragmatic Engineer came about because I was blogging on the side for a long time. I just loved it. I just liked doing it. I learned that I loved writing; not because I ever thought that it will turn into a business. And – okay, the last advice…

[laughs]

Number four…

It’s save up. So just to summarize the advices, it was do side projects, understand what businesses are, even your current business, work in the industry and get that expertise, and save up enough savings that you can actually take a risk. I would have never done The Pragmatic Engineer if I didn’t have like a year or two of savings, and I was able to quit my job, and I said “I’m not going to look for anything for six months. I’m just gonna do me. I’m just gonna write this book”, and I said no to all of the recruiter reach-outs…

[01:14:18.21] Because obviously, when you’re experienced, people come your way, they want to recruit me for this, or that, or have a coffee, or get me as an advisor. I said no to everyone, because I was on no one’s payroll anymore… And I just chilled then, and kind of the inspiration came. If I didn’t do this, The Pragmatic Engineer would not exist as it does today.

Well, they say “Step away to get unstuck”, or sometimes step away to find the direction that you need to go. Not so much get unstuck, but find the path that you want to take. I think you do a great job with writing. I think one thing that you do really well is you shine a light in an area where it’s very hard to quantify the details and share the details of a very just hard to understand world. And not a lot of people have the trust and the access that you have, and then also the background that you have… So I think that you do a great job of like demystifying and clarifying a lot of things that are just challenging to have visibility into; and then you’ve gained the trust of many people because you write honestly. You were in the right place, at the right time, but you were also there with passion and preparation. So you can’t discount that ability, which - it takes time to get that passion. Well, I guess, passion can kind of come at any point, but the preparation - it takes time to get that.

Yeah. And I guess the last one is just reflects that I think is just be curious. And this goes back to what we were talking about, the boring industries. One of my best reasons I feel I was successful in my career, and now in my new career as well - I’m just really interested in stuff and in people. And maybe this comes intrinsically, and maybe you cannot do it, I don’t know… But I’ll tell you, at Uber, for example, one of the things that I thought helped my success - when I would sit down to have lunch, I would try to just go to someone and say “Hey, do you mind if I have lunch with you? Let me just introduce myself. Where do you work? What do you do? Oh, customer support. Tell me about that. I have no clue; in my mind, customer support is this boring thing, but I’m sure it’s really exciting. So can you tell me?” And I just then shut up and listen. And I actually met a lot of people…

And later, just at my job, something came up and someone was like “Oh, something customer support. There’s a customer support agent sending us a ticket” and I was like “Oh, hold on… I know a person from there. Let me just ping them.” And they’re like “Oh, yeah”, and it was going on. And people were like “Oh, wow, you’re so connected.” And I wasn’t trying to be connected, I was just really curious. I was really interested in what does your world look like?

When I was in London, actually, for some time, I reached out to a few fellow tech leads or senior software engineers and I said, “Hey, I’m working at SkyScanner as an iOS engineer; you’re an Android or iOS engineer at this other company… Do you want to just have – coffee’s on me. Do you want to just meet? Because I would love to learn what you are doing. You’re in this different company, and I just want to get a sense of what are your challenges, and maybe we can learn from each other.” And if not, coffee was on me.

So I did this for a few times, and I stopped doing that after a while, because I met enough people… But this curiosity of, again, just – especially if you’re feeling smug about how good you are at your company, or how great of a place you are, just talk to someone else, because it’ll first of all get you grounded and you’ll learn more… And I think a lot of – potentially maybe one of the things that people might like about writing - I’m super-curious. And this is one of the reasons I love doing it. I get to talk with so many people. Now that the newsletter is a little bit better known, most people will respond if I reach out to them… But I have a long list of things I’d love to learn more about, because I think the whole industry is fascinating. I think we don’t know what we don’t know, and we don’t know a lot of things.

One of the things on my bucket list - I’ll just put it on here, and if someone works there, they can contact me… One of my things on my bucket list, which is just hard to do - it’s at some point try to get either on the record or off the record people who will build spaceships at the likes of SpaceX, or NASA, or the European Space Agency, to talk about how they do that stuff. And the reason it’s hard - I don’t know how confidential all this is. And I’m not interested in confidential details, but of how is that world different, and how can you get in there? What are the differences to, for example, when you’re building a social media app, or just something that is a little bit more traditional software engineering.

[01:18:19.20] So I think the world is super-interesting, super-exciting, and what I’ve noticed, software engineers never get asked, or even most people in the business you work at, like someone who works in customer support operations - you never get asked by a person who is not a manager, they don’t walk up to them and say “Hey, I’m interested in what you’re doing. Can you tell me?” And I’m also a software engineer, so I’m happy to trade notes.

Yeah, for sure. Get humble, be curious. But Gergely, you’ve got - pragmaticengineer.com is where people can go to find all the stuff you do. Right?

Exactly.

We appreciate you coming back for this annual trip down what’s gonna happen next. Maybe - should we say you’re coming back next year? Should we predict that? Is it a possibility?

I’m gonna come back next year. I love being on the Changelog, and I love catching up with all of you. Also, it seems every year it’s different, so… Let’s try to predict what might happen next year, although predictions are a little bit off…

Let’s see if this ages well. Are you predicting something now?

Well, let’s see… I do hope that in a year, when I’ll come back on the usual fall catch-up, I hope - it’s not a prediction, but more of a hope… I hope we’ll be through the most rocky part of this market, and I hope we’ll all just be like “There’s just not much to talk about the market. It’s not great, it’s not bad… It is.” I’d be very happy with that. And this is something that is hard to predict.

I would hope that we’re seeing a few more interesting areas that we’re like “These are areas that we think are going to be – they’re more likely that they’ll be big in this.” We’ll say that AI/ML, or data engineering gets bigger, or there’s something – maybe we’re seeing that frontend and mobile is moving closer together, something like that… So it will be cool to see a little bit of movement, because I feel there’s a lot of like small wins here and there, but I’m not seeing a trend change yet.

Maybe next year we’ll have Gergely AI, or something like that, where we could just train a model on your writing style and you could just stop doing what you do… It’s like – since you mentioned Silicon Valley, it’s like Dinesh and Gilfoyle when Dinesh was chatting with Gilfoyle all day, but it was actually Gilfoyle’s AI, and…

Oh, yeah…

…he was like “Oh, my gosh…” That was the coolest part. But maybe we’ll have a Gergely AI, or something like that, next year.

That would be cool.

That would be cool. Well, this was awesome. Thanks for having me.

Yeah, thanks for coming, man.

Thanks again for coming on the show. We always love having you. I appreciate it.