Never in my measly undergraduate imagination, when I first decided to learn how to build software, did I imagine that such lousy economic circumstances could pervade for so long. I believed software to be an invincible industry of the future, ripe for stable employment and mild contentment. (I was too young for the dotcom bubble to have made an impression, it seems 😅)

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Meanwhile, all these companies shedding employees seem only to be growing in market valuation. And people in tech continue to make good money relative to the general population. It’s a bizarre combination of lopsided growth and simultaneous contraction, a collection of spasms reminiscent of the iconic transformation scene in An American Werewolf in London.

I realize that’s a pretty dark metaphor, but it was the first to come to mind.

The lazy answer for all these layoffs you’ll find on Reddit and social media is corporate greed. And AI. It’s not necessarily the wrong answer, but its horribly imprecise to the point of being meaningless.

It wasn’t until recently that I was able to pull together a few major converging factors into a coherent narrative, one that I think adequately represents where we are.

Why it’s helpful to think of software as leverage

Software can be immensely lucrative because, at it’s core, it’s leveraged.

You can solve a problem once, and assuming you solved it well, replicate it millions of times with minimal added cost.

This isn’t the case when you produce t-shirts or the latest bro-supplement. In those traditional industries, every unit you sell must be physically produced, and therefore your margins are much lower compared to software.

But to unlock that upside potential, you need to solve a common business problem comprehensively, and ship that solution to thousands if not millions of users. That scale is a challenging problem. To solve it, you need smart people with relatively rare skill sets. That makes them expensive, even more so when your competitors are trying to tap them as well.

So software is effectively a business where you front load your costs with the hopes of getting a lot of run away potential. This is what makes venture capital and startups work the way they do and why the industry is so often speculative to the point of being absurd. It pays to shoot for the moon.

A perfect storm gathers

1. Everyone is Leveraged (2020-2022)

The previous decade established and matured a lot of software business models, Software as a Serivce (SaaS), ecommerce (Amazon), marketplaces (Etsy, Uber), and streaming (Netflix).

When COVID first hit, the world fell back on these systems as traditional, in-person alternatives collapsed.

As a result, everyone in the industry loaded up on their chips given how well things were going. Hiring demand was sky-high, employee compensation hit records.

2. Zero Interest Policy Ends (March 2022)

ZIRP stands for zero interest-rate policy, which effectively makes borrowing money cheap. The end of ZIRP increased the cost of borrowing, so all these expensive, employee-heavy bets also grew in cost.

We saw some minor rumbles in the tech sector as some investments were pulled back as a result.

3. GPT from OpenAI comes online (November 2022)

LLMs (large language models like GPT), as implemented and designed by OpenAI, signified a paradigm shift. They introduced new ways to solve hard problems and easier ways to solve simpler ones. Companies like Chegg and Grammarly immediately felt the pain.

Obviously LLMs are not a panacea, but they do trivialize a substantial portion of machine learning problems.

The industry woke up to the idea that pursuing AI-solutions in the vein of LLMs is where the major developments of the next decade will occur.

In turn, everyone realizes that they’re leveraged in the wrong direction.

And their leverage is getting more expensive as interest rates goes up. And they’ve over-hired people at premium rates. And these people, they believe, have the wrong skill sets for the future.

queue massive indiscriminate layoffs

The fallout

The tech industry’s exposure to LLMs has only grown since 2022. And everyone is confused. Including me at times.

Most of these AI tools are 💩. Others are genuinely helpful and vast improvements over their predecessors, especially if you invest to learn how to use them.

Things will continue sorting themselves out as best practices, patterns, and further developments emerge.

In the meantime, the disruptions will continue. Tech workers, as I mentioned, are expensive to their employers. Counterintuitively, this makes their work especially vulnerable to AI.

If a service manages to successfully augment or replace some of the work of a software engineer, for example, that means they’ve solved a problem that the business has been willing to pay lot of money to solve in the first place. That means the service can charge a lot of money too. The incentives are there to go after high-paying white collar jobs.

Even if the tools can’t fully replace an engineer, any AI tools that amplify a senior employee's output will be adopted too. They allow a company to better stretch their best resources. These solutions don't even need to be better than a human—they just need to approximate the work well enough.

