16 ms·

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connecti

by geff82 10y ago

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other place. The rest of the country's infrastructure is so good that you could connect venture capitalists, founders and customers in any arbitrary way. I also say to the main point of the articles: rents have a lot of room to grow under the current logic. City centers simply get voided of average earning people and replaced by high earning ones. As soon as they are the average earners, even more wealthy people move in. Also with the rents, salaries go up, so people have the possibility to pay for their accommodation again. While in Berlin you could easily live with 40.000 Dollar/year, you'll probably have to add another 60.000 so people are at least somehow able to move to work for your new shiny SV company.

bpicolo 10y ago
There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a company to hire top tech talent if they're in Miami / Des Moines, because the Bay Area has a much higher concentration of tech workers. Convincing people to move is hard, especially so for more experienced tech workers who have a life/family somewhere. You need to be getting an insane deal for it to be worth abandoning your friends and family/forcing your partner to find a new job (and I've yet to see tech companies trying to compete on comp vs SF/SV outside of them). Can't run off middle-road new grads alone (Edit: Good point below that top grad talent wants to hit the big cities too).
- amyjess 10y ago
  You could always do what the founders of TI did: start your own university and grow your own talent. The University of Texas at Dallas, established explicitly for this reason, is probably the reason why Dallas is a tech hub.
  - startupdiscuss 10y ago
    Every large city has some schools. Why is it that Austin is a tech hub (UT) but Houston is not (U of H, Rice)? One theory: it is not the school, but the kinds of jobs people get after. Austinites went to work for Dell, and Houstonians went to work for Exxon.
    - CPLX 10y ago
      Exactly. As I watch Downtown Brooklyn seemingly magically transform itself overnight from a collection of third-tier forgotten university offerings to a genuine nexus of tech and engineering education[0] I'm reminded that this dynamic does indeed work in both directions. [0] https://thebridgebk.com/engineering-hub-downtown-brooklyn/ https://thebridgebk.com/engineering-hub-downtown-brooklyn/
    - vonmoltke 10y ago
      Houston is, for some definition of "tech". It's just more focused on petroleum and ocean engineering, which don't get a lot of play I'm these circles.
      - ghaff 10y ago
        Exactly, people in certain circles have this somewhat self-referential definition of tech that means "what they do a lot of in Silicon Valley." And ignore things like the oil industry or pharma/biotech which are very much tech but just don't happen to have much presence in SV.
      - mturmon 10y ago
        This whole thread, unfortunately, is conflating "tech" with "information tech". When talking about "big picture" stuff like national real estate trends and macro-economics, the HN bubble is limiting.
      - _delirium 10y ago
        There are a ton of even pretty straight-up tech jobs in those industries, e.g. ExxonMobil's Houston office has a large machine learning group.
- deleted 10y ago
  [deleted]
- zimzam 10y ago
  See, here's the thing about coastal types: they are obsessed with getting the "top" talent, as if every project or startup requires it. What if most startups only need "good" developers to develop their mostly CRUD apps and don't need "the best" developers?
  - bpicolo 10y ago
    It's true that not everybody needs it, that's a separate argument probably. Companies that feel they don't are often outsourcing though, no? There's definitely the argument of "talent pays for itself (in multiples)" to think about.
  - crispyambulance 10y ago
    What they say they're getting ("the top talent") and what they actually get are two separate things.
    - mcguire 10y ago
      Hey, the worst graduate from Stanford is better than the best graduate of Ohio State, right?
      - jamiek88 10y ago
        Sarcasm?
        mcguire 10y ago
        Yup.
      - deleted 10y ago
        [deleted]
      - deleted 10y ago
        [deleted]
  - deanCommie 10y ago
- jimlawruk 10y ago
  Exactly right. Young people today would rather be poor in a "trendy" city, than rich in a not so trendy one. It has almost become a badge of honor of how much you can rough it to stay afloat in X trendy city. I am guessing it was not like this for previous generations, and I think it leads to too much homogeneity of culture. I think we should start to encouraging people to go to a uncool city and help build it up and make it cool.
