The EPIC Cycle: When Winnie-the-Pooh Meets Silicon Valley Economics
We live in fascinating times. The stock market soars while the most profitable companies lay off workers in droves. Career dreams shatter as established models of success and corporate values crumble in broad daylight, even as market caps hit all-time highs.
In this post, I'll share my personal—admittedly unscientific and data-light—perspective on what's happening and, more importantly for those affected, what to do about it. My insights come from two sources I trust: decades of industry experience and solid common sense.
Let's assume most decision-makers are psychologically stable and are not conspiring against humanity in smoke-filled rooms. If that's true, then this chaos has rational reasoning behind it—note I said rational, not necessarily correct. Now let's examine what's unfolding in our beloved industry.
The Pattern Emerges
Throughout my software career, I've witnessed several seismic shifts that forced companies to fundamentally change how they operated: personal computing, networking, the internet, browsers, and business intelligence, to name a few. Across these transformations, I've detected a consistent behavioral pattern I call EPIC—Exuberance, Panic, Ideation, Creation.
This isn't company-specific behavior; it's human nature applied to the software industry. These patterns appear throughout life—I've simply adapted them for our context.
Stage One: Exuberance
Here's where the noise reaches fever pitch. Gurus multiply like rabbits, pontificating, elevating, proclaiming. They invent buzzwords and tell you how to revolutionize your life. Executives and financiers sketch upward-trending charts while market analysts craft predictions backed by cherry-picked historical data, promising riches if you just buy the right stocks and invest in the right technology.
This isn't entirely without merit—it's just emotion running hot, characterized by massive overinvestment in whatever technology currently holds the spotlight. It's prime time for marketing teams, PR agencies, bloggers, forum warriors, and politically savvy corporate climbers. LinkedIn event photos multiply, YouTube explainers proliferate, TikTok shorts flood feeds.
Stage Two: Panic
This is our current location. Company leadership realizes their grand hopes won't materialize. Whatever was hyped won't generate the promised revenues within the assumed timeline. Those who funded the vision politely request results, then start asking less polite questions.
Companies pivot to Plan B because something prevents them from achieving Plan A—classic Winnie-the-Pooh logic. They discover that talking about innovation doesn't make it appear, and that code quantity doesn't transform into product quality. This is when the economist in all of us has that uncomfortable "aha!" moment.
Cost-cutting isn't inherently evil, but it's unclear whether it produces better products, superior AI, or improved lives. Welcome to the Winnie effect in action.
Stage Three: Ideation
The most interesting and rewarding phase for many. Companies realize that random layoffs, rebranding exercises, and motivational posters plastered across campuses don't create products. They start thinking seriously about attracting and retaining talent, considering design, understanding customers, and building proper architecture.
This phase is coming. When former epidemiologists and geopolitics experts who morphed into AI gurus move on to their next clickbait subjects, the industry will finally invent something genuinely valuable.
Stage Four: Creation
The most economically satisfying stage. The industry grows again—not just in market cap, but in real products that people actually use and benefit from. Some companies won't survive to see this phase, but we'll witness genuine innovation. Remember mobile phones, apps, cloud services, and ubiquitous internet connectivity. Blockbuster vanished, but Netflix and other streaming platforms emerged.
Where We Stand
Major tech companies are firmly in EPIC's second phase, hence the widespread layoffs. There's genuine pressure to act, but nobody knows the right answer, so companies default to what they always do during uncertainty: cut costs. They also champion "flattening organizations"—though given human nature, we'll see how long that lasts before reverting to traditional hierarchies.
What Can You Do?
Two words: learn and adapt. Change is inevitable. Remember that AI and everything surrounding it is just a tool. It will profoundly affect how we live and work, but not in the ways currently being discussed.
How do I know? Empirical experience. Every new technology begins with promises of radical transformation but results in significant improvement while leaving fundamentals intact. Most importantly, it's completely learnable and not particularly difficult. The underlying mathematics may be complex, but for 99% of industry professionals, it can safely remain a black box.
Few people understand internal combustion engines, electric motors, or short-wave radio technology (aka cell phones), yet everyone uses them successfully. Nobody—except a few unfortunate geeks—thinks about Einstein, Heisenberg, or Schrödinger (the cat guy) when using GPS.
So, fear not and carry on! This too shall pass, and like every previous technological wave, we'll emerge stronger and more capable. The industry has weathered these cycles before—from the dot-com crash to mobile disruption—and each time, we've built something better. Keep your chin up, stay curious, and remember: every expert was once a beginner. The future belongs to those who adapt with confidence and a sense of humor.
In future posts, I'll explore AI and its effects in greater detail.
This analysis represents personal observations from decades in the software industry. While not backed by hard data, it's grounded in pattern recognition and practical experience.