If you subscribe even a little bit to the Bullshit Jobs argument of the late David Graeber,1 where he argues a significant portion of white collar jobs are meaningless with little real valuable output, it’s not hard to imagine those jobs going away even when the tools themselves don’t blow your mind.

There's a cannibalistic aspect to software that Paul Krugman once captured (albeit incorrectly) when he predicted in 1998 that the internet would produce less economic value than the fax machine. While he was profoundly wrong about the numbers, he pointed at something important: much of the Internet's growth came from gobbling up existing businesses: newspapers, retailers, and movie theaters.

We’re entering into an era where a lot of major software incumbents are especially vulnerable to a similar fate. They have complex legacy solutions that, if approached correctly, could be built better and cheaper with the use of LLMs. This future has been referred to as “product-market fit collapse,” where many businesses will struggle to catch up to competitors who effectively leverage what’s available in our new world.2

In the future, I’ll likely try to shed some more optimistic light on these technological developments. But in the interim, it’s difficult to see the spasms of transformation subsiding any time soon.

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If I were six Rum and Cokes deep at my local watering hole and asked a stranger for life advice, and stipulated that they couldn't mention their ex-wife or Joe Rogan, then I imagine they’d likely quote a Stoic. At the very least they might mention a Stoic principle, like "focus on what you can control" or "there is nothing either good or bad, but thinking makes it so" (yes, that's Shakespeare but it expresses a Stoic concept, so lay down your pitchforks).

In case the scenario above seems far-fetched, what I'm trying to say is this: Stoicism is popular. It's also practical and helpful, but there's also a few factors that I see for its rise in popularity:

1. It's secular. You likely won't offend the religious or sound like you're trying to proselytize to the atheists in the room.

2. It's accessible. No strange German words to deal with. Or terms like phenomenology. I guess there's a sprinkle of Latin but that's to show it's legit. Amor fati, dude. You heard of it?

3. It's ancient. It's stood the test of time, so that must means its true.

4. Marcus Aurelius – badass emperor. Killed by Joaquin Phoenix in Gladiator. Epictetus? Unbreakable slave dude. The Django of Hierapolis.

5. Some cross-pollination with other cultural trends, like hustle culture. I.e., Apply the lessons of an ancient Warrior-Emperor to become a respected business leader.

6. Super effective communicators like Ryan Holiday, as well many other writers and scores of content creators online that make it easy to consume.

It occurred to me while reading Hegel: A Very Short Introduction1, that due to the reasons above, we've probably over-indexed on Stoicism. "We" being the people who consume popular philosophy content.

One of Hegel's key contributions was to consider different schools of philosophy as products of their time and to recognize that the human condition could change significantly from one historical era to another. This is what he believed about Stoicism:

The spread of these philosophical schools was… a result of the helplessness that the individual, who sees himself as a free being, must feel in the face of a domineering power he is unable to influence. The retreat into philosophy is, however, a negative response to this situation; it is a counsel of despair in the face of a hostile world.

Surely, many of us have felt this way in response to different events in our lives. But does it make sense to apply a way of thinking, molded by such bleak conditions, as our main lens towards… everything?

Let's not forget that many thinkers in Western philosophy were completely aware of Stoicism, interpreted it, and still had important contributions to make. Eastern philosophy too, arrived at sometimes similar and sometimes differing viewpoints, but is no less significant.

What I’d argue is that it’s impossible to put together a way of thinking that is universally true and helpful one-hundred percent of the time. If someone is already taking the time to dig into Stoicism, and they found it interesting or helpful, why stop there? Some of the best learning can take place when you contrast ideas.

I think that’s what makes Alan Watt’s lectures, for example, so compelling. A lot of the time, he’s effectively completing an analysis of comparative religion, relating his study of Eastern religions to his background as a former Episcopalian priest. The truth lands somewhere in the middle.

There is no one philosophy to live life by. We can, however, turn to different schools of thought at different times in our lives, in response to different situations, and develop our own individual sense of the world.

If you’re looking for a place to start, here are a couple of my favorites:

• The Consolations of Philosophy by Alain de Botton

• The Marginalian by Maria Popova

Telling myself to write is the best productivity hack I've ever discovered. Suddenly, my apartment is vacuumed, my taxes are done, and I've even called my grandmother.

