6 ms·

Bay Area attracts the most startups – but NYC, Boston, and LA are catching up

27 points by jimschley 10y ago

soared 10y ago
> Quality of life drives entrepreneurial activity Err... no, sorry. That is obviously not true.
- BadassFractal 10y ago
  Agreed. You're going to be sitting in a scrappy office for the next 5-10 years of your life, why does "quality of life" matter? You're not there to retire. I do care about conveniences like access to instacart / uber / maid services / munchery though, as I don't have time to do any of that stuff since I'm working all the time.
  - Koshkin 10y ago
    But: these 5 - 10 years will be the best years of your life (as you'll think of them later)...
- lintiness 10y ago
  then maybe it's imagined quality of life. there's a reason chicago with its budget woes, gun violence (overblown), and terrible weather can't attract the same kind of talent; it's not population or top school / student vicinity.
projectramo 10y ago
Hard to see them catching up since we don't see a trend over time. Very curious about why people believe the cost differential between SF and, for instance, Austin, hasn't driven more business to Austin to reach equilibrium, and why SF continues to be so dominant compared to the others.
- findjashua 10y ago
  Startups go where the money is. For Austin to attract startups, I think it needs to provide access to VCs at par with sfba.
  - projectramo 10y ago
    Shouldn't the VCs move there because the startups are cheaper because everything costs less and your $ go farther?
    - findjashua 10y ago
      I'm not sure if expenditures related to location make a significant part of a startup's valuation
      - projectramo 10y ago
        That's true. I didn't mean it in that direct sense. I just thought if a VC invested the same amount of money in 10 startups in Austin, they would last longer, develop more product, explore more and therefore be, on average, more successful.
- rdl 10y ago
  The single biggest problem with Austin is the VC situation. AV became a "growth" fund, and nothing has really replaced it. When Seattle has a better VC community than your city does, it is a problem. Without VC, Austin remains a great place for the engineering offices of tech companies from elsewhere, but until there are more angels and VCs in Austin, probably not the best place to start a company.
  - projectramo 10y ago
    You're saying they need truly early stage investors. I wonder if the SF investors are willing to be more risky because $100k feels like so much less money. In Austin, that used to be an apartment in the burbs.
rconti 10y ago
The Bay Area is #2 even though we can't get gigabit internet??
- mikeyouse 10y ago
  Large swaths of the Bay Area can get gigabit internet.. especially at offices where the startups will be performing their work. I'm at a non-tech company with ~100 employees in the Presidio and a speedtest runs at 220mbps. There's been a slow roll-out to consumers, but much of SF is now covered by Webpass, Sonic, Monkeybrains, etc. Even Comcast is offering multiple-hundred mbps cable internet now. The number of techies who are materially impacted by 200mbps vs. 1,000mbps is so small to be irrelevant when talking about regional startup trends.
mmanfrin 10y ago
If I had a dollar for every article about how [some locale] is [some vector approaching] the Bay Area for [tech attribute], I'd be able to afford a nice apartment in SF.
- LukaAl 10y ago
  "I'd be able to afford a nice apartment in SF" is the new "I would be rich"
  - DarkTree 10y ago
    And I wish it was hyperbole
    - WalterSear 10y ago
      It has been, for some parts of the city, up until the last few months. Very pleasant and yet unfashionable areas, like the area around the Excelsior, McClaren park and the Crocker Amazon, have been mostly being ignored by hipster and techbro alike. (Prices started rocketing these last couple of months, though, after 5+ years of ~5% price increases) It's rather bemusing, considering all the shit and blood being hurled around. There's, no question, a >lot< of people quietly suffering are a result of the housing crunch in SF. But it's hard to look outside my window and not question how much of the noise is being made by entitled children squabbling over fashionable digs in the same four blocks of the mission. I even had one prospective roommate who asked me to see my mail in order to 'prove' my zip code was actually a San Francisco one.
      - DarkTree 10y ago
        I just moved here a couple months ago and am currently searching for apartments. There is no doubt that most people complaining of the prices are competing for housing in the most desirable areas. However, if an area isn't desirable to live in, it quickly slides into very undesirable, for example, the Tenderloin. Is it livable? Yes, but for people who aren't used to living around a bunch of drugs and homeless people, it can look pretty daunting.
