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The Rise of Developeronomics 253

Posted by Soulskill
from the supply-that-demands dept.
New submitter Geist3 writes "Forbes has an article by Venkatesh Rao asserting that the safest investment for both corporations and individuals is in software developers. Throwing money at talented coders now — even on random projects — will build relationships that are likely to pay off big in the future. 'In what follows, I am deliberately going to talk about the developers like they are products in a meat market. For practical purposes, they are, since the vast majority of them haven't found a way to use their own scarcity to their advantage.'"
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The Rise of Developeronomics

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  • Great a new boom. (Score:5, Insightful)

    by jellomizer (103300) on Tuesday December 06, 2011 @03:36PM (#38283600)
    A bubble in Developers! Developers! Developers!
    That means we will get a bunch of snot noes guys jumping into Computer Science who are in it just for the money. It will create the .COM boom all over again... Then it will crash and half of the idiots will stay and they will lay off half of the skilled workers.
  • by mario_grgic (515333) on Tuesday December 06, 2011 @03:42PM (#38283672)
    Overproduction of developers/comp.sci. graduates does not create a bubble. Perhaps a lot of miserable people, but not an economic bubble like the .com bubble of the late 90s. The most likely economic impact overproduction of qualified people will have is the cheapening of labor i.e. lower pay rate for developers.
  • Unionize (Score:2, Insightful)

    by dcollins (135727) on Tuesday December 06, 2011 @03:48PM (#38283742) Homepage

    "...the vast majority of them haven't found a way to use their own scarcity to their advantage."

    The way: Unions.

  • Idiots (Score:4, Insightful)

    by sexconker (1179573) on Tuesday December 06, 2011 @03:48PM (#38283746)

    Well, then Forbes and Venkatesh Rao are idiots.
    The safest investment for corporations and individuals is corporations, as usual. They control everything and they're not going away.

    Nobody wants talented coders. People want cheap, get-it-out-the-door coders. And those are in India.
    People will buy any old fucking thing you slap a lower case i in front of. Why bother trying? Why bother risking a talented coder coming along and doing stuff on their own? Why, they could get the sense that have some sort of control over, or input into, the project. If they leave before we ship, no one will know how to fix everything. It's best to keep monkeys doing the monkey work, and to pay a "project manager" to vaguely tell them what to do.

    A "talented" coder is like a UFO. Everyone talks about them. Some of them say the place in the other business park has one. But no one's really sure what one looks like, or how to tell if one's real when it comes time to interview people for a position.

    Furthermore, coders, especially the "talented" ones, don't exactly fly the banner of allegiance. They'll leave at the first opportunity to make more money. If you don't let them take control of a project, they'll either do it their own way, or go somewhere else that lets them do it their own way. Have you heard of open source software? Nothing ever gets done because they keep "forking" things when they have their own ideas!

    If you give money and attention to talented coders, they'll think they're worth something, and then you'll have to compete for their work!

    No, thank you. I'd much rather we all agree to keep treating them like shit, paying them shit, and not really understanding what they do.

  • Wisdom (Score:5, Insightful)

    by lucm (889690) on Tuesday December 06, 2011 @03:52PM (#38283810)

    This is exactly how Rockefeller was thinking: when you come across talent, you hire, then you adapt your business based on the people available. Even if in the short term it does not fit in an existing MS-Project plan, over the years you build a strong core and the team is driving the business, not the other way around. And if people walk away to get more experience, you keep the door open so you can benefit from what they did elsewhere.

    Unfortunately, a lot of companies are doing the exact opposite because the MBAs are trained to manage by balance sheet, stock price and quarterly projections: short-term metrics.

  • by BadPirate (1572721) on Tuesday December 06, 2011 @03:52PM (#38283820) Homepage

    Seems to me that there is miles of difference between a born Engineer (a smart, logical thinker who loves tinkering and solving problems), and a sold Engineer (someone who has no inclination or desire towards engineering, but simply wants to make as much money as possible).

    I don't think there will be a Boom of engineers, because what any decent company is trying to do (and what this article is referring to) is get their hands on GOOD engineers... a product that you cannot commoditize.

