MasterStroke with Monica Enand & Sejal Pietrzak

The Realities of the U.S. Job Market - What You Need to Know

• Guest Co-Host Ned Renzi • Season 1 • Episode 23

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In this episode, host Monica Enand and co-host Ned Renzi dive into how tech giants like Elon Musk and Mark Zuckerberg are shaking up Silicon Valley with aggressive cost-cutting moves. We discuss Musk's downsizing at Twitter and Meta's pivot, focusing on what these changes mean for the workforce—especially young professionals navigating a tough job market.

We also break down the economic trends influencing the job market. Ned Renzi shares his insights on how long-term low interest rates have led to overcapitalization and inflation in tech. We explore how AI might impact job security across different career stages and highlight the importance of continuous learning and adaptability.

Finally, we share practical career growth tips, like choosing financially stable employers, focusing on long-term development, and finding inspirational mentors. We also suggest creating a personal board of advisors to help you navigate today's evolving job market









Georgianna Moreland - Executive Producer | Managing Editor;
Matt Stoker - Editor


Ned Renzi:

There were two sort of high profile cases to me that sort of were lightning rods on this. One was what Elon Musk did with Twitter, where he basically gutted I don't know I don't know the exact number, but like more than half the company and despite all the skies falling they kept going right, operations stayed up, all this kind of stuff. And then similar when Altimeter and Brad Gerster kind of went public with you know how you know Meta was spending money is particularly on the you know VR and stuff like that and to give religion about managing costs. And when Zuckerberg did that, I mean their stock's been on a tear. Since then. I think the rest of Silicon Valley saw that hey, we just have way too many people for what we need to do.

Georgianna Moreland:

This is Masterstroke with Monica Enid and Sejal Patrizak, and welcome to our special guest host, Ned Renzi. Conversations with founders, CEOs and visionary leaders in Technology and Beyond.

Monica Enand:

There's a lot going on economically and in the macroeconomic climate. It's like a crazy time in some ways, and I really thought it was just time for us to pause and reflect on what's been happening lately and try to interpret what's going on.

Ned Renzi:

You know, I think you're right. I kind of joked with my mom at the end of her career. She was in a business where you know. I asked her about experience and she said I have 35 years experience and it was like not a dynamic environment. I said it's kind of like one year experience 35 times, whereas where I think, being a founder, if you have one year of experience, sometimes it feels like a decade in six months. Right, I mean, there's just markets crashing, job markets changing, fundraising, m&a there's just like so many things happening at one time. So I think it's a good time for us to have this session.

Monica Enand:

Yeah, and to me it's also not just relevant for founders, but it's relevant for anyone sort of navigating the job market. You know, I have this younger person. I would have called him a kid, but now I realize he's in his 30s so I should not do that, but he was telling me so he's 30. And he was telling me that for every job that he's ever gotten in his career since he left college, he's just applied and gotten the job and he said it never took him more than a few weeks to find a job he liked. He's had multiple jobs in his career. He's never taken more than a few weeks to get them. Career he's never taken more than a few weeks to get them. He never like leveraged his network or like he just looked at jobs at companies that he was interested in, found the job, applied, got the job.

Monica Enand:

And he's recently in a transition and he had the expectation that he was going to have the exact same thing happen and he was floored that it didn't happen and he started honestly suffering a little bit of depression and he was pretty upset and he was like I don't understand what's going on. Why is this happening to me? It's never, ever happened to me before and I tried to tell him hey, you're 30. Since you've been out of college, the job market has been pretty darn good, especially, you know, he's kind of done some tech sales and he's done some business development deals, you know. So it's like for what you were trying to do, the market was crazy good and you think you have 10 years of experience, but really in one market condition and we are no longer in those market conditions. I don't know if you have. You had similar thoughts about.

Ned Renzi:

I have. I think there's kind of a cohort of people who came into the marketplace from 2009 forward where, up until COVID, everything has kind of been up and to the right. And then even during COVID, in our industry tech where you can work remote there were still way more jobs than people to do them. So I mean, from a job hunting standpoint, it was still up and to the right. I think I joked with you in a prior pod. Most of what I say is due to scar tissue that I have and I graduated in the fall of 1987 from college with an engineering degree and, if you remember, in October the stock market crashed. So I came out of college when nobody was hiring. Everybody had hiring freezes right, and in the ensuing 30 years there's ups and downs in the market. So for folks like me it's kind of a normal cyclical occurrence, but for a lot of people who, like you know, like you're saying, around 30 years old, this is a new thing for them to deal with.