These rituals of productive procrastination make me a great housekeeper, but when all those tasks are said and done, I have little to no time left for writing. It’s especially dangerous because with this tactic, I temporarily bamboozle myself into feeling like I’ve done something meaningful. That I have my shit together and life just got in the way of my writing.

Obviously, there's a lot of cognitive dissonance and self-sabotage here. During the day, I keep a journal of story ideas, I make character notes when inspiration strikes, but come the time to put words to the page, scrubbing the toilet suddenly feels like the most urgent and intoxifying project in the world. Staring at a blank page, I find myself yearning for a whiff of Clorox.

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Understanding procrastination

A few months ago, late into the night and deep in the YouTube rabbit hole, I stumbled upon an interview with Gabor Mate, the Canadian physician and addiction expert.1 What stood out in particular to me was this question he posed: what does the compulsion allow the addict to avoid?

For example, we may discover that through their addiction, the homeless fentanyl user avoids the reality of their material condition, the obsessive sports gambler escapes the reminders of his ex-wife's infidelity, or that the workholic evades incessant thoughts of unworthiness.

And in the vein of that discovery, I asked myself, why do I have these compulsions not to write?

Role of “the gap”

The answer, I uncovered, is that writing for me is a painful process. I think this discomfort can be best described by Ira Glass's quote regarding "the gap."

All of us who do creative work, we get into it because we have good taste. But there is this gap. For the first couple years you make stuff, it’s just not that good. It’s trying to be good, it has potential, but it’s not. But your taste, the thing that got you into the game, is still killer. And your taste is why your work disappoints you. A lot of people never get past this phase, they quit. Most people I know who do interesting, creative work went through years of this. We know our work doesn’t have this special thing that we want it to have.

But why is this writing gap so painful for me, in particular? For example, I like pottery and art, I can recognize good pottery and art, yet I'm perfectly content slopping away on a paint-by-numbers kit without worry. Obviously, I perceive a gap, but it doesn't bother me. Hell, I can bang out my company’s internal newsletter in an hour too, so why not my own personal work?

The answer is a bit simple and silly, but it wasn't obvious to me for a long time.

I had simply staked too much of my identity and self-worth around "being a writer."

A company newsletter is a job that needs to be done and not something someone typically earns acclaim for, so it's okay for it to not be 👏 great 👏. I'm not at all concerned with becoming a visual artist, so not being good at pottery or painting isn't a reason to worry either.

But I would like to publish short stories, maybe even a novel some day.

So whenever I'd have to face a first-draft, or re-write a story, the stakes were incredibly (and unnecessarily) high. Every evening I'd sit myself down in front of the keyboard, it’d wrench my ego in the existential equivalent of spending a night on the rack.

My work was no longer about the piece, but about proving to myself that I am in fact capable of being a great writer. And when faced with the reality that my work wasn’t as good as I’d want it to be, I was opening myself to indulge my worst self-criticism. And I know I'm not alone.

This is exactly what Steven Pressfield warns about in The War of Art, where he describes "The Resistance" – a metaphor for all the things that stop us from doing our creative work.

"[The Resistance] wants us to stake our self-worth, our identity, our reason-for-being, on the response of others to our work"

Seeing creative work as a measure of your worth adds an unnecessary burden to an already fragile process, and more importantly, zaps the fun out of it all. As Rick Rubin describes in The Creative Act, we do our best work when it retains an element of play.

Active play and experimentation until we’re happily surprised is how the best work reveals itself.

So what can we do?

Glass suggests we can close the gap by chipping away at it and letting ourselves go through the cycles.

It is only by going through a volume of work that you will close that gap, and your work will be as good as your ambitions. And I took longer to figure out how to do this than anyone I’ve ever met. It’s gonna take awhile. It’s normal to take awhile. You’ve just gotta fight your way through.

There’s power to repetition of course when it comes to developing skill –we can look at the oft-cited pottery example2 – but I think an underlooked aspect of repetition is how it naturally lowers the stakes.

If someone aspires to be a great writer, investor, artist, or whatever, and they systematically do that thing at some regular frequency, then that means that there is no one story, no one investment, no one painting that will make or break their career. The work right in front of them becomes just one of many instances and the pressure to get this one "just right" is diminished. However, this does require having trust in yourself that you will pick this up again and work at it consistently.

