The software engineering industry in 2024: what changed in 2 years, why, and what is next
Summary
TLDRThe speaker, known for 'The Pragmatic Engineer' newsletter, discusses significant shifts in the tech industry, particularly the impact of rising interest rates on job markets, VC funding, and IPOs. They compare current changes to past cycles, highlighting how smaller teams are achieving rapid growth, similar to Instagram's early days. The talk emphasizes adapting to a new reality with fewer job opportunities, slower career growth, and a push towards more practical engineering practices, while suggesting that AI tools can augment developers' productivity rather than replace them.
Takeaways
- 📰 The tech industry is experiencing significant changes, including shifts in the job market, VC funding, IPOs, and strategies within big tech companies.
- 🚀 Small teams are now able to move faster and build solutions more quickly than in the past, as seen with companies like Blue Sky and historical comparisons to Instagram's growth.
- 🔍 Feedback loops in software engineering are lengthening, with teams becoming less accountable for mistakes and more focused on passing issues to others.
- 📉 The job market has cooled down from the highs of 2021, with increased competition and a tougher environment for both new graduates and experienced engineers.
- 💹 Venture capital funding has seen a significant downturn, with 2024 levels returning to those of 2018, impacting the amount of money available to startups.
- 📈 The Federal Reserve's interest rate hikes to combat inflation have had a ripple effect on tech, influencing investment strategies and the viability of unprofitable companies.
- 🛑 Large tech companies, even those with record profits, are implementing layoffs, indicating a strategic shift rather than a necessity due to financial troubles.
- 💼 There is a trend towards more full-stack development, with engineers expected to handle multiple aspects of product development, from backend to frontend.
- 🔄 The industry may be returning to monolithic architectures, as the organizational benefits of microservices become less relevant for companies not rapidly scaling.
- 🛠️ There is a push towards 'boring technology' that solves business problems efficiently, reflecting a shift in focus towards stability and reliability over cutting-edge innovation.
- 🤖 AI and large language models are becoming increasingly important, with a significant portion of VC investment flowing into AI, suggesting a new technological revolution in the making.
Q & A
Who is the speaker known for writing and what topics does the newsletter cover?
-The speaker is known for writing 'The Pragmatic Engineer', a newsletter that delves into big tech and startups. It discusses various topics including interviews with people working in these companies.
What is the significance of the book 'The Software Engineer's Guidebook' by the speaker?
-The book 'The Software Engineer's Guidebook' is significant as it is another work by the speaker that provides guidance and insights into the field of software engineering, although the specific content is not detailed in the script.
What are the key companies the speaker has worked for in their career?
-The speaker has worked for notable tech companies including Uber, Skype (during its time under Microsoft), Xbox One project, and JP Morgan, where they served as a software engineer and engineering manager.
What is the example given to illustrate how small teams are moving faster in the tech industry?
-The example given is Blue Sky, a Twitter competitor, which was founded in 2022 and managed to reach 5.5 million users within a year with a small team of 12 developers, showcasing the rapid development and growth possible with small teams.
How does the speaker compare the growth of Blue Sky to a historical example?
-The speaker compares the growth of Blue Sky to Instagram, which also experienced rapid growth with a small team, reaching millions of users within the first couple of years of its existence.
What is the observation made by Kent Beck about the current state of software engineering?
-Kent Beck observes that feedback loops are getting longer, indicating a trend where teams are less inclined to take responsibility for mistakes and prefer to pass on problems to others.
What are the key areas of change discussed in the tech industry?
-The key areas of change discussed are the job market, VC funding, IPOs, and shifts within big tech companies, including unexpected layoffs even among profitable companies.
What was the impact of the Federal Reserve's interest rate hike on the tech industry?
-The Federal Reserve's interest rate hike, the largest in 28 years, has led to a decrease in VC funding, fewer IPOs, and a tougher job market, as the cost of capital increased and investors sought less risky investments with guaranteed returns.
Why did the speaker mention the smartphone and cloud computing revolutions in the context of low-interest rates?
-The speaker mentioned these revolutions to highlight that the low-interest rate period coincided with significant technological advancements, which provided more reasons to invest in startups and led to the creation of many successful companies.
What is the new reality for software engineers as discussed in the script?
-The new reality for software engineers includes tougher job markets with fewer available positions, increased competition, slower career growth, and the need to adapt to more efficient and sometimes less exciting technological choices.
What advice does the speaker give to software engineers in response to the changing tech industry?
-The speaker advises software engineers to become more business or product-minded, to understand their company's business model, to build relationships with product managers, and to aim for career security rather than job security.
What is the speaker's perspective on AI and its impact on software engineers?
-The speaker believes that AI, specifically large language models, will not replace developers but will serve as tools to make them more productive. They encourage engineers to make these tools their allies and to improve their workflows with them.
Outlines
📰 Tech Industry Changes and Small Teams' Impact
The speaker, known for writing the Pragmatic Engineer newsletter and a software engineer's guidebook, discusses recent changes in the tech industry, particularly the rapid development and growth of small teams. Using Blue Sky, a Twitter competitor, as an example, the speaker illustrates how small teams are achieving significant user growth with minimal staff, drawing parallels to Instagram's early growth. The talk sets the stage for a discussion on the new type of change in the tech industry, suggesting a return to patterns observed in the past.
📉 The Shifting Landscape of the Tech Industry
This paragraph delves into the significant shifts in the tech industry, including changes in the job market, VC funding, IPOs, and movements within big tech companies. The job market, once booming, has seen a stark turn with unexpected layoffs even among profitable companies. Venture capital funding has receded to 2018 levels, and IPOs have dramatically decreased. The speaker also highlights the puzzling layoffs at big tech companies like Meta and Google, despite record profits, suggesting underlying economic factors at play.
