The Tech Issue: How It Started How It's Going
Bloomberg Businessweek|May 30 - June 06, 2022 (Double Issue)
The market collapse isn't just the inevitable result of macroeconomic forces like high interest rates and inflation. It's also the best opportunity in more than a decade to reckon with the tech industry's excess
Brad Stone and Lizette Chapman
The Tech Issue: How It Started How It's Going

Over the past half-century, Silicon Valley has toggled between two similar-sounding pursuits that are often in conflict: wealth creation and moneymaking. Wealth creation is the act of invention and patient, long-term business building. It's the rising tide that lifts the boats of employees, shareholders, and everyone else. Moneymaking is the baser impulse: the hunt for a quick buck. The technology industry and its risk happy patrons have learned, time and again, what happens when short-term profiteering takes precedence over the development of stable companies that can create cool stuff. And yet, here we are again. Years of wildly inflated valuations, crypto-flavored pyramid schemes, and all manner of naked opportunism have led us to the Bust of 2022.

So far this year, the tech-heavy S&P 500 has lost just under one-fifth of its value. Among the worst-hit have been Amazon.com (-36%), Tesla (-38%), Zoom (-44%), Meta (-45%), and Shopify (-76%). As a whole, venture- backed companies that have gone public during the pandemic are down 48%, according to PitchBook. “The boom times of the last decade are unambiguously over,” the partners at the venture capital firm Lightspeed Venture Partners wrote in May, in a representative example of the industry sentiment making the rounds in presentations to portfolio companies. “Schadenfreude has set in.”

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