  • Career length (Score:4, Insightful)

    by vlm (69642) on Tuesday December 06, 2011 @03:52PM (#38283822)

    investment is actually investment in people who will live out long careers in the sector

    long careers? He means ageism might kick in at 35 instead of 30? Sign me up!

  • Re:Profit!!! (Score:2, Insightful)

    by Anonymous Coward on Tuesday December 06, 2011 @03:59PM (#38283926)

    Step 1 Pay Devs
    Step 2 Release Product
    Step 3 Get sued into Oblivion by a hundred patent trolls
    Step 4 go out of business

    There, fixed the business model for you.

    Yours,
          A recently laid off Developer.

  • Re:Wisdom (Score:4, Insightful)

    by Maximum Prophet (716608) on Tuesday December 06, 2011 @04:00PM (#38283940)
    Most employers are looking for Rumplestiskin employees. "If we just had people that could spin straw into gold, we'd rule the world." Then they either wait for Mr. R. to apply, or they take the first smooth talking huckster that claims to be able to spin gold. This is especially bad at the 'C' level.
  • by Anonymous Coward on Tuesday December 06, 2011 @04:01PM (#38283948)

    You misunderstood. First there is a bubble. A bubble is when the price of a good keeps rising because it has risen in the past. Then there will be people who want a piece of the pie but aren't actually developer material. The bubble may burst sooner due to demand side changes or it will burst later due to the supply side flood.

    I believe that developers are exceptionally undervalued. So much so that drastic raises would not be a sign of a bubble but a necessary correction. If you haven't noticed, the importance of software keeps growing, and writing good software is a hard problem that requires lots of experience and knowledge in difficult abstract fields in addition to application specific knowledge. Currently software quality is a major inhibitor of economic growth. Just look at how often you have to update software to fix security bugs.

  • by luis_a_espinal (1810296) on Tuesday December 06, 2011 @04:02PM (#38283958) Homepage

    Overproduction of developers/comp.sci. graduates does not create a bubble. Perhaps a lot of miserable people, but not an economic bubble like the .com bubble of the late 90s. The most likely economic impact overproduction of qualified people will have is the cheapening of labor i.e. lower pay rate for developers.

    It will create a bubble in the sense that morons will invest tons of money in developers, with salaries and benefit packages increasing until economic realities force their fist down their throats, with companies that existed solely for hoarding talent folding down as they should.

    Granted that this is harder to happen than in the dot-com era (where the plan was to hoard anything with e- or www in it, hoping to bail out and cash in or be bought by Yahoo or what not.) It is harder, but not impossible. In fact, given the penchant for speculative stupidity displayed by humanity in general (and us Americans in particular), it is highly possible. I cannot wait to see the debacle unfolding as it will be quite hilarious. Yes, it will be hilarious.

  • by Maximum Prophet (716608) on Tuesday December 06, 2011 @04:03PM (#38283970)

    ... In an overheated market, when hiring managers have to take what they can get if they want to fill a position at all... it is STUNNINGLY easy for workers with zero aptitude to jump in.

    It's often easier for the worker with near-zero aptitude. Someone who's spent time studying how people interact will always get ahead of someone who's only studied how *things* work.

  • Re:Unionize (Score:5, Insightful)

    by PoolOfThought (1492445) on Tuesday December 06, 2011 @04:04PM (#38283978)

    "...the vast majority of them haven't found a way to use their own scarcity to their advantage."

    The way: Unions.

    No, that's how the non-scarce resources create an advantage for their collective selves. If you're not scarce you make yourself scarce by joining a group that then says "well, we're it" so you must treat us as if we are scarce. Sort of a "you don't like what I want... well guess what... you have to give it to me anyway because all my buddies are going to hold out for the same and no one will do you work if you don't meet my demands".

    Scarce resources have power individually, through simply being scarce. Sometimes it takes a while for someone to realize just how scarce they actually are. Scarce resources are special. They might be really close to the only one who can do the job required job in the required amount of time to the desired degree. That's what makes them scarce. They have the right experience, with the right knowledge, and the possibly even right background for the exact work that needs to be done. Truly scarce resources are capable of getting more than they would be unionized because they are not lumped in with the not quite so scarce.