🏦 The Federal Reserve's Actions and Their Impact on Tech
The speaker explores the Federal Reserve's interest rate hikes as a potential cause for the changes in the tech industry. The significant increase in interest rates was intended to combat high inflation, but it also affected the tech industry by making traditional investments more attractive, thereby reducing the flow of venture capital into startups. The speaker provides a historical context for interest rates and suggests that the tech industry's reliance on low-interest rates has made it vulnerable to financial policy changes.
📱 The Smartphone and Cloud Computing Revolutions
The speaker connects the low-interest rate period with two significant technological revolutions: the rise of smartphones and cloud computing. Companies like Spotify, WhatsApp, Instagram, Uber, and Snapchat owe their existence to the smartphone revolution, while cloud computing has enabled businesses like Netflix and Airbnb to grow rapidly. The speaker argues that these revolutions have provided ample reasons for investing in tech startups, but the current high-interest rate environment may slow this trend.
🛠 The New Reality for Software Engineers
The speaker outlines the new reality for software engineers, characterized by fewer job postings, increased competition, and a tougher job market. Companies are reporting fewer people quitting, leading to less backfilling and hiring. The speaker predicts slower career growth due to less demand for senior positions and suggests that software engineers should expect a more challenging environment for career advancement.
🛠️ The Evolution of Software Engineering Practices
The speaker discusses the evolution of software engineering practices in response to economic pressures and technological shifts. There is a push towards more 'boring' technologies that are proven and efficient, a resurgence of monolithic architectures over microservices, and an increase in full-stack development. Additionally, there is a shift left in developer responsibilities, including security and project management tasks, and a move away from reinventing the wheel towards adopting existing solutions.
🔄 Reflections on Past Tech Busts and the Future
The speaker reflects on the similarities between the current tech climate and past busts, such as the dot-com bubble, drawing on personal accounts and experiences. There is a sense of déjà vu in the industry's response to economic pressures, with a return to fixed specifications, upfront design, and longer feedback loops. The speaker suggests that the industry may be entering a period of consolidation and efficiency, with a focus on profitability and practicality.
🤖 AI's Role in the Tech Industry and Career Security
In the final paragraph, the speaker addresses the impact of AI and large language models on the tech industry, suggesting that while AI will not replace developers, it will make them more productive. The speaker advises embracing these tools and using them to improve workflows. They also emphasize the importance of career security over job security, encouraging continuous learning and engagement with challenging projects, and concludes with optimism about the tech industry's future.
Mindmap
Keywords
💡Pragmatic Engineer
💡Software Engineer's Guidebook
💡Tech Industry
💡Interest Rates
💡Venture Capital (VC) Funding
💡IPOs
💡Job Market
💡Blue Sky
💡Kent Beck
💡Full Stack
💡Monoliths
💡Shift Left
💡AI Revolution
💡Career Security
Highlights
Introduction of the speaker, G, known for writing 'The Pragmatic Engineer' newsletter and 'The Software Engineer's Guidebook'.
Discussion on the rapid change in the tech industry, especially the shift in small teams building faster solutions.
Case study of Blue Sky, a Twitter competitor, showcasing how a small team achieved significant user growth quickly.
Comparison of Blue Sky's growth to Instagram's early days, drawing parallels between the two in terms of development speed and user acquisition.
Insights from Kent Beck on the cyclical nature of software engineering, particularly the lengthening of feedback loops.
Analysis of the job market in 2021 being the hottest in tech history, followed by unexpected layoffs in 2022.
Observation that layoffs were not limited to non-profitable companies, as even profitable companies like Meta and Amazon initiated layoffs.
Venture Capital funding saw a significant drop post-2021, impacting the amount of money available to startups.
IPO numbers dropped drastically in 2023, affecting exit opportunities for employees and investors.
Big Tech companies, despite record profits, continued to lay off employees, indicating a change in the industry's approach to growth and cost management.
The Federal Reserve's interest rate hikes and their impact on inflation and the economy, and how they indirectly affect the tech industry.
The connection between low-interest rates and the startup boom, suggesting that the tech industry's growth was partly a bet on interest rates.
The smartphone and cloud computing revolutions coincided with the low-interest rate period, enabling numerous startups and tech advancements.
Current AI revolution happening in a high-interest rate environment, which may affect its pace and nature compared to past tech revolutions.
Shift in software engineering practices towards more efficient and 'boring' technologies due to financial constraints.
Prediction of monoliths making a comeback due to the need for efficiency and less organizational complexity in startups.
Emphasis on full-stack development to reduce team size and increase the speed of product development.
The role of TypeScript in enabling full-stack development and its adoption in various startups for cross-platform compatibility.
Shift of developer responsibilities to include more project management and security tasks, indicating a change in the software engineering role.
Advice for software engineers to become more business-minded and focus on career security rather than job security in the changing tech landscape.
Final thoughts on the tech industry's future, emphasizing the importance of adapting to change and viewing it as an opportunity rather than a threat.