  - bpicolo 10y ago
    I was speaking with a friend about this recently. I do think we'll see growth in smaller cities, kind of like how Austin exploded. I think an interesting aspect of this is the job problem. Jobs are getting more scarce outside cities as industries change it seems, and I wonder how that might affect population movement.
  - pantalaimon 10y ago
    > I think we should start to encouraging people to go to a uncool city and help build it up and make it cool. While this is a laudable project and it works in some places, many rural citys are very conservative and against anything new the youth might be interested in.
    - iamatworknow 10y ago
      This is the issue I face in the area where I grew up and still reside in rural New York. If you read the newspaper editorials it's a constant string of racist and homophobic garbage. I'm approaching 30 and it's very hard to find like minded people here, much less single women with ambitions and who aren't just looking for a baby daddy. So why haven't I moved? Frankly I'm scared that I can't cut it elsewhere. My job is secure and pays very well for the area (as a single person I make about 160% of the median family income). I could move and work remotely for the same amount which would result in a drastic decrease in quality of life, or try to get another job that I'm probably not qualified for. I've been trying to figure it out for the better part of a decade now.
      - 10y ago
- ryandrake 10y ago
  > People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country We're talking about tech workers though. I don't know about you, but my whole life as a tech worker, I've gotten up at the crack of dawn, worked all day, come home late at night exhausted and passed out sleeping until the next day. I don't even know what city I live in because I NEVER SEE IT. Culture? Nightlife? What the hell are they? It doesn't make sense that tech workers would care about these things because we never get to take advantage of them.
  - dpark 10y ago
    You should get a better job if you spend all your waking hours working. "Better than 16 hours a day" isn't a high bar.
  - pavel_lishin 10y ago
    > It doesn't make sense that tech workers would care about these things because we never get to take advantage of them. Not all tech workers are 12-hour-a-day workaholics. Why are you killing yourself at work?
    - bradstewart 10y ago
      Because I legitimately find work more stimulating and enjoyable than most other things. Which isn't to say I don't do other things I find enjoyable, but I have no qualms about working 10+ hours a day.
    - QuantumGravy 10y ago
      Why would you get paid six figures as a tech worker unless you're a workaholic? If you're not putting those hours in at work, surely you're putting in those hours in for both fun and personal growth at home, right? You're passionate about code, aren't you? ...no, I'm not honestly asking that, but those are the questions I'd expect to fend off.
      - pavel_lishin 10y ago
- steffan 10y ago
  My counter-anecdote - it seems to have been very hard to hire a Consulting Engineer in the Bay Area for my team. We've had plenty of candidates (some very good) from other cities, but haven't yet found anyone in SF or the surrounding areas. Could be issues with our sourcing, perhaps, but it seems surprisingly difficult. (PM me if you'd like to be a counter-example)
rco8786 10y ago
Technology has a long way to go before it completely disrupts human evolution and the desire to be close to people with similar values.
- geff82 10y ago
  You are right. But still I don't quite understand why there are not more smaller dynamic centers popping up. Of course it is NOT only SV and NYC any more. But there would be many other places that are nice enough to attract IT in a substantial way.
  - bpicolo 10y ago
    I think there are some popping up. Austin comes to mind. Takes time for cities to grow, though. Hipsters, microbreweries, and fancy lattes will continue to spread I am sure!
  - dcosson 10y ago
    It seems riskier to employees if that were the case - if you get laid off or tired of one company in one of these small regional centers and there's only say 5 companies total to choose from, chances are you'll have to uproot your life and move to a new city for your next job which is a big inconvenience. I think some part of the network effect of big tech hubs is the option value. If you're in the Bay Area you can have the best of both worlds - stay in one place as long as you want for your personal life/family, and still have the possibility of working at any of thousands of the best companies of all sizes and switching between them if you need to.
