I wrote about tech being a clown-world career before. Tech is not the only clown-world career. Clown world is far reaching. I think every company that is not making profits and instead pursues bogus metrics, such as “downloads” or “monthly active users” or “gross merchandise volume” is quite likely a clown-world operation. These companies can be small, but they can also be very large. The have in common, though, that they are fueled by fiat money and hype, and are on a quest of finding someone who is willing to hold the bag, either via an IPO or by selling the company to a larger competitor. I think the only way of dealing with this situation is nihilism.

Let me start by making a confession: I am no stranger to working in unprofitable companies, or even companies where the CEO says that they do not care about profitability. Once tech company I used to work for years ago routinely loses hundreds of millions of dollars per year. Rumors are that they are preparing an IPO because their investors are getting antsy. They need a new bagholder, it seems. In tech in particular, there are a lot of of jobs in such unprofitable companies, and they may indeed be your only chance to get a job, in particular when times are tough. Profitable companies are normally run well and they restrict hiring. They normally do not decide to just set up a new team, group, or division, and filling it completely with outside hires. If this is where the jobs are then you may have to go there.

It can take some time to wrap your head around working in a company in which the world is upside down, and money is being burned in vague hopes of somehow finding a pot of gold at the end of the rainbow. It is probably better to not think too much about this but instead have a cynical view on it. This means that you decide for yourself what you want to get out of working for such a company. You need something concrete, for instance “working as a senior engineer for two years” or “learning skill X by using it on project Y”. You should completely ignore any promises people make. This includes compensation in fake shares, i.e. shares in pre-IPO companies, as well as any promises of a promotion. The IPO may not happen, and if it happens, it may go a lot worse than you think. Further, there are various tricks the company can play to make sure that the paper worth of your stocks is a lot less than they tell you.

A very cynical view is that if the leaders of the company you work for keep talking an IPO but it somehow always get put off by yet another year, then there is probably a good reason for this. Also note that, historically, companies with strong fundamentals and fast growth used to do their IPO within a few years. Look at Google or Facebook, for instance. They did not sit around for year after year after year, talking about waiting for the right time, for this or that metric to improve, or “the market to recover”. If the company you are working for is ten years old and the CEO keeps talking about an IPO, then you may be better off dismissing such talk as nothing but marketing or, worse, a cheap motivation technique.

Any thought of having a long career in a clown-world company is probably misguided. Granted, such companies can stick around for a surprisingly long time, even beyond a decade or two. One company I am thinking of is Wayfair, which has been around since 2002. It seems they only made a profit in a single year, in 2020, and otherwise just burnt investor money. At some point, this will have to end. Such madness was enabled via ZIRP, but this phase is over. Consequently, a lot of companies are on borrowed time. You should therefore have a good understanding of where the company you work at stands. See if you can figure out how much funding they have and how much money they probably burn every year. This gives you the “runway”, i.e. the time they have until money will run out. A simple back-of-the-envelope approach for getting such an estimate for a private company is to assume that each engineer costs $100k/year, and everybody else $75k/year. Then take the recent funding round, and divide that number by the estimated annual payroll expenses. If you work for a publicly listed clown-world company that does not make any money, such as Wayfair, then just look up the last few annual reports, write down the annual losses, and see if there is a trend line. Then you compare this figure with the cash remaining in the business as well as any upcoming debt obligations, and you can get a decent understanding of how much time there is left. None of this is precise, but you do not need a precise number. However, you need to know if you have, for instance, only a year or two left or perhaps five years or more.

To grow your career in clown world, you can use the aforementioned method and deliberately target companies that have enough money for a certain number of years and then you keep jumping ship. There is even a good chance that you can get a bigger job title by changing your employer because sometimes that is part of the compensation, i.e. they may pay you less than a senior engineer would get somewhere else, but you get the senior-engineer title, which you can use to embellish your CV, and likely you will also get the chance to work on more challenging projects.  This approach works a lot better in tech than in other industries because there is not much of a penalty for short job tenures. Obviously, if you have had multiple stints of less than a year, you probably want to stick around a bit longer at some point, but you will find a lot of people who jump ship every one to two years, sometimes even collecting sign-on bonuses in the process. These people treat their employers as a short-lived vehicle to advance or extend their career, nothing more. In clown world, this is the only plausible approach.