Tech Is In A Bubble — But This One is No Dot Com
Last week my company instituted a hiring freeze. Many other companies around the tech industry are doing the same. It’s a sign of the grim reality that the tech industry has more ambition than demand.
Does this remind you of the dot com bubble? Though it may look familiar, there’s an important but subtle difference. In the late 90s, customer-facing businesses were all the rage. Think retail sites like Pets.com, Webvan, and eToys.com. For many of these companies, there simply wasn’t enough demand.
Today’s tech industry is different in a way that may not be immediately apparent to everyday consumers. Instead of user-facing services, many of today’s highly-valued tech companies provide business-to-business solutions. Think Salesforce, Zoom, and Amazon.
Wait, Amazon? Yup. AWS is more profitable than their retail business.
Why is this difference important? There’ll always be demand from end users — people wanting to watch movies and stream music, ship items from across the world to their front door, and follow their favorite online personalities. COVID proved that even when the economy grinds to a halt, people still use their phones and laptops. If anything, they use them more.
