Venture-backed startups can afford expensive nonsense like in-house dietitians and custom menus in gourmet food courts. Conventional wisdom holds that top-notch technical talent absolutely must have a work environment that resembles their parents' living rooms. Talented engineers can't be bothered to make their own cheap lunches at home or grab a quick pizza slice at the corner shop. Catering to these whims cultivates a perpetual adolescence among the most highly educated people in the world. It's no wonder Millennials are in love with the Affordable Care Act and other government entitlement programs. Desire for cradle-to-grave security now carries over into their Silicon Valley workplaces.
Here comes a hard-core smack upside the head for these overgrown babies. Venture capital funds have an easy time attracting investors right now because institutional investors (pension funds and university endowments) need higher yields in their portfolios to match the liabilities of their future payout streams. They can't find those yields in the Federal Reserve's zero interest rate environment. The easy availability of risk capital thus engenders VC investments in wasteful startups. Fast talkers with a cute coding idea are now populating very crowded B2B and B2C marketplaces, all because VCs need to throw money at things.
These euphoric waves in hot startup sectors always end painfully. Normal interest rates will destroy investors' appetites for risky investments. Higher rates will also destroy the stock market's bull run that would otherwise have allowed lucrative exits for even the worst tech businesses. Startups with tons of pampered employees will be nothing memories in a couple of years. Maybe their exposed brick SOMA offices can be re-zoned for affordable housing, where former tech rock stars can live once their unemployment checks kick in.
I will not miss the gourmet food or its enabling ecosystem of culinary experts. Vegetables and other healthy things are cheap. Insanely expensive spices have low-cost substitutes called salt, pepper, and butter. Healthy meal ideas are one web search away, with no need for costly food professionals on retainer. A return to financial sanity in Silicon Valley means a return to frugality. Millennials will learn to pack their own brown bag lunches.