If I run three times a week, I'm okay with having a bad day once in a while, because I know I'll give it another shot this weekend. What's most important is to show up to give myself the opportunity to do good work.

The most meaningful way we can lower the stakes, however, is to become comfortable with ourselves as we are. Or rather, accept where we’re at. If we can feel whole right now without the achievement, then there's no reason to do the work but for the pleasure of completing the work itself.

Reaching this state can be difficult, given that we're taught to look up to those who do extraordinary things. I think it can be useful, though, to realize that the status we desire or the achievement we wish to notch into our belts isn't going to provide long-term happiness. I think this is a realization many people discover as they get older and start to reach those "life milestones" that were so hyped up to them when they were young.

It's well documented that our happiness is multi-factorial, and there isn't one shortcut that let's you skip over all that complexity (see the hedonic treadmill3 and the arrival fallacy4). Things aren't that binary and that's a good thing.

So to wrap things up, if you're like anything like me, there's three parts to getting over that fear of doing the work.

1. Detach your self-worth from the outcome

2. Do the work regularly

3. Do what you can to fall in love with the process

I can't claim to have all these things right myself, but I find solace in the fact that the heap of laundry in the corner of my room isn't as enticing as it once was.

I just finished reading The Black Swan by Nassim Nicholas Taleb (NNT), and I suspect it will be the best non-fiction book I'll read this year. It’s part behavioral economics, part statistics, part finance, and part philosophy.

For those of you unaware, the book explores the many facets of how and why, we, as societies and individuals, fail to understand randomness and are particularly bad at preparing for large deviations (so-called Black Swan events).

As put by NNT, a Black Swan event has three characteristics:

rarity, extreme impact, and retrospective (though not prospective) predictability.

Reading about Black Swans feels especially relevant in 2020/21. But one could also argue that the pandemic, the capital riots, and the blackout in Texas are not (pure) Black Swan events because they were predicted by some people.

In practice, though, it doesn't really matter if some people predicted a Black Swan as long as the event catches enough people off-guard to have an outsized impact (e.g., the subprime mortgage crash in 2007/08).

So, what are some of the reasons why people are prone to Black Swans? Here are a few reasons NNT presents in the book that stuck with me:

• The “Problem of Induction.” When do our observations become facts? For example, the book’s namesake, the black swan — once it was discovered “down under” — disproved the longstanding notion that “all swans are white”

• Our innate need to establish cause and effect (create a story) can result in misattribution or oversimplification

• Our inability to conceptualize real risk. Real risk is not like the risk found in a casino, where the odds are known

• Our tendency to platonify, or impose mental models onto reality

This last one — tendency to platonify — is of particular interest to NNT, who spends much of the book grilling the deficiencies and over-assumptions found in Modern Portfolio Theory and much of the social sciences.

There is nothing inherently wrong with creating models to understand the world, but it’s easy to become arrogant in their efficacy, particularly when they’re backed by calculations and “math.” It also doesn’t help that language, education, and other systems around us can reinforce these models and make it difficult for others to re-evaluate their truthfulness.

NNT’s discussion of the false security afforded by “knowledge” reminded me of a similar discussion that takes place in Alan Watts’ The Book: On the Taboo Against Knowing Who You Are. There's a moment where Watts' describes the world as wiggles that have no discernable end or beginning in space or time.

They wiggle so much and in so many different ways that no one can really make out where one wiggle begins and another ends, whether in space or in time.

However, if you drop a grid over the wiggles, as shown below, suddenly the wiggles look like something that can be analyzed and understood.

Perhaps the wiggles in the grid can be understood in some capacity, but we need to be able to admit that its possible for the wiggles to escape our grid. To deny that and say “the wiggles can only take place within the grid I drew” would be to platonify.

In The Book, Watts’ uses this illustration to demonstrate how the separateness we feel between ourselves (our sense of self) and the rest of the world is an illusion.

But it is always an image, and just as no one can use the equator to tie up a package, the real wiggly world slips like water through our imaginary nets.

Where Watts' speaks to how our mental model of "self” leads to unhappiness, NNT talks about how arrogance in our mental models can lead to financial (practical) ruin.

It pays to be skeptical. Doing so means having to learn how to live with uncertainty.