Transcripts
so good morning everyone finally sorted
the screens it's great to be here I'm G
thank you for the introduction Jose and
I am most well known right now for
writing the pragmatic engineer which is
the newsletter that does dive into big
Tech and startups and I do talk with
people working at these companies and I
also wrote the book the software
Engineers guide book and before I
started this newsletter I I worked at
tech companies so I worked at Uber sky
scner Skype I like to say Skype but it
was actually Microsoft uh at the time I
I got to work on the Xbox one which came
out a bit more than 10 years ago now and
and at JP Morgan and I was a software
engineer for about 10 years engineering
manager for another five and I kicked
off uh this newsletter where where I'm
now writing about the stuff that I've
been
doing but today we're going to talk
about
change and we're going to talk about
we've seen a lot of change lately in the
tech industry more than usual but we're
going to talk about a specific type of
change change that feels like it's a
very new type of change but it's
something that we actually might have
seen before at least people who have
been in the tech industry for a long
enough time and let me give you one
example to start with so these days
we're starting to see small teams move
faster build solutions kind of faster
than they would have nor normally done
in the past and this kind of makes sense
right like we have better tools we have
better knowhow more seniority an example
is Blue Sky a Twitter competitor it's
it's nice that we we mentioned Twitter
you know like a lot lot of people I
think heard about me the first time when
Twitter was in turmoil and I managed to
talk with people who are working there I
no longer know anyone who's working
there by the way even though I know a
lot of people but blue sky is one of the
The Challengers to Twitter these days
and what they did is they started in
2022 so almost two years ago that's when
the company was founded they had one CEO
J uh and two developers uh they started
to develop a mobile app 6 months later
with two developers only one developer
was developing an iOS and an Android app
they did a soft launch one year ago in 6
months they got to million users and
last month they were at 5.5 million
users and they have 12
developers and this is kind of
impressive in the sense
how what a small team launches this kind
of uh this kind of application usually
most companies have way more Developers
for for similar scale but we've seen
this before haven't we this is not
entirely new I mean here's an example
from 2010 from a different startup they
started mobile development they got to
million users in the first year then to
5 million 10 million then 30 million and
in 2 years they were at 13 developers
and of course I'm talking about
Instagram which which is one of these
well-known stories and if we we compare
the two together it's a very similar
timeline in terms of when I just look at
the number of developers and I mean
Instagram got some more users but both
of these companies built an IOS app an
Android app and and a website and
obviously the backend services and
enough scale to handle those millions of
users in the same time period but the
interesting thing is it should have been
a lot easier in 2022 I mean in 2010
building native house was really harded
yeah so I guess we kind of have seen
this
before so what what else is familiar
from from earlier times and I I reach
out to uh a friend Kent Beck he's
the one of the Azure Manifesto Founders
um he's been very involved in tdd in the
2000s he's just published a book
recently called tidy first and he works
at a company called mechanical Orchard
where they help companies migrate their
cobal code using AI onto modern code
which is which is really cool so anyway
ask Kent Hey Kent like you've been
around in the industry for like working
in the software industry for 40 years
you've seen a lot have you seen some
changes in software engineering where
you feel they've happened before and
Kent is like oh yeah I I've seen plenty
here here's one feedback loops are
getting longer and I was like what do
you mean what kind of feedback loops
like deploying to production like
responding to to like bug requests or
something he's like no every imaginable
feedback loop what I mean is and this is
him saying it if if as a team we made a
mistake we don't really want to know
about it about it let it be someone
else's problem it's not our teams I was
like oh really that's what you're seeing
he's like yeah there's a lot of excuses
for it but it all seems like BS to me
and he tells me like this was like this
in the 2000s as well he's like I don't
know why but it's just going back to
where it used to be I was like huh
that's interesting so seems we we're
seeing a couple things that did happen
before but today we'll start by talking
about what is happening right now
then we'll talk about the new reality of
of things and then we we'll we'll go
back to like where did we see this
before and
why so let's start with what is going on
what is going on in tech industry and we
we've seen change I'll I'll talk about a
few different areas the job market VC
funding IPOs and big Tech so on the job
market in 2021
it was looking back it was the hottest
Tech job market ever like probably in
all of Tech History where if if you
wanted to get a job that was the time to
to get a raise to get a better
opportunity and to give an example of
how crazy this was here's a CTO at a
scale in Germany back in the end of 2021
telling me this that our interview
process is short but we're still seeing
people drop out because they have
multiple offers we've lost a person that
went to Twitter to work remotely this
was when Twitter announced remote work
forever
before it was reversed a few years
later and the competition has
intensified with silicon valid companies
allowing remote work and every single
company this was a well-funded scale of
they raised I think tens of millions of
of Euros or dollars they were struggling
to hire and big Tech was struggling to
retain and everyone was struggling to
hire and it was so good to be on the job
market it it was it was really good to
shop around and uh we we we've seen
reports of this in just in in February
2022 the New York Times Al reported on
tech companies facing this hiring
crisis but then out of almost nowhere in
just two months later we started to see
some really unexpected layoffs seemingly
out of nowhere first fast the oneclick
checkout startup that raised $100
million a year ago they just went
bankrupt pretty much overnight bolt one
click checkout did layoffs Clara buy now
pay later they also let go I think 5 or
10% of Staff instant delivery apps fex
cyber security they all start to do like
5 or 10% layoffs and it didn't really
stop in in the fall of
2022 there were just more startups and
scals letting go I think stripe let go
more than 10% uh we had lift we we we
had a lot of startups but there was one
thing that kind of connected all of
these all of these companies were making
a loss so I mean we could kind of put it
together we're like well okay I guess
it's not great to have layoffs but these
companies are making a loss clearly not
able to raise money I mean you know that
kind of makes sense right like you know
and the the thinking back then was like
well maybe just beware if you're not
working at a company that makes profit
like working at a profitable company
should be fine and then a month later
this happens meta extremely profitable
company they're posting close to record
