exit sign in HRExaminer.com article, Silicon Software Diaspora published May 18, 2016. Photo CC0 by Leeroy.ca

The layoffs have begun. As Silicon Valley exorcises its current devils, the rest of the world (and all of the nascent tech hubs) will be the beneficiaries.

The layoffs have begun. As Silicon Valley exorcises its current devils, the rest of the world (and all of the nascent tech hubs) will be the beneficiaries. That the Valley is pivoting is beyond question. The change takes many things in new directions.

Recruiters across the continent are drooling at the prospect of picking up the talent they’ve been aggressively chasing.

It’s not just the unicorns who are cutting their budgets. Everyone, up to and including Apple, is reevaluating their product development process and their investment in it. The new religion in the Valley includes a focus of near term profitability and overall business sustainability.

You were right when you thought that at least some of the ‘on-demand-economy’ business plans were 50 shades of kooky.

In the first quarter, there was a significant re-valuation of tech stocks. Many of the major names in tech suffered equity losses in the 30% to 40% range. Investors simply stopped believing that tech was special. After 30 years, it’s hard to continue to pretend that tech offers something worth a major premium over other industries. That triggered the change in thinking.

The result is a major exodus of high-flying tech workers. It’s miserably difficult to get laid off, contemplate your unvested stock options and continue to pay the exorbitant mortgage that comes with a Northern California address. The rest of the world is suffering real talent shortages and the Californians are in the process of sending much-needed supplies of talent.

Just the beginning.

The rethinking of excessive business models is a hallmark of California’s boom and bust cycle. When things go well, the pruning comes before the crash. When times are a little sloppier, the crash precedes the house cleaning. It’s definitely easier to bail the ship before it’s finished sinking. So far, so good.

It’s never just the wacky ideas in the business plan. The Valley also gets obsessed with extremes in everything from compensation and benefits to the actual methods used to develop software. All of these aspects of the business come under the microscope when it’s time to start bailing. Sometimes it’s a thoughtful look and sometimes it’s battlefield amputations.

At the heart of this particular boom cycle are two ideas that are liable to get deeply ‘evaluated’:

  • Minimum Viable Product (which is the idea that you ship barely working stuff to customers who then serve as your R&D and QA Departments), and,
  • Agile Development (which is the idea that software should be developed in the absence of firm requirements).

Both of these ideas depend very heavily on extravagant stock market valuations for the companies that produce software. They are mistake laden ideologies that reward business development by braille rather than vision. There is a pendulum in software development that ranges from strict requirements definition (it’s mandatory in Aerospace and Defense where lives are at stake) to the sort of high energy, loosey-goosey free-form approach that is the caricature of current Silicon Valley development.

The cutbacks will bring an end to this developmental largesse. In some ways, it was the direct result of talent shortages. You have to give the technical folks a lot of rope when there are not enough of them to go around. It makes up for the brutal working conditions.

So, well-trained Agile development players will flood the markets of the emerging regional tech hubs.

Meanwhile, the Valley will be busy developing a more disciplined approach to technical evolution. That will set a pattern for several generations to come where engineers get their early training in Silicon Valley and then move to places like Charleston, Kansas City, Northern Virginia, Detroit, Minneapolis and so on.

If you’re in the Valley, remember that it’s good to be first when the layoffs start.

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cover image of book Naked Statistics in HRExaminer.com article by John Sumser published May 17, 2016
Skinny Dipping Stats

Statistics and driverless cars won’t do you a damn bit of good if you don’t know where you’re going first.