Just recently, Forbe’s contributor Venkatesh Rao wrote an interesting piece called “The Rise of Developernomics” (follow link here), which makes some insightful propositions. The following is an excerpt from the article in question:
“Investing in good developers is such a good bet at the moment, that if you have money and you happen to find a talented developer who seems to like you and wants to work with you, you should give him/her your money to build something, anything, even if you have no really good product ideas (those are cheap; I’ll sell you a dozen for a dollar). If you don’t have money, you should offer up whatever other kind of surplus you do have. The NPV on a strong and positive relationship with a talented developer today is ridiculously high. If you gain the trust of a talented developer to the point that they are likely to drop any active gig in the future in favor of joining one of your projects, the value is through the roof. The world is your oyster, which you with your developer will open.”
One would have to read the 6-page contribution to get the full understanding of Rao’s postulate. And there is a lot of sense in it. Investing in excellent software development talent is, no pun intended, a good investment. This is true for a company small or large, engineering or not engineering in nature.
Kirschen - There is always another bubble
However, and what I’m afraid will be lost in translation is two key words that appear constantly in Rao’s thesis around the noun “software developer” – “excellent” and “talent”. It not just about hiring developers (which will include unqualified code monkeys that cannot operate without hand-holding supervision for long lest they apply “Schlemiel the Painter” algorithms all over their employer’s code base.) Rao is specifically referring to sufficiently qualified software development talent. Anything less than that will invalidate Rao’s thesis.
Unfortunately, and quite predictably in the way we Americans tend to conduct engineering-related business, this will be lost in translation. I predict that, should Rao’s “Developeronomics” actually begin to take place, it will be ZOMG LOLCAT dot-com buggery all over again. A new, glorious bubble will rise.
It will create a bubble in the sense that morons will invest tons of money in developers, regardless of talent, skills or expertise. “They” (those that can code a conditional) will be the new gold. Invest in the software gold. Go, go buy some code monkey go will be the new rallying cry of the David Lereahs, and the idiotic bovine masses will follow… with predictable results.
Yes, this will create a bubble in the sense that morons will invest tons of money in developers, with salaries and benefit packages increasing as they did before in the dot-com – remember the smug CS/MIS college grads who demanded (and still do) $60-70k salaries just to code static html? I do. The bubble and its obscene abuses will rise until economic reality will force its ponderous, Darwinian fist down their throats, with companies that existed solely for hoarding talent folding down as they should.
Zakour and Miller's take on the dot-com bubble
Granted that this lolapocalypse is harder to happen than in the that unfolded during the dot-com era (where the plan was to hoard anything with e- or www in it, hoping to bail out and cash in or be bought by Yahoo or what not.) It is harder, but not impossible. In fact, given the penchant for speculative stupidity displayed by humanity in general (and us Americans in particular), it is highly possible. I cannot wait to see the debacle unfolding as it will be quite hilarious. Yes, it will be hilarious.
Luis Espinal's CS Voodoo Blog 
Posted on December 7, 2011
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