Tech is coming back this year

Tech will be back sooner than we think despite many of us being confused, looking around at the blood on the walls, while trying to pick up the pieces of bomb fragments that left us scarred and bruised.

If we haven't already hit the bottom, I believe tech is bottoming out right now. 2022 was a disaster but tech will make a comeback earlier than 2024. Here’s what I don't mean by comeback: like how it was in 2021—the YOLO good times, with massive funding rounds and valuations, lots of bloat, too many specialists, and employees who can’t contribute.

The comeback will be characterized by an inflow of workers into tech which will continue to rise (the inflow of talent into tech still remains numerically greater than the outflow), tech jobs will rebound, and investment dollars will be greater than they were the last few quarters. For tech, it's only up from here. 2000, 2008, and then 2022—we were overdue for a correction, and despite the headlines from the media, tech is not losing it's luster. It's just more evenly distributing across international markets.

Tomasz Tunguz put it well:

"The spirit of Silicon Valley continues a spread outward. Covid accelerated distributed work, which is now a norm. Startup company formation & funding thrives outside the Bay Area. The year of sobriety before us provides a potent substrate for startup formation. Boom cycles begin this way. Tougher markets demand better product-market fit from startups leveraging the new technology of the era. This foundation leads to more halcyon days when the promise of technology is realized & the market rewards both customers & founders."

Broadly speaking, the fundamental driver for tech coming back sooner rather than later is a shortening of innovation cycles as visualized here. In the long run, every company will be a tech company—”digital transformation” is happening across all sectors and tech is driving that innovation. The recent rise of AI/ML further contributes and demonstrates the accelerating pace of tech innovation and may very well be the saving grace for us.

I believe that the economy will increasingly mirror the innovation curve, where bull and bear markets won't last as long, rather, they'll just happen more frequently. I've generally said that we should be pessimistic in the short run and optimistic in the long, but now I think we should be both optimistic in the short run and long run. We stand to gain by our optimism even though the world seems like it's falling down all around us.