Siliconned - Emmanuel Maggiori

Oct 14, 2025

Author: Emmanuel Maggiori, PhD
Title: Siliconned
Edition: Applied Maths Ltd. 2024, 230 pages (eBook)
Language: English

“How the tech industry solves fake problems, hoards idle workers and makes doomed bets with other people’s money”, is both the subtitle and a first overview of the contents of this book. Its author, Emmanuel Maggiori, PhD , knows what he is talking about: Maggiori not only holds a PhD in Computer Science, but can also point to his academic work in the areas of deep learning, machine learning and artificial intelligence as well as his long-term work experience in the tech industry, both in start-ups and large companies like Expedia and Vodafone.

Maggiori had previously shared the frustrations and disappointment that this work experience entailed in a viral article . There he describes the widespread idleness and unproductivity which are constants in the everyday work of many software engineers, as well as his observations that the tech industry has a tendency to fall for unreasonable hypes and nonsensical rituals, while money never seems to be a problem but basically available in unlimited amounts.

In the book at hand, the author builds on these observations and performs a deeper analysis. He is looking for an answer to the question, how this worrysome state of affairs could develop and establish itself in the first place and why the tech industry is plagued by regular, almost periodical cycles of excess, of burning money and indulging in megalomania, with the inevitable crash never far away. Rinse and repeat. Aside from the contemporary sudden and drastic cost cutting measures and mass layoffs that hit the tech industry in the last years, the infamous “dot-com bubble” of the late 1990s is named as a predecessor and similarily the author does not predict a bright future with a happy ending for the current soaring hype around AI.

The problem areas

The subtitle of the book indeed falls a bit short, as the book not only entails a criticism of the tech industry, but devotes significant room to scrutinizing the world of finance and financial policies in general. During its course, it becomes obvious that Maggiori has good connections to entrepreneurs and financial investors as well. This enables him to criticize not only the happenings within “the industry” from the point of view of an experienced software developer, but also to take a closer look at worrying trends among start-up founders, venture capital and economic and financial policies.

The book is structured around six chapters, with the first two chapters focusing on the decidedly strange project ideas, planning processes (or lack thereof) and general behavior of many start-ups in the field of software development.

1.) Start-ups with shortsighted planning, misguided strategies and outlandish products

“It sounds obvious that you should only work on problems that exist. And yet by far the most common mistake start-ups make is to solve problems that no one has.” ~ Paul Graham, p. 25

Maggiori uses the example of a number of impressively absurd and comical start-up ideas to illustrate his criticism, that many start-ups completely ignore the existing realities of the market as well as the needs and problems of their target customers. Instead they try to push products that nobody wants or needs, that simply cannot work and which would require a miracle to be successful.

The fuel for this “belief in miracles” is the hope to land the “next big thing”, something unseen and unheard of that will revolutionize an entire industry, establish market dominance and and result in marvelous profits in the vein of giants like Amazon, Google or Facebook. Nothing less seems acceptable, nothing else will do.

The author jokingly distinguishes the belief in market miracles (an existing market as well as the behavior of the competition and the customers would have to completely change overnight), technical miracles (instead of working on research for a technical breakthrough, the “believers” act as if it had already happened or will somehow magically happen by itself) and people miracles (if person X founds/leads a business, then success is automatically guaranteed by virtue of charismatic personality/previous job history alone).

Maggiori is also highly critical of the fact that most start-ups never bother to develop a moat. This term, which was coined by Warren Buffett, refers to a protective effect in form of a competitive advantage, which safeguards a business from copycats and competitors, who will inevitably pop up in great numbers as soon as a new product or service starts to become successful.

Instead of working on genuine moats like the network effect or a high switching cost, many start-ups either do not think about this concept at all or cultivate a feeling of safety because of an illusionary moat. Like the 10x illusion (the product/service is assumed to be at least ten times better than what the competition has to offer), the scale illusion (the size or financial power of a company is supposed to safeguard against competition) or the brand illusion (a well-established name will fend off competition). The author describes several cases which prove that these presumptive moats are in fact no moats at all and that the current top players in the industry are very well aware of that too.

