Ask Slashdot: How to Avoid The Worst of a Tech Bubble?

An anonymous reader writes: I just reached a senior level in a tech career and I've been doing pretty much a bit of everything, e.g. software architecture, full stack dev, eng. related specific dev, consultancy, etc. So I'm at a point where I want to start focusing on something that has a good development path, i.e. I won't struggle finding a job, it'll be fairly paid and it'll allow me to move up in responsibility (bigger teams, more difficult projects) if I want to. It seems like we might be heading into a new tech bubble. Based on your experience of the .com collapse and your predictions for the current market, is there any path you wouldn't recommend (or strongly recommend) if this bubble goes pop? What were the roles most affected when the .com bubble burst back in 2000 and would it be any different this time? Is there anything you can do to be better prepared, such as focusing on broader techs rather than niche techs, etc.

Comments

Plumbing.

[ColdWetDog]

Works on bubbles, vacuums, what have you.

Remember, plumbing is at the heart of civilization - the Romans figured that out for us. Without plumbing, we would be up shit creek.

Where in tech is the bubble?

[AuMatar]

The bubble isn't really tech. Its some aspect of tech. Just like the .com bust was caused by too much money in startups without legitamate ways of raising revenue and the 2008 collapse wasn't a banking collapse, it was a ssubprime mortgage collapse. Figure out what the cause will be, and find a company that is not in that subfield and has minimal reliance on it. This won't allow 100% avoidance, but will limit your exposure.

FWIW I expect the eventual burst to be due to an advertising collapse- someone has to actually sell something at some point. Established companies that sell physical goods should be immune, firmware would be a good call.

Also, the best way to be bubble immune- cash in the bank, so you can ride it out. I don't need to work this decade, so a few months without a job won't hurt me.

Re:How to avoid the tech bubble

[bkmoore]

Don't be inside the bubble when it burst.

That's the best advice of all. Make sure that whatever you're working on, it's continued existence does not dependent its short-term market valuation. Imho, most of the losers in the 2000- bust were businesses that needed to maintain high valuations in order to have access to capital to for day-to-day operations. In short, needed to constantly borrow money to cover operating expenses.

Have canaries

[MyFirstNameIsPaul]

I was selling trade show exhibits in Silicon Valley during the .com bust and I can tell you that the first department to cut their budget in an organization is marketing. We knew we were in a recession/local depression long before anyone else.

Companies whose revenue comes primarily from venture capital may have certain requirements for promotion, as some investors want to see promotion for promotion's sake, vs. requiring an actual ROI on promotion efforts. Network out to some of your non-tech co-workers and vendors in the marketing arena. When they start to see a lot of companies holding back on hiring new positions, reducing trade show attendance and other marketing expenses, evaluate your current options. It may be that you have an opportunity to seek safety in a lower paying, but far more secure position in your current firm or a different firm. Management is often very insecure.

I can tell you that the nearly instantaneous elimination in the number of commuters in 2000/2001 here was mind-blowing. I knew if a prospect was worth pursuing by the evaluating the size of a building and how empty it's parking lot was. This all happens much faster than most people realize, so having a canary to tell you what is about to come is very important. It may be that you are in a very secure company, but they decided to purchase some large asset or make some other large investment that offsetting the cost due to reduced revenue requires those positions and even whole departments considered secure to be temporarily eliminated.

Companies whose primary revenue comes from advertising will see some of the largest reductions in revenue. Stay away from them unless they are incredibly well established and you have a seriously critical position.