Monica Enand:

What is going on? Like what do you think the main forces that are causing this change? And do you like I guess you know what's going on and then help us understand? Like what do you think Is it going to continue?

Ned Renzi:

So I think the main thing that's causing it is tech companies are starting to get the religion on managing costs and efficiency right. And I think for about you know, a decade and a half, it was growth at all costs and I could tell you a lot of stories sitting in board meetings where investors were just throwing money at founders and just, we don't care what it costs to acquire a customer or lifetime value, we'll monetize later All those stories that you hear and all of a sudden, companies have to find growth at a reasonable cost. And what is that trade-off? And a lot of it came down to.

Ned Renzi:

I'll say there were two sort of high-profile cases to me that sort of were lightning rods on this. One was what Elon Musk did with Twitter, where he basically gutted I don't know, I don't know the exact number, but like more than half the company and despite all the skies falling, they kept going right, operations stayed up, all this kind of stuff. And then similar when Altimeter and Brad Gerster kind of went public with how Meta was spending money, particularly on the VR and stuff like that, and to give religion about managing costs, and when Zuckerberg did that. I mean their stock's been on a tear since then I think the rest of Silicon Valley saw that, hey, we just have way too many people for what we need to do.

Monica Enand:

Is the why just interest rates were low for a very long time and money seemed cheap, free, or is there something more to it than that?

Ned Renzi:

Yeah, I think for over, like I said, a decade and a half, there was way too much money chasing way too few good ideas, and so you had a lot of companies that were raising money with little to no metrics and raising way more money than what they needed. And then the combination of that is because there's so many companies doing that, talent gets very diluted Right, and so instead of one company having like 20 awesome senior execs, they might have five awesome execs and say, 15 B players, because the other 15 awesome execs started their own companies Do you know what I mean? And there was this sort of dilutive effect on the market.

Monica Enand:

Okay, and why do you think interest rates were so low for so long, since we're going down this Y chain?

Ned Renzi:

Well, I mean it was really coming out of the financial crisis. I think it was needed to restart the economy. I mean, if it wasn't for government intervention and printing money, it would have been the biggest crisis since the Great Depression and perhaps bigger, and so they kind of stayed it off and as the economy came back, I think we just got addicted to low rates, elected officials and everybody else just sort of like just government pumping money into the economy. I think, as of last week I was talking with somebody. I think the government spending now is something like 30 percent of GDP, which is ridiculously high in a non-war situation.

Ned Renzi:

But it was all coming from these low interest rates, right, and so if you can't get, you know, good returns on bonds and stocks, you go into more risky asset classes. So you had more and more people going into early stage venture and you had all the sort of public companies coming down to late stage. You had the late stage people coming into mid-stage on venture and the whole market was flooded with capital. And that includes, like foreign sovereign wealth funds from overseas family offices, overseas funding these deals at incredibly high prices.

Monica Enand:

Okay, so it's all the government's fault, although I mean they were doing the right thing to kind of stimulate the economy and keep us going, and I guess the guard.

Ned Renzi:

I think they did for a while and then they did too much.

Monica Enand:

Really the thing they're trying to prevent. So let me just check my understanding with you. So like, if they lower interest rates, that's great for the economy, they're pumping money in to be invested, but the bad side of that is it can cause inflation, right it?

Ned Renzi:

causes inflation and you overcapitalize bad ideas, right? Yes, yes, and that we have seen quite a bit. I think that started playing out over the course of the last decade. But then, when COVID hit, there was another need for this infusion, so that sort of forced artificial or rates to stay artificially low, and then they did it for like one or two more tranches. Instead of just the first COVID response, there were some follow-ons that in hindsight weren't needed. It really kicked off this inflation reaction and then they started raising rates again and now you're seeing this tightening and it's trickling down to the job market finally.

Monica Enand:

Yeah, so okay, that is one backdrop, and there's monetary policy, fiscal policy as well, right, especially around COVID, some stimulus, that's right.

