How did we get here?
What I Learned Watching Tech Grow Up (And Why We'll Probably Forget It All)
It’s often mentioned in hushed tones inside boardrooms and leadership meetings. People can feel the uneasiness, but can’t really put their finger on what exactly is wrong. There is something off in the air. New graduates feel tremendous anxiety about their future. Gen Xers and Millennials are increasingly feeling unsure about what their retirement plans will look like. This feels different from the usual boom and bust cycles that everyone is somewhat used to. Before I say what I think the ‘thing’ is that everyone is feeling, please bear in mind that this is one dude’s opinion. Also, everything I say is very local to tech industries or tech-enabled industries and the people who work in them.
OK, so the ‘thing’ everyone is feeling is the end of a boom cycle that started in the early 2000s, when the internet exploded into people’s living rooms and onto their personal computers. The end of the boom cycle for tech doesn’t mean the end of tech. This is tech growing up and maturing as an industry. Which means the same rigor the market applies to established industries like healthcare, finance, and auto will now be applied to tech companies as well. Market rigor almost always comes with belt tightening, more measured valuations, and market consolidation, because, unlike in the early and mid-2000s, not every tech company can just IPO anymore. I have been in this industry since the early 2000s, and I have gone through these cycles as both an engineer and an executive, so this post is my analysis of what happened, why, and some lessons I learned along the way. But here’s the irony: it doesn’t matter how many people write about this, we’re probably going to repeat our mistakes anyway. Humans are flawed creatures. But if this helps at least one current or future leader, it’s mission accomplished for me. So, let’s get into it.
Early 2000s: The Internet Gold Rush
Most people think the tech industry was born in the early 2000s, but that’s not exactly true. The tech industry has been around for at least 60 years before that. Microsoft and Apple were founded in 1975 and 1976 respectively. From the 1980s to 1990s there was a boom in the personal computing space. What really exploded in the early 2000s was internet-enabled companies, and that’s why most people associate this era with the birth of tech.
The boom cycle was kicked off by Netscape, which went public in 1995. Its stock exploded at launch. The thing to remember is that an internet-enabled world meant globally available products, globally available workforces, and global trade. The world suddenly felt way, way smaller than just a few years before. After Netscape crushed its IPO, the market just gobbled up any business that was internet-enabled. No customers and no growth? No problem. The venture capital industry poured billions into so-called internet-enabled businesses. Then came the crash.
It wasn’t just one thing, but rather a series of troubling events. Companies like Microstrategy had to restate their financials. A bunch of high-profile companies like Pets.com, eToys, and Webvan started failing because their core products didn’t really hit product-market fit. News articles started publishing the reality of how most tech companies had only a year or so of runway left. All of this caused the NASDAQ to wipe out about 75% of its value between March 2000 and October 2002.
2002-2009: The Lean Years
This was a tough time. Tech was still reeling from the dot-com bust, and tech jobs were extremely scarce. The companies that survived, like Amazon and eBay, became extremely disciplined about how they spent money. However, there was a very bright silver lining. From the ashes of the 2001 fire arose many of the companies we love and adore. Facebook, YouTube, and Twitter all launched between 2004 and 2006. Google IPO’d in 2004. AWS debuted in 2006 and kicked off the cloud revolution. The iPhone debuted in 2007, kicking off the mobile revolution. In general, I categorize this time as when tech decided to stop crawling, stand up on two legs, and start walking. Tech CEOs and founders now knew how to build technology products that solved a pain point versus being a novelty like it was in 2001. They had a better sense of how to price their products. They figured out distribution, marketing, and support channels. And things were great, until a few Wall Street geniuses decided to sell debt as securities. Welcome to the 2008 financial crisis.
2009-2015: Free Cash for Everyone!