profits and they let 10% of Staff go
133% 11,000 employees and a few months
later every single other profitable
company publicly trade of Amazon mic
Google they do the
same so so and when we look at the the
the actual layoffs by number on this
website called layoffs.fyi there was a
huge spike in 2023 so something was
happening there and it wasn't just
non-profitable companies but it wasn't
just a job market VC funding up to 2021
it it was just going up it was going
this is every year from 2011 to 2021 it
was going up up up and a huge jump in
2021 and after
2021 there was just a draw downwards
this is data from pitchbook who who
gather who are one of the best sources
for for this
information and in 2000 in right now
last quarter in 2024 we are at 2018
levels so it's kind of like we're seeing
less Venture Capital less money going
being able to go to
startups and it's it's it's not just the
job market and Venture Capital but IPOs
companies going public like this is
companies going public is a big exit
opportunity for people who work there if
you have shares they're going to worth
be worth something and it's also a good
big one for investors the more companies
go public the more money they have to
reinvest again in 2021 huge spiking
companies going public this these are
the the blue ones are the public listing
again from from pitchbook and in 2023
this number dropped incredibly and and
we only we saw Zero Tech IPOs in 2022
and only three in 2020 23 and now we're
seeing a couple more but again it just
really went up and down and finally for
for big Tech some of the largest tech
companies this is where it gets really
puzzling they big Tech did large layoff
in
2023 where where they let go a large
amount of people and we could justify
that saying that was the pandemic they
over hired and they had to let people go
but now just this January and February
in this year they all posted record
profits they were all doing very well
financially and they still went around
and did more cuts and Google
specifically is a really good one to
look at because it it just highlights
the seemingly doesn't make sense so
Google was founded in
1998 and I i' I've marked the layoffs
with Reds whenever they had Mass layoffs
in 2008 they with the financial crisis
Google got worried and they let go of 2%
of of of their staff about 300 people uh
they had one layoff in 2013 where they
bought motor and they let a lot of
Motorola people go but not Google
employees or the ones that were at
Google and then nothing for 15 years
there was no layup so if you looked at
if in 2022 you looked at Google it it
was the safest place to work they had
one Mass layoff which was a very small
one in the financial crisis but nothing
else and then in 2023 they let go a 6%
of staff and in 2024 they're now seem to
be doing layoffs again and this is just
very strange because Google has been the
been awarded many times the best place
to work in TCH why were they doing this
it's it's it's pretty puzzling so to sum
it up what we're seeing is less VC
funding fewer IPOs big Tech having
record profits and still laying off and
the job market just getting
tougher so why why is this all
happening something clearly changed
around 2022 and 2023 and yes the the
pandemic was easing the lockdowns were
were ending that is clearly one part but
as I look through the data as as I talk
with people as I talk with CTO and
Founders on why they're doing this thing
it was something
else I I I found this article as as I
kind of revers researching in the middle
of 2022 the fed the Federal Reserve
which is like the central back of Bank
of the US if you will by by a small
stretch they they did an interest rat
that was the largest in 28 years and you
know this is finance news we're we're
we're Tech conference we're software
industry why am I talking about interest
rates are we really going to talk about
interest rates right now yes we're
really going to talk about interest
rates right now so it's going to be
important for us to understand why
interest rates are import are are
affecting Tech in the end in the start
we need to understand what why interest
rates impact inflation because the FED
did a a raise in order to combat the
high inflation in the US back then it
was about 8% in the US and and they
wanted to bring it down
so why would raising interest rates help
reduce inflation well I I took this
quote from uh the BBC who talks about
the UK Central Bank fighting inflation
which applies to the US to Hungary with
with with with M to to EU with the
European Central Bank so this is from
from the ABB quote the bank of England
so and any Central Bank really moves
rates up and down to control inflation
in the country and inflation means the
increase of prices as we know over time
when inflation is high the bank may
decide to raise rates as well but why
would raising rates do anything with
inflation well when you raise rates so
when the Central Bank raises rates
everything goes up the the price of
taking out of mortgage goes up so fewer
people are going to buy houses the price
of credit goes up so interest on your
credit card goes up so you might think
about doing it as well and if you leave
your money in the bank before you got
nothing or like
0.25% now you might get three or four or
5% so you're probably going to leave it
there to accumulate and spend less so
demand in the economy will go down
people will spend less and when people
spend less prices will not go up as much
because it's it's silly to raise prices
at that time because no one's going to
buy it and then the bank monitors this
whether they hold rates or whether they
raise it and it's a balance to to raise
prices against risk of damaging the
economy so with with this Finance I
guess less than out of the way this is
this is important to see because there
is a big question why rates are so high
globally so let's go back to rates so
this is what it was like in the US the
the the rates it was
0.25% and it went to 5% in less than a
year this was a pretty big change but
let's zoom out let's zoom out 15 years
what what were the rates like in in the
US and it was from 2009 it was almost
zero all the way to like 2022 there
there was a small raise you can see in
steps it went up to like 2% in 2017 and
then it dropped down again because Co
started and they wanted the the bank
again wanted to simulate the economy but
let's zoom out even more let's zoom out
50 years or as long as we can as long as
we have data in the US this is all the
data we have from
1955 all the way to here so like I guess
you know modern American interest rate
history and something really interesting
happens when we look at the only times
there were low interest rates which
means 1% or below in 1958 it was 2
months
in 2003 after the Doom bus it was 2
months and then we had this 9 years
straight from 2008 and then another two
years so like for 15 years we've had
very low interest rates and this has
never happened before ever the rates
have only been for a few months and now
we were here for 15
years and it's not just the us if we
look at Canada if we look at the EU if
we look at the the UK it's all the same
the rates went down globally
everywhere so okay but why still why
should we care like we're in Tech we're
we're not in finance I mean this I'm
sure you enjoyed this this interesting
observation but now let's get to like
how it affects
Tech interest rates in startups are
actually connected and this is not me
saying it this is Matt LaVine uh
Bloomberg analyst who writes the money
stuff uh daily news that are in in
Bloomberg and this is a quote from him
