Silicon Valley crisis and the Tech Diaspora
For a long time, global Silicon Valley kidnaped talents from the rest of the industry. The upcoming recession is about to break this ruling
The first iteration of the word “diaspora” comes from the Jewish exodus from Egypt and Babylon in 6 B.C. As time went by, it grew in meaning to encompass any major civilizational spread, often due to hardships faced by said civilization.
Although people from the tech industry hardly can be called a “civilization”, the same can’t be said about the “pharaohs” and “Babylon kings” of our time: Google, Amazon, Meta, Tesla… you know the crew.
Much like the plagues wreaked havoc on ancient Egypt, allowing the Jews to flee (according to the mythos), the looming economic recession is breaking the legs of giants that seemed to be hegemons for over a decade. Zuckerberg's message to Meta employees or Musk’s tweets about staff changes are not cracks, but open wounds of an industry that now expects a Dot-com crisis 2.0.
That might be great news for the tech community as a whole…
“Silicon Valley is a mindset, not a location”
This quote from Reid Hoffman, LinkedIn founder, is fundamental to understand how the tech industry as we know came to be. Silicon Valley is a spirit, ubiquitous everywhere. São Paulo, Tel Aviv or Singapore, every corner of the globe has a “Valley” to call their own and their unicorns to boast about. Centralization is the name of the game. Not geographical, but financial.
Literature inside the Tech sphere doesn’t help either. An absurd amount of content is produced by experts painting Netflix or Spotify as undeniable success cases. The majority of books you can buy on Amazon about Product Management, for example, are based on experiences inside a couple or more companies from “the Valley” (any Valley).
The same way the Silicon Valley mindset centralizes the definition of “right or wrong” to an exclusive clan of organizations, each one of them reflect this behavior by trying to convince people that they are the pinnacle of any career in tech, the center of the industry. You don’t “work at Meta”, you “have made it to Meta”.
Companies are not businesses anymore, they are fetishes. Tech people are not workers, they are rockstars, leading the charge towards the future. Being inside a big tech has been portrayed as a guaranteed one way ticket to self realization and professional glory.
The consequence of this new fetish for work is that for the past 10 years, companies from “the Valley” all across the world predated companies outside their circle for the best professionals. Even worse, they did so while preserving the staff of their VC fund brothers. A true hiring Cartel.
As investors pressed for growth, more and more people were hired. “Valley” Businesses were bloated to the point that Cagan could justify recommending a team to be doing 10, 20 or more tests on the product weekly, while other companies struggled to find people to hire, often being forced to pay way above their capabilities or overloading the few they could retain with work.
The past few years saw a consolidation of a hiring food chain where unexperienced people were hired by the overall market for lack of better option, trained, and “the Valley” would reap them when they were ripe. Truly digital transformation is impossible when the people that would lead the change is kidnaped before they can do anything. Once again, Centralization.
What happens when the bill comes for those that had too much? They let go. Companies firing right now (whether they are big or not) are the ones that hired not with the money they had, but with the money they thought they would have. Since VC is short past the seeding stage and public valuations are plumbing, “Valley” enterprises have to tighten the belt and trim the excess personnel.
When the first dot-com bubble burst in 2000, we had no smart phones, the internet was a luxury and people enjoyed watching cable TV. Layoffs meant unemployment since tech people could not work somewhere else. More than 20 years later, we have digitalized ourselves as a society to the point that there is no more distinction between a tech business and a regular one.
There is not a single company out there that doesn’t have an app, a service or an internal system that needs development and upgrade. Engineering, design, data, product, all the positions that a “Valley” organization employs today can easily be absorbed by anyone on the market.
While the industry is sour for everyone, companies out of the “center”, now more then ever, need to double down on their projects to make money faster. Similarly, freshly funded startups need people, and they need very competent people if they want to survive for another day.
Why it might be good for everyone?
Call me an optimistic, but I do think that this scramble of tech professionals might ensue a new golden age for product development. The first years will be hard due to recession and instability, but through evolution and adaptation, we are in for the consolidation of product development at it’s best.
On one hand, legacy companies have tried to adopt better ways to create technology for a long time. They failed because “agile” and “product” as it’s many times envisioned was mostly thought for hypergrowth, not stable, financially sound growth.
On the other hand, Silicon Valley has mastered the art of creating great products inside big structures. Most of it might not be financially sound, but they do know how to get through a complex internal environment and deliver an awesome experience to their customers.
Imagine a world in which a legacy company can systematically hire “Valley” former personnel? A reality in which product leadership did not came from the brick and mortar marketing team, but from one of the most well succeeded digital business on the market?
History has told us time and time again: when knowledge and experience is not a privilege of the few, the whole world becomes a better place.
If you have been victim of a recent Layoff, I offer you my most sincere condolences. I’ve written this piece in the hopes that I might present a more positive interpretation of what you are going through.
I myself am very worried about what the future holds for me as a Product Manager. I can’t help but think that I have written this article to ease my own mind.
If I can give you one small word of advice is to not let yourself be eaten by anxiety. You need your A game to be able to relocate, and your worth is very well needed. There is life out of the bubble in which some of us think that’s where good product exists.
Try and look for opportunities outside of the obvious places, you might surprise yourself.