There's been so much talent locked up in bigtech for so long. The amount of talent in these companies that have had golden handcuffs forever due to the continual rise of their stock grants is staggering.
Now suddenly bigtech stock is down 50%+, and they can't issue enough RSUs to cover the compensation gap. Moreover, there's layoffs coming. All of the sudden these extremely talented people, many of whom have a small fortune in savings due to a decade+ of bigtech stock grants, are unleashed on the wider industry, some with 6-12 months of paid severance. They could easily start up a new business with minimal personal financial risk.
Will be interesting times, for sure.
Example: When Jira was the new kid it was all snazzy and sleek and interesting. Over the last few years a lot of alternatives have appeared. Although Atlassian has made some changes, they can't just bring in what makes those products different unless they write a whole new product, and large companies can't make new products.
Currently I think we're at or just past a high point. The current lineup of Jira alternatives will probably wittle down, the best ones will get bought, made part of some enterprise lineup, that way of working becomes a standard, they'll get big and bloated and unable to innovate. The cycle will get to a low point and then we'll see another explosion of alternatives.
And that's just one niche.
It's harder to find the business potential because the opportunities are much more closely coupled to optimizing specific processes in specific industries. But if you can find the right niche, the business opportunities are there.
The "current" use of the word implies VC capital. As in "I joined a startup and we raised..."
However in the past it referred to literally "starting a business". Someone sees a gap in the market, builds a product, and looks to fill that gap one customer at a time. Since there is no incoming capital, it has to be revenue positive, well enough for the owners to survive.
This sort of business is (somewhat perjorativly) called a "life style" business. In that it provides salaries to some number of people, and provides a (good?) living.
The reasons for starting such a business are numerous, and while maybe some do with the goal of being mega-rich, in reality the successful ones end up being merely "rich".
But there are a _lot_ of upsides other than money. I'll offer a few from personal experience, but really they offer any goal you like.
A) freedom to work on what you want, when you want, where you want, how you want. Yes, of course you are constrained by actually delivering (or you don't get paid) but the mechanics of delivering are up to you.
B) job security. It takes time to get to this point, but once a business is profitable the owner has a job for life. (he is literally the last person to get laid off) [1]
C) a lack of corporate bullshit. No endless layers of managers. No endless meetings. If you need a new PC you go buy a new PC. (equally true, if you report directly to the owner, decisions get made quickly. If you need a new PC you only have to convince one person.)
D) while on the topic, being employed by a small business has huge benefits as well, but to need to move the income needle for the job security.
I could go on but I think you get the point.
[1] ironically when getting person credit, like a mortgage, ticking "self employed" leads me to a lower credit score, despite the fact that 40-odd people get laid off before I do :)
[2] about 5% of new (bootstrapped) businesses make it to 10 years old. I'm not suggesting this route is easy, but it is desirable.
Financially, it's the exact opposite of a problem; it's too profitable. There will always be big market for companies that manage to lock up an audience within its walls.
I bet there are lots of sectors out there that could be totally disrupted or made more efficient if they got attention from high-caliber developers and UX folks.
Let's all start some some startups, especially if we get canned (looks sideways)
As free/cheap money goes away it should force entrepreneurs to build real businesses rather than VC fueled money pits.
I want this to be true, but I don't see how.
Good talent is still locked up in BigTech.
Talent that got freed up was working on things BigTech had no way of make money off of, even long term.
On the other hand, SmallTech offers now have a better chance, and seem attractive, to said talent. That must count for something.
This round of layoffs is proof that BigTech safety net is a lie. But not enough to push people with dependents to take on the pain and uncertainty that starting up ensues.
Surely your downside is capped at zero?
Why? From the executive's perspective at megacorps like Google, employees are completely replaceable, and even for a megacorp, Google is incredibly scared of discrimination. The safest way to conduct layoffs is to do so completely randomly.
> You kind of expect this kind of thing in startup land.
No. In startup land, you should expect that there is a good chance that your entire company is dissolved. Your equity is completely worthless. You have no 6 month severance. You have nothing to show for the longer hours you worked besides a very sub-market salary.
Like we don’t necessarily notice that any business that employs software developers has to be $5+mil/yr or on the way to it which is not true at all for like a restaurant.
What?
Unless your work literally drives you to suicide, the cap on the downside is 'You go out and interview until you find another job.'
You aren't risking your own money - you're an employee. You get paid for your work.
If want to work on your idea, but you don't already have connections to tap for immediate VC funding, any work you do on it is earning $0 income while you're still having to pay the bills. Your downside risk is that after X number of months or years, you've lost $Y dollars of your starting savings.
If you take the Microsoft offer, your downside risk is that after X number of months or years, you get laid off, and have to look for a new job, but your $50k is still there, and quite possibly a bunch of new savings as well.
Of course your downside is capped. You're never going to wake up one day and owe Microsoft a billion dollars.
A real example of uncapped downside is when you sell call options on a stock, or short a stock. You actually can wake up one day to your broker telling you you need to find millions of dollars right now because the market moved against you. And it can get worse and worse, the downside is truly uncapped.
Unless you use Azure, of course. Then you don't even need to wake up to owe them that much.
I would love to start the kind of lifestyle (or "non-scaling" as you put it) business, but right now it's a complete non-starter for me because getting a health insurance policy for my entire family would be comically expensive.
It's even been harder for me interviewing with smaller startups because compared to single people, my insurance premiums are bonkers.
The cost of catastrophic situations is still ultimately too high in the US without or with insurance.
Instead of annual out-of-pocket maximums that are mandatory under the ACA and make that unlikely, plans used to have kind of the reverse: lifetime coverage caps that particularly severe conditions could exceed. (This is one of the reasons premiums are higher for superficially similar—e.g., what services are covered and at what cost sharing rule befoee reaching caps—coverage under the ACA.)
I can't see how it can happen post-ACA, unless the condition as a practical matter requires services that are entirely outside the scope of coverage.
Of course, this is only true for capital intensive startups. My sincere hope is that this wave of layoffs leads to a thousand bootstrapped, customer focused, non-scaling companies, like 37signals. Or kickstarters like the Framework laptop. I believe we need more companies like that, and far fewer moonshots that mostly fail and leave workers broken.