I’m not going to go into why the financial crisis happened, but here’s the one-line summary: Wall Street pushed people to buy houses beyond their financial means through subprime mortgages, sold those mortgages as securities in the open market, and when people started defaulting, the market blew up. The financial crisis was nastier than the dot-com bubble because it affected almost the entire Western world. Global banks that controlled most of the world’s wealth, Lehman Brothers, Wachovia, Bear Stearns, all went under, and almost ALL the major US banks like Goldman Sachs, Wells Fargo, and Citigroup were under threat of collapse. An extreme example: Iceland lost 25-40% of its pension funds because they were invested in securities backed by subprime mortgages. I used to work at Fidelity Investments when the crisis hit and it resulted in about 3,000 job cuts. I vividly remember my boss back then clearing out his cube just to mentally prepare for being let go.
This is when the government decided to step in and bail the banks out. This is the point in the essay when free market absolutists will say the government shouldn’t have intervened. I don’t have a strong opinion on it, but I do know that if the government didn’t do anything, it would have caused a dramatic collapse of the US financial system, emptying people’s 401ks (my tiny 401k was cut in half in 2009), putting people out of their houses, the works. But maybe that’s the cost of capitalism? Anyway, I digress. The bottom line is, the government intervened. They bailed out the banks using TARP (Troubled Asset Relief Program), where they purchased stocks in these troubled banks and injected capital into them, which gave them the runway to recover. Along with TARP, the US Federal Reserve introduced ZIRP. ZIRP stands for zero interest rate policy, which basically meant it was very cheap to borrow money in the US. Easier borrowing means more spending which means accelerated economic growth that helped push the US out of the financial crisis.
ZIRP made ‘safe’ investments like Treasury bonds pay almost nothing, like 0.5% instead of 5%. So institutional investors like pension funds and endowments needed to find returns somewhere else. That money flooded into venture capital. And where did venture capital invest all those dollars? Tech companies.
2015-2020: Growth at All Costs
Tech companies largely escaped the financial crisis for two reasons. First, they’d just gotten slapped in the face by the dot-com bust, so in 2009 tech companies were more disciplined. Second, tech companies weren’t heavily invested in subprime mortgages. Tech quickly became the industry where all the venture capital money started flowing, which resulted in massive growth between 2009 and 2020. Right around 2015 is when tech companies forgot the dot-com bust and decided to forgo financial discipline for growth. It was growth at all costs and the market rewarded them for it. My theory as to why tech forgot the lessons of the past is that this time around, the founders and CEOs were from a different generation, specifically millennials. These were the millennial founders who founded companies like Snap, Reddit, Kickstarter, Uber, etc. Different generations, different points of view. These millennial founders exchanged suits for t-shirts and business plans for experiments.
A great example of ZIRP-era excess is WeWork. At its peak, the company was valued at $47 billion. In 2023, it declared bankruptcy. Why? Because WeWork was losing $1.9 billion per year, more than its entire revenue. The business model never made sense, but in the ZIRP era, investors didn’t care. They didn’t care until COVID came along and punched everybody in the face.
2020-2022: The COVID Frenzy
COVID was brutal in so many ways. Outside the fact that it killed millions of people worldwide, it introduced a level of instability in the capital markets that we’re still working to stabilize. In the blink of an eye, most of the world went remote. And what do remote workers need? Tech, and lots of it. They needed software that enabled them to work remotely: Zoom, Meet, Teams, Slack. They needed e-commerce services that delivered stuff to them: Amazon, Walmart, DoorDash. They needed gig workers to support delivery companies, and so on.
The Fed had ended ZIRP in 2015, but once the coronavirus upended our lives, they reintroduced ZIRP and more! They brought rates back to zero, introduced massive stimulus packages to help businesses affected by COVID, and pumped trillions into the economy. Remember the tech companies that started forgetting how to be disciplined in 2015? They went completely berserk during COVID. The valuations for tech companies exploded through the roof. Markets were pricing companies at 20 times their revenue, which was unheard of. The singular theory that everyone was basing all their investments on, which included hiring more talent, was that the demand COVID created for tech would continue to stay, if not grow.
