Tuesday, March 25, 2008
Why Student Programmers Rant about Business Students with “Ideas”
(as inspired by this and my pledge to positively contribute thoughtful ideas with less ranting)
I understand the frustration that engineering students and fledgling programmers feel when they first experience petitions from business students with startup ideas because I’ve felt that frustration myself. It’s a social struggle for status and identity which intrinsically favors business student. The engineering student is learning that their hard work in school does not entitle him to recognition and respect, and the business student is learning that he has no means to create anything alone. So the engineer seeks somebody to reward him, and the business student seeks somebody to reward —to create greater value for himself. As students are products school, the dynamic resembles school. Once again, the student programmer will work unhealthily hard to earn a reward imposed by others (like honor students), and the business student will work less but be respected more by capitalizing on his identity as a “social leader” (like football players).
Further, as business students almost always initiate the engagement, they lead relationship dynamic —to be in their favor. Often, the justification is that because the business student approached the programmer, the programmer works for the business student. This is called “having the idea,” but in practice, a startup idea is merely a decision to execute, not an idea of intrinsic value. [1] Leadership and the ability to make decisions is valuable, but only in groups with realizable ability to execute. Leadership of zero people is like division by zero: it’s undefined. Leadership of one people is like 1/1: two people to produce a one functional person. A 1 leader / 1 follower works for an Olympic gymnast and her coach, but in a startup, it’s a frustrating waste.
Since the business student needs the programmer, why doesn’t the programmer demand control of the engagement like, for example, an investor? Because the business student sets the initial expectations of the relationship, and changing those expectations may be very difficult or impossible for the programmer. For example, assume the business student suggests 10% equity for the programmer. To counter with 90% has been maneuvered to be too aggressive and would kill the deal. Even ambitious programmers will probably counter with 50%/50% (”fair”) and then compromise down to close. But even if a deal is reached, the programmer will feel offended and abused if they first thought that they deserved the better share.
Why don’t programmers approach business people to pay them to contribute their ideas? They do, for patent licenses, for example. But if my hypothesis is correct —that most startup ideas are merely decisions to execute rather than ideas of intrinsic value— then who would pay for a decision to execute? Nobody would unless they were convinced by others that they cannot make their own decisions. And to be convinced of that, I can see, is frustrating.
Programmers have a status inferiority complex, and ambitious engineering students feel entitled for respect for their “sacrifices” in school and esoteric technical skills —an expectation rarely socially realized outside of a geeky clique. The truth is that “engineer” and “programmer” are not high social status identities (they’re for “nerds”)[2]. Compounded by the introverted, intelligent, yet naive tendencies of engineering students, programmers may intellectually recognize that they are valuable yet do not command the respect they feel they deserve. Unfortunately, they have little ability to positively confront this frustration. So these humiliated ambitious programmers vent their frustration with violent outbursts against higher status people (business people) or retreat to status-supplements like video games like World of Warcraft. This dynamic may be intrinsic to being human, but it’s still unpleasant to be at the bottom of it.
Many business students are aggressive and gregarious, many programmers are socially awkward, and most inflammatory, the business student has no money to pay the programmer. So not only is the business student equipped to abuse, not only is the programmer equipped to be abused, but the situation forces business student to try to get more work for less. He can’t afford better behavior. [3]
Traditionally, when programmers contribute their programming skills to a business, it’s called “employment.” This is the cultural norm. So business students, despite paying less, try to mimic the employee-boss relationship model like how young girls try to mimic their parent’s dinner conversations with dolls. To them, that’s what “business” is. Programmers ambitious enough to want to start a startup will resent being treated like an employee, even if they’re called a “founder” and have an equity stake. Proud but resentful becomes humiliated, and humiliated becomes irrational and violent. Hence, a violent and socially destructive programmer rant explodes onto a blog.
[1] An idea like “let’s make a Facebook application about X (in March 2008)!” could lead to the realization of that idea which can be valuable (and thus the idea itself is valuable, since it initiated the effort), but such an idea by itself seems to have about a “n/0″ value, like a leader with no followers or a donut hole without a donut. …or maybe a “n/0 + n” value.[2] Is programming and engineering lower status that business? A programmer will try learn business, but a business man will avoid learning programming. Or, successful tech entrepreneurs with a programming background become “business people,” but successful tech entrepreneurs with a business background never become “programmers.” (both groups, if unsuccessful, become “technologists.”)
Note: “trying to” is not a sufficient condition for “succeeding at.”
