Don’t Be Afraid of the Economy and Do Your Best

Apparently some of my friends and family were wondering where I was the past couple days. I was not online at all and my phone was out of reach. Well, I was actually at a company sponsored retreat for all of the engineering staff and it was absolutely awesome. We stayed at a camp ground in Pescadero called Costanoa and even though the surroundings were beautiful it was raining the entire time. However, all of our activities were indoors so it didn’t matter. One of my favorite professors from college came to our retreat and gave a week’s worth of lectures from his computer security class and I actually learned a lot. After dinner there were a myriad of fun activities including Scrabble, Belgian beer tasting, a poker tournament, and lots of arm wrestling. (I won the Scrabble and bested a Stanford grad and an MIT grad! Berkeley FTW in Scrabble!) The next day we had a security contest where we were all given an open source project to hack. My team didn’t win but it was still a lot of fun. Amidst all the fun our CTO gave a speech on the economy of all things, and I thought it is interesting enough to share.

Our CTO is a very smart guy that has been around the Valley for many many years (possibly longer than I’ve been alive). He said that he has been through many economic downturns and booms in this crazy place. As he tells it, when he attended college here the semiconductor industry was booming and highway 101 had traffic from 8am to 11pm. Then all those jobs were outsourced and the Valley was quiet once again. Then came the famous dot com bubble and bust. He recounted a conference he attended back in 2002 right after the burst. He and several other people were scheduled to speak to a room full of newly unemployed engineers. The first speaker was a recruiter, and he told the room full of people that there are absolutely no jobs, and advised people not to talk to him to look for positions because there is none. The second speaker was someone who was sort of an expert on real estate and basically told everyone that they will see a housing downturn and lose their homes. The third person was some sort of reporter and also said something depressing. Our CTO was last and he thought to himself, whatever I do I have to say something positive to this crowd of people. So he went up there and asked everyone, “How many of you are unemployed engineers?” Practically everyone raises their hands. Then he asks, “How many of you were doing mundane work like getting data from database and displaying it on a website and got paid obscene amounts of money for it?” A large percentage of the room raised hands. Then he says, “you know what, this is how you can fix our problem. I am sure there is someone smart enough in here to start something truly interesting, and all it takes is one of you to start a company that is amazing and not mundane and the rest of us can work for you.” Supposedly, that is the year our company grew from an idea to a band of the best engineers and researchers. Then he went on about topics such as the mortgage crisis and globalization, and here are my take aways from his talk:

1. Do Not Be Afraid – I came back from the retreat and the stock market was going crazy because of the Fed’s extremely large interest rate cut and various economic problems. The CTO did say that this is going on because of a lot of fear. There is a lot people who are afraid of what is happening to the banks and what is happening to businesses, but in the end things will get better because of innovation and increased productivity. Most of the fear people have is because of uncertainty. There is no clear indicator that everything is alright so there is panic. The right thing to do is to be innovative and try to profit.

2. Economic Downturns Can Be Great Opportunities – The CTO said that the best time to staff up a company and rent office space is in times of economic downturns. If a company has money, then they are getting a bargain because people are more willing to accept lower wages and commercial real estate rents drop drastically. So if you have cash during a downturn, then you are able to snatch up many bargains. As I wrote in a previous article, I will be on the lookout for sales in stocks or real estate.

3. Globalization is Necessary – He said that the world has been changed so much by technology that globalization is no longer an option. Every company and country needs to establish footholds globally to become big. Even though people are always complaining about immigrants in America and jobs being outsourced to India, these things are necessary and probably good for everyone in the long run.

4. Make Yourself Valuable – The CTO asked if we were afraid that we would be outsourced, and only one person raised his hand. He thought that was a good sign because we are a great group of engineers. He further said that if you keep yourself at the top of the pack then you can demand to be paid well and you will not be outsourced. I think that is good advice because there is no need to sell yourself short and if you keep on improving yourself, you should be able to charge a higher price.

5. Surround Yourself with People Smarter Than You – This is  something the executive officers say at almost every speech they do. They always say that they hired people smarter than them to create a great company. I think it is great advice because I learn a lot from those who are smarter than me, and in turn I become smarter. There is also a chance that one of them will start a company one day that is the next Google or the next Microsoft and I can go along for the ride.

Anyway, I thought the CTO’s speech was very motivational and candid. I am sure he can make a living by hosting success seminars, but instead he does funny things like making movies and cheering us on. So once again, do not be afraid and do the best you can this year.

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