epoxyhockey 10y ago
The x/y axis labels are flipped on the trends in exit volume graph.
Alex3917 10y ago
These lifestyle metrics are pretty dubious. Supposedly NYC is at the bottom of the list, but it's possible to live a pretty good lifestyle here even with a minimum wage job. If you and your partner both make minimum wage for exempt employees in NYC ($70,200) then that's enough to afford an 800+ square foot apartment with good public transit access in safe, walkable neighborhood with plenty of food and recreation options. And that's without spending more than 25% of your income on rent, as is recommended. Sure, maybe you could theoretically do better in Denver, but what's the point if NYC is the 'least livable' city and it's already more than good enough.
- cylinder 10y ago
  What are you talking about? $9 is the minimum wage. That's $37k per year combined for two people. I assure you minimum wage workers are not living good lifestyles here, even in The Bronx (where most of them live).
  - Alex3917 10y ago
    The minimum wage for exempt employees in NYC is $675 per week, so for two people that's $70,200. https://labor.ny.gov/legal/counsel/pdf/administrative-employee-overtime-exemption-frequently-asked-questions.pdf https://labor.ny.gov/legal/counsel/pdf/administrative-employ... (If you take outside funding for your startup, that's going to be the minimum you're allowed to pay yourself, and statistically it's unlikely that your spouse is going to be making less than that.)
    - bskap 10y ago
      That's the minimum wage where your employer doesn't have to pay overtime if you work more than 40 hours a week, not the minimum wage an employer is allowed to pay you. It seems kind of silly to say "sure, you can afford a decent lifestyle as long as you have two well-paying jobs".
      - __derek__ 10y ago
        We're talking about technology start-up hubs. Like it or not, this is the relevant comparison population. People creating those companies and their partners are unlikely to be working hourly minimum wage jobs.
ComteDeLaFere 10y ago
Not sure the college degree chart is correct. Roughly 1/3 of the 25-34 age group nationwide has a college degree, but according to this, D.C. leads the list with 8.1% of the total city population aged 25-34 with a degree. Am I reading this wrong? See https://nces.ed.gov/fastfacts/display.asp?id=27 https://nces.ed.gov/fastfacts/display.asp?id=27
- oabm 10y ago
  I believe it's the percentage of the total city population that are both 25-34 and have a degree. Not the percentage of 25-34 year-olds with a degree.
cpprototypes 10y ago
I think LA has a lot of special advantages that other regions don't have: 1) It has the same strong CA protection against non-competes as Bay Area. 2) Starting to develop some big and significant "anchor" tech companies such as Snapchat. 3) Surrounded by good universities (UCLA, USC, Caltech) 4) Main tech hubs are Santa Monica and DTLA. These will soon be connected by a new rail line (opening this month) 5) Housing is expensive, but not as bad as Bay Area. And rail line should greatly expand cheaper housing options while being able to work at a tech hub.
- dmode 10y ago
  Also, significantly closer to Bay Area than other tech hubs. With a gazillion flights between the region
  - RangerScience 10y ago
    Also, weather. And arguably affordable housing - you can at least trade commute for housing, if you want to live ~20-30m south of the 10.
    - x0x0 10y ago
      And by affordable, you mean look how far your million dollars can go! I kid (kind of...)
- kec 10y ago
  Well, devils advocate: 2, 3 and 5 are all true for Boston and have been for years. Massachusetts does allow noncompetes, but at least anecdotally no one I know in the Boston tech/startup scene has been required to sign one.
- donretag 10y ago
  Is there a tech hub in DTLA? I cannot think of a single company. There are companies in Pasadena, Glendale, Burbank, Hollywood (all combined are still less than the westside), but DTLA seems to have nothing of note.
hacknat 10y ago
These articles are so zero sum. Increased economic activity in one geographical area might be one of the most text book cases on non-zero-sum growth. Why compare yourself to something else? I guess there's a bit of a competition for talent, but American mobility is going down, so it's really on these geographical locales to take advantage.
cloudjacker 10y ago
Bay Area's benefit is the diversity of VCs. This will continue to be a circular inclusive self fulfilling prophecy.

27 points by jimschley 10y ago

soared 10y ago

> Quality of life drives entrepreneurial activity Err... no, sorry. That is obviously not true.

BadassFractal 10y ago
Agreed. You're going to be sitting in a scrappy office for the next 5-10 years of your life, why does "quality of life" matter? You're not there to retire. I do care about conveniences like access to instacart / uber / maid services / munchery though, as I don't have time to do any of that stuff since I'm working all the time.
- Koshkin 10y ago
  But: these 5 - 10 years will be the best years of your life (as you'll think of them later)...
lintiness 10y ago
then maybe it's imagined quality of life. there's a reason chicago with its budget woes, gun violence (overblown), and terrible weather can't attract the same kind of talent; it's not population or top school / student vicinity.

projectramo 10y ago

Hard to see them catching up since we don't see a trend over time. Very curious about why people believe the cost differential between SF and, for instance, Austin, hasn't driven more business to Austin to reach equilibrium, and why SF continues to be so dominant compared to the others.

findjashua 10y ago
Startups go where the money is. For Austin to attract startups, I think it needs to provide access to VCs at par with sfba.
- projectramo 10y ago
  Shouldn't the VCs move there because the startups are cheaper because everything costs less and your $ go farther?
  - findjashua 10y ago
    I'm not sure if expenditures related to location make a significant part of a startup's valuation
    - projectramo 10y ago
      That's true. I didn't mean it in that direct sense. I just thought if a VC invested the same amount of money in 10 startups in Austin, they would last longer, develop more product, explore more and therefore be, on average, more successful.
rdl 10y ago
The single biggest problem with Austin is the VC situation. AV became a "growth" fund, and nothing has really replaced it. When Seattle has a better VC community than your city does, it is a problem. Without VC, Austin remains a great place for the engineering offices of tech companies from elsewhere, but until there are more angels and VCs in Austin, probably not the best place to start a company.
- projectramo 10y ago
  You're saying they need truly early stage investors. I wonder if the SF investors are willing to be more risky because $100k feels like so much less money. In Austin, that used to be an apartment in the burbs.

rconti 10y ago

The Bay Area is #2 even though we can't get gigabit internet??

mikeyouse 10y ago
Large swaths of the Bay Area can get gigabit internet.. especially at offices where the startups will be performing their work. I'm at a non-tech company with ~100 employees in the Presidio and a speedtest runs at 220mbps. There's been a slow roll-out to consumers, but much of SF is now covered by Webpass, Sonic, Monkeybrains, etc. Even Comcast is offering multiple-hundred mbps cable internet now. The number of techies who are materially impacted by 200mbps vs. 1,000mbps is so small to be irrelevant when talking about regional startup trends.

mmanfrin 10y ago

If I had a dollar for every article about how [some locale] is [some vector approaching] the Bay Area for [tech attribute], I'd be able to afford a nice apartment in SF.

LukaAl 10y ago
"I'd be able to afford a nice apartment in SF" is the new "I would be rich"
- DarkTree 10y ago
  And I wish it was hyperbole
  - WalterSear 10y ago
    It has been, for some parts of the city, up until the last few months. Very pleasant and yet unfashionable areas, like the area around the Excelsior, McClaren park and the Crocker Amazon, have been mostly being ignored by hipster and techbro alike. (Prices started rocketing these last couple of months, though, after 5+ years of ~5% price increases) It's rather bemusing, considering all the shit and blood being hurled around. There's, no question, a >lot< of people quietly suffering are a result of the housing crunch in SF. But it's hard to look outside my window and not question how much of the noise is being made by entitled children squabbling over fashionable digs in the same four blocks of the mission. I even had one prospective roommate who asked me to see my mail in order to 'prove' my zip code was actually a San Francisco one.
    - DarkTree 10y ago
      I just moved here a couple months ago and am currently searching for apartments. There is no doubt that most people complaining of the prices are competing for housing in the most desirable areas. However, if an area isn't desirable to live in, it quickly slides into very undesirable, for example, the Tenderloin. Is it livable? Yes, but for people who aren't used to living around a bunch of drugs and homeless people, it can look pretty daunting.

epoxyhockey 10y ago

The x/y axis labels are flipped on the trends in exit volume graph.

Alex3917 10y ago

These lifestyle metrics are pretty dubious. Supposedly NYC is at the bottom of the list, but it's possible to live a pretty good lifestyle here even with a minimum wage job. If you and your partner both make minimum wage for exempt employees in NYC ($70,200) then that's enough to afford an 800+ square foot apartment with good public transit access in safe, walkable neighborhood with plenty of food and recreation options. And that's without spending more than 25% of your income on rent, as is recommended. Sure, maybe you could theoretically do better in Denver, but what's the point if NYC is the 'least livable' city and it's already more than good enough.

cylinder 10y ago
What are you talking about? $9 is the minimum wage. That's $37k per year combined for two people. I assure you minimum wage workers are not living good lifestyles here, even in The Bronx (where most of them live).
- Alex3917 10y ago
  The minimum wage for exempt employees in NYC is $675 per week, so for two people that's $70,200. https://labor.ny.gov/legal/counsel/pdf/administrative-employee-overtime-exemption-frequently-asked-questions.pdf https://labor.ny.gov/legal/counsel/pdf/administrative-employ... (If you take outside funding for your startup, that's going to be the minimum you're allowed to pay yourself, and statistically it's unlikely that your spouse is going to be making less than that.)
  - bskap 10y ago
    That's the minimum wage where your employer doesn't have to pay overtime if you work more than 40 hours a week, not the minimum wage an employer is allowed to pay you. It seems kind of silly to say "sure, you can afford a decent lifestyle as long as you have two well-paying jobs".
    - __derek__ 10y ago
      We're talking about technology start-up hubs. Like it or not, this is the relevant comparison population. People creating those companies and their partners are unlikely to be working hourly minimum wage jobs.

ComteDeLaFere 10y ago

Not sure the college degree chart is correct. Roughly 1/3 of the 25-34 age group nationwide has a college degree, but according to this, D.C. leads the list with 8.1% of the total city population aged 25-34 with a degree. Am I reading this wrong? See https://nces.ed.gov/fastfacts/display.asp?id=27 https://nces.ed.gov/fastfacts/display.asp?id=27

oabm 10y ago
I believe it's the percentage of the total city population that are both 25-34 and have a degree. Not the percentage of 25-34 year-olds with a degree.

cpprototypes 10y ago

I think LA has a lot of special advantages that other regions don't have: 1) It has the same strong CA protection against non-competes as Bay Area. 2) Starting to develop some big and significant "anchor" tech companies such as Snapchat. 3) Surrounded by good universities (UCLA, USC, Caltech) 4) Main tech hubs are Santa Monica and DTLA. These will soon be connected by a new rail line (opening this month) 5) Housing is expensive, but not as bad as Bay Area. And rail line should greatly expand cheaper housing options while being able to work at a tech hub.

dmode 10y ago
Also, significantly closer to Bay Area than other tech hubs. With a gazillion flights between the region
- RangerScience 10y ago
  Also, weather. And arguably affordable housing - you can at least trade commute for housing, if you want to live ~20-30m south of the 10.
  - x0x0 10y ago
    And by affordable, you mean look how far your million dollars can go! I kid (kind of...)
kec 10y ago
Well, devils advocate: 2, 3 and 5 are all true for Boston and have been for years. Massachusetts does allow noncompetes, but at least anecdotally no one I know in the Boston tech/startup scene has been required to sign one.
donretag 10y ago
Is there a tech hub in DTLA? I cannot think of a single company. There are companies in Pasadena, Glendale, Burbank, Hollywood (all combined are still less than the westside), but DTLA seems to have nothing of note.

hacknat 10y ago

These articles are so zero sum. Increased economic activity in one geographical area might be one of the most text book cases on non-zero-sum growth. Why compare yourself to something else? I guess there's a bit of a competition for talent, but American mobility is going down, so it's really on these geographical locales to take advantage.

cloudjacker 10y ago

Bay Area's benefit is the diversity of VCs. This will continue to be a circular inclusive self fulfilling prophecy.