he's saying startups are a low interest
rate phenomenon when interest rates are
low everywhere a dollar in 20 years is
as good as a dollar today so and this
this means that if you have a dollar and
you put it in the bank in 20 years with
the zero indust rate you will have a
dollar in the
bank and so Starbuck's business model is
I will lose money for a decade building
artificial intelligence and then make a
lot of money in a far future in 10 or 20
years that sounds pretty good because
what else are you going to do you're
going to just put your money in the bank
and you're not going to get an interest
interest instead you put it in a startup
and you're not going to see anything for
10 or 20 years and you might see a
bigger turn or you might lose it all you
do this with 100 startups you know
you're a big fund you invest $100
million and over 10 years you're not
going to see anything and then you might
turn that 100 million to 150 or 200 or
250 million and that sounds pretty good
because the alternative is make no
interest so matth line continues if some
charismatic Tech founder have come to
you in 2021 I'm going to revolu
Revolution the world via AI Robo taxis
flying taxis flake taxes or
blockchain it might have been unnatural
to reply nah What If the Fed rais is
raised by
0.25% and because Tech was supposed to
be an industry with this radical vision
of the future of humanity and not a bet
on interest rates turns out it was a bet
on interest rates all
along and this when I read this I I read
this I think maybe 6 months ago at first
I was like no no way no way
it can be but but it actually is so what
happens when the rates go up like like
like they have they go from 0 to 5% well
what this means for VC funding you're
just going to see less VC funding
because VC is funded by Pension funds
heed individuals and all of them are
like huh I could just put up my money
into the bank for 5% if I have $100
million and there's a 5% interest rate
every year I make $5 million in 10 years
I make $150 million in 10 years by doing
nothing I I turned that 100 million into
150 million with zero risk or virtually
zero risk so VCS are going to have a
hard time convincing them to give us
some dardos where in 10 years you're not
going to see anything and when every
year you're going to receive a return
there's going to be fewer IPS initially
because a lot of tech compan if you're
Tech IPOs could because a lot of the
tech companies are loss making and no
one wants to give money to loss making
companies in a in a a high interest rate
world there's big Tech will have to
generate more profits than before cuz
everyone cares about more profits more
profits cuz you can get more profits
just by putting your money in the bank
and then the job market will just be
tougher because of all this but it's
it's not just interest rates something
else also happened in 20072 2008 in 2007
this came out the iPhone it's pretty
interesting because that's also when the
low interest ratees started almost at
the same time I think maybe maybe a year
after but in 2008 Android came out and
then it wasn't just smartphones which we
know revolutionize everything but in
cloud computing a AWS launched in 2006
as your Google Cloud 2008 and the timing
is pretty darn incredible I I just
mapped it out together the smartphone
key events and the cloud key events they
almost all happened right as interest
rates went to zero so not only did we
have a low interest rate period where
more Venture Capital will flow into
startups we actually had more reason to
invest in startups because suddenly the
smartphone Revolution birthed so so many
huge companies today Spotify was founded
in 2006 but they really took off with
the iPhone and an Android WhatsApp
Instagram Uber snap they all exist
because of smartphones if it wasn't for
this Smartphone Revolution who knows if
they would be around and there's
thousands of more and Cloud Computing
Made a lot of startups just a lot easier
or more profitable Netflix so these are
all large AWS customers Netflix Airbnb
stripe twitch without cloud computing
they would have had to build their own
data centers it would have been slower
more expensive they would have not been
able to grow as fast and again thousands
of more companies were
enabled but it's been 15 years and I
think it's fair to say that the
smartphone cloud computing Revolution
kind of maybe ran its course because now
15 years later building a mobile app or
a cloud it's it's just not a huge
Advantage I mean it is but it's what
everyone does so to recap why all these
changes happening now it's it's
because mostly of the low interest rates
but it's added interest it was really
interesting that when low interest day
started we had two massive technology
revolutions kick off now these days
we're seeing the AI Revolution kickoff
so I I I I marked the Chad GPT launch in
November 2022 we see AI is really hot
and this could be a very interesting and
promising Revolution but it's now
happening in a high interest rate
environment not a low interest rate
one
so this is what's happening but what is
a new reality and I'll talk about what
it means for software engineers and for
engineering practices for software
Engineers it's just tougher to get a job
there are just fewer jobs postes so
these graphs start from 2020 and they
end in
2024 their job listing a hacker news on
indeed in the US UK and Germany you can
see that the job number of J job posting
peaked in 2021 2022 and they're now kind
of back to where they were in 2019 2020
so there are fewer jobs out there to
apply to then just two years ago for
example and there are more applicants
for jobs so this is I talk with the
startup a scaleup in the US called
Supply Pike they're based in Arizona I
think there are around 50 or 100 people
uh they require people to work hybrid so
you need to either move to Arizona to
the to the the sorry there aranas uh you
need to move there or or be willing to
move there so you know it's not a full
remote company but for one posting for
every One open headcount they get 192
intern applications for software
engineering 164 software and 37 senior
engineer and their CTO shared some
observations with me this January they
said that intership applications doubled
since last year software engineering
applications tripled since last year
more big Tech applicants from Facebook
Google Etc senior Engineers are no
longer kind of shopping around
interviewing and then choosing the best
one they're just taking the the first
one and they're saying that from their
perspective compensation after returning
back to normal which is always gives
pleasure to hiring manager it just means
that it's more it's it's harder to
negotiate a higher compensation
package we also see fewer developers
quitting so this this January uh with
with the help of of of a of of of
Dominic Jack Weston who's who's part of
founder keeper CPO Forum he asked around
how are you seeing basically people
quitting at your company 50% of EU
Founders said no change but another 50%
said they see a lot fewer people
quitting and with fear developers
quitting there's just less hiring
because you need to you know back fill
fewer people another thing that we
should expect as software Engineers is
just slower career growth and this is
just because when there's less hiring
either because of back filling or compan
is not growing as much there's just less
need for for more more Senior Elite
positions you don't really need if you
have a team of
10 and you have a pretty good
distribution of seniority you will not
need that many more tech leads or staff
