The Stack Overflow Podcast

Taking stock of the crypto crash and tech turbulence

Episode Summary

On today's episode, Matt and Ben talk about data showing Silicon Valley losing its status as tech's center of gravity. Plus, what it means to make major engineering changes in public and how to reckon with the collapse of some of the biggest names in crypto.

Episode Notes

Data show's Silicon Valley's share of new startup funding deals dropped below 20% for the first time.

What does it mean to experiment with big changes to an engineering org, in public and in real time?

SBF would like the chance to explain himself.

Today's lifeboat badge goes to CodeCaster for explaining: What is E in floating point?

Episode Transcription

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Ben Popper Hello, everybody. Welcome back to the Stack Overflow Podcast, a place to talk all things software and technology. I am Ben Popper, Director of Content here at Stack Overflow, joined as I often am by my colleague and collaborator, Stack Overflow Developer Advocate and Evangelist, Matt Kiernander. Hey, Matt. 

Matt Kiernander Hello! Nice to be here.

BP So Matt, we're starting out with a link here. Silicon Valley shares of startup deals drop below 20% for the first time. And the premise of this story from The Wall Street Journal is that increasingly investors looking for the next big technology or software company are investing outside of Silicon Valley. What do you make of this prey tell? 

MK Yeah, I think this was kind of predicated by the rise of remote work around how a lot of people were leaving really high cost of living areas like Silicon Valley to live in less intensely cost living. They could save more money, they could do the same job remotely, it was all fine. I think this was kind of a natural progression as those kind of epicenters started to crumble and be distributed, this was just a natural progression of that happening. And I'm not sure where that money is going, whether or not there are just other companies located in other geographic regions where that money is being pumped into, but it's a fairly significant change because California has been the center of a lot of these technologies and companies and startups for the last 40 or 50 years, and what that looks like going to the future is going to be quite interesting.

BP Yeah, I think the rise of remote and hybrid work is certainly a big deal. And here in this article they also say virtual remote deal making is now the norm, so it’s not odd to get on a Zoom call with someone and pitch your company and be able to get a term sheet out of that whereas in the past, they would've wanted you to come sit down in their office and sort of take the measure and stuff like that. So yeah, a fascinating little tidbit and I also think they mentioned in here that a lot of the deals were still out west, but had moved as you pointed out, to sort of this halo around the former Silicon Valley area where people had just moved a little farther out to Austin or Tacoma or whatever it may be. Sort of within the orbit of Silicon Valley but a bit further out where the cost of living was a bit lower and they could get a little more space. Speaking of changes in big tech, big layoffs continue at some of the larger companies. I think one of the stranger things to me here is to think about the 10 or 20 year cycles we go through. So there was the dotcom boom and bust, which took us through the ‘90’s to the beginning of the new millennium, and then there was kind of a lull, although really big important companies like Google and Facebook were incubating and launching, and then there was the 2008 financial crisis collapse. And from 2010 to 2020, until the pandemic or whatever, we were in this era of money being very cheap. Interest rates were super low, it was easy to take on debt, and companies were very focused on growth, not profit. And the pendulum has swung back fiercely and quickly and I have a bit of whiplash. I think you and I have been on podcasts talking six months ago about how all the power was with the employee and people were getting two or three job offers a day and feeling liberated to quit and take a new job if and when they wanted to. And very quickly it feels like things have shifted where people are worried about layoffs and questioning if we've reached an inflection point for ‘big tech’. So how's your vibe on this? Take the temperature here. 

MK It’s honestly a bit scary. I'm personally quite frustrated with a lot of these layoffs because it seems like they're not due to companies losing money. It's due to growth targets not being hit. So they're still growing, just not at the pace that they were previously. So for me, it's a little bit frustrating to see so many people lose their jobs because of growth targets not being hit, essentially.

BP No, I totally feel you on that. The story that we all tell ourselves about what is a healthy company changed quickly from a healthy company is one that is growing its user base and its XYZ, to a healthy company is one that is profitable or is cashflow positive and is not going to need any venture capital injection anytime soon. And as you point out, this is even stranger for very large companies that have a hundred billion dollars in the bank. But such is the power I think of Wall Street and of the stock market and of the media to set expectations to a certain degree. On the other hand, I will say our own CEO has been doing the rounds, talking to folks in the press about how this is a great time to be at a startup that is hiring because there's a ton of incredible talent coming on the market. So there is that side of it too. 

MK Yeah. And it's not like it's just one or two. There have been layoffs –severe layoffs– and thousands and thousands of extremely highly skilled tech workers who are now looking for their next role. And I'm a little bit concerned, to be honest. I've seen some other things, Instagram tech-fluencers saying, “Now is the best time to hire really good talent.” And yeah, that is true. But on the flip side, these people are coming from extremely large tech companies who have historically had extremely high total compensation packages in terms of their salaries and equities and everything else. And it's first world problems, but at the same point, these people are also going from extremely high total compensation and now they're having to all fight it out for these other companies. And if they're going to smaller companies as well, that's a significant financial hit they're going to have to bear and if they haven't kept on board with their lifestyle creep, and mortgage, kids, private school, whatever else is going on, there's going to be some serious adjustments to lifestyles as well. 