Another point of criticism is that the only strategy that many start-ups seem to know is an excessive focus on growth, growth at all costs and as fast and explosive as possible. According to Maggiori it is a misconception that start-ups have to collect millions of dollars from investors as soon as possible. This is described as being treated almost like a rite of passage and a “must have” by many founders, without spending any time or thoughts on developing a concept how their start-ups will ever become profitable in the long run. Instead all hopes are placed on a miracle once again. Maggiori points out how common this behavior is among start-ups, especially those based in Silicon Valley and how even established big players like Spotify, Uber, Fiverr and the likes survive only thanks to yearly financial injectons by investors, while these companies themselves only generate enormous losses and are constantly operating in the red, year after year.

2.) Venture capital and financial policies create wrong incentives

“Doesn’t anyone do due diligence anymore?” ~ Financial Times, p. 95

The crucial third chapter deals with the question why many start-ups are readily supported with millions of dollars and frenetically praised by investors, despite business ideas that are plainly and obviously absurd, despite ignoring the realities of the market and the needs of customers, and despite displaying an obvious lack of strategy and sound planning. The most important investors are venture capital firms (VC), which create and nurture wrong incentives for start-ups, because they themselves profit from wrong incentives.

Maggiori explains how VC firms make their biggest profits not by successful investments, but by collecting millions of dollars in fixed management fees from their funds. These funds consist of the combined capital of various organizations, businesses and individuals, who invest their money into one or more funds of a VC firm, so that the latter can re-invest it in order to generate a profit. The larger the sum of a fund, the larger the management fees the VC firm can demand. These fees are independent of the success of the VC firm’s investment decisions and are required to be paid even in case of investments that result in a complete loss of their clients’ money.

This makes it easy to see how prudent investment strategies with realistic chances for generating profits have become a thing of secondary importance for the VC firms. Instead there is a clearly discernable focus on building ever more and ever larger funds. This, as well as the existence of contractual non-disclosure obligations that the investors have to sign if they want to partake in a VC fund, combined with the fact that the firms are very reluctant and opposed to the idea of publishing tangible numbers in regards to the profits their investements generate (all the while praising themselves for generating profit margins that are as spectacular as unverifiable) should sound all alarm bells.

However, Maggiori convincingly portrays how VC firms, which he calls “masters of storytelling”, are highly proficient in working with artifically generated hype and the fear of missing out ("FOMO"), referring to the fear of investors to miss out on something really big that could win them enormous profits. Riveting storytelling, charismatic founders and rampant hypes are seen as perfect tools by the VC firms in their quest to collect ever higher investments for their funds. And there is no other industry like the tech industry, which can evoke such compelling visions of the future and promise such overwhelming profits, while keeping the costs of production and operating costs so low in comparison to other lines of business.

At this point an explanation suggests itself for the fact why charismatic boasters like Adam Neumann and others, or even criminal scammers like Sam Bankman-Fried were not only readily provided with millions of dollars, but were downright celebrated, glorified, and hyped up, why they were so popular with VC firms and why they sometimes still are. Here we have an explanation why founders of start-ups that crashed heavily and went bankrupt, like it happend with Adam Neumann’s start-up WeWork, are once again embraced with open arms by VC firms and readily supported with millions of dollars all over again for yet another questionable project. What matters is that they can still hold an audience captive with their personality and their stories and generate hype and FOMO once again. Maggiori mentions the cynical “Greater Fool” strategy, meaning that start-up founders and VC firms team up to look for a “greater fool”, someone who can be deceived into buying all these completely overrated business conecpts and shares or who can be talked into making a substantial investment.