[3] While gregarious programmers and awkward business people exist, the model is the other way. Claiming a counter example to a generality is not relevant to this essay, particularly since I assume such a dynamic would not produce the typical student programmer rant. Yes, it’s an unfortunate stereotype, and if I could discuss it without perpetuating it, I would. But unpleasantness doesn’t make a stereotype baseless.
Daniel Tenner said,
March 26, 2008 @ 3:49 am
That’s an interesting counter-rant (although still a bit ranty).
Although the points are on the whole correct, I can’t help but get the impression that you look down on programmers, due to the bits and pieces of language that you use.
As a would-be business person, I’d expect you to develop a bit more tact. After all, that’s supposed to be your main skill. Saying someone has an “inferiority complex”, for instance, will not endear you to them - particularly if it’s true!
Also, your assumption that programmers lean towards business and not the other way around is incorrect, mainly because it’s based on the flawed definition of “business”. Business is merely the activity that turns another activity into something that makes money. As such, it is natural that anyone who wants to generate more money will be interested in becoming a “business guy”. Many hackers (e.g. paul graham) are both business guys and hackers.
As an example to disprove that statement, I have some friends who are architects and are learning to be business guys because they are starting a business. Does that mean that business is superior to architecture? Not at all. Yet if their business takes off they will likely be seen as business guys - because that’s an essential quality to start a business.
I propose the following reverse argument, deliberately made a little more aggressive than it needs to be: business students are useless. Anyone can learn business. The programmers you look down on, however, are priceless - you couldn’t learn to do what they do even if you tried, but they will learn to do what you do without even trying.
As such, I think indignation at being put in second place by an arrogant business student is well placed - and hopefully it will result in said hacker learning the business skills so that he doesn’t need to partner with any “business guys” next time.
Be nice to your hacker cofounders or they’ll find someone else to work with.
Daniel
[Daniel, I’m writing from the programmer student perspective.]
Erik Peterson said,
March 26, 2008 @ 4:25 am
As the “inspiration” for this post, I’d first like to say thanks for the thoughtful response.
I wouldn’t necessarily say this has anything to do with students or school. I’ve been out of school for a couple of years now and have been working as a developer for about 5 years.
One incident, in particular, drove most of the hatred for my original (and now replaced) rant. It involved an M.B.A. recruiting me to work for “his idea”, promising a bunch of money and a sizable stake in equity (~35%). However, once the boss-employee relationship set in, the money evaporated and the equity shrank to 5%. In the end, I wasted 6 weeks of incredibly hard work and came away with a chip on my shoulder.
The argument doesn’t really have much to do with Hackers and Business types. As you point out, it simply has to do with the fact that in a small group of people (2 or 3), there is no room for pure leaders. At that group size they merely become bullies, and the whole group is less powerful because of it.
David said,
March 26, 2008 @ 6:20 am
I think most business students, like most programmers perhaps, start with good intentions but eventually realize they can’t make the sacrifice. Superiority over nerds is a compulsory part of their social identity, and they aren’t going to cast themselves loose from the most valuable thing they have just to take a chance on a startup idea. Even if the startup succeeded and they made a few million dollars, would it be worth it if their old friends talked down to them? There’s a difference between “alpha money” and “nerd money” just like there’s a difference between “old money” and “new money.”
David said,
March 26, 2008 @ 6:34 am
Okay, the first person I showed that comment to thought I was being sarcastic — I wasn’t. I really do think MBA connections are the most valuable thing a business student has. Suppose you’re forty and the company you work for is going down the tubes. The friends you made at a top-tier business school can get you a six-figure job or seed capital. That’s security; that’s social capital. Your engineering friends can get you some interviews, sell you their old car for a discount, or maybe lend you a couch to sleep on. Not so valuable. That’s why high-status people get so scared about deviating from the norms of their social group. There’s a lot to lose. It isn’t just about having a sense of superiority.
Noel said,
March 26, 2008 @ 7:30 am
Both parties are necessary and neither is more valuable than the other, but as soon as one thinks he is the one with the more valuable skills, the relationship deteriorates.
I am an engineer and I also have an MBA and I have been exposed to engineers/programmers who could theoretically gain business skills, but from what I have seen most of them are not visionaries. Woz is an amazing engineer, but he alone could not have created Apple.