Engineers from budget perspective we
never recognize this because until now
those teams were growing this year was
10 next year 15 20 there was always room
to get promoted but there might not be a
business reason so there's going to be
fewer
promotions and here's the thing a few
companies I think are kind of preparing
for this new reality of fewer promotions
and Shopify is a good example I I'll
just talk you through I I I wrote this
article just a few months ago asking is
Shopify responding to higher interest
rates by Chang changing their promotion
process which sounds pretty cheeky but
it's actually a legit question here's
what Shopify did before they had levels
from C1 to like C10 C6 was senior
engineer I think C7 maybe staff engineer
and you know you get promoted from C
from C4 C5 C6 it's it's just a leveling
framework that was the way the only way
to get promote it they changed this they
introduced a Mastery score from one to
50 from zero to 50 on each levels for
like C6 C7 and now they're saying
there's two ways to advance your career
you can either uplevel in your Mastery
so go from 30 points on on C7 to like 40
points because you're getting better at
your craft and going higher by the way
it means a pay rise it it does mean
bonus it it means all those things or
you can change your scope go from C7
team lead to C8 I think a discipline
lead but then your Mastery drops and and
they're emphasizing that's now a
different job like and you know you
should think about do you want to do
that different job now what this is
really preparing for I talked with I
also thought about it and and my
thinking was that I think they're kind
of watering down the old meaning of
promotions because they're probably
expecting to see a lot for your
promotions and I I talk with the manager
at the company who actually agreed with
this but at the same time I think what
Shopify is doing is brilliant because I
mean it's it's not great to work at a
company and you know like until now you
saw promotions every one or two or every
like two or three years and now it's
going to be you know four or five years
with no promotion but the Shopify people
are are going to advance every 6 months
their Mastery will increase they will
get small bonuses they'll get that
recognition so I think it's really smart
from what they're doing and I think more
companies will will follow or companies
that that look ahead and they see that
are going to be be hiring L they should
follow so Shopify I think will keep
their their Engineers happier this way
so this is the new reality for software
engine it's tougher to get a job and
promotions are harder and the career
growth is
slower what does this mean for this
these change mean for software
engineering
practices clearly when we're we're
looking at
a at a time where there's less money
more constraints more focus on
efficiency we should be choosing more
boring technology that get gets the job
done right and I I made this comic to
illustrate this point where you can
choose either to you know choose the
technology to solve the business problem
it's proven and and good and it's
working you know may that be Java or p
HP
or
jQuery or you can just choose the really
really cool technology right you could
do Rust you could do nextjs you could do
kubernetes although I'm I'm no longer
sure where that goes and I I just wanted
to make this funny point that this
Choice should be obvious that you should
press the business button but the more I
looked at this
photo the more I felt
I don't really want to press the I
actually want to I really want to press
the the new technology because that's
how we learn that's what's fun the new
technologies are usually there for a
reason they usually have better
performance they they work around the
limitations of of of the other stuff and
they're the future so I mean I I want to
say that we're going to see more people
pressing this left button just to solve
the business problem but I think most
engers will just say let's let's just
choose both let's let's press both at
the same time we'll use this new
technology in order to solve your
business problems
and you know this will still mean we'll
we'll try to justify how to use a really
cool new Tex but we'll also s we will be
mindful of solving the business problem
but the truth is we will have a lot more
pressure of software Engineers coming
from non uh especially from from the
non-technical people the business
leadership to choose the boring
technology because that will be their
preference it might not be our
preference but it will be theirs and
just to show the how different this used
to be just a few years ago what
technology choices during the zero
interace periods look like I'm going to
single out monzo here with a with a
slack message that their founder and CEO
sent to the team and and they actually
put it on a conference it's not not some
internal confence and this was in 2015
so in the middle of zero interace period
he went step one go step two
microservices step three who knows step
four
profit and this was actually shared on a
microservices conference in I think
2016 as the explanation of why monzo
shows microservices because after Uber I
think they have the most microservices
out there one of the most they have
thousands of microservices with 500
Engineers so it's like a couple
microservices per engineer they got it
to work for themselves but I mean if
this really was a reasoning that's that
raises some questions but I am glad by
the way that they shared this because a
lot of this was not just them a lot of
companies St like this right with CTO
even the CEOs really got bought into
this because what this meant don't
forget this kind of made some sense back
then it was really hard to hire software
Engineers even if you had the funding
you you struggled you needed to give
them something else like cool technology
so I think what this really said is we
don't we know this way we're going to
hire software engineers and they want to
conferences to talk about it and to hire
more software engineers and and they
succeeded but seriously uh one thing
that's going to change looking forward I
I've been talking to a lot of startups I
think monoliths are making their way
back yet
again it's it's just starting to become
trendy to start with a monolith and then
stick with the monolith I mean there's
one company that's been doing this for a
long time Shopify you turn into module
or monolith obviously but there is there
is some sense in this in the sense that
when you know you're going to hire a lot
of people for the next two or three
years you're going to double your team
every time microservices solves an
organizational problem if that's not
going to happen you don't really have an
organizational problem to solve so
monolith should be good enough but I
suspect that in a few years we'll be
going back but for now monoliths are
might just be the the new microservices
who knows
full stack is in full swing we've been
hearing full stack a lot but I'm hearing
it way more everywhere and and here's a
simple explanation why here's a typical
small team that that's building iOS
Android web and backend two backend
Engineers one web engineer one iOS and
one Android how does this look like when
you change your text tack a little bit
to something like react native or or
flutter or or or something else well you
can just actually have like I guess
three types of engine all who are full
stack one with a backend Focus one with
a web plusus backend one with a mobile
Focus I know I know there's KS on this
but you can produce a similar output you
