5 ms·

This was shared earlier: < https://news.ycombinator.com/item?id=11983154 https://news.ycombinator.com/item?id=11983154 > I'll repeat the comment I gave there:

by p4wnc6 10y ago

This was shared earlier: < https://news.ycombinator.com/item?id=11983154 https://news.ycombinator.com/item?id=11983154 > I'll repeat the comment I gave there: >I don't view Berlin as a viable replacement as a top start-up hub because wages in Berlin are simply ludicrously low. >With Google's investment in the Zurich office, and the much, much more internationally competitive wages you can earn in Switzerland, I think Zurich could be better positioned. >There's certainly no reason to believe that specifically an EU city would be the next to take off. And in most other ways, the Swiss job market is just much more competitive. >I'm also depressed by the article using a picture of an anti-human violently wide open co-working space as a stereotype of a thriving start-up culture. Nothing says you're being totally taken advantage of like a wide open floor plan.

romanovcode 10y ago
Living is also not as pricey tho
- p4wnc6 10y ago
  It doesn't balance out at all. If you care about being a very successful start-up, then you are implicitly competing for international talent, whether you like it or not. The same people choosing to work in SV are the people you should be trying to convince to work in Berlin. Saying they get ~ 50k euros/year but don't worry, the cost of living is low is a universal non-starter. That's just simply not competitive. The cost of living is not so low that a person can reduce their salary to around 1/3 of what they could make in New York or SF and expect to have the same quality of life. You're basically handcuffing one arm behind your back by basing yourself in Berlin (or many other places) because now your pool of applicants is limited to only those people who have some ulterior reason to be interested in living in Berlin and are willing to make a Faustian bargain regarding huge reduction in their wage (even relative to cost of living).
  - Xylakant 10y ago
    american and german salaries are fundamentally not comparable if you look at the bare numbers. German salaries already include pension and healthcare for example, for which the employer pays 50% of the total, which goes on top of the salary. That alone makes a 50k EUR salary more similar to a 75k USD salary (not taking into account the exchange rate, which adds another 10% as of today). There's also at least 4 weeks of paid holidays and unlimited paid sick-leave. Rent difference can easily account for something like 1k to 2k per month. Rent is still comparatively cheap even in the most expensive and central parts of Berlin. Having 15 minutes of travel to the office instead of hours can also change the equation massively, at least if you're looking at your quality of life. The crucial number is how much money is left in your bank account after all your expenses are paid for - and that can vary massively depending on your personal lifestyle. The salary before taxes and other costs is a fairly uninteresting figure.
    - p4wnc6 10y ago
      In 3 out of the 4 jobs I've had in America, I have paid zero premium for health insurance (100% paid by employer), and had either 4 or 5 weeks of vacation (not including between 9 and 12 company holidays too). Even with the exchange rate, my base salary was more than triple the $50k euros amount, and I have < 4 years of experience. I am a specialist in my area which makes my case a bit harder to compare, but still, the offer of provided healthcare and 4 weeks vacation doesn't make foreign jobs more attractive to me. I've had that in almost every American job I've had and also was paid a wage that was high enough to comfortably exceed local cost of living. In fact, I generally find that when an employer has to start nervously listing side perks like medical coverage or vacation as apologetic offerings to excuse an obviously poor salary relative to cost of living, it's a huge red flag that they know they are not equipped to recruit exceptional people. In all my comments I am already talking about how much money you have left after general cost of living expenses. Even though such costs are lower in Berlin than in many major US cities, the salaries in Berlin are even lower at a disproportional level. Unless you adopt a more ascetic lifestyle, your lower salary in Berlin will not stretch as far despite the lower costs. The costs, while lower, aren't low enough.
  - dragandj 10y ago
    You forget a very big factor: only US citizens can move to SV or NY without many hoops. If you are from EU, you can go to Berlin with no fuss, if you can get a job. Maybe your US counterpart can go to SV, but you need a visa rain dance, which make sense only if you are a star that some company want to pay a fortune to bring there. Maybe Google and Facebook take the 0.001 % of the top developers. But, top 1% is not bad either. Also, there is a lot of talent in Eastern Europe. For them, there are hoops and work visas for both EU and US, but, US hoops are much more difficult to pass. Not to mention that Berlin has a great nigthlife. SF? Only complaints about the male/female ratio and nerd-dominated culture. So, while SV is certainly the center of the industry, 100K in Berlin can give a much better life than 200K in SV, especially for people with EU citizenship.
misja111 10y ago
I don't understand your points about wages being too low in Berlin. If low wages are a problem for a start-up, what is keeping it from offering high wages, even in Berlin? On the other hand, I could imagine that start-ups would rather keep costs low, especially in the beginning. Then it would be a problem to be situated in a city like Zurich.
- p4wnc6 10y ago
  Investors may choose to invest with a company in a certain city, like Nashville or Berlin or Singapore, because wages are low. So if wages become a problem for the company, the investors stop being interested. There won't be money available to raise wages (for that, the investors will just go back to markets like NYC, Boston, or SF that they trust more). So from birth, companies based in these areas are predicated on the idea that wages must be low -- that's what makes them attractive to investors -- and as a result they really are not recruiting good people. The whole thing basically amplifies the casino effects in start-ups. You invest in Berlin/Nashville/Singapore start-ups because it's an insanely cheap scratch-off ticket that costs you mostly nothing, has very low chance of striking it big, but offers you entertainment, or bragging rights, or something else, as an investor. Companies in these areas will not be in a position to raise their wages to a truly competitive level for very long periods of time (most won't live that long anyway). So by agreeing to work for them, you are simply resigning yourself to a permanent reduction in real wage (i.e. after accounting for cost of living). Not to mention, for international workers anyway, adding visa risk, tax complications, equity complications, etc. For a very talented developer who can earn far enough about market salaries even in NYC or SF so as to live a comfortable life in those places, it would only make sense to bear all these risks and join a firm in Berlin if you were being paid a premium -- i.e. that your wage in Berlin was even higher above cost of living than what your ~ $180k salary would be in Brooklyn -- and you should not at all consider it if someone starts conning you with arguments like, "but it's so much cheaper in Berlin ... and you can drink beer in the park and watch Bayern or Dortmund play here twice a year, go to Berghain on the weekends, etc. etc." (unless, of course, your utility function responds more to beer and soccer than to money).
  - cyphunk 10y ago
philefstat 10y ago
Wages being low is a good thing, no? CoL is significantly lower too which is great.
- p4wnc6 10y ago
  In what way are lower wages good for the employees you're trying to attract? While some aspects of cost of living are low, others are not low at all. I guess if you're looking for nothing more than a temporary lifestyle involving enough money to go to concerts and eat at restaurants, the wage is fine for a younger person in Berlin. But it's a fantasy to believe you can effectively grow a company that way. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. For these people, earning ~ 50k euros / year in Berlin is a way, way, way, way, way worse deal than earning ~ 200k dollars in San Francisco, despite SF's insane costs. You just simply cannot do anything with 50k euros/year in Berlin unless you have no outside obligations and are happy spending the money of minor lifestyle perks. I'm surprised that any of this is even controversial. The same is true for start-ups almost anywhere else in continental Europe too. To a very limited extent there are some companies in Amsterdam that actually pay a "real" wage (i.e. you can support a family, enjoy life, and save for retirement), and some across Switzerland, but not many. Thinking in terms of "yay, cost of living is low so I don't need much of a salary" is the classic immature analysis of a recent grad who looks at it more like a program for teaching English is southeast Asia than like they are actually working a job, building a career, etc.
  - AndreyErmakov 10y ago
    A bit of feedback from someone who tried to make it in Germany with a 40K salary (in the south) and couldn't. It's just not doable. You need at least 60-70K to get started in medium towns, and around 80-90K for large expensive cities. Otherwise you either have to downgrade your standard of living to that common in third-world countries or accept it to live with a chronically empty bank account and most likely with a long-term debt as you're trying to pay back your initial accommodation expenses. Cheap is an illusion for a brochure.
hocuspocus 10y ago
I'd love to see the tech landscape in Zürich grow but there are a few problems: - Sponsoring non-EU immigrants has become extremely difficult in Swizterland. - Google trounces the competition by a margin that is completely out of reach for European start-ups. - Switzerland itself is a very small market. The cash-flow of your typical SaaS start-up is going to be mostly in € or $ with all the associated burdens and risks. Also it's funny you mention Amsterdam since from what I've seen, wages are even lower than in Berlin, which is insane given the higher CoL.
- peterbraden 10y ago
  The Swiss tax system also cripples startups in Zürich
  - hocuspocus 10y ago
    True, but they're working on that (I think?), and you can always put your HQ in Zug :D
    - peterbraden 10y ago
      Does that solve the taxation based on market cap thing?
- speleding 10y ago
  Wages in Amsterdam are lower than London, but the Netherlands have a great deal for ex-pats: the so called "30% rule", which means that you only pay tax on the remaining 70% for the first 8 years there. So your take home pay can be really good (and it has other benefits like a good healthcare system, free education for the kids, etc). Also, if you want to start a start-up low wages are actually a plus... (Source: I started a startup there and have several employees on the 30% rule)

by p4wnc6 10y ago

romanovcode 10y ago

Living is also not as pricey tho

p4wnc6 10y ago
It doesn't balance out at all. If you care about being a very successful start-up, then you are implicitly competing for international talent, whether you like it or not. The same people choosing to work in SV are the people you should be trying to convince to work in Berlin. Saying they get ~ 50k euros/year but don't worry, the cost of living is low is a universal non-starter. That's just simply not competitive. The cost of living is not so low that a person can reduce their salary to around 1/3 of what they could make in New York or SF and expect to have the same quality of life. You're basically handcuffing one arm behind your back by basing yourself in Berlin (or many other places) because now your pool of applicants is limited to only those people who have some ulterior reason to be interested in living in Berlin and are willing to make a Faustian bargain regarding huge reduction in their wage (even relative to cost of living).
- Xylakant 10y ago
  american and german salaries are fundamentally not comparable if you look at the bare numbers. German salaries already include pension and healthcare for example, for which the employer pays 50% of the total, which goes on top of the salary. That alone makes a 50k EUR salary more similar to a 75k USD salary (not taking into account the exchange rate, which adds another 10% as of today). There's also at least 4 weeks of paid holidays and unlimited paid sick-leave. Rent difference can easily account for something like 1k to 2k per month. Rent is still comparatively cheap even in the most expensive and central parts of Berlin. Having 15 minutes of travel to the office instead of hours can also change the equation massively, at least if you're looking at your quality of life. The crucial number is how much money is left in your bank account after all your expenses are paid for - and that can vary massively depending on your personal lifestyle. The salary before taxes and other costs is a fairly uninteresting figure.
  - p4wnc6 10y ago
    In 3 out of the 4 jobs I've had in America, I have paid zero premium for health insurance (100% paid by employer), and had either 4 or 5 weeks of vacation (not including between 9 and 12 company holidays too). Even with the exchange rate, my base salary was more than triple the $50k euros amount, and I have < 4 years of experience. I am a specialist in my area which makes my case a bit harder to compare, but still, the offer of provided healthcare and 4 weeks vacation doesn't make foreign jobs more attractive to me. I've had that in almost every American job I've had and also was paid a wage that was high enough to comfortably exceed local cost of living. In fact, I generally find that when an employer has to start nervously listing side perks like medical coverage or vacation as apologetic offerings to excuse an obviously poor salary relative to cost of living, it's a huge red flag that they know they are not equipped to recruit exceptional people. In all my comments I am already talking about how much money you have left after general cost of living expenses. Even though such costs are lower in Berlin than in many major US cities, the salaries in Berlin are even lower at a disproportional level. Unless you adopt a more ascetic lifestyle, your lower salary in Berlin will not stretch as far despite the lower costs. The costs, while lower, aren't low enough.
- dragandj 10y ago
  You forget a very big factor: only US citizens can move to SV or NY without many hoops. If you are from EU, you can go to Berlin with no fuss, if you can get a job. Maybe your US counterpart can go to SV, but you need a visa rain dance, which make sense only if you are a star that some company want to pay a fortune to bring there. Maybe Google and Facebook take the 0.001 % of the top developers. But, top 1% is not bad either. Also, there is a lot of talent in Eastern Europe. For them, there are hoops and work visas for both EU and US, but, US hoops are much more difficult to pass. Not to mention that Berlin has a great nigthlife. SF? Only complaints about the male/female ratio and nerd-dominated culture. So, while SV is certainly the center of the industry, 100K in Berlin can give a much better life than 200K in SV, especially for people with EU citizenship.

misja111 10y ago

I don't understand your points about wages being too low in Berlin. If low wages are a problem for a start-up, what is keeping it from offering high wages, even in Berlin? On the other hand, I could imagine that start-ups would rather keep costs low, especially in the beginning. Then it would be a problem to be situated in a city like Zurich.

p4wnc6 10y ago
Investors may choose to invest with a company in a certain city, like Nashville or Berlin or Singapore, because wages are low. So if wages become a problem for the company, the investors stop being interested. There won't be money available to raise wages (for that, the investors will just go back to markets like NYC, Boston, or SF that they trust more). So from birth, companies based in these areas are predicated on the idea that wages must be low -- that's what makes them attractive to investors -- and as a result they really are not recruiting good people. The whole thing basically amplifies the casino effects in start-ups. You invest in Berlin/Nashville/Singapore start-ups because it's an insanely cheap scratch-off ticket that costs you mostly nothing, has very low chance of striking it big, but offers you entertainment, or bragging rights, or something else, as an investor. Companies in these areas will not be in a position to raise their wages to a truly competitive level for very long periods of time (most won't live that long anyway). So by agreeing to work for them, you are simply resigning yourself to a permanent reduction in real wage (i.e. after accounting for cost of living). Not to mention, for international workers anyway, adding visa risk, tax complications, equity complications, etc. For a very talented developer who can earn far enough about market salaries even in NYC or SF so as to live a comfortable life in those places, it would only make sense to bear all these risks and join a firm in Berlin if you were being paid a premium -- i.e. that your wage in Berlin was even higher above cost of living than what your ~ $180k salary would be in Brooklyn -- and you should not at all consider it if someone starts conning you with arguments like, "but it's so much cheaper in Berlin ... and you can drink beer in the park and watch Bayern or Dortmund play here twice a year, go to Berghain on the weekends, etc. etc." (unless, of course, your utility function responds more to beer and soccer than to money).
- cyphunk 10y ago

philefstat 10y ago

Wages being low is a good thing, no? CoL is significantly lower too which is great.

p4wnc6 10y ago
In what way are lower wages good for the employees you're trying to attract? While some aspects of cost of living are low, others are not low at all. I guess if you're looking for nothing more than a temporary lifestyle involving enough money to go to concerts and eat at restaurants, the wage is fine for a younger person in Berlin. But it's a fantasy to believe you can effectively grow a company that way. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. For these people, earning ~ 50k euros / year in Berlin is a way, way, way, way, way worse deal than earning ~ 200k dollars in San Francisco, despite SF's insane costs. You just simply cannot do anything with 50k euros/year in Berlin unless you have no outside obligations and are happy spending the money of minor lifestyle perks. I'm surprised that any of this is even controversial. The same is true for start-ups almost anywhere else in continental Europe too. To a very limited extent there are some companies in Amsterdam that actually pay a "real" wage (i.e. you can support a family, enjoy life, and save for retirement), and some across Switzerland, but not many. Thinking in terms of "yay, cost of living is low so I don't need much of a salary" is the classic immature analysis of a recent grad who looks at it more like a program for teaching English is southeast Asia than like they are actually working a job, building a career, etc.
- AndreyErmakov 10y ago
  A bit of feedback from someone who tried to make it in Germany with a 40K salary (in the south) and couldn't. It's just not doable. You need at least 60-70K to get started in medium towns, and around 80-90K for large expensive cities. Otherwise you either have to downgrade your standard of living to that common in third-world countries or accept it to live with a chronically empty bank account and most likely with a long-term debt as you're trying to pay back your initial accommodation expenses. Cheap is an illusion for a brochure.

hocuspocus 10y ago

I'd love to see the tech landscape in Zürich grow but there are a few problems: - Sponsoring non-EU immigrants has become extremely difficult in Swizterland. - Google trounces the competition by a margin that is completely out of reach for European start-ups. - Switzerland itself is a very small market. The cash-flow of your typical SaaS start-up is going to be mostly in € or $ with all the associated burdens and risks. Also it's funny you mention Amsterdam since from what I've seen, wages are even lower than in Berlin, which is insane given the higher CoL.

peterbraden 10y ago
The Swiss tax system also cripples startups in Zürich
- hocuspocus 10y ago
  True, but they're working on that (I think?), and you can always put your HQ in Zug :D
  - peterbraden 10y ago
    Does that solve the taxation based on market cap thing?
speleding 10y ago
Wages in Amsterdam are lower than London, but the Netherlands have a great deal for ex-pats: the so called "30% rule", which means that you only pay tax on the remaining 70% for the first 8 years there. So your take home pay can be really good (and it has other benefits like a good healthcare system, free education for the kids, etc). Also, if you want to start a start-up low wages are actually a plus... (Source: I started a startup there and have several employees on the 30% rule)