The inverse is also true. I have met many MBAs/managers who think engineers are cogs that are easily replaced. By discounting the expertise of these people they place themselves on a pedestal. I have met many of these people who also get nowhere because they alone can’t get the job done. Again, if Steve did not realize the value of Woz there would be no Apple.
I believe the startup should be split 50-50 because that signals to both parties the value of their contribution and each party understands that the other has complementary skills needed to be successful.
Ho-Sheng Hsiao said,
March 26, 2008 @ 10:41 am
While a lot of the facts in this rant is true, I think the author has way too much serious status issues.
Luckily for me, I was born in Taiwan. In America, the alpha male is the most extroverted one that everyone has to listen to. In Chinese culture, the alpha male is the most introverted one which everyone orbits around. It allows the introverted alpha male to find all the patterns around him and seize opportunities, giving him a tremendous advantage when it comes to negotiation and social engineering. I don’t suffer from an inferiority complex and I don’t consider myself as a nerd.
As other commenters have noted, startups != business. My business partner recently terminated a contract with two guys. They were frat brothers running a startup. They had almost no skills to pull off the technical end of things, though one of the guys can do some decent web designer. They tried to treat my business partner as an employee, despite the de facto contractual, 1099 relationship. When my business partner left for a better gig, they tried to screw us out of the last check we billed them. Just like they did to the last five people. Because of their experience working as *employees* of Fortune 500 companies, they claimed to have “business” experience. That’s total drek. You can have lots of “business” experience — usually meaning “business culture” or “business organization” — but there is one reason startups are much better able to innovate than large business organizations.
So while my business partner and I have run into that kind of dynamics, a programmer is not as helpless as he thinks he is. Human nature may be irrational, but that does not mean it is un-hackable. Otherwise, we would not have the jargon, “social engineering”. And since hackers are capable of social engineering — and often have the *skill* for it — not putting all that raw intellect in figuring this out is a failing of the hacker, not the business types.
In short? “Wah.”
rick said,
March 26, 2008 @ 12:05 pm
Great article. It is very true. I’m sure no business people want to deal with anything difficult, but no programmers would want to deal with accounting.
I used to tease a friend for learning a trade that will put him in a managerial position over people that do jobs that he has no idea about.
Robert said,
March 26, 2008 @ 12:39 pm
Programmers are just a commodity. The business student with the idea could get any programmer to complete his vision. The programmer on his own goes nowhere without direction. He is just a tool. Ideas are the currency. Sounds like sour grapes to me. But, the idea of paying business students for ideas is a good one. But alas, programmers will fail to follow this through. That’s why they ‘normally’ stay as code monkeys and don’t make the big bucks. Life is always unfair to the unloved programmer. As seen through their eyes anyway.
Jack Hardy said,
March 26, 2008 @ 1:00 pm
Business people don’t become programmers because doing so is too difficult.
Programmers become business people because it is really, really easy to pick up business skills.
The above statements sound demeaning to MBA-types, don’t they? Even though the above is true (as evidenced by the multitude of successful businesses started and run by programmers), it is a bit inflammatory.
So, also, is your statement that such moves indicate a superior/inferior position. But not only is your statement inflammatory, it is erroneous.
Jack Hardy said,
March 26, 2008 @ 1:02 pm
To Robert,
I think you’ve got it backwards; /IDEAS/ are a commodity. Anyone can have them. The good ones? They are had simultaneously by lots of people.
Having good ideas is relatively easy. Executing on those ideas is hard. It is hard technically, but also business-wise. Thus, the need for people with both sound technical skills, and sound business skills.
“Really, really” good skills in either area are exceedingly uncommon, and are therefore not a commodity.
Robert said,
March 26, 2008 @ 1:26 pm
I’m DO agree that technical skills are hard to learn, but sorry I respectfully disagree that business people don’t become programmers because doing so is too difficult, though that may be one reason. They don’t become programmers because it’s dull, repetitive, non-social, non-creative and you go basically nowhere. Not always nowhere, but mostly. I’m not saying that they’re not necessary and that in reality the relationship between the ideas person and the make-it-happen person should be more equitable. But it’s not, and it never will be.
As for saying having good ideas is relatively easy - absolute bollocks! GOOD ideas are gems. But you’re right really, really good skills in either area ARE uncommon and should be equally rewarded. But they’re not. Ideas bring the bucks and the kudos.
As a grotesque generalization, business students (MBAs etc) go and make it happen - ( I don’t happen to like all that they do) and programmers sit in their cubicles churning out code grumbling about how unfair it is that their brilliance goes unnoticed and unrewarded.
