hype_cycleEarlier this week our own Bryan Goldberg wrote a post proclaiming that “Finance lost. Tech won” where he explains why the most talented people are choosing technology over Wall Street. He brings up some good points, but I respectfully disagree that tech has won anything.

One of the benefits of being old, and I’m much older than most people guess, is that you reach an age where you were probably around during the previous cycle of hype. I was there the last time people claimed that tech had won. It was 1999 and a bunch of Gold Rush-chasers showed up in the Valley to mail 40 pound bags of pet food. In fact, I was one of those neophytes, and believe me, I had no business being in the tech space. Unless you know absolutely nothing about the history of Silicon Valley, I think you know how all of that “winning” turned out.

There are two problems with Bryan’s argument: a) It assumes that tech’s current popularity is permanent, and b) It assumes that this popularity is attracting real talent and not followers.

Let’s address the first issue. Wall Street has recently gone through its roughest patch since the Great Depression. Many bankers have been laid off, and fewer are being recruited. Yes, the people who can make the cut still have a path to riches, but that group has grown significantly smaller, and that path has become less certain in the past few years. Add in the fact that Wall Streeters are commonly portrayed as amoral villains, and it’s no mystery why investment banking is looking less desirable.

On the flipside of that, we have the tech space, where four or five blogs will write about you like the second coming of Amazon, because you mail boxes of underwear, and angel fundings are announced so often that it seems like seed money is being handed out to anyone with a Powerpoint deck. Meanwhile, Aaron Sorkin is making hit movies about starting social networks to meet girls and make billions, and people are reading about bloggers with no venture capital experience of any kind starting their own fund. Who doesn’t want to be at that party?

If tech has won anything, it’s won the battle of public image. And this “victory” will only last until the cycle winds down and the good times end.

The second flaw in Bryan’s argument is that it assumes this wave of popularity in tech is attracting legitimate talent and not just opportunists. Of course, some of the people pursuing technology are seriously talented, but the vast majority of those people would have pursued tech regardless of the popular zeitgeist.

In order to get a fair assessment, we have to consider the multitudes who are getting into tech because it’s the cool thing to do. For example, about a year ago I was asked to talk to a young investment banker who wanted to get into the tech space. I asked him why he wanted to leave what sounded like a good gig in banking and he replied, “My passion is to help start a tech company that will exit for at least $100 million.” His “passion statement” was obviously total bullshit, but he was a great example of the Gold Rush-chasers we’re now seeing in technology, the same mentality we saw in 1998-1999.

Most of these people aren’t pursuing tech careers because, as Bryan put it, “It’s a better fit for their skills and interests.” They don’t even know what their skills and interests are. Tech is just enjoying a renaissance of coolness aided by social media, a hit movie, flush angel money, and even a reality show. This is no different than what’s been going on in Hollywood for years. People don’t come to Hollywood because “it’s a better fit for their skills.” They come because it’s cool and they have stars in their eyes. And most of the people who show up in LA thinking they’re going to be the next Brad Pitt have no talent of any kind — exactly like the bandwagon followers currently piling into the tech industry.

To paraphrase the old Mark Twain quote, the reports of tech’s victory are greatly exaggerated. Eventually the bloom will come off the rose and finance or real estate or some other segment of the economy will get hot again. For now, tech is simply enjoying a good run of hype fueled by a combination of high profile successes, a few get rich quick stories, social media providing a kind of integrated PR machine, and the fact that it cost almost nothing to start an internet company.

While Bryan sees all of this as beneficial because it attracts talent, having been through the previous gold rush, I’m not so sure. If the talent we are now attracting isn’t really talented at all, then what have we really won? Perhaps just the booby prize.

[Illustration by Hallie Bateman]