Monica Enand:

So that's kind of one backdrop. Then it makes me wonder okay, so now they're starting to. Rates went up and now rates are going to come down. Does it mean, like the party days are here again in terms of the job market? Because I still wonder. You know you talked about the government spending as related to GDP, like One of the ways we get out of that. You know there's a numerator and a denominator and one of the ways we get out of that is maybe increased GDP, right? And is that? Is AI going to create enough increased GDP that we don't have to worry about it, or is it, you know which one of those? So, as you look sort of to the future and what we're going, what would you say to, like, people who are in the job market?

Ned Renzi:

What should I tell my 30-year-old friend? Yeah, I think there's probably three or four questions to unpack in there. I think for the 30-year-old friend it depends on what their goals are right, like some people are in places in life, maybe with mortgages and kids, and they need income security and so for them the early stage of the market may not be right. There may be other 30-year-old people who, you know, really want to get on a rocket ship and between like 30 and 50 years old, for example, you might get three or four shots on goal right Because you start with the company you can't leave every 12 months.

Ned Renzi:

You can, but I don't recommend it, right. So if you sort of take a job and you give it three to five years and it doesn't work, you want to have three or four more shots on goal right. I think if you're in that latter camp you kind of look at it very much like a venture investor would look at it right, not like the first cohort would say what's the probability of success in income stability, whereas the second cohort will say if it succeeds, what's the probability? It could be like a world dominating company and kind of look for that rocket ship. So it all depends what your personal situation is.

Monica Enand:

Yeah, okay. So let's take that case by case, because maybe even at the end we try to figure out kind of an expected value, outcome, right. So the probability of an outcome times, you know, it's like the risk associated with the outcome, right?

Ned Renzi:

It is, but I will interject in that I think there's a flaw in that model because the expected value sort of looks at this mean distribution right, when the reality is the 130 euro we talked about once. You know, somewhere on the left end of the distribution with cash certainty, and the other one wants to be on the right tail of the distribution with this outsized return, and so I think it's really a bimodal, and so I think expected value is the wrong statistical formula to look at.

Monica Enand:

OK, ok, I'll buy that, all right. So if I'm person A and I want stability, what do you think is the? What would you give them in terms of advice? Say, they're, you know, starting a family, settling down, expenses are going up and they need to really create a steady cash flow.

Ned Renzi:

Okay, so for that I'm going to make the assumption they're in the tech industry and somewhere in the spectrum of the continuum of the startup world. It's not like they're going to go work for Microsoft.

Monica Enand:

Well, to be honest, I kind of feel like a lot of the industry has gone to tech. I mean, a lot of the dynamics that are affecting tech are affecting a lot of industries. So I mean I think that's a fine assumption, but I don't think our listeners should kind of tune out if they're not in the tech industry, because I think you know we're seeing some of the same dynamics. But go ahead.

Ned Renzi:

So I think for public companies a lot of this info is known. For private companies you kind of have to find this out in the interview. But you want to at least make sure they have enough cash that they have a couple of years of runway. If you know the wars in the Middle East and the Ukraine sort of go south and you know creates a worldwide recession, you sort of want to make sure these companies are cash rich and stable and can afford you and all that kind of stuff. I think, assuming that's the case, you still want to be with a company that's growing right, because when companies are going sideways or shrinking, there's more people that jobs need to be done and eventually you're just going to get cut. So even if you're in the stable cash situation, you still want somebody, some company who I feel is growing probably in a 10 to 30% a year reasonably consistent, consistently, and they have a reasonable competitive position in their industry.

Monica Enand:

Yeah, I'm going to plaza there because I actually think this is critical and I don't think people think about it or talk about it too much. If I look back on my career, you know the first seven years I spent at Intel the company was growing pretty significantly not so much now, but opposite thing happening. But I watched it, you know, back then grow like crazy and the opportunities I got to take on new challenges, take responsibility on, grow, try different things, take risks, were pretty incredible and, I think, shaped the rest of my life. And that's because I was working in a company that was growing. It wasn't about did I know that I had the highest starting salary Back then I optimized for I was an engineer graduating from Samu and I thought it was a cool project to be on, so that's really what I was kind of optimizing for.

Monica Enand:

But could you have optimized for something different? I don't know. A lot of people that I talk to are optimizing for their entry-level salary and I always tell people yeah, that's your static salary at entry point isn't necessarily the right thing to optimize for. What you're really trying to do is it's the net present value of future cash flows right that you're trying to optimize for, and so what that means is future cash it's a time to learn and a time to earn.