The following chapter shows why it can sometimes feel like there is unlimited money in circulation and why there is so much readiness to invest in high-risk VC funds: as an “antidote” for economic crises like the crash of the “dot-com bubble” or the 2008 financial crisis, the central banks, supported by national governments, implemented a policy of low interest rates, also called ZIRP (“zero interest rate policy”), which made it easy to take out loans. Additionally the exacerbating measure of quantitative easing (QE), the acquisition of government bonds and shares by the central banks on a massive scale, in order to introduce more money and liquidity into the market, had an additional effect: it led to sources of investment which were previously safe (yielding reliable if unimpressive profits), like interest rates on saving accounts and low-risk bonds and shares becoming largely unprofitable, this way enticing investment in more risky alternatives that have the potential for bigger profits.

Those who are interested in economic theory will be pleasantly surprised that at this point Maggiori introduces theories critical of mainstream economics like the Austrian school and Neo-Keynesianism, comparing them to the economic theories that dominate the academic and political discourse and explaining the decidedly different views that these theoretic schools have about the causes of and solutions for the recurring economic crises of the last decades.

The chapter closes with a criticism of the downright happy-go-lucky attitude when it comes to governments granting taxpayers’ money to tech start-ups in the form of subsidies and grants that do not have to be repaid. Maggiori is able to illustrate from personal experience how the European Union is exceedingly generous, swift and unbureaucratic when it comes to supporting tech start-ups with taxpayers’ money. It does not matter if the business ideas of these start-ups are obviously and foreseeably doomed from the beginning, as long as there is generous mention of desirable buzz words like “environmental sustainability”, whether their mention make sense or not.

3.) Demotivated and unproductive at work thanks to agile development methodes

“[W]ork expands so as to fill the time available for its completion.” ~ Cyril Northcote Parkinson, p. 144

The second to last chapter is strongly inspired by the author’s aforementioned viral article. It is also likely to be the part of the book with the highest level of personal recognition for anybody who has worked in software development before. One part of Maggiori’s criticism is the practice of “hiring sprees”, the hiring in advance of software engineers while a company does not have enough work for them - and indeed sometimes not even a plan on what they should actually work.

While getting paid for being idle might sound like a dream job at first, Maggiori points out that on the one hand this will create (justified) feelings of resentment among the rest of the working population where real work is done. Additionally, in the long run this state of idleness will do a lot of damage not only to a software engineer’s motivation but also to their future career prospects. The same goes true for working on obviously futile and doomed projects, which will neither raise the motivation or self-esteem of developers nor lead to any tangible results that look good in future job applications.

Another big point of criticism is the so-called Agile methods of software development. While Maggiori agrees that the principles of agile development - develop and release a minimum viable product (MVP) early, then improve it continuously with frequent updates and feature releases and in close coordination with your customer - are very sensible and useful, he is critical of the rigid, dogmatic rules for how everyday work should be organized, according to agile frameworks like e.g. Scrum.

These rules are anything but agile and flexible and lead to a lot of “meta work”, such as meetings that drag on for hours on end, review discussions, daily briefings about topics that are entirely irrelevant for the majority of participants and drawn-out debates about every single small step, all of which takes time away from getting real work done.

Maggiori also demonstrates how agile rules like e.g. the one demanding that new features have to be developed and then released in an interval of two weeks (so-called “sprints”), lead to task bloat: software developers estimate their upcoming tasks to be much more difficult and time-consuming than they really are, in order to have a large enough time buffer to ensure that they will definitely be able to complete the task. This is practiced as a means of self-protection, instead of taking on too much work and having to turn up with empty hands at the end of the sprint.

This way, tasks which could be completed by a single person in one or two days of work (or even within a few hours), are inflated to monumental challenges which “require” several weeks and software engineers for completion. According to Maggiori, this problem is inherent in the agile set of rules and will reliably take hold of engineering teams, even if they start out motivated, all the more since it is quite hard for a non-specialist to assess the actual amount of time and work needed for a software feature.