  • 10x Engineer (Score:4, Insightful)

    by Maximum Prophet (716608) on Tuesday December 06, 2011 @04:14PM (#38284088)
    The industry standard when I was in school, was that the average programmer could churn out 10 debugged lines of code a day. I know I could run at 300 lines of C a day if distractions were minimized and the coke machine didn't run out. I had friends that could do 600 without too much trouble. (none of us got good grades, because we were writing too much code.)

    These days the company I work for keeps the phones ringing, cube noise up, and enough meetings that I'm lucky to write a few lines. Some days go by without any objective measure of success.
  • by Timothy Brownawell (627747) <tbrownaw@prjek.net> on Tuesday December 06, 2011 @04:14PM (#38284094) Homepage Journal

    Right now, I make nice money. If this is a bubble, that will go up. And I'll get comfortable with that, and adjust my life to suit. When the bubble pops, my income will go way back down again, and that is going to hurt.

    Sign up for direct deposit, with a fixed amount (not percentage) going to your checking account, and the rest going to a savings account that you never look at.

  • Re:10x Engineer (Score:4, Insightful)

    by fsckmnky (2505008) on Tuesday December 06, 2011 @04:22PM (#38284192)

    the company I work for keeps the phones ringing, cube noise up, and enough meetings that I'm lucky to write a few lines. Some days go by without any objective measure of success.

    Remember all those people in your COBOL class that had perplexed and confused looks on their faces, and were only there because they required the class as part of their MBA coursework ? Those people are your managers, and their cost-benefit analysis said if they stuffed you at a tiny desk in the phone room, they could save $100 on floor space and cubicle walls.

    Go talk to some of them about a productive engineering environment. I'd lay odds the same perplexed look re-appears. ;)

  • by Curunir_wolf (588405) on Tuesday December 06, 2011 @04:25PM (#38284244) Homepage Journal

    Umm... were you around during the 1990's? Even in a normal market, tons of hiring managers don't understand enough to separate the wheat from the chaff anyway. In an overheated market, when hiring managers have to take what they can get if they want to fill a position at all... it is STUNNINGLY easy for workers with zero aptitude to jump in.

    Well that's the difference, isn't it? That's why it's important to locate and invest in the good developers now. In the speculated wave of developer bubble, it will be the difference between being the next Amazon or being the next Pets.com.

  • Re:Wisdom (Score:4, Insightful)

    by Amouth (879122) on Tuesday December 06, 2011 @04:33PM (#38284344)

    my favorite part about that is they often over look a real Mr. R because he doesn't have the normal look of the slick C level guy.

  • by Tomato42 (2416694) on Tuesday December 06, 2011 @04:49PM (#38284574)

    that requires lots of experience and knowledge in difficult abstract fields in addition to application specific knowledge

    Yes, many don't see that real world IT is a interdisciplinary field. You need to take at least accountancy 101 if you want to know what accountants want from your software, let alone how to implement it, and implement it correctly.

  • by doom (14564) <doom@kzsu.stanford.edu> on Tuesday December 06, 2011 @05:00PM (#38284686) Homepage Journal
    Has anyone actually read this article? The guy is talking out his ass. As far as I can tell he's got nothing behind anything he's saying. In the places I've worked, developers have certainly been valuable-- this is why, after all, we're paid a lot of money to do stuff a lot of us would do anyway-- but the critical assests of the companies have been things like the reputation of a domain name, or the side-agreements with various content providers, and so on. As for a new bubble, yes, as far as I can tell there's a venture capital bubble of sorts in the SF area: VCs are tossing money at 20-somethings that'll work 80 hour weeks under the delusion that they're going to be the next facebook. This makes a degree of sense from the investor point of view, if you consider that there's nothing else going on in the economy remotely worth investing in. This time around, there's this weird phenomena where there are no rental apartments available at any price in SF, but there's plenty of vacant office space: the kids are working on laptops in their living rooms and out in cafes, not in actual offices-- they're also completely trashing their backs and hands in the process. If you really want to invest in a growth industry, think about "physical therapy".
  • Re:Wisdom (Score:5, Insightful)

    by Belial6 (794905) on Tuesday December 06, 2011 @05:02PM (#38284728)
    I'm not going to disagree with you, but I would like to put in that there is another factor that gets over looked.