BP Yeah, it is tough because if you got a job at a big tech company in Silicon Valley and you were making a certain salary that was commensurate with that whole milieu and then all of a sudden you don't have it, well you bought a house that was XYZ expensive because that's what it costs to live around there, and so you're carrying that mortgage and you send your kids to XYZ school because those are the schools in the area that are well thought of and where all your colleagues send their kids. And so it's not as simple as saying, “Well just go take a job at a startup because they're readily available.” That may not fit your financial profile anymore. 

MK We have spoken about this before where even though it is quite doom and gloom for some, and for most, and unfortunately that's going to be a really tough situation to crack, these situations can bring about some good in terms of people banding together, starting their own companies, building some really cool things that they otherwise wouldn't have been pushed to do if they hadn't. So I'm hoping there's a net positive out of all of this, but it's kind of hard to do that when people are kind of struggling to find work and pay the bills at the moment. 

BP Right, exactly. All right, I want to talk about something that we brought up on a recent episode. We can't avoid it, so let me put it out here. We are not here to comment on the rights or wrongs, the strategic value of Elon Musk's decision making at Twitter. On the other hand, there was a Twitter post today from a fellow who has written for the Stack Overflow Blog and has quite a popular substack with software engineers. His name is Gergely. He was an engineer at Uber and at Skype, and he writes now for this substack called Pragmatic Engineer. It's quite good. What's so striking to me is that there's a conversation happening out in the open getting thousands of retweets that is just so deep in the weeds. It's the kind of weird nerdy stuff that we talk about on this podcast but that is not usually big news. Gergely says if you're a software engineer today, things could hardly get more interesting. Shutting down microservices in bulk is next up today at Twitter– that's what they're talking about doing. Now we know why the Git freeze was instituted a few hours earlier. He had a whole big thread about Git freeze and how it had gone read only. As said before, this is the kind of stuff we've not seen in public and at this scale, and he's responding to a tweet from Elon, “Part of today will be turning off the microservices bloatware. Less than 20% of them are actually needed for Twitter to work.” So a lot to unpack there. Again, not the place of this podcast to comment. We're going to take a stance on whether this is the right or wrong approach, but it’s fascinating to think about because so many of the podcasts I've been on are about what is the value of microservices? What are the pros and cons? When you decide to go this route away from monoliths to microservices, then you need observability, or maybe you need a service mesh, or maybe you need better DevOps. It has its drawbacks. It's one approach to architecture. It’s interesting and powerful in some ways, it can have its downsides in others. That you would make a choice to turn off 80% of them on a few days notice is, I think it's fair to say extreme, and we're going to see in public what the impact is. And I think lots of talented software engineers likely are going to weigh in, so it's going to be a very interesting discussion and it's an interesting level of transparency around these big software architecture engineering decisions we don't usually get, that we're not privy to.

MK That stuff all happens many months in advance, and it's done through a whole release plan, everyone knows the stakeholders, there is so much meeting and administration that goes into something like this. And taking all the politics and the bad juju out of this and you're looking at this purely from an engineering standpoint, this is a really, really interesting time and a unique opportunity to kind of see how these changes are implemented and the impact on these platforms. And it is rare that you have the opportunity to tweet the CEO of a company and potentially get that feature or that thing changed the next day when you wake up. It's bizarre, and the fact that Gergely as well actually is doing kind of a weekly reporting on the engineering changes since Elon's first day there. It's interesting and I'm going to be following along and seeing how these impact the platform, the user base. I don't think we're going to get this opportunity again for a wee while.

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BP I wonder, also as we discussed last week, whether it will inspire others to take a similar path. It is part and parcel of what we talked about before. Software engineers were previously at companies that were completely focused on growth. Now all of a sudden Twitter is very focused on the bottom line and that change is happening. I guess the other kind of interesting thing to me is how in a world where software companies are among the most valuable and software developers were among the most highly compensated, usually when there is a cut back, it's folks like you and me who are first to go. I mean, it's marketing. We're the ones on the chopping block, and rightfully so. People pull back on their marketing spend, the Christmas ads aren't as much, maybe there won't be as many crypto exchanges purchasing stadiums to bear their names. But it does seem like here there is an interesting sort of change in sentiment, like a feeling that, “Oh, well. Maybe it's the software engineering side where there's some bloat, or maybe it's the software engineering side where we can cut and that will right-size the business.” So that I think is very different than the approach even at a tactical level or at the level of the pandemic layoffs and furloughs, very different than we've seen in the last decade or so. So yeah, raises a lot of interesting questions. For the listeners of this podcast, as you do with Gurgley or when you tweet at Elon with a future request, DM me and Matt, tweet at us, send an email to podcast@stackoverflow. Let us know what your questions are and what you're thinking or if you've been impacted and you want to discuss it because we would love to hear it, and I think part of the value of this show has been since the beginning that it's meant for the community– a community of software engineers who come to Stack Overflow to get their work done or to learn. It's not just to listen to us opine. We want to hear from you and we want to discuss what you want to hear. So I think especially at this time, I would love to get some feedback from the community. So if you're listening be sure to shout us out or send us a message. 