Sam Jew said,
March 26, 2008 @ 1:40 pm
In response to Ho-Sheng’s comment, I only agree up to a point. The social hacker is limited by the level of comprehension of human beings. Their failure to comprehend Truth is the source of this social hacker’s frustrations.
In response to the comment above, “business” dudes are a dime-a-dozen and aren’t worth shit unless they bringing cash money working capital to the table. Without that, they’re worse than worthless.
Zaika said,
March 26, 2008 @ 1:50 pm
Here is my two cents, “business people” are not necessarily people who have MBAs or a big fancy degree. “Business People” are visionaries with great leadership skills and tremendous networking experience, they are great negotiators and manipulators. It is not what you know, but who you know that makes or breaks certain ideas. That is obviously if there is a viable idea.
I have seen over a hundred startup pitches in the past year, and the ones that make it are the good ideas that are backed by a great Business Leader and a Tech Co Founder. If either one is missing it’s not going to work out, investors don’t like either one to be missing. If you get business people with an idea who are outsourcing their engineering/programming, generally it is frowned upon. If you have an engineer/programmer and no business person, investors don’t believe they could execute alone either and do all of the marketing, it’s IMPOSSIBLE.
To do a successful startup you need people who can execute, lead, network, build relationships, geniuses on the tech side, who can code and build great kick-ass products and develop ideas… It seems like it is common sense, yet a lot of people kind of miss the point. The fact is you need both, and how the dynamics of the relationships between co-founders are determined are solely up to both people.
Haha, I sort of went completely off topic.
John said,
March 26, 2008 @ 1:59 pm
Robert said: They don’t become programmers because it’s dull, repetitive, non-social, non-creative and you go basically nowhere.
It’s solitary work, that’s true. All engineering pursuits are like that. The other statements are gross over-generalizations, because software development is extremely creative work. It takes many, many ideas (good ones, too) to pull off. The better the ideas, the better the solutions. And good programmers build really good solutions.
There are corporate grunts who are “content” to sit in their cubes and do the same mind-numbing stuff day in and day out, but those people aren’t who we’re talking about in this situation.
It takes three elements to make a successful start-up: business acumen, technical knowledge, and money. It also takes ideas, but any of the three element people can have those. Smart people would recognize and place value on the contributions/ideas of their fellows, regardless of role. The rest will end up like Robert, sneering at the engineers, but never quite able to get their great ideas off the ground.
Of course I may be over-generalizing, too, but it sure sounds right.
Sam Purtill said,
March 26, 2008 @ 1:59 pm
Let’s let history do the talking.
Bill Gates - Engineer
Steve Jobs and Steve Wozniak - Engineers
Larry Ellison - Engineer
Larry Page and Sergey Brin - Engineers
Jerry Yang and David Filo - Engineers
Jeff Bezos - Engineer
Mark Zuckerberg - Engineer
I don’t think I need to say anything else…
Sam Jew (banned) said,
March 26, 2008 @ 2:07 pm
[banned]
Zaika,
It’s presumably the case that you need strength in both marketing and development. However, there’s just too many idiots in this world who call themselves visionary networking whatevers because they don’t actually have anything worthwhile going on.
When it comes to the real deal, I’m as knowledgeable about such things as anyone else when it comes to the broad strokes, but get pigeon-holed as a programmer cuz no one else got it going on like that.
The frustration for me is just all the bullshit idiots out there and especially the ones who’ve been bankrolled fat for all these years.
It is Our moral right to slaughter them and their families and snatch all they diamonds and Ferraris, yachts and private planes and whatever bullshit.
That said, money on the barrelhead is the acid test of credibility in business. Everything else is bullshit. Maybe that’s why prostitution is such a growth industry.
ccozad said,
March 26, 2008 @ 6:01 pm
“I think you’ve got it backwards; /IDEAS/ are a commodity. Anyone can have them. The good ones? They are had simultaneously by lots of people.
Having good ideas is relatively easy. Executing on those ideas is hard. It is hard technically, but also business-wise. Thus, the need for people with both sound technical skills, and sound business skills.”
Totally agree. The proof is in the pudding here: http://www.cambrianhouse.com. Lots and LOTS of ideas there, only a few are breaking through to see the light of day. The ones that are are have good balance between technical and business execution.
Talk is cheap, execution is priceless. That goes for execution on both ends.
