Forced Obsolescence

In the ’50s and ’60s, American automakers became famous for implementing an approach known as “planned obsolescence.” The idea was to roll out new features and appearance changes every year–adding a bigger tailfin here, a new hood ornament there, an FM radio option, an increase in horsepower, and perhaps a new form of power steering–so that a hapless person who bought a new car three years ago would look at their perfectly adequate vehicle with a sense of embarrassment and decide that they needed to buy a new one just to keep up with the times.

The new tech companies have gone one step beyond planned obsolescence, into the realm of forced obsolescence. That’s what happens when the tech companies just stop supporting the old tech that seems to work just fine, requiring you to purchase and switch to new tech. You don’t just want to change to keep up with the Joneses, you have to change if you want your device to work at all.

This is what happened with our Roku device, which is probably more than five years old. It has worked like a charm. Several months ago, however, we started to get messages when we tried one of the streaming service channels advising us that the channel was no longer available on our antique Roku device, At first I resisted doing anything about it, figuring that one less streaming service is not that big a deal. But now other services have started to drop off, too–so I’ve knuckled under and bought a new Roku device that hopefully will get us back to full streaming capabilities.

It’s irritating, but what are you going to do about it? The tech companies will tell you that they had to stop supporting the old device because of security risks, so the switch to the newer, faster, safer device is really for your own good. But his forced obsolescence approach also happens to provide a lot more certainty for tech company bottom lines, because the switch to the new product is no longer dependent on unpredictable consumer tastes and decisions. The tech companies figure that if they’ve got the ability to eliminate the X factor, why not do it?

Bursting Bubbles

In case you haven’t been paying attention, the economic news in the tech field isn’t exactly great. Recently, Microsoft announced plans to lay off 10,000 workers, and Alphabet, the parent of Google, disclosed that it would be handing the pink slip to 12,000 of its employees. Amazon also has announced sweeping job cuts. By some accounts, almost 50,000 people have been laid off from their jobs in the tech industry already in 2023–and we aren’t even through the first month of the year. That follows a 2022 in which about 100,000 employees of private and public tech-related companies are estimated to have lost their jobs.

This shouldn’t really come as a surprise to anyone with some seasoning. The tech industry grew exponentially during the early days of the pandemic, as the world shifted more to on-line commerce, and it was predictable that, as conditions changed and economic cycles occurred, there would be some retrenchment. What’s interesting, though, is that some of the tech leaders apparently didn’t see this entirely predictable result coming: they were confidently predicting that there had been a permanent paradigm change and the growth would continue, as one recent article notes.

And the company bigwigs weren’t alone in this view. Some young tech workers reportedly are shocked that their cutting-edge companies could–and would–lay them off; they thought they were set for years to come. Interestingly, however, their older and more experienced colleagues aren’t surprised, because many of them have been laid off before in prior tech boom-and-bust cycles.

It’s a valuable tutorial for everyone, although people seem to quickly forget the teaching: economic cycles are inevitable, retrenchment typically follows rapid growth, it’s wise to build some bad news into your business and personal planning, and confident predictions of impending future success frequently turn to ashes in the mouths of the know-it-alls who voiced them. A dose of humility and rationality isn’t a bad thing for tech company leaders–and those shocked young workers have just received a valuable life lesson that they probably will never forget.

Interesting Austin

We’re down in Austin for a visit, and our first day here reaffirms what I’ve believed for a while: Austin is one of the most interesting cities in America.

For one thing, it’s booming. Many tech companies have moved into the Austin area, and the skyline is dotted with construction cranes putting up some very interesting new buildings, like the one in the photo above. Many transplants from other states, particularly California, have followed the tech companies to Austin, resulting in Texas’ capital city dealing with an unprecedented influx of recent arrivals that has created perhaps the hottest–some might say completely overheated–housing market in the United States. If you’re trying to buy a house in Austin, coming from a place like Columbus, prepare yourself for egregious sticker shock and the frustration and disappointment of being routinely outbid by people paying far above the asking price because they also are desperate to buy a home of their own.

From our walk around downtown last night, it’s pretty clear that Austin has a very active population of youngish professionals and tech workers who are looking to have a raucous good on Sixth Street or Rainey Street on a Friday night. There’s an active nightlife, and we had dinner at a really good restaurant that was so busy we couldn’t get in until 9:30 Central Time. That’s like dining in New York City.

But the booming growth and sizzling housing market and partying is going on cheek by jowl with an obvious homelessness problem. Many intersections, highway underpasses, roadway sidebeds, and downtown sidewalks are the site of homeless encampments. The Austin homeless live in tents or under tarps, like the person in the photo above, with their possessions defining their own personal space. It’s hot here now, and it’s hard to imagine how the homeless survive broiling days when the temperature hits the upper 90s. The choice between being out in the blazing sun all day, or sitting in a suffocating tent, isn’t a good one. It can’t be healthy for these unfortunate people, and the encampments raise e, public health, basic sanitation, crime, and personal security issues. But how do you begin to tackle such a huge problem?

The photo below shows a homeless encampment right in front of the Austin City Hall building, at one of the major intersections bringing you into the downtown area. It’s not exactly the kind of image that a city would want to project to visitors, but there’s a lot of things on Austin’s plate right now. The city is trying to deal with the homelessness challenges, an obvious housing shortage, bursting at the seams growth that looks like it will continue indefinitely, a changing political dynamic, and assimilation of a bunch of newcomers into the proudly weird Austin way of life.

As I said: Austin is an interesting city.