It’s also worth remembering the Great Resignation that happened in 2021-2022, which greatly contributed to companies overhiring during that period. For the uninitiated, the Great Resignation was when about 47 million people voluntarily left their jobs in 2021, followed by another 50 million in 2022. COVID ushered in remote work, and that, combined with ZIRP, meant that tech companies were desperately looking to hire more talent, which meant people could easily switch jobs. One day you could be working for a company in California, the next day you’d be working for a company in Massachusetts. Because talent was so hard to come by during 2021-2022, tech companies massively widened their pay bands to attract people. And the thing about salaries is that they always go up, never go down.
So to summarize: between 2020 and 2022, tech companies, fueled by ZIRP and remote work, hired overpriced talent they didn’t need, based on growth projections that assumed COVID demand would last forever.
2022-2023: The Reckoning
But that didn’t happen. If you think about it now, of course, the demand for tech products was going to go down after COVID. COVID was an anomaly. It was not a permanent reset in consumer or economic behavior. In March 2022, the Fed started raising interest rates to combat inflation, which by the way is the negative side effect of ZIRP. When capital is flowing freely in the markets, inflation goes up. ZIRP was over. The free money spigot that had been open for over a decade turned off. When demand reset and interest rates spiked, tech companies figured out that all their growth projections from 2020 were wrong. Valuations crashed to earth. Companies that had built bloated organizations between 2020-2022 couldn’t sustain them anymore, and with investors suddenly demanding profitability for the first time in years, the bloodletting started.
Present: The AI Bubble (Or Is It?)
Welcome to 2025, where things are good but somehow still bad. If there is one word to describe the current tech world, it would be AI—AI, LLMs, vibe coding, take your pick. It is undoubtedly the era of AI. So have investors learned from their mistakes in the past? Heck no. Even though everyone (especially investors on LinkedIn) will argue that AI companies are appropriately priced because of their potential future growth, I would argue that the exact same thing happened during the dot-com and COVID eras. Tech companies were dramatically overvalued during those boom times, just like AI companies and AI-enabled companies are currently overvalued. All it would take is one minor downturn to completely explode everyone’s balance sheets.
And here’s the kicker: the so-called productivity gains that everyone associates with AI have just not materialized yet. AI is making the existing workforce more productive, but it doesn’t come close to replacing an entire person. All the companies that are laying off are not downsizing because they’ve found tremendous productivity gains by using AI. They’re predominantly doing it because they’re still dealing with the hangover from the COVID-era mess.
However, the overvaluation of companies is not across the board. Overall, tech companies have grown up since we first encountered them in the ‘90s. Even though the CEOs still wear t-shirts, they’re paying more attention to business basics like profit margins. Lean, focused teams are back in vogue. Tech companies are becoming mature businesses. What happened to financial companies in the decade before tech is now happening to them. Tech companies have finally grown up.
What This Means for You
So what does all of this actually mean? Whether you’re a founder, an employee, an investor, or someone just trying to navigate their career in tech, the maturation of this industry has real implications for how you should think about the next decade.
If you’re a founder or executive:
The days of “we’ll figure out monetization later” are over. Your investors want to see a path to profitability, not just growth. This doesn’t mean you can’t raise capital or build ambitious companies. It means you need to build real businesses. The market will reward companies that can demonstrate sustainable unit economics, not just virality or user growth. The question is no longer “how fast can you grow?” but “can you grow and make money doing it?”
This also means the talent war is over, at least for now. You don’t need to compete on compensation bands anymore. You can actually build teams based on mission, culture, and the work itself. Use this window wisely. Hire people who want to build something that lasts, not people chasing the next equity lottery ticket.
If you’re an employee:
Job security in tech is no longer a given. The social contract between employer and employee fundamentally changed between 2020-2023, and we’re still figuring out what replaces it. Don’t assume your company will be around in five years just because it has a big valuation. Ask hard questions: Is this business profitable? Does it have real revenue? Can it survive without raising another round?
Also, diversify your skills and your income. The era of specialization, where you could be a “growth PM” or a “React developer” and coast on that for a decade, is ending. The market wants people who can wear multiple hats and deliver business outcomes, not just execute within a narrow domain. And if you’ve been thinking about a side project, consulting, or building something of your own, now is actually a great time. The barriers to entry are lower than ever, and the bloated companies are creating opportunities for leaner, scrappier alternatives.