Monica Enand:

Yeah, oh, time to learn and a time to earn. Okay, actually, we'll have to dive into that a little better, because I haven't heard that. But the way I explain it is if you have growth opportunities and the ability to take risks and try all these new things, you can really capitalize on them and it's going to cause your wealth generation to be higher later. I don't know, is that what you mean by time to learn and time to earn?

Ned Renzi:

Well, I think that's right. I think you want to learn these skills that are going to be valuable and you want to be good at them and like them right and you also want to get in a situation where you have really good mentors. And so, again, I imagine Intel in the 90s when they were kind of, you know, the whole Wintel thing was up and to the right. I imagine you had really really smart, motivated people to mentor you and a lot of opportunities where, you know, when a promotion came up, you had a chance to jungle gym your way up instead of one you know career straight up ladder, like you see in a lot of traditional industries.

Monica Enand:

Absolutely. We had some of the best micro architects and software people and hardware people in the world that the concentration of them, the number of really smart people all in one place, was just insane at that time taking on kind of the next night microprocessor project and it was just a thrilling environment to be part of. You were talking still about the stable person. They should need to know that there's enough cash. Find out if the company is growing. What else would you tell them?

Ned Renzi:

I would also say work with people you like and admire. Right, Because it's a big part of your life. You're going there every day. It should not feel like a grind and there should be people there who inspire you, you admire, and they're going to mentor you and sort of take care of you.

Monica Enand:

I think that's really really good advice and sort of under. That's one where I feel like people have to be reminded. I have to be reminded, I do too Because you get in these grinds and you're just like thinking and grinding on, trying to get something done and you don't. You don't always pick your head up and sort of think about that and go like who's inspired? I like that you use the word inspire because it's like who's inspiring me here?

Ned Renzi:

I sort of comment to some of my CEOs for a different reason, but I think it applies here is we spend a lot of our life working in the business, right? You're an engineer, you're a coder, you're doing sales, whatever. You're grinding day to day, you're working these 12-hour days and six days a week or whatever it takes. But there's times where you have to step back and get out of the weeds and the trees and work on the business, right, and I tell my CEOs, like you know, we have these think weekends where they kind of go away and work on the business and have time to think without being sort of reactive.

Ned Renzi:

I think for people's personal careers that's also important to take a step back and look at that whole picture and go where am I going? Why am I going there? Do I even want to go there? You know, just sort of ask those questions who are my mentors? Who should I seek out to be a mentor? You know I'm a big fan. I build this thing I call like a personal board of advisors when I was a junior employee and I'd either find you know, I'll joke real people like you know, people in the org, or my mentor orbit and just sort of meet with them regularly. And I also had this individual board of directors where these are people that I could never meet with. Maybe it's Warren Buffett, maybe it's Jeff Bezos or somebody like that. And I say, man, if I had to present this project to them, how would I present it? How would they critique it? And I sort of challenged myself on this individual board of directors.

Monica Enand:

Okay, that's fascinating. So Sejal and I have definitely had the conversation about CEOs working in the business and on the business, but I love your application of put that in your personal life. Like anyone, you're working in your career or on your career and on your sort of career, and it has to be periodic because you wait too long and you've missed. You know you really need to pick your head up every I don't know, like quarter or two probably.

Ned Renzi:

We recommend every quarter. That's right, that's a good cadence.

Monica Enand:

I would say two quarters, and then I also have these questionnaires.

Ned Renzi:

I said my CEO is like at the end of the year and it's just sort of like a reflection and it's like you know what? What went well this year, what didn't go well? Am I doing what I want? Am I working in my zone of genius, whatever it may be? But then also we set the goals for the next year. So then the next year when they do that review, you could look back and say did I do it? And then quarterly throughout the year we revisit those.

Monica Enand:

That's great. So documenting it, having these snapshots, having these reflective questions, really sound like great practices. All right, the second thing you talked about was the board of advisors and Sejal and I have talked about that too, because having personal board of advisors this is an interesting twist. You've given it this individuals that you and I actually wonder if you couldn't train an AI on all of. If you pick Warren Buffett, I'll pick Charlie Munger and we go, okay, like I'm going to train on all the Charlie Munger stuff. And then I want to ask Charlie Munger, what does he think about this investment that I'm doing with that? Because I have those people that, yeah, that I go. Oh, I would love to if I could no longer living.