I also think it needs to be brought up that there is a distinction between leadership and management. Management is what is taught in the MBA programs. Leadership is a tougher skill to teach and learn. Leadership is learned in the “school of hard knocks” through experiences. And to put it quite plainly some people have it and others don’t.
Just like exceptional problem solving skills (of good engineers) some people have them others don’t and it is pretty hard to gain it if you don’t.
If you put REAL leadership together and exceptional problem solving together, that is the “secret sauce”
Robert said,
March 26, 2008 @ 6:59 pm
Mr Purtill, I think you do need to say something else.
I could name you 10 equally exceptional non-engineers with huge bank accounts. Pointless though that may be.
You would also probably agree that Bill Gates and Steve Jobs were not exceptional engineers. But they are visionaries, and bloody good at marketing too.
I don’t agree with the system, but I will work with it.
All I know is the 60 engineers I work with (Half of them are top-notch, very clever guys. The other half -meh!) will keep coding and grumbling away for years, while the marketing team, the sales team and even the product management team all move up the ladder. That’s just the way it is.
Oh, and after working at Saatchi & Saatchi for 8 years (in IT) I know ideas are not a dime a dozen.
You really want money then go work in finance. The City of London shared over 40 billion pounds in bonuses in the last 3 years. That’s over 80 billion dollars shared out amongst a whole heap of suits.
ccozad - I agree with you buddy.
MentalFloss said,
March 26, 2008 @ 8:20 pm
First off, I must say that this is the most refreshing forum thread I’ve read in a long time. There was not one single flame, everyone has stated their arguments and opinions, and real progress has been made. This was such a joy to read that it’s almost surreal.
Accolades asside, I do have a few things I’d like to interject.
Many of you have stated that it should (in an ideal world) take a programmer (or one with high technical prowess), and a “business” man to create a successful start-up.
(Note: as you can clearly see, I’m on programmer side)
Try this concept on for size. Take a really exceptional programmer (who has had to learn the ways of a business socialite to some degree) and couple it with a savvy buisiness man (who has respect and a moderate understanding of technology / programming).
Now, the concept is simple. It’s a 50/50 split monetarily, of course. However, things change when it comes to the actual work involved.
Businessman:
- Maintains financials
- Aquires customers
- Aquires investors
- Has the vision / idea (although, not always)
Programmer:
- Implements the businessman’s idea
- Maintains the code to the level of customer satisfaction
- Further inovates the businessman’s idea due to higher understanding on concept (the disconnect)
Amalgamation:
- The businessman with mediocre programming skills assists the programmer with writing tools to accomodate the programmer in the end result.
- The programmer with mediocre business skills assists the businessman with the low-level grunt financials that would be required.
In this sense, the programmer becomes the leader and the businessman becomes the grunt. Just as when the tables need to turn the programmer becomes the grunt and the businessman becomes the leader.
Time goes on, businessman/programmer hire new positions as business grows. They both abstract themselves from the actual business and enjoy their time in Hawaii…
Bottom line: In order for both parties to justify their existence in the partnership, they must be able to bring equal things to the table.
That’s my opinion at least.
By the way, again… thanks for the great read.
drewyates said,
March 26, 2008 @ 8:46 pm
Perhaps angst between programmers and business students derives from that the business student’s value is at it’s minimum and will grow over time as they acquire their professional network and experience, while the programmer’s value may be near a peak depending on the work and technical expertise required to build the startup. This tends to force the business student to misrepresent his immediate value.
Given this hypothesis, it would be best to be an engineer in one’s 20’s and then transition to a more strategic business identity in one’s 30’s and beyond.
Drew Yates » Rant versus Reason Traffic Graph said,
March 26, 2008 @ 9:11 pm
[…] Rant versus Reason […]
Rob O said,
March 26, 2008 @ 11:18 pm
Fantastic article. Thanks for writing it. I am surprised at how widespread the business type abusing the programmer really is. Sucks to be us sometimes (most of the time).
An Analogy said,
March 27, 2008 @ 7:46 am
Businessman says : “I have a great idea, let’s find a cure for cancer”
Scientist, who has been through years of training, endured through countless failures and some successes in her lab, etc. has after many years discovered a cure for cancer.
Businessman cries: I found a cure for cancer … this scientist? Oh .. just a tool that I used to do it.
Sound reasonable to you?
Nicolas Mailhot said,
March 28, 2008 @ 4:02 am
Many business students have an inflated idea of their own value. Deep down they think they’ll become another Bill Gates, and that their partners on the technical side are just a step up from the rent-a-technician they see been abused by everyone.