can produce those iOS Android and web
applications and they'll functionality
wise they'll be similar and now you'll
have a smaller team less communication
from a manager perspective that's a
lower budget and one thing that's
helping this transition so if we compare
it to it's pretty obvious it's it's a
different number of people and again
smaller do move faster right but
typescript is is helping make this
transition I'm seeing so many startups
that have been started the past few
years who talk about how typescript
makes all of this possible Blue Sky the
company we talked about one of their I
guess Secrets was they use typescript
almost all the way the back end is in
typescript the front end in in
typescript the mobile apps are in
typescript it's using react native and
Expo and so all of their Engineers can
modify any part of it well I mean you
still need to know the domain but all of
their 12 Engineers modify the the back
end the mobile and the web this is
pretty incredible and it's not just it's
not just a blue sky a linear um the
popular product management solution
founded by Thomas arkman a former
colleague of mine at Uber he told me
this in in October I get remind me daily
how awesome it is to have just one
language types for the entire SE from
back end to front end it's safe to say
that our Tech sa is serving us well and
this is I'm not I'm not I don't want to
single out typescript but like having a
technology where your engineers can
contribute to the the whole sack is is a
good
one what one more thing that's changing
is developer responsibilities are
shifting left you're going to probably
hear shift left a lot on on on
conferences in the coming years and what
this mean is
before a few years ago or even a decade
ago we had developers write code and I
guess we had QA tested and we had Ops
deployed to production obviously this
has already changed at a lot of
companies where developers do all of
this thing so they write test and and
they they deploy it you might have some
platform teams that help with this but
we're now also starting to see more
things shifting left on developers
security some Sr tasks uh and and from
from the other side as well there's a
little bit of of project management so
like I don't think Developer jobs are at
any risk of you know like there's this
question of will AI replace software
Engineers which is see seems like a very
POS one test but I don't think that's
happening what is happening as a
software engineer we're going to be
doing a lot more of this work and there
will still be some specializ roles in
company security Engineers exist but
there will be fewer of these specialized
roles per 50 or 100 software
engineers and finally I think we're just
going to less Reinventing the wheel
we're going to see companies instead of
building your own platform solution that
we've seen so many companies do like
there there's this there's this there's
this like Open Secret pretty
much that in the tech industry every
single large company reinvents react
native
internally and we I've seen it we we've
done it at Uber it was kind of built
because you know react native wouldn't
scale or do or whatever we wanted to do
and then it was built for a couple years
rolled out internally quietly retire but
it happens everywhere and I think this
Reinventing will just stop will see a
lot more buying softwares or adapting
open source Solutions so this is the
think the new reality for software
engineer practices more push for barding
technology monoliths becoming more
popular full stack becoming more popular
more shift left and L Reinventing the
wheel I mean and all of these are kind
of I guess practical or sensible so like
they don't seem too drastic I think the
only one you know we could get into
argument is like monoliths versus
microservices but but outside of
that not not that much and so for the
last part have we not seen some of this
before all this change and there is a
bit of a Deja with a do com bust I
talked with people who were working
during the Doom bus during 2001 so there
was a huge investment Splurge from like
1998 to like 2000 into all these
companies like web van which promised a
5-minute grocery delivery and I guess
you know they went bankrupt but like 20
years later we have instacart which
promises maybe a 30 minute or hour St
delivery but and and then there was a
big big big bust especially in Silicon
Valley people lost their job and it was
really really hard to get jobs and
here's quotes from two people who were
in The that time so here's quote from
someone who graduated in 201 saying I
was laid off by the time I graduated my
most of my friends startups failed and
we were all desperately looking for work
this she's a computer science major in
the US we were competing with
experienced Engineers who were also laid
off and Who start S every day we heard a
big startup collapse it was really
depressing and she said we accepted
anything part-time unpaid internship
just under the premise to build a
resumes and she pivoted from software
engineering to Consulting as a website
developer and then into a technical pm
and this is niia Henry she's now
director rangering at at Spotify in New
York and she told me that I think for
like five or six years she worked at
these like non-technical roles as a
software engineer cuz that was the only
way she could get that job and she she
went back into software engineering
later on and here's one learning from
the Doom but from someone who graduated
there uh Google s um and and this this
person said that the his learning was 20
years later always be on the revenue
side of whatever company you work for
make sure sure that they sell software
and don't use software to sell for
something else I mean this is this is a
way to say that if you work in a profit
Center your jobs jobs are are more safe
during u a time where there's a focus on
efficiency and going back to kenbeck I I
asked kenbeck what similarity he sees in
the 2000s where he already was working
for 20 years and now and he listed a
couple of things he's saying very
interesting things fixed specification
and upfront design are back and
iterating conly are just happening less
he's seeing that there's more handoffs
between like developers handing off to
QA or someone else it's a bit more like
oh we did our job we did it perfectly
it's you know like it's not our problem
now we don't want to be responsible
apparently he's saying seeing more
documentation people just document more
again potentially to like say you know
we've done our jobs perfectly like you
know don't don't don't bug us with this
and let's frequent deployments to prod
and just longer feedback loops and we
were kind of talking about why this is
happen happening and my theory is that
there might be this thing like when
you're working in an environment where
it's kind of stressful and you're kind
of fearing for your job and your manager
not really but you know you know you
could be let go any time if the company
does does well you want to do a great
job you want to show that you're you're
busy you're doing the best job so you're
you know you're going to document it
you'll hand it over and just's a bit of
less incentive to take risk to like you
know take that bug that is not your
stuff that you might not be able to fix
even though the customers want it to fix
because if you fail it might make you
look bad I'm not sure but it it seems
Ken Beck said that after do humas the
same thing happened like things slowed
down it went more into silos and it took
a while for it to ease up so this I just