Proposals for solutions

In the last chapter of the book, Maggiori proposes solutions for all the problems described so far. For start-ups the logical advice is to change their focus to solving real and existing problems of customers while paying attention to the existing realities of the market, in order to avoid pursuing pipe-dreams based on a “belief in miracles” and in order to become profitable and self-sustainable in the long run, with a clear competitive advantage to fend off copycats and competition.

In contrast, the proposed solution for the excesses of venture capital firms and the policies of central banks and governments seem a bit helpless. Maggiori himself admits, that from the point of view of the VC firms there is no need for change whatsoever, since the firms are very successful with their current methods and generate big profits for themselves.

Similarly, Maggiori admits that a change of mind in regards to financial and economic policies is rather unlikely. Integrating alternative schools of thought with their explanations and suggested solutions for economic and financial crises into mainstream theories and policies is prevented by the poisoned culture of debate between the mainstream camp and alternative factions like the Austrian school or Neo-Keynesianism, where personal animosities and embittered accusations run deep.

Concerning the oftentimes frustrating and unproductive everyday work of software developers, Maggiori advocates taking the principles of Agile software development to heart while steering towards more flexibility when it comes to their implementation in structuring the work day: ridgid formulas and appointed rituals should be replaced by consultations and discussions whenever truly needed, as well as a focus on implementing important features instead of working through a backlog in fixed sprints.

Final verdict

I can recommend this book in good faith not only to those who have a background in software development or similar experience in the tech-industry, but also to everyone with an interest in start-ups, economic theories and the world of finance in general. Also to everyone with an open mind for critical voices in an industry, which is notoriously optimistic, perpetually hyped up, and generally praised as the bearer of a glorious future and blissful progress.

Maggiori succeeds in painting an impressive portrayal of the instability and the problematic tendencies within and around the tech industry. He knows what he is talking about, obviously did throrough research on the different subject areas and bases his arguments on facts and tangible numbers and examples.

All the while his writing style is never dry, boring or lecturing, but vivid and entertaining to read. Personal anecdotes and bizarre episodes from the world of start-ups provide for moments of head-shaking and laughter likewise. My personal highlight of absurdity is the story of the start-up Juicero, which pursued the “daring” business idea of a “high-tech”, Wi-Fi controlled juicer for the small asking price of $699 per unit, with an additional cost of $5-7 for each capsule of fruit pulp on top - and which was supported with $120 millions by investors.

In my opinion, the depiction of the relations between the worlds of start-ups, finance and financial and economic policies is a major strong point of this book. This way we are presented with “the big picture” and it becomes clear that the misery which is described by the author has many fathers - and profiteers - and could only emerge from an interplay of different wrong developments and wrong incentives in different areas. If I were asked about weak points of the book, only Maggiori’s proposed solutions come to mind.

They are all well-intended and at least a change of direction towards a more rational and realistic approach to planning is conceivable when it comes to the basics, the goals and target audience of newly founded start-ups, as well as a rethinking of the rigid and dogmatic rules that structure the work day in Agile software development. These improvements could happen out of economic necessity, after the years of plenty with a seemingly unlimited cash flow appear to be over for the time being. However, a change of mind among VC firms, central banks and politics is siginificantly less likely, as the author himself admits. But of course this can not be blamed on the author and for my part I have to confess that - presumably like most of us - I do not have any better or more realistic suggestions how politicians and investors could be made to see reason.

The portrayal of the tech-industry and its surrounding sphere is sobering, not only because of the historic examples which we can draw from so far, but also because of the predictable “eternal recurrence of the same” if things do not change. The current excessive and hysterical hype around “artifical intelligence” is a telltale sign, the writing on the wall is clear that once again we are facing a speculative bubble fed with tremendous amounts of money while being completely detached from reality and reason.

Emmanuel Maggiori, being an expert for AI by trade, wrote another book specifially on this phenomenon. That will be the topic of my next book review.