If you’re trying to figure out where AI fits:
AI is real, but it’s not magic. It’s a tool, like the internet was a tool, like mobile was a tool. The companies that will win are the ones that use AI to solve actual problems and create real value, not the ones that slap “AI-powered” on their pitch deck and hope for the best.
The bigger picture:
Tech is no longer the “new kid” industry. It’s establishment now. That means it’s subject to the same market forces, the same scrutiny, and the same expectations as every other mature industry. This isn’t a bad thing, it’s just different. The Wild West era is over. What replaces it is an industry that’s more stable, more predictable, and frankly, more boring. But boring isn’t bad. Boring means you can actually plan for the future. Boring means companies that build real value can succeed without needing to be the next unicorn. Boring means careers in tech can be sustainable, not just a series of boom-and-bust cycles.
The question isn’t whether tech will survive this transition, it will. The question is: will you? The people who understand that the game has changed, who adapt to this new reality, who focus on building real skills and real value—those are the people who will thrive. The ones still chasing the 2020 playbook are going to have a rough decade.
So here’s my advice: assume the music has stopped. Assume capital will stay expensive. Assume your company needs to justify its existence with actual profits. Assume AI won’t save you from bad business fundamentals. And then ask yourself: given all of that, what should I be doing differently?
That’s what this means.
Observations
So what are my observations from being both a passenger and driver during tech’s maturation cycles?
On Cycles and Memory
Each generation of founders believes “this time is different,” but the pattern repeats: easy capital → growth at all costs → reality check → discipline. The specific technology changes (internet, mobile, cloud, AI), but human nature doesn’t.
Companies and investors have institutional amnesia. The people making decisions in 2020 weren’t the ones who lived through 2001. Every 7-10 years, we get a new cohort that has to learn these lessons the hard way.
On Capital and Discipline
Cheap money makes bad companies possible. When capital is expensive, only businesses with real unit economics survive. ZIRP didn’t just fund innovation; it funded a lot of nonsense.
Financial discipline isn’t sexy, but it’s what separates companies that last from companies that flame out. Amazon and eBay survived the dot-com crash because they learned to be ruthless about costs.
On Hiring and Talent
Overhiring in boom times creates painful corrections later. It’s better to be slightly understaffed and hungry than bloated and complacent.
Salary inflation is a ratchet. It only goes one direction. Once you establish high comp bands, you can’t easily walk them back without losing people.
The “hire fast, fire faster” mentality of 2020-2022 destroyed a lot of trust between employees and employers. That cultural damage will take years to repair. In fact, we are still repairing it in 2025!
On Valuations and Reality
Revenue multiples are a lagging indicator of delusion. When investors start pricing companies at 20x revenue (or higher), they’ve stopped caring about fundamentals.
Every bubble has a “this time is different” narrative. Dot-com had “eyeballs,” 2020 had “COVID acceleration,” 2024 has “AI transformation.” The narrative always sounds compelling until it doesn’t.
On AI Specifically
AI might be transformative, but transformation takes time. The internet didn’t reshape business overnight. It took 15-20 years. Expecting AI to deliver 10x productivity gains in 2-3 years is naive.
We’re confusing “making smart people more productive” with “replacing entire jobs.” Those are very different value propositions with very different P&L implications.
On Maturation
Growing up as an industry means accepting trade-offs. You can’t have hypergrowth AND profitability AND work-life balance AND unlimited runway. Mature companies pick their battles.
The shift from “move fast and break things” to “move deliberately and build things that last” isn’t a betrayal of tech culture, it’s evolution.
On Leadership
The best leaders I’ve worked with treated bull markets with skepticism and bear markets as opportunities to build. The worst leaders did the opposite.
If you can’t explain your business model to a smart 12-year-old, you probably don’t have one. Complexity is often a smoke screen for businesses that don’t make sense.
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