want want to share because it's so
interesting and and this is what I think
I I I think there's a push to kind of
become focused or utiliz or or or to
make sure you look busy and then there's
just no time for like I guess slack to
do what when you're not as busy you
actually have time to step in and do all
these
things but what is different in 2024
versus in in 200 a few things are
differently in in 2000 the internet was
growing rapidly today Ai and and large
language models are growing rapidly and
here's the investment the percentage of
investment in all venture capital going
into AI uh by the middle of 2023 $1 in4
so 25% of all of VC investment went into
AI so clearly you know this is whatever
the internet was it looks like the a
like in terms of investment looks like
it's AI so it's different but in 2000
the tech industry was much much smaller
let me show you the seven largest
publicly traded tech companies in in
2003 uh uh and on on this list the ones
that are boldest so like Google was
number four Microsoft and and apple
number six and seven the others were
non- te companies and in 2024 the top
four are tech companies and actually
five out of the seven are tech companies
and they're they're way larger by the
way if we compare the Microsoft size
back then even in just a dollars they
tech industry has become massive it's
everywhere and I think the only question
is how much larger will it become it's
still growing but at some point that
growth will
slow
so as as as
takeaways what happened in the 2000s
after a big boom and then and then bust
it's probably going to happen now to
some extent we will probably have we're
already seeing the more doers for
planners when companies are are cutting
are doing layoffs and software
engineering engineering managers are
often targeted a lot more because teams
are being flattened I I know some
startups that let go a lot of their
middle management or director of
engineering but they they didn't touch
software Engineers because they know
what they're the doers and so for for
engineering managers becoming Hands-On
and a lot of engine managers moving back
to Tech lead positions to be you know
more doers and planners be seen less as
an overhead We Know by the way there's a
reason for the overhead but in in this
scenario a lot of companies are kind of
ignoring it there's a lot of doing more
more with less
and and uh and
and a lot of full stack uh push and just
using boring technology so getting a job
is more of effort so you just need to
plan for it and here's some advice your
network is becoming a lot more important
whether you have it or not if you have
it it's good to rely on if not it's good
to try to build it referrals are more
important applying early is becoming
important because there's so many
applications coming in that sometimes
only the the first I don't know 50 or so
are being looked at investing unpaid
time in interviews like take homes it's
going to be just the norm uh and it's
becoming a bit of a numbers game you
need to apply to a lot of players
placees a he
back one big change I think one one
thing that will help greatly is becoming
more I guess business or product minded
which which means just understand the
business model of your company how are
they making money or or are they even
making money or can they can they be
become profitable at some point build a
relationship with your product manager
who should be really good at
understanding it and figuring out how
you know we can transform that and then
you know just just talk with people
outside of engineering customer support
research come up with ideas on how you
can help the company the software
Engineers who can help company make more
money or spend less money are really
really valuable and I think you most
companies are going to be looking for
for those kind of people I wrote an
article about this called the product
mining software engineer just Google
this and I I share a couple of more
advice there
insights and my final takeaway is just
in this environment I think you we
should all aim for career security not
job security and this is a quote from
someone thank you for the clap and and
and there this is for from here's a
quote from someone who on under one of
my posts commented uh her name is alen
May she said it's always we're preparing
for the possib job Cuts I was part this
CH saying part of layoffs in 2001 and
two where there were four rounds one for
quarter and it took our organization
from 180 people to 35 people and from
that experience from laid off she well
also laid off I learned that there's no
such thing as job security I can either
promise it as a manager cuz now she's a
manager or expect it as an employee what
I can do what all of us can do is have a
career security keep learning keep
working on challenging projects at your
company and keep working with great
people and this is the most you can do
and she said that after she she got let
go she did find different positions
again hopefully this will not happen
with most of us but it's good to keep in
mind for this time so what
happened what happened in 200 like to
happen now getting a job is more
difficult becoming product minded is a
good strategy and aiming for career
security as well
and to close with I just want to mention
the elephant in the room and by the
elephant in the room obviously I mean AI
I mean I like to I'm I'm liking this
term less and less artificial
intelligence because it suggests that
this int I just like to say what it is
it's large language models that's what
we under
Ai and I don't think that AI will
replace developers there there's this
question going around it's really
popular it gets it gets trending on
social media but I do see that it makes
developers using tools more productive
it makes me more productive when when I
get a co-pilot or I use Chad GPT for
some of my brainstorming some of my my
patterning picking up technologies that
I I'm not as familiar with it really
makes a big difference so my suggestion
just make these tools your ally
understand how how they work there's a
you you can uh Google an article from
Steven wol from called how does chat GPT
work in in a few pages he he explains
this really well it's a very simple
underlying technology using a lot of
data try other tools co-pilot Codi any
other thing that you can get your hands
on just get your own opinion on it
improve your own workflows because there
it's just an assistant it's it's just
like uh your ID autocomplete is an
assistant these tools will be an
assistant and with these tools you
probably can pick up new Frameworks
faster I certainly do and just avoid the
hype so like see it for yourself see
what works there's way too much hype out
there most from people who who don't
write code with these tools and don't
know where it's helpful and where it's
not make them your
Ally and finally as as closing don't
forget like there's a lot of change
right now but this change even though
for for many of us who have not been
working professionally in 2000 it's not
happening before it has happened in
Industry before and work and even though
it feels like there's some downward
spiral actually what's happening is
we're going back to what it was like
before in 2018 or 2019 or even the 2000s
and you know the tech world was pretty
awesome even then so I believe the tech
world will continue to be a great in
interesting industry to work in and even
though it's it's way less predictable
but this is what makes it part of the
fun and part of the challenge so thank
you for your time
[Applause]
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