In 2016, in that of Mountain View, the birthplace of Google which is to technology what Barolo is to good wine, the Zume start-up launched the robot that churned out excellent pizzas in the back of a traveling bus, with the aim of ensuring home delivery. In 2018 the company, well funded by Japan's Soft Bank, faced the market scrutiny with a goal of a $2,225 billion valuation. Two years later, however, Zume fired half the staff. Today the robot-pizza chefs have been converted to another role: scavengers, with the commendable role of collecting agricultural waste in special eco-sustainable containers, to the benefit of the health of the ocean. But not the portfolios of the venture capitalists who paid dearly for the madness of the all-tech season, when on the wave of Nasdaq boom (increased 11-fold from 2009 to early 2022), financial markets have funded all kinds of ideas, even the wackiest.
The "epic fails" of Silicon Valley
The Wall Street Journal mercilessly makes a list of the ideas that end up in the various landfills Silicon Valley. Let's go Google glass fallen into oblivion to the ruinous history of which, the platform that was supposed to defeat Netflix with programming of short stories via smartphone. An unhealthy idea, even if conceived by geniuses of the caliber of Meg Whitman, former manager of e-Bay and HP, now ambassador in Kenya, and Jeffrey Katzenberg, former head of Walt Disney. But the list is long: it goes from Plastisher and by other attempts (see Medium), to awaken the publishing industry with the use of digital platforms, to services based on the rental of drones rather than scooters. Not to mention the staff of dozens of engineers who Amazon has been funding the search for the next generation smartphone for years. Or the mysterious efforts of Apple Lossless Audio CODEC (ALAC), to give life to the car of dreams, capable of making the old four wheels retire. And what about the metaverse? Experts continue to launch amazing predictions, but for now the total turnover, including clothes for Avatar and helmets for navigating the metaworld, is only 1,5 billion dollars, a fraction of the traffic of an iPhone.
After 2022 everyone will be more cautious
In short, as happened at the time of the Internet bubble, disappointment and sarcasm abound around the fate of the future economy. But the digital economy is paying dearly, in the US more than anywhere else cryptocurrency crisis, i.e. the most ambitious bet in recent years. The collapse of the Ftx platform has dragged with it an image built on the sound of millionaire sponsorships, from the Orange Bowl upwards. Of course, there is no going back. But after the blows accumulated in the last twelve months (-35% approx Nasdaq), the markets are much more cautious: partly because money has become a rarer and more expensive commodity under pressure from the Fed, partly because there has been a reduction in expectation of the "miracles" of the future. Applies to Tesla, once judged as a technological start-up with unlimited prospects, today just a manufacturer of electric cars competing with Chinese manufacturers and the revenge of GM and Ford.
This is the climate in which those who already appeared as the new masters of the universe are destined to move in 2022: Jeff Bezos, Elon Musk, Mark Zuckerberg and so on. Already acclaimed and often admired, today feared and often hated like the owners of the new ironworks, like the various Rockefellers or Jp Morgans at the end of the 2023th century. At the beginning of 1, the big names must face two challenges: 3) stop the bleeding on the financial markets, which have inflicted losses 2 times higher than the tech compared to the rest of the list, XNUMX) recover efficiency, after past excesses, even at the cost of heavy cuts in investments and personnel.
But will the big names in technology be able to reverse course? And if so, how long? To attempt an answer, it is worth starting with the humble examination of conscience which, under the strict eye of the Fed, is characterizing the beginning of 2023.
The crisis reshuffles the cards: big techs ready to restart with humility
The new look was inaugurated by Amazon: the colossus that has almost one million employees, engaged for months in a tough battle against the emergence of internal unions, has announced an unprecedented cut in personnel: 18 people. At the same time the new CEO Andy jassy, chosen by Bezos for the bad times, has anticipated a sharp cleaning plan, canceling numerous development programs of the group, heavily engaged in space but also in the financing of the Rivian electric car as well as in dozens of new initiatives. “All interesting things – underlined Jassy – but which for years will only be a cost. We can't afford it today." Meanwhile Amazon, which also has 35 billion dollars in cash (against medium-term debts for 55/56), has subscribed 8 billion in bonds: the era of zero-cost money is now at the end of the line.
Other giants have chosen, sometimes belatedly, the path of austerity. It is the case of Salesforce, which announced the layoff of 10% of the workforce, even of those white-collar workers hired a few months ago, when it was thought that the risk of a recession raised by the Fed's hikes was just a bad dream. “It's my fault – said the CEO Mark Benioff – I didn't understand the market trends”. A mea scuola that has made school: even Mark Zuckerberg of Meta apologized for not having seen the clouds arriving, imitated by Jack Dorsey, the former number of Twitter, and by Glen Kelmann, head of the giant Redfin, leader of online financing on the house. "If I could go back 18 months - he commented - I would say that the best way to lead a company is not to implement beautiful innovative ideas that strike the public's imagination, but to limit oneself to not doing stupid things". The CEO of Uber says in this regard: “I am still convinced that we are facing a potentially multibillion-dollar market. But these numbers are meaningless if I can't translate them into immediate profit."
In short, humility. Not a day goes by without a project already abundantly announced being shelved. This is the case of Snap's mammoth army of drones, postponed to a later date. Since the beginning of 2022 over a thousand tech companies have cut 150 jobs, a bloodletting that has not provoked reactions also because the American economy, driven by domestic consumption, has continued to absorb the workforce, without suffering too much from the slimming treatment of A (-12.800 places) or of Goldman Sachs, which is about to cut the most massive personnel in its history which, moreover, will be accompanied by a useful record. An attitude that the Federal Reserve really likes, committed to chasing away the ghost of socialism, a perverse fruit of inflation according to the US interpretation.
But will it be enough to relaunch the digital economy on Wall Street?
A bear rally in the coming months cannot be ruled out. But to have a lasting turnaround will take time, necessary to develop trends and products. After the Internet bubble burst, it took a good year to celebrate the irruption of Google, the search engine that changed the world. A little patience and the same will happen for a 3D manufacturing, a non-folkloric use of the metaverse and the start of the new mobility.
In the meantime, the battle will focus on the occupation. The Fed explicitly sets itself the goal of destroying more than 4,5 million jobs to reach XNUMX% unemployment. When the numbers get close to that goal, Powell will widen the purse strings. And the digital economy will smile again.
