alt Hacker NewsI think you're entirely correct.
I put it to not-tech people as: "[insert_ridiculous_valuation] is because you can fire everyone tomorrow and keep operating"
> "Tech was an outlier in this case because ZIRP allowed companies to retain full engineering teams to keep "engineering" the product despite it being essentially finished."
This is wrong, though, it's unnecessarily tying in a pop-finance obsession with ZIRP.
Unnecessary is the right word because it's not necessary for the rest of your post, you could cut it out and it wouldn't affect your argument or anyone's understanding.
Wrong is the right word because the dynamics it assumes are fantastical - companies took on debt to fund bloated engineering teams because no one noticed the engineering was done?
Additionally, ZIRP didn't induce this, this stuff happened, exactly the same, during ZIRP as well. Saw it in the iPad point of sale industry in early to mid 2010s.
A real finance nerd would point out ZIRP would in fact induce more of this behavior. It makes it cheaper for private equity/entities like Bending Spoons to take on debt to buy out companies and strip mine them. (strip mine being my word for this behavior)
> companies took on debt to fund bloated engineering teams because no one noticed the engineering was done
ZIRP allowed a lot of "businesses" to exist that wouldn't in a conventional, competitive capitalistic environment. Businesses in quotes because there was never any reasonable potential for profitability, but it didn't matter because VC money was cheap. Building a sustainable business is hard, playing "startup founder" and having that lifestyle subsidized by VCs is easier.
In that case, (over)engineering was part of the performance art that was required to keep your only revenue source: the next funding round. There was never any incentive to "finish" the product because doing that would put your business model (or lack thereof) to the test and stop the music. On the other hand, as long as cheap money is around you could endlessly "engineer" and pivot and bullshit around, chasing the next funding round and using that to pay yourself/your friends decent salaries.
During the ZIRP era it was all about "engagement" and DAUs/MAUs, then it was blockchain, and now it's all about AI. For those that have run out of grifts, they fold or "incredible journey" and get sold for pennies on the dollar to entities like Bending Spoons that do notice there are bloated engineering teams that can be cut.