Traversing Turbulent Times in Tech
Strategies for tech employees to navigate the current economic climate, feat. Charles Dickens and Cockroaches
Great posts have to start with a bang no? Especially the first post of a newsletter (which I type as I sit jobless on a supposed-to-be-sweltering-weekday in May in New Delhi (which, because duh, climate change, is putting on its best impression of a chilly October evening)).
So I was looking about for a good opening salvo which encapsulated the good old days in tech (also known as 2021, ZIRP, tech supremacy, and various other acronyms). Enter the OG - Charles Dickens, and his fantastic opening paragraph from a ‘Tale of Two Cities’ which I will shamelessly borrow.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.
Calling this prescient is not even an exaggeration. Reading this I could almost visualise the good old days - where money was free and available to everyone who wanted to experiment with an app, where crypto would give us decentralisation and help us take back control (what an underdog narrative that one, but probably better left for another day), tech was going to, well, ‘techify’ everything, and humanity would ascend into a higher consciousness in your lifetime.
Well, that was then. This is now.
Cut to 2023, and it's definitely not a great time to be a an employee in tech. Till last year, you were earning comfortably above median, getting to complain about going back to office, and were basking in the glory of Sony Liv’s Shark Tank finally popularising what you do.
Things have turned on their head. Layoffs, salary cuts, company shutdowns, and the realisation that if things looked too good to be true, then they probably were - ('everything everywhere all at once' is a good way to put it). Google employees can almost smell the scented oil from all the free massages. Sigh.
But, phew, what a ride no? And now, the brakes are on and everyone needs to figure stuff out.
That brings us to the meat of this particular post.
These actually are tough times, and if you’re new to this whole tech product thing then you would be doing some serious introspection (here’s to all you management consultants who switched to product, and are now looking at their multicoloured JIRA boards asking themselves why, oh why).
But introspection is good. It’s like I tell everyone who asks me how to get into product management - ‘Don’t get into product management’.
Tough times force you to ask the right questions, center yourselves and figure out the ‘right thing for you’, compared to easy times when everyone wants to go with the ‘current in thing’, which last year was product management.
So here are a few questions I have had to answer over my conversations with people in the ecosystem over the past few weeks. Documenting here in the hope that this helps some people figure out how to think about the next few years in their career.
How long is this going to last?
Depending on who you ask - either everybody knows or nobody knows. Although every boom cycle is followed by a bust, my view is that with this cycle there are enough differences from previous cycles that things are very hard to predict, including an actual war in Europe (looking at you Putin).
The guidance is that whether you are an employee or an organisation, try to get to a 'default alive' scenario i.e. you have enough cash in the bank to ride out whatever storm awaits.
How are CEOs and leadership thinking about these scenarios?
'Default alive' 'Cockroach not unicorn' 'sustainable growth' - are now phrases in vogue.
Every CEO now has 2 priorities, in the hope of somehow converting their startup into a viable business - 📈Increasing revenue and 📉decreasing costs. This means deprioritising moonshot projects, improving efficiency, and cutting flab wherever possible.
Side note on short term vs long term thinking
Across the ecosystem short term thinking will dominate. VCs and founders will want to show hard numbers, and try to make sure they ride out the storm, rather than pursue a fuzzier long term vision. The challenge for CEOs is to find the balance that works for their context. Cutting out longer term strategic projects looks good on an excel, but how much impact could this have on the company's long term moat?
Converse: As an early stage founder, this could be an opportunity for you? Without revenue pressures, could you out-execute incumbents in spaces they are afraid to venture into because they have too much to lose?
I'm in the product team at a startup. What should I do?
Some practical tips
💸 Be closer to revenue - Simple answer - to increase the probability that your job is not impacted, make sure you're close to revenue generation problem statements. If not, try working on products that are adding to team efficiency (and hence reducing costs).
🛠Show that you can do more with less - In general it is going to be important to focus on efficiency. The product development team, including engineers and designers, will be expected to do more with less. Work with your engineering and design counterparts to set this context. It is also important to let leadership know how efficiency has improved. One way to do this is to showcase visible improvement in shipping velocity - more story points delivered per sprint for example.
🌓 Contextualise moonshots - If you're in a moonshot team, make sure you have a conversation with your manager on how much the company is willing to invest in the moonshot. Typically and unfortunately, these are the first projects to get the axe.
👷🏽Ask for more responsibility - If you're in an entry level role, this is the best time to start asking for more responsibility, and start building credibility. Leaders will be looking for people who can deliver higher than expected output, and it will be easier for you to work on interesting products that previously would have been filled by an external hire. Also a great opportunity for people in product adjacent roles to work in product teams!
📢Communicate more - If you're in a mid-management product role (SPM+), then its important for you to communicate effectively between product leadership and junior PMs. Ensure your team has context on why they are operating the way they are, what the org strategy and goals look like, how their work fits in, and what they should focus on over the short term.
👊🏼Partner on strategy and set the right goals - If you're in a product leadership role, make sure you understand the company strategy, finances, and short term goals. Your team's roadmap should be aligned with these goals. Otherwise its time to have a conversation with your boss and figure out how you can make sure your team is contributing to org goals. These are crazy and uncertain times, and a lot of the responsibility is on you to make sure that goals are being effectively translated into a short term executable roadmap.
🥷🏽This is Sparta! Closing thought - for most CEOs and product leaders this is war time, and war is the best time for employees to get noticed, work on interesting and high impact projects, and get outsized returns for the work they put in.