MK Yeah, this isn't Matt and Ben's narcissistic hour of power. This is something we are trying to provide some value in in any way that we can. The whole Twitter thing is going to be really interesting to ride out and see whether or not, hypothetically looking into the future, if all of these changes are made, cut down 50% of the engineers, everything else, whether or not people will look at that as a kind of precedent for– okay, so they did this and it worked. How can we lean up our own software development pipelines and cycles? If it does work, what that trickle down effect is going to be. Are people going to start reevaluating how much engineering headcount they do have? Obviously as an engineer, I don't want that to happen. I would like as many jobs as possible, but I think there are probably quite a few companies out there. This happened with Jack Dorsey I think, who was the old CEO of Twitter, where he basically came forward in a statement recently to say that the layouts were partially on him because he overhired headcount and that was ultimately his responsibility. So whether or not we take a hard look at kind of the structure of engineering as a whole and whether or not it is actually bloated or it does need to be leaned down, we'll see. 

BP And yeah, it's interesting. I mean, there's almost too much to talk about it feels like. It's a little bit overwhelming. We had a big election in the US. There's big news out of the land war in the Ukraine. And then last week we didn't get a chance to talk about it on the podcast, but one of the biggest most trusted names in crypto in the world, and especially in the US, Sam Bankman-Fried and his exchange, FTX, exploded and declared bankruptcy. And so unfortunately I think that will only collide with the ongoing layoffs to create a bit more chaos and uncertainty in the tech sphere for the moment. There's a lot of talk there as there was after the Celsius meltdown about contagion. I want to talk about that one for a second though, because that was a company that didn't have a lot of engineers on staff. For its size, it hadn't hired a ton of people. And I've seen people make the argument, and I think it's true, that these were not fundamentally technology issues. It was not an indictment of the way crypto works. The blockchain did not fail. The decentralized trust remained trustless. These were human issues of malfeasance that are very similar to what happened at other hedge funds or Enron’s or things of that nature. And so it’s important to draw a line there and just say that while this may have big sort of rolling implications for the world of crypto Web3 blockchain and that obviously impacts technology, the argument could and maybe should be made that this isn’t an indictment of the technology itself. I don't know, what do you think? 

MK Yeah, it's tricky because I feel like I agree with you absolutely. It just kind of makes me sad that basically every time crypto hits the news and by the time the mainstream public kind of figures out, “Oh, some bad person did a bad thing and it had these bad consequences and all these people lost money,” it's a lot of the negativity that comes out of the crypto space that kind of will impact everyone's feelings and attitudes towards it. I cannot remember the last time there was a good heartwarming story about crypto or Web3 helping someone. It just hasn't been there yet. To go back to your original question, no, I agree. It wasn't the technology's failing. It was people using it for nefarious purposes, which happens with any technology. People use JavaScript for ill. You can't really shoot the messenger I don't think in that stage. 

BP Totally. All right, y’all. So yeah, quite a week. We'll have to check back in in real time on our next hometeam episode and see how things are going because it's all developing very quickly. And we are getting towards the end of the year, there'll be some holiday breaks and we have a ton of great episodes also backed up from my trip to the Next.js conference. So we will try to pump out as much material as we can before the end of the year and to follow along with sort of the breaking news and some of the experiments. But yeah, this podcast is not in real time, so by the time it comes out it could all be very different, so we'll see. 

MK Yeah. This is why I kind of appreciate the stuff that Gergely is doing, because we're going to have a very public documented stream of events as well as real time consequences of those actions at scale. This is not something we've really had the opportunity to see before.

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BP All right, everybody. As always, thanks for listening. Like I said, crazy times out in the world of tech, especially for software developers. We do always want to hear from you. Let me see if I can find a person in the community to shout out and then we will say our goodbyes and let you know where you can reach us. Okay, awarded yesterday: a lifeboat badge to CodeCaster who came on and helped save a question with a score of -3 or less. They gave it an answer, CodeCaster did, and now it has an answer score of 20 or more, and the question has a score of 3 or more. “What is E in floating point?” Excellent. We have an answer for you. Appreciate it, CodeCaster. I am Ben Popper. I am the Director of Content here at Stack Overflow. You can always find me @BenPopper on Twitter. You can always email us questions or suggestions, And if you like the show, leave us a rating and a review. And if you have a question, I got a tweet earlier today from Robert asking for an old episode where we talk about a founder who left tech to build furniture. It rings a bell. I will look it up, Robert, and I will send you a link. 

MK Also, I just want to add as well, if any listeners have a good reputable job board that might be a good place for laid off tech workers to have a look at things, please email us at and we can do our best to try and help some of the folks that are disadvantaged at this time of year.

BP Yeah, if you know a good place for folks to go to look for new opportunities, share it with us and we'll try to share it with the world. 

MK My name is Matt Kiernander. I'm a Developer Advocate here at Stack Overflow. You can find me online @MattKander on YouTube and Twitter, and emails are to

BP All right, everybody. Thanks for listening and we will talk to you soon. 

MK Bye! 

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