The truth is that they’re not that much likely to become Bill Gates than their partners (you don’t raise to those levels without a lot of luck, personal qualities, and relatives to give you initial funding) and will usually end up as just another cog in the system (for example the mid-level contractor manager the customer technical contact routinely yells at). The background of hugely successful business people is very varied and the MBA bit is quite accessory (and often a late addition) to the rest of their experience.
So, do not despair! Just because some business people succeed by being very aggressive egoïstic assholes, does not mean every aggressive egoïstic asshole will succeed, and the fate of assholes without a huge fortune to redeem themselves is nothing to be envious of.
If you find out the business element of a startup does not justify its pretentions, just dump it (or leave the startup if you’re not in control). There is a life after start-ups, and failure of human management is not an indictment of the technical side (quite the contrary).
mysticbyiq said,
April 1, 2008 @ 6:12 am
remembering one of the chants from college at a “tool” school full of engineers:
“engineers: we have jobs!!!”
“biz mgt students: working for us …”
Tjerk said,
April 17, 2008 @ 1:05 am
Hahaha this makes me laugh… i really look down on business students. A friend of mine learns Mechanical Engineering AND Business Science.. And he says that business science is really easy, just a bla bla bla science.
Often people with big egos learn business science and think they are worth a lot.
But i can tell you, us software engineers (i am not a programmer, please do not call yourself a programmer) can have a high status, but it all begins with yourself… build your self asteem.. And begin a business yourself.. you surely do not need a business guy.
@ Robert,
- First of all you do not know what software engineering is,
i quote:
‘They don’t become programmers because it’s dull, repetitive, non-social, non-creative and you go basically nowhere.’
Wrong.. Software engineerings is a very complex job and is social because you must talk alot with other engineering about hte architecture problems etc.
- Programmers are not a commodity, not every programmer has the same skill.. I’ve you think programmers as commodities you are going to have uge architectural problems in your applications and you have to pay big bucks to engineering companies to fix that for you. Ideas are there enough, the skill to bring it succesfully to the market are not! You are worth almost nothing.. Seriouzly.
- It is engineerings who are going to make it happen.. Look at all the big web2.0 companies: All made by some group of programmers and hours of hard work. Look at youtube for example.
Too bad for you
Robert S. Robbins said,
April 17, 2008 @ 7:18 am
I’ve developed web applications for many entrepreneurs. Uusually their web sites fail to get any traffic or generate any business. But I get paid so I’m the only one who comes out ahead. I don’t pay any attention to their “great idea” or business plan although I do suggest improvements to the application. Recently I’ve started to implement a few modest ideas of my own for web applications but only when it is simple and I know exactly how to execute it.
Most great ideas should come from experience. For example, if you’ve worked in an industry and observed an inefficient process that could be improved upon to meet a definite need.
Johnny said,
April 17, 2008 @ 9:53 am
I was an engineer for 7 years before I headed back to school to get my MBA. Most of the comments seem to have a heavy-engineer bias or are written by “business” people who have “ideas”. I tend to agree more with the posts that talk about management and leadership skills than “ideas”.
The engineers who posted seem to have a heightened self-worth and fail to accept that many business ideas don’t require rockstar innovation on the programming side. If you want to sell pet food on the Internet and have an associated pet-related social network, the site can be pieced together with off the shelf components by engineers in Romania.
The hypothetical site would need to find an audience (marketing), advertisers or partners (bus dev, sales), manage the offshore team (management), grow enough to reach economies of scale, and find a way to create a competitive advantage that makes them different than all the other sites (strategy and “ideas”).
When businesses move to outsourced labor, costs are not always reduced, but simply transferred from engineering labor to management labor. This is a growing trend.
Now here is the other side of the argument. There are many, many, many ideas that require great technical expertise. getdropbox.com is an example of a very simple idea that has been floated around for a decade (remember Xdrive anyone?) but took a few brilliant programmers from MIT to bring it together. The “idea” has almost zero value. The implementation appears so great that it may take off without any serious business experience.
Lastly, I think that design is undervalued. For many (most?) websites, the design (usability and visual) is what makes the difference. I’ve found it very rare to find an engineer who is also a good designer, and those who are are worth their weight in gold. Did facebook because of great technology (friendster couldn’t scale) or great business (innovative idea) or great design (much cleaner than myspace)? Or just get lucky?