I didn't get promoted this year despite being a top performer. Should I leave the company?
Practical tips, and 2 dividends for the patient man - the time spent dividend, and the cockroach dividend
Here's the reality - tech salaries have been out of whack over the past few years. There was no law except supply and demand, the ecosystem was flush with venture money, and great talent was scarce.
There was bound to be a reset, and this is it. The market is taking the opportunity to get back to some sort of normalcy. As an employee, expect some short term pain, but understand that this is a macro scenario over which you have no control.
If you think you did a great job but are still underpaid, you should obviously look out for a better role. But
There's a lot of competition out there for a limited number of roles.
Salary hikes are not going to be that generous (note this is the average case for the average employee).
If someone is offering you an abnormal hike, then make sure the company has some fundamentals going for it (and is not hiring you in a bout of desperation, you don't want to be looking out for another role 6 months down the line)
There’s a couple of subjective things that should weigh into your decision. These are things that accrue by virtue of your not leaving for another company, and are compounding in nature. This means that if you start afresh, you take more time to get to exponential growth rates (the hockey stick curve all PMs should be familiar with). I call these the Time Spent Dividend and The Cockroach Dividend.
The Time Spent Dividend
Sometimes, it just takes time.
It takes at least 2 years for someone to create a meaningful impact in a company that she has joined. That's when the context you are operating in, the relationships you make with the team, and skills you learn on the job come together and start compounding. This increases the potential for you to generate a successful outcome in the role.
Ask yourself if you are leaving at a time when you could potentially become an even more important member of the team, get better work, and potentially learn more? Is increased compensation in a new company worth the additional time that you now have to spend to gain context and create impact?
This might not seem important early in your career, but sooner or later people are going to ask what outcomes you have delivered in previous roles. If you haven't spent enough time in companies, you haven't given yourself the time to create outcomes.
The Cockroach Dividend
When everybody is dying, the ones who survive will profit. Companies going through near death experience a unique set of phenomena which, on survival, generate what I like to call the 'cockroach dividend'.
As CEOs and teams shift into wartime mode, the top 10% most important things in the org becomes clearer, across people, projects, and processes. If handled well, these scenarios are great opportunities for leaders to sharpen the execution machine and create a cohesive, fast moving organisation that is mission focused and geared to win. As an employee you might suddenly find yourself working with a CXO on priority projects and solving tough, but important, problems. This is invaluable experience and can open up a lot of opportunities for career growth for the right person.
Once the headwinds of the macro scenario subside and the company has ridden out the storm, you are now (hopefully) in a place where you have done a good job on a tough project with high visibility. You are now part of a battle scarred winning team, with better relationships, real skills, and most importantly, trust from the leadership. People who have played team sports can quickly identify with this feeling. The benefits of being part of this team will start accruing to you, because you’re an important player.
Admittedly, its hard to compare these subjective long term benefits of not quitting against a shiny new thing and possibly improved compensation, but that’s the thing - if everyone knew how to make this trade-off, then the value would be arbitraged away. But make sure you consider both these factors while making the decision to switch.
Caveat: Both these dividends obviously only make sense if the core fundamentals of the company work - its a good problem statement, the people are nice, and you aren’t being treated like shit.
Is this a good time to switch roles/companies? What should I be doing?
You should consider changing companies because you don't like the culture, have a bad boss, or generally are not excited by work, but not purely for increased compensation. Because
its tough to get increased compensation elsewhere
you're giving up on the compounding effects of staying in one place (see above)
If compensation is the only reason you're thinking of moving, I would advise against it. Compensation is short term, and it is not the best or only lens to look at job changes with. Consider the time spent dividend, and how that might put you in a good place once the short term macro pressures go away.
What roles will be most impacted?
As companies move into 'default alive' mode projects which are more 'long term' and not essential for revenue will be deprioritised. (see Zuck's latest missive on removing low priority jobs). Moonshot projects, or projects which have a large up front cost implication and delayed outcomes will be in the firing line.
Bonus: Some thoughts on moving into product from other roles
Is it easy to move into product from non-product roles?
Short answer is 'it depends'
Long answer:
If you're looking to move into an entry level product role, there could be two degrees of separation you have to contend with
1 degree of separation: moving from non-product role to product role in the *same* company.
2 degrees of separation: moving from non-product role to product role in a different company.
Moving 2 degrees of separation is much harder - Companies have over hired, especially at entry level roles. There is a lot of product talent available in the market today with a couple of years of on the job product experience.
So if you're a business analyst looking to move into product management in a new company you have to compete with an APM with 2 years of experience. It's going to be much harder to get noticed with your application.
However making the switch within the company you are working in (1 degree of separation) is much more doable today. Teams are focusing on efficiency, and instead of looking to hire someone full time to do product work, they are looking for people in roles close to the product to do more. This is especially true for moonshot products which have a high risk of failure.
It's a good time for senior devs, business analysts, designers, and test engineers to stick up their hand and say - 'Hey, i can run this feature'.
This will give you invaluable product experience to put on your resume (on job learning is always better than a course), and make lateral movement easier.
That’s it for today! Do subscribe and share this with your friends!
I liked the way you articulated "time spent dividend." It is not so obvious, and early in a career, we get away with short-term thinking.
I think compounding in general is nonintuitive. Local maxima are rarely global maxima.