    Middle management is a necessary job that is not taken seriously. I have worked for great middle managers, and I have worked for (lots) of bad ones. The C level management has no idea what the actual employees do. In a company of any size, they couldn't get a grip on it anyway just do to the vast quantity of different jobs being done. Middle management is there to manage the day to day work, and to report to the higher level management. When this breaks down, the C level management can't informed decisions, and the worker doesn't have the tools necessary to do their job effectively.

    Middle management has become such a joke that neither the C level management, nor the workers take them seriously. No doubt the fact that the C level management doesn't take them seriously is a big reason why so many people that are bad at management end up in middle management.

    I know that when I have worked for a middle manager that was skilled in his trade, my productivity has often doubled or tripled over the times I have worked for those that were not skilled in their field.
  • Re:Idiots (Score:4, Insightful)

    by msobkow (48369) on Tuesday December 06, 2011 @05:07PM (#38284798) Homepage Journal

    Furthermore, coders, especially the "talented" ones, don't exactly fly the banner of allegiance. They'll leave at the first opportunity to make more money.

    Having repeatedly stayed on to try to deliver failing and late projects over the years in order to save a client's bacon, I find your comment not only insulting but dead wrong. I and many other people I work with actually have the integrity to do our level-headed best to get things done, even if management is pissed off because we couldn't get it done on their fantasy schedule or overly optimistic budgets.

    Real coders are ethical people who work on the code as much out of love of getting things done and the satisfaction of happy users as they are people who want to make money. Let's face it -- if you're only into money, this is the wrong industry to be in with all the fierce competition from cheap overseas labour constantly undercutting the rates.

  • by Anonymous Coward on Tuesday December 06, 2011 @05:29PM (#38285040)

    >So cash out before the crash. Barring that, be part of the upper half.

    I hate people who say this kind of thing. It's like telling investors: Buy low, sell high!

    There is no "upper half" that is fairly and reasonably chosen. I have a lot of experience in the field, and politics, knowing your manager's favorite flavor of ice cream, and selling your work to everyone is worth a lot more than actually being the talented guy who delivers rock solid work. Work environments are full of politics. It's wrong, and it's lame, but it's true.

  • Re:Unionize (Score:4, Insightful)

    by Sponge Bath (413667) on Tuesday December 06, 2011 @06:51PM (#38285866)
    No mod points today, so I'll post to keep your reasonable, polite and on-topic post from being buried by the "mod down anything supportive of unions" brigade. To the person modding the OP flamebait: If it's an echo chamber you want, there are plenty of other sites that will meet your needs.
  • Re:Unionize (Score:4, Insightful)

    by swillden (191260) <shawn-ds@willden.org> on Tuesday December 06, 2011 @07:17PM (#38286108) Homepage Journal

    Lastly, Unionization is fully in-line with Libertarian ideology

    Voluntary unionization, yes. But voluntary unions don't last; if the union is at all successful it begins to focus on perpetuating itself and its lock on the labor side of the bargaining table. In some cases scabs get beaten, maimed or killed. In other cases, the unions champion changes in the law that make non-union labor effectively illegal. Even when those extremes are avoided, intense peer pressure is applied to those who don't want to join the union.

    The biggest problem with unions and collective bargaining, though, is hidden in your parenthetical comment "which does not need to be seniority based, and can be performance based". No, it can't be performance based, because that requires an objective way to measure performance. The normal employer/employee relationship has a lot of fuzziness that allows hard-to-quantify performance factors to be taken into account. But unions need to establish clear rules and structures that can be written into the collective bargaining agreement, at least if the agreement is going to do anything more than specify minimums. That's why so many collective agreements end up being purely seniority-based: because it's about the only thing that can be objectively measured.

  • by TiggertheMad (556308) on Tuesday December 06, 2011 @08:25PM (#38286668) Homepage Journal
    Seems to me that there is miles of difference between a born Engineer (a smart, logical thinker who loves tinkering and solving problems), and a sold Engineer (someone who has no inclination or desire towards engineering, but simply wants to make as much money as possible).