Ned Renzi:

It's funny you say that I did that like a month ago. I got on chat GPT and I said, you know, assume I'm like a CEO who has a lunch with Charlie Munger and I have fun questions. I want you chat GPT to play Charlie Munger and I started asking questions, that it spit out this advice and so like again, I have no idea how accurate it is or how you validate it, but it was a fun, fun exercise and you could do that for anybody who's you know. Obviously, if you could train the LLM on a lot of public info which he has a lot written by him and right.

Monica Enand:

Yeah, absolutely Okay. All right, I want to know something now. If you had your personal individuals, who would it be? Would it be, I assume, either Warren or Charlie, one of them, right?

Ned Renzi:

So when I did this exercise for myself, I broke it into different categories. So, like for wisdom, I put Charlie Munger. He would be somebody who, like on my personal board of advisors, his role would be like wise old counsel, right? Yep, I'll show my sports bias, but there's a guy who started a company called the Ringer, named Bill Simmons, who's built podcasts, and he's built this like sports pop culture empire. But before Ringer he did something called Grantland, and what I admire Bill Simmons for is he has a knack for talent that is undiscovered Right. And so, like, he'll find these writers that nobody ever heard of that are just fantastic. And now, like so many of them, have their own sub stacks, their own podcasts, whatever.

Ned Renzi:

And I sort of look at so much of my job as a venture person is how do I find those undiscovered gems Right? And so how does he find those types of undiscovered gems Right? Um, you could take somebody like Elon Musk, for all the pros and cons of Elon, the first principles, thinking, and like when somebody tells you something to understand who wrote that, why did they write it, what would you know? And just keep asking the whys behind that. Absolutely this idea of you know. For for me. Trained as an engineer, I'm not good at being vulnerable. I was never good at communications and stuff. I had Oprah Winfrey as one of my you know people I admire because she had a way of just communicating and building trust with people quickly and then them sharing things. That was very effective for me as a board member right that to get the CEO know the CEO as a whole person, not just their role in the company and things.

Monica Enand:

But anyhow, who would you put on yours? I think on the vulnerability. I mean, when you said that, I thought you were going to say Brene Brown and I probably would put Brene Brown. I've tried to read everything she writes, she would be great.

Monica Enand:

You know, I definitely like Charlie Munger's writings and have for a long time tried to read a lot of what he has written. You know, I don't know, I don't know if it would be useful, but like I think of Danny Kahneman as somebody who's like got good thinking and like Yuval Noah Harari, like those are like good thinkers. I guess if you try to think like who are the good thinkers, I guess those are people that would come to mind for me.

Ned Renzi:

Yeah, oh, excellent choices.

Monica Enand:

If you say, like here we are, hopefully the Fed is going to cut rates. I believe we hope it seems that way. What do you see for the future? Do you see like there's sort of this macroeconomic, okay, monetary policy thing going on, but then there's also this AI wave and innovation and they're sort of having different disruptive trends on not just tech but everything in the economy. How do you see those two things sort of playing together?

Ned Renzi:

Yeah, look, I'm not a prognosticator on these short-term things because nobody really knows. What I would say is if you think AI is a long-term wave, regardless of how jagged the market is, whether it's wars, interest rates you just look at history the march of technology is up and to the right. Maybe it's AI, maybe it's biotech. Whatever sectors you're in, it's generally going to keep going up and to the right, independent of these cycles. So I'd say, find one of those long-term waves and ride it through all these different cycles.

Monica Enand:

You know, and I agree, and it is hard to time the market, so you have to just kind of look for the wave and position your surfboard. You know, I was reading that and, honestly, I don't remember now, right now, where I read it. But I read somewhere recently that, like I don't know I'm going to make up a number but it was something like 63% or something of like, the AI companies are going to shut down, and why. Or Gen AI, and it was because of data. It was that there isn't enough good data for what they're trying to do. So this is going to be an interesting time to figure out which ones are going to go, which ones are bad ideas. Do you have any thoughts on that?

