It’s in Doom Times technology

The tech industry is experiencing earthquakes.

America’s five largest tech giants have lost more than $ 2 trillion in stock value this year. There are regular announcements in companies large and small about hiring or firing, including on Facebook, Uber, Robinhood, and the celebrity video app Cameo. Start-up founders who left aspiring investors a few months ago should now try to make more money. (Breathe.)

The big unknown is: is this melting BIG ONE that shifts technology from the position of the most dynamic and successful industry in the world? Or, as many times during the decade-long technology boom, is it a temporary panic?

I asked my colleague Erin Griffith, who reports on technology start-ups and venture capital, to assess the current moment of fear of technology.

Shira: Is this technical doom and darkness meaningful?

Erin: I go back and forth because I have seen this cycle many times. Every few years for the past decade, at any time when there were certain fluctuations in technology or moments of doubt, smart people have predicted that the growth of the tech economy could not continue after the Great Recession. And each time, those predictions were wrong.

Even in the first months of the Covid-19 pandemic, technology investors thought many companies would be destroyed. But within a few months a lot of money was spent on all the technical issues and the companies ’values ​​moved to the moon. The madness of technical money over the past two years has been something I have never seen before. Now we still hear the warnings.

Shira: Sorry, but I have to ask: Is this time different?

Erin: ᲨIt is possible. We have not seen this combination of economic anxiety and high inflation so far. Economists weigh the risks of the US recession, and many industry companies are worried that their business will slow down. At other uncertain technical moments, there was not the same combination of economic stresses.

And because there has been so much agitation, growth, and money in technology since 2020, there may be plenty of companies that were not worth close to what they were worth a year or two ago, and others were fluctuating from the start and may not be able to withstand the contraction.

Shira: Has anything really changed? Start Amazon, Zoom Video and Food Delivery Instacart It costs a lot less than it did six months ago, but are they worse companies?

Erin: არReally not! So far it has been more condensed about what investors think these companies are worth. But a changing mood matters. Particularly fast-growing startups need the trust of investors, customers and employees to maintain momentum. If this progress is hindered, it can kill companies.

Shira: What signs are you watching that might tell us if this technical breakdown could be temporary?

Erin: First, if more start-up businesses will collapse overnight. Recently, the payment company Fast, which cost hundreds of millions of dollars, ran into problems and closed relatively quickly. If this continues, it is a sign that many of the so-called uniques that we thought were built on solid ground may be at risk.

And second, if the so-called. “Good” companies will start to hurt. So far, startups that have closed or announced significant redundancies are the ones that have taken big risks, spent a lot of money, and suggested that investors were always willing to pay more for them. If beginners who preached responsible spending and reasonable growth also retreated, it could be a sign that this time is different.

Shira: What can happen next?

Erin: The biggest question is how long the technical melting will last. If stock prices return in a few months, investors start making money again for beginners, and the primary public offering market freezes, the industry could be fine. But if investors stay in superstitions for many months or years, it could lead to significant fluctuations.

The tech industry is mainly developing after the post-recession period of 2010. Now it’s a big part of the economy. We do not know what will happen to this titanic and affluent industry in the face of widespread decline.


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