    So very true. As someone who did a fair amount of freelance developing over the last decade, the number of people who are using compilers because they think it will get them rich is truly scary. Non-comp sci types are *probably* safe to let loose on basic web development tasks, and that is about it. If the number of developers that I have meet that are the really talented types who really 'get' coding are representative of the industry as a whole, I fear for our future.
  • Re:10x Engineer (Score:4, Insightful)

    by JustNiz (692889) on Tuesday December 06, 2011 @08:29PM (#38286690)

    So true.
    The company I work for recently moved office but they gave us engineers the opportunity to see some sites they were considering.

    The managers were amazed when we said we preferred the crappy old site with separate ofiices rather than the shiny executive newbuild with a big open space.

    Then It dawned on me the reason why they couldn't understand.

    Managers spend all day doing nothing actually productive, just justifying their existence to each other verbally, so they automatically believe that any environment that promotes communication must be the best.

    They are not mentally equipped to understand that anyone's productivity can be anything other than proportional to the level of communication going on around them, whereas in fact, for developers it tends to be inversely proportional.

  • Re:Wisdom (Score:5, Insightful)

    by Doubting Thomas (72381) on Tuesday December 06, 2011 @08:58PM (#38286920)

    I don't say this often. Hell, I never say this: this is one place where the military has the right idea about how to manage people. Or at least, my poor, second-hand understanding of military chain of command suggests that is so.

    Non-Commissioned officers are on a separate career path. They are expected to continue managing 'the workers' in some capacity for their whole career. They both know what has to be done and can sympathize with the poor bastards who'll get stuck doing it. They are not expected to seek a C level position. That's not their job. Getting shit done is their job, and no assignment or promotion will ever completely hamper that goal.

    Meanwhile, the commissioned officers never manage the workers. Occasionally junior COs will try get things done that are a Bad Idea, and an NCO (eg, a warrant officer) will tell them to "Kindly fuck off, sir.". These people ARE expected to seek a C level position. Perhaps most importantly, if you demonstrate an inability to eventually achieve a C-level position, you may find yourself unwelcome, and encouraged to leave. "Up or Out"

    I think where this breaks down when applied to civilians is that we don't distinguish people who DO from people who manage. If you can get things done, we should let you do that until the world ends. If you can't get things done, but you can kinda sorta interact with some people who do, should we really keep you around forever? It seems to me like maybe that's not such a good idea.

  • by tomhudson (43916) <barbara.hudson@ ... a - h u dson.com> on Wednesday December 07, 2011 @12:48AM (#38288070) Journal

    Overheated market?

    What overheated market?

    When I see stupidity like this:

    A software developer on the other hand, can float free on the Internet, making money in mercenary ways, with no deep loyalties, if he/she so desires

    ... it's like this guy has never heard of outsourcing to cheap 3rd-world and eastern European countries and crap sites like elance.

    Or this ...

    An ex-Microsoft engineer is valuable anywhere in the economy if he voices support for buying Microsoft wherever he goes.

    He's never read the posters on the minimsft blog [blogspot.com], all swearing that after being "managed out", they will never, ever recommend Microsoft products.

    A talented high-school kid who starts hacking away at an iPhone app at 14 is likely to stay in orbit around Apple for his/her entire career.

    Really? So none of those iPhone or Android devs got their start on anything but Apple or ... what? Gmail?

    Of course, it's all based on a false premise:

    Today, this abstract point specifically translates to: people who can invest in developers, developers, and everybody else. This means that if you are in apparently more fundamental professions - perhaps you are a baker with a small business - you are effectively useless, not because bread isn't important, but because surviving in the bread business is now a matter of having developers on your side who can help you win in a game that Yelp, Groupon and other software companies are running to their advantage. If your bakery doesn't have an iPhone app, it will soon be at the mercy of outfits like Yelp.

    And god forbid, if you donâ(TM)t have a skill, like baking, which the developer-centric economy can actually use, you are in deep trouble.

    The bakers and butchers will still be eating when Groupon is bankrupt. And almost nobody gives a crap about Yelp. They get their recommendations from friends, not strangers trying to game the system. And certainly not from an iPhone app spamming them with "Eat at Joe's".

    Like so much from Forbes, this is just more idiot drivel!

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