- Finnucane 10y ago
  Technology has been disrupting human evolution since we learned to bang the rocks together.
pjmlp 10y ago
I work in the world of enterprise consulting where offshoring and remote work are a daily part of the job. Yet many companies don't allow remote working to their own employees, even though all contractors (including freelancers) are doing it mostly remotely.
xienze 10y ago
> Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. Startups are built on young talent. Young people are obsessed with living in "the big city" and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable. So if you want young talent, you better set up shop in SF.
- eli_gottlieb 10y ago
  That's a bit silly to say, considering SF and SV are about as suburbanized as can be. If you wanted "the big city", you'd go to New York, London, Paris, Tokyo, or some other place with actual urban density.
  - xienze 10y ago
    SV is very suburban, yes, but SF is densely-populated. "Big city" in this case doesn't necessarily imply that the city proper is 10M+ in population. And the lengths to which this insanity will go is that (e.g.) Google workers will live in SF and commute into SV. Talk about turning the "live in the suburbs, work in the city" paradigm on its head!
    - ghaff 10y ago
      I also think it's something of a SV/SF anomaly. I've lived and worked mostly west of Boston/Cambridge (which until quite recently is where basically all the tech was located) for a very long time and I've known relatively few people who commuted out from the the city.
- coldpie 10y ago
  > and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable Motor vehicle accidents are the largest cause of death for people in the US under the age of 24 so it is, arguably, the worst thing imaginable ;) https://www.cdc.gov/injury/wisqars/leadingcauses.html https://www.cdc.gov/injury/wisqars/leadingcauses.html
Finnucane 10y ago
You might have to think twice about Berlin: https://www.nytimes.com/2017/03/18/world/europe/berlin-rent-fight-against-gentrification.html?_r=0 https://www.nytimes.com/2017/03/18/world/europe/berlin-rent-...
eli_gottlieb 10y ago
>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Because the real commodity being sold with the apartments and offices isn't net access or even land. It's proximity to rich people. It's not an open market economy; it's a feudal system in which you need to stick close to your patrons.
- startupdiscuss 10y ago
  That's a very interesting and original way of looking at it. It would also explain clustering in other areas (finance in NYC, Oil and gas in Houston etc). Do you have any links or references exploring that idea in greater detail?
  - CPLX 10y ago
    I don't mean to have this come across as snarky, at all, but really the reference for this is the whole of human history. Wealth is basically self-concentrating. Our political systems tend to end up with a few capital (and often Capitol) cities where the spoils from the plundering, both metaphorical and literal, end up. The original article does present some interesting and relevant examples of countervailing forces at work as well, and is insightful. But the elephant in the room, as always, is that returns to capital and rent extraction are the primary drivers of wealth, and that the winners tend to keep winning and vice versa.
    - startupdiscuss 10y ago
      That's not snarky, and you have a point. But even if things seem "really obvious" and we can tell "just by looking at the facts", I feel better if someone has looked at the data and shown that to be the case. We aren't living in the feudal era, and a lot of people like to think that the reason people move to the cities is because of (for instance) bars and restaurants, museums and the opera, high-paying jobs and so on. This proximity to wealth may be a symptom of some third factor or it may be the driving factor. That's why I appreciate it when smart, hard-working people take their time to figure it out for me.
maccard 10y ago
I wouldn't have any interest in living in many of those cities you listed, and as a result wouldn't be willing to move and work there. I'm sure there are many out there who feel the same.
- pc86 10y ago
  But most people would be willing to work remotely regardless of where the company headquarters is.
