There are basically two types of companies in tech: a.) companies that don't make a profit, and b.) companies that make a profit from those companies. As an example just consider every startup is basically in category A, and Amazon's most profitable sector, AWS, in category B.

For more than a decade money was more or less free and the only sane choice for investors was to pour cash into anything that might one day get big enough to magically flip the profit switch and make a huge amount of net positive revenue.

I thought the pandemic would be the end of the tech boom, but I was wrong. Not only did more money get pumped into the market but into consumers wallets as well. This led to extremely rapid expansion in the tech industry as investors were willing to pump even more cash into any company (hoping for a rapid IPO and a the ability to cash our there chips before the casino closed) and consumers had a surprising amount of extra cash lying around from being locked up for months.

Unfortunately reality has started to show it's ugly face. Inflation is starting to hit hard, not because of the money supply, but because we are hitting some real resource limits due to a combination of supply chain problems and the Russian war with Ukraine (which, to be fair, is also happening because of resource strain). These are not temporary causes of inflation.

This has caused the central banks to rapidly attempt increase interest to combat this inflation. Ending the era of cheap cash. This is coupled with the fact that things cost more so consumers also can't spend as much (even though they are also taking on more debt then ever, an unsustainable trend).

Sure inflation is cooling a bit but that's largely because of a drop in oil prices (at least in the US) which is a political play from the democrats resulting the record low strategic oil reserves in the US (since 1984) [0]. This cheap oil cannot be sustained and will end after the next election cycle.

The immediate impact of all of this is that direct to consumer companies are seeing an immediate hit (e.g. streaming service subscribers are churning faster than ever). Then non profitable ad revenue companies start to take the hit (see Snap's layoffs today). Next it will be non profitable B2B. But then we'll start to see how much of those profitable companies bottom lines comes form non-profitable companies.

This will have a cascade effect, since as I mentioned, it won't be as easy for us tech workers to find an new job with anywhere near the same TC. As a 200k+ engineer, consider all the crap you pay for without thinking of it because you don't have to. All the ubers and door dash orders that are surprisingly pricy to the average person, but really a brainless decision for any tech workers.

It's just getting started. If you work at a B2B tech company I encourage you to go poke around your internal data and look at how your customers are doing. I promise it's not great.

Then look at the state of venture funding [1]. Sure it's still above 2018 levels but it's rapidly falling. The start up scene is going to dry up quickly.

There's is more I could dive into but this is a good start.

0. https://www.reuters.com/business/energy/crude-us-emergency-r...

1. https://www.cbinsights.com/research/report/venture-trends-re...