Ned Renzi:

Yeah, you know, I think you have to look at it like you would, like I said, put your venture hat on and you sort of look at these LLMs that are getting all the press today.

Ned Renzi:

I don't see any meaningful way to differentiate an LLM, unless I'm missing something. They're all training their models on the same data, they're all converging on pretty much the same answers, and so I think the only way to have any differentiation is with private data, right? And so now you see some of the big LLM companies trying to do a deal with Reddit or New York Times or somebody so they could get some of this access to private data. But you have to look at it and say, okay, am I going into an AI company? Am I in infrastructure where somebody is doing RAG? Am I in, you know, sort of a small language model where I'm on the edge of the network? Like, how do you be contrarian and correct as part of this sort of long-term wave and I'm not an AI person, like I'm not deep in AI but I do think there's some emerging vertical applications where companies have access to this private data. They do have a data advantage, and the question is like, how does a startup break into that. How do you pick the right one?

Monica Enand:

How should people feel about the future? Should short term future which I know it's hard to prognosticate about the fortune, but I mean just from a job market point of view, like, if we're talking about the job market, is it going to get better? Is it going to get stay the same, get worse? Honestly, I feel a little dour and I don't want to end on a dour note, but what do you think, ned?

Ned Renzi:

I think it's very industry and geography specific, right. Like if you're in ai or you're in a medical field like my daughter, you're a pa, you're a nurse or something there's way more jobs than than people to do them, right. But if you're in these industries that are trying to get efficient and that's you have 30 years experience and you're 50 some years old, it's going to be really tough, right. Yeah, but like I could tell you, like my son's in nashville and his neighborhood, there's 14 cranes right. So like, if you talk to kids in Nashville, it's like the sky's the limit, right. But I have friends who live in Syracuse, new York, and GE's shutting down or whatever. There's no other jobs in Syracuse, new York, so you either got to move or work remote. It's gonna be a lot tougher for those people.

Monica Enand:

Absolutely, and I think that the thing I would say to people is, no matter what your age, you've got to be willing to learn new things and try new things, because those industries that are going to get more efficient you might oh I have friends that jumped to this company and then you jump, and then six months later that's, there's layoffs there, and then you, oh, there might be something, the water might be fine over here, and then you're going Again. It's that sort of like the advice about look for the market trends, look for the waves and where they're going. Kind of think about where the puck is going and then really try to position yourself there. Because if you try to find short-term safety in an area that's trending towards more efficiency and is going to get there, you're really setting yourself up for repeated my dad in the 1970s.

Monica Enand:

So my dad came to this country as a textile chemist in the late 1960s and the textile industry in this country in the 80s, 70s, in the 70s just shut down, and so you know, my childhood is marked by we went to this company and this factory and then the factory shut down and then he got laid off and then we went to this factory and then the factory shut down and then he got laid off and we just chased factories for quite a few years where he just kept the factories just kept shutting down and it was really painful for my mom, for all of us. I I there was, you know, I think I went through six years of school where I went to like seven different schools and this I'm talking about young years like elementary school to. I went to like seven different elementary schools. We couldn't stay anywhere and you know, I think my mom finally had to say like hey, that's it, I'm sick of trying to get these In her mind.

Monica Enand:

It was jobs. These jobs are terrible, working for somebody else is terrible. So she was like we have to own our own business because that's what's going to. You know, let us control our destiny and not let them just close these factories and lay us off and constantly getting laid off. So she really leaned towards like I want to start a business and I think that's kind of the spirit of entrepreneurship in our family, or me watching my mom. But I think you know, it doesn't have to be starting your own business, but it has to be finding something where you can be in, something that's sort of up and to the right.

Ned Renzi:

Hey Monica, great summary of the job market. You know my sense is near term. It could be a little rocky but I think, like tech has been up and to the right. I'm long on America, I'm long on the economy. I think things are going to turn out fine just over maybe a little bit longer time horizon. So I'm a definite optimist in that camp. With that, I just want to thank Monica again for having me as a co-host. It's been a great time, and thanks to Georgiana and Matt.

Georgianna Moreland:

Thank you for listening today. We would love for you to follow and subscribe. Monica and Sejo would love to hear from you. You can text us directly from the link in the show notes of this episode. You can also find us on the LinkedIn page at Masterstroke Podcast with Monica Enid and Sejo Petrozak. Until next time.