  - maccard 10y ago
    That's not what the parent comment said. > Talented people already move from one coast to the other, so they could as well move to any other place.
sparkling 10y ago
I think more than anything else, this problem is caused by a old mindset. Some managers really believe that "if he ain't in the office, he ain't working". Especially when working with external consultants, even if that means paying them to commute a total of 5+ hours daily.
amyjess 10y ago
> Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? I agree in general, and I think it's likely that the future of growth is in sprawling inland metro areas like Dallas-Fort Worth, Kansas City-Overland Park, and Minneapolis-St. Paul. Well, in the case of Dallas, this is largely going to depend on whether or not the Texas state legislature can ever get their heads out of their asses. If SB6 passes, expect Texas's economy to crater. On the other hand, I'm not sure if your exact list of cities is feasible. Amarillo is too small to really become a hub for anything in the near future (it would take a dedicated effort, like how Bugsy Siegel transformed Las Vegas). And Miami is limited in its ability to sprawl because it's on a coast. Des Moines is a distinct possibility, though. The suburbs have room to sprawl out forever. The city centers can become high-rent places for the rich, and everyone else can live in the suburbs and exurbs. Furthermore, the inner ring suburbs can become "edge cities" where businesses prefer to locate themselves (this is already how Dallas is laid out) so people from both the exurbs and the city center can have short commutes.
AJ007 10y ago
This book does a good job of explaining why: https://www.amazon.com/New-Geography-Jobs-Enrico-Moretti/dp/0544028058/ https://www.amazon.com/New-Geography-Jobs-Enrico-Moretti/dp/... Pretty much it is a networking effect issue. The same reason why you are posting this on hackernews instead of reddit. Physical proximity matters a lot, even when work is digital.
- bpicolo 10y ago
  Ordered a copy. Thanks for the suggestion! I've been looking to read a bit more non-fiction :)
AlexB138 10y ago
My understanding is it's largely demands of VC. They want to be able to check in on their investments, and having to hop on a plane to do that isn't convenient. That has always struck me as odd, since the invested money would go further in a cheaper market, but that's the explanation I've heard many times.
reverend_gonzo 10y ago
I live in Chicago. I love it here because of everything else it has to offer. I have everything almost everything I need available to me within walking distance from home. That includes grocery store, dive bars, cheap restaurants, high end restaurants, clubs. For anything else I may want to do (concerts, sports games, plays, comedy), there are dozens of world class options within a ten minute cab drive / 30 minutes on public transportation. It's gotten to the point, where if there's a band I want to see, but they're in the suburbs, I'll just wait til they're back in the city. I grew up and went to college two different small beach towns. There wasn't much of anything to do besides drink. If you wanted culture, you'd have to get in your car and drive at least an hour. I have no desire to live outside of a big city, unless it is in the middle of nowhere, but in that case, I will still have a home in a city. My guess is a lot of other people feel the same way.
- robterrin 10y ago
  I've heard this pitch for Chicago many times, and it seems reasonable if you are in the one of the industries, Tyler mentions, that are more diffuse. The main problem with Chicago is it lacks an anchor industry. Is it the best place to be for finance? No, that's NYC. Is it healthcare? Boston, Baltimore, Cleveland or Rochester. Energy? Houston. Technology? SF. Entertainment? LA or NYC. Politics? DC. What exactly is Chicago good at? They have Wilco, so that's cool.
  - ntdef 10y ago
    I think you're a bit misinformed. Chicago has two large keystone industries that serve the global economy: (1) Industrial large scale manufacturing (Boeing, John Deere, Caterpillar), (2) Insurance (all of them); not to mention a ton of Food and Agriculture HQs are based there as well.
    - acchow 10y ago
      Isn't Boeing in Washington? Also, not too many people aspire to be in insurance. I don't think you can put it on the same level as finance, arts, software, fashion, film, etc.
saiya-jin 10y ago
same logic that makes off-shoring (okay, near-shoring in this case) to not work, or be at least occasionally painful experience. to quote one client - I'll rather have a mediocre dev sitting right here so we can discuss/plan/design behind one single desk/board rather than having a star 500 (or 5000) km away. even if there wouldn't be time difference, in person contact has high value. and seeing this daily, cannot agree more.
kazagistar 10y ago
Software Companies only have two real requirements on their location... skilled programmers, and money. Both are easier to come by in megacities, so that's how it ends up working most of the time.
