The Rise of the Tech Bro#

Back before the year 2000, if you wanted a predictable career where you could make a lot of money, you generally needed a nice suit and an important-looking business card. Your main options were Finance, Medicine, Law, or maybe reaching senior company management if you were lucky.

But just a few years later, around the same time those folks in fancy suits were causing a global economic mess, a new kind of millionaire started showing up everywhere. These were the Tech Bros. They ditched the puffer vests and Bloomberg terminals for flip-flops and Vim terminals.

Compared to people in those more traditional high-income jobs, Tech Bros often:

• Worked fewer hours
• Had better perks
• Made better money

What’s more, people actually seemed to like them. Executives, bankers, and their fancy lawyers got blamed for getting rich by taking advantage of a broken system – a system that cost people their homes, their jobs, and their futures. Meanwhile, people loved the idea of hacky-sack-playing nerds making millions by actually making stuff that made our lives better.

The Turnaround: Tech Bros Become the Establishment#

Fast forward about 15 years, and things changed. The Tech Bros became pretty much everything they originally promised to tear down. And, honestly, they kind of ended up destroying themselves in the process too.

You see reports like Facebook planning new systems to track user data even after they leave the site. Or companies like Computer Associates laying off up to 10,000 workers. You even hear CEOs, like Larry from Google, openly talking about a future where entry-level programmers might be completely replaced by AI.

At their peak, Tech Bros seemed to have it all:

• Endless career progression opportunities
• Stock options packages that could make them multi-millionaires before they were 30
• A great work-life balance
• The promise that if you knew how to code, you were pretty much guaranteed a good job forever.

Today? They’re being pushed back into overpriced cities that frankly don’t really want them. They’re facing mass layoffs. And the ones who still have jobs are just being told to “grind.” It seems they made programs so good that their own CEOs are happily talking about that future where AI takes over jobs that used to be for new programmers.

Between that “Golden Age” and what we’re seeing now – maybe the “Dark Ages” of Tech Bros – there were three big changes. These changes were behind both their huge rise and their current struggles.

Problem 1: The Dot-Com Bust and the Real Golden Age#

The first big problem was that they simply ran themselves out of business the first time around.

Remember Friday, March 10th, in the year 2000? That’s when the NASDAQ hit its highest point up to that time. Investors were just throwing money at any company even remotely connected to the internet. The excitement was so wild that just mentioning “.com” in a company’s paperwork was sometimes enough to send their stock price shooting up.

Eventually, of course, this all came crashing down. Only a small handful of companies from that crazy era actually survived.

The truth was, the internet is an amazing technology. It went on to totally change our lives and helped create some of the most valuable companies ever. But just putting a regular old business onto a website wasn’t revolutionary on its own.

What came after the dot-com crash was a genuinely Golden Era for tech services. The companies that survived the bust were the ones that were actually useful. Getting rid of all the shaky companies meant that more talent and investment could go towards supporting businesses that really provided a good service.

Think about it:

• Early YouTube
• MySpace
• Facebook
• Amazon
• Online gaming

If you’re around my age, you probably remember how novel and genuinely great these services felt. They were amazing!

Money was still flowing into the tech sector, and it handled the global financial crisis (starting around 2008) better than most other industries. The first iPhone came out in 2007, and even during the worst of the layoffs and company failures in 2008, people were still lining up around the block just to buy the iPhone 3G.

You were told that if you learned to code, you’d definitely have a good job. At the same time, companies like Apple and Google were known as the most desirable places to work. Why?

• Their relaxed corporate attitude
• Excellent work-life balance
• Amazing employee perks
• Surprisingly competitive salaries

Most importantly, these companies weren’t seen as the old establishment. They were scrappy startups making products that people actually enjoyed using.

After the dot-com crash, it took the NASDAQ over 15 years to get back to its previous peak. Because tech employees got paid partly in stock options, the Tech Bros in the mid-2000s were making good money, but they were likely still making less than their Finance Bro friends (assuming those guys didn’t lose their jobs in 2008).

But that slowly started to change. As these tech companies got bigger, more money poured into the industry. And with more money came:

• More workers
• Bigger bonuses
• More valuable stock options

The industry wasn’t an alternative place for nerds making fun products anymore. It became the industry, making products designed to get funding from a growing pool of investors. They went from being in the business of adding value through technology to extracting value through monopolies. For a while, you could be pretty confident that spending a few years at a big Silicon Valley tech company could make you seriously rich.

Funding the Boom: Venture Capital (and a Quick Word from Our Sponsor)#

All this relied on a steady stream of money that wasn’t coming from nowhere – it was Venture Capital. These are the firms that invest in new startups early on to help them develop new tech.

Here’s an interesting detail: Venture Capital funding never actually reached the level it did during the dot-com bubble… that is, until something changed in 2021.

To really understand how Tech Bros ended up causing their own problems, we need to understand how money works.

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(Okay, back to the story.)

Problem 2: The Hiring Frenzy and The Fall#

So, as tech companies got bigger and way more valuable, the competition to hire talented people got intense. By the mid-2010s, if you were a skilled developer right out of college, you could easily make more money than in pretty much any other career by working for a company like Facebook, Apple, Amazon, Netflix, or Google – the companies often called FANG.

These FANG companies already had huge, established platforms, but they were still hiring tens of thousands of developers and paying them incredibly well. There were a few reasons for this:

• Adding New Features: They were always trying to add new stuff to their main products. Also, just keeping a platform like YouTube running and updated to meet what customers want takes a massive amount of work. Just look at the YouTube homepage today compared to even 5 years ago – it’s totally different.
• Exuberance and Blitzscaling: Newer companies like Uber, Airbnb, Twitch, Snapchat, Tinder, and even Wework were growing so fast they were hiring developers before they even had specific projects for them. Why? Because they figured hiring when they actually needed people would slow them down.

This second reason was part of a relatively new tech industry strategy called Blitzscaling. It’s a pretty obvious nod to the Blitzkrieg of World War II. The idea back then was to capture as much territory as possible, as fast as possible, using new technology before the enemy could react. Supply lines couldn’t always keep up, but the hope was the German army could sort all that out after they captured the territory.

Now, tech companies obviously aren’t rolling tanks through Belgium, but they were using how easily technology can grow to quickly grab market share in industries like:

• Food delivery
• Taxis
• Holiday rentals
• Online dating

And then? They’d figure out things like what to do with all their staff later. In an interview published by the Harvard Business Review, Reed Hoffman (a Silicon Valley venture capitalist and one of the folks who helped start PayPal and LinkedIn) actually said that companies doing Blitzscaling might need to get as many “Warm Bodies” through the door as quickly as they possibly can.

There was another reason why tech companies were hiring developers so fast: it was a great way to stop those talented people from going to potential competitors, especially new startups that could (and I really, really hate using this word) “disrupt” the industries of the big, established players.

Think about it:

• Big companies acquiring smaller competitors as they started to get popular could get them into trouble with the FTC for doing things that hurt competition.
• But there weren’t any rules against just hiring away all the staff a potential competitor would need to even get their business off the ground in the first place.

A report by The Wall Street Journal even interviewed tech workers who admitted they were hired to literally do nothing at all. It was like these businesses were just hoarding developers like they were rare Pokémon cards.

That whole situation became much worse when high interest rates came along. They made the market feel less certain and reduced customer demand for a lot of these tech products. The result? Mass layoffs across the industry.

Companies that were trying to Blitzscale either shut down completely or totally changed their strategy, shifting to only hiring workers they actually needed. Developing new features slowed down a lot. And the big, established companies didn’t need to worry about hiring people away from competitors anymore, simply because nobody else was hiring either!

Then there’s Artificial Intelligence. AI is already doing a lot of the basic, repetitive tasks that are usually given to new hires in tech companies. Companies in the tech industry are naturally more open to using these new technologies. Even replacing just a small number of entry-level developers can save companies millions of dollars every year. So, it’s a perfect setup for automation to take hold.

This was the second big hit to the Tech Bros. They had traded the promise of a super stable career for something that has turned into an incredibly risky game of survival. Sure, you can make a ton of money in tech, but your success now depends just as much on picking the right company or startup at the right time to invest your career in, as it does on your own skills.

Think about it:

• An entry-level developer who started working at Intel five years ago had a good chance of being laid off last month, and their stock options are likely worth absolutely nothing.
• A developer with similar skills who took a job with Nvidia at the same time, on the other hand, probably never needs to work again in their life.

The ones who got lucky are doing great. The ones who got laid off are sick of their career feeling like they’re just playing the stock market. If that’s what they wanted, they would have become Finance Bros in the first place!

Problem 3: Location, Cost of Living, and Public Opinion#

And then there’s maybe the biggest problem of all. Workers want to be near job opportunities, and companies want to be near workers. This means the whole tech industry has ended up packed into just a handful of locations.

These cities have become incredibly, ridiculously expensive. And the infrastructure – roads, public transport, housing – hasn’t been able to grow anywhere near as fast as these companies have. So, it’s not uncommon for tech workers making a six-figure salary to be sharing a two-bedroom apartment with three other people who also make a lot of money. (Ask me how I know!)

If a tech worker struggling to afford a place to live on that kind of salary, there’s basically no hope for all the other workers in these cities – the people who are still essential for keeping society running smoothly. As a result, big tech cities haven’t just become expensive; they’ve also become, frankly, not particularly nice places to live.

Remote work could have really helped with these issues by easing up the pressure on these small, packed markets. But the big tech companies now have way more power when negotiating with workers (who really don’t want to become another layoff statistic). And they are using that power to demand everyone return to the office. Get this – even Zoom, the company that literally makes remote working possible, has told its teams to come back into the office.

These problems also don’t really come with many good things for the people who already live in these cities. The big selling point is that these companies offer great jobs. But most of those jobs go to people who weren’t local; they only move to the city after they get hired. And then, they compete with local people for housing and other services.

I personally moved to San Francisco from out of state after I got a job at an investment bank. So, even though I was technically a Finance Bro, I was still very much part of this same problem.

Other areas have gone from welcoming tech companies opening offices to actively pushing back against it.

And this whole situation is part of a trend that’s way bigger than just cities getting more expensive (gentrifying). People just straight up don’t like the tech industry anymore.

Whether it’s:

• Pushing them out of their homes
• Collecting tons of their data
• Making their services worse
• Treating delivery drivers poorly (“piss and [bottle] models” likely referring to tough conditions)
• Threatening their jobs with AI

Most people just don’t see this as progress anymore. And the Tech Bros have become just as unpopular as us Finance Bros.

The Shift to Monopolies and the Future#

These big tech companies have also bent the rules in their favor to make their particular way of building market power technically legal. If you want to know more about the tricks they’ve used to make that possible, you should check out my video on why everything is a monopoly again.

On another note, I’ll actually be writing an article soon about why some Silicon Valley bigwigs want to build a brand new city outside of San Francisco. If you want to read that, plus get other articles and these videos a day earlier, make sure you sign up to keep on learning how money works.