Arizhel 10y ago
A lot of people don't want to live in boring, conservative places like Amarillo and Des Moines. More importantly, tech company executives and managers really don't want to live there. The workers have to work on-site with managers, so the workers obviously can't live there either. Everyone has to be co-located in the same place.
- csense 10y ago
  > Everyone has to be co-located in the same place. Why?
  - Arizhel 10y ago
    You can't question this. It's known to be true to executives and managers.
    - passiveincomelg 10y ago
      Preach the gospel sister, brother or other gender identity! Executives and managers are the priests and offices are their temples. Amen.
- mercutio2 10y ago
  Have you ever been to Des Moines? Not picking on you specifically, but boring and conservative aren't the adjectives I'd use for it. It's possibly slightly more conservative than Ann Arbor or Madison, but the area around Drake feels like a college town to me when I visit.
lkrubner 10y ago
> Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Some of the burden is on you to prove what has failed so far. If it is possible to build a successful large scale startup in Amarillo, why hasn't it happened? I'll point out the theory of agglomerative clustering also includes the contrary point: a city that is great at something tends to exclude other activities, for any given amount of population. A city like Amarillo, which plays a role in the oil industry, is less likely to be great at software, because it plays a role in the oil industry. It's population would have to grow before it could be good at both. Also, if two 20-somethings build a successful startup in Amarillo, they may want to move to San Francisco as soon as they have money. The "this startup can be anywhere" argument works both ways: yes it could be Amarillo, but if it can be anywhere then it doesn't need to stay in Amarillo. And the startup can also move to Poland, or Romania, or India. If you believe the startup can be anywhere, then you basically believe that a startup would only be in Amarillo by random chance. If there are 100,000 great cities in the world, and all of them equally good for a software startup, then the chance of a startup being in Amarillo is 1 in 100,000. But in fact, there are good reasons why startups tend to cluster into certain cities. You should read "Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv" : https://pando.com/2012/11/20/why-tiny-stockholm-has-the-most-stunning-startup-ecosystem-since-tel-aviv/ https://pando.com/2012/11/20/why-tiny-stockholm-has-the-most...
- lkrubner 10y ago
  Why is this getting downvoted? I can not see a single sentence in this comment that is not accurate.
- mcguire 10y ago
  It's also important to note that "successful large scale startup" in this context means "a new web application with a lot of users". The Dept. Of Energy, Southwest Airlines, Texas Instruments, and Principal Financial Group need not apply.
  - Kalium 10y ago
    DoE may be slightly different from the others...
nojvek 10y ago
Talent attracts talent. Wealth attracts wealth. This cities work because there is a high concentration of wealth, talent and resources for them to produce big wins over and over. Google and Facebook couldn't have been this successful anywhere else. Pg had a nice article on how other places can become sv like hubs.
laughingman2 10y ago
Rational behind Zoho's new office in rural Tamil Nadu (their engineering base is primarily in city Chennai) is to reduce clustering in mega cities. https://www.youtube.com/watch?v=lyHgMNuftL0 https://www.youtube.com/watch?v=lyHgMNuftL0 Zoho's CEO feels that good software products can be developed not only in silicon valley or even big cities like Chennai and Bangalore, it can be developed in non-descript towns like Tenkasi too. I think with more accessibility to digital media, and expansion of skills through internet education, skills can be diffused across geography, atleast in our field.
dpark 10y ago
>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Because face to face is high bandwidth. You can have everyone work from home but it will reduce your ability to collaborate effectively. Teams worry about being in separate buildings or even just split across floors because the friction introduced reduces impromptu face to face conversations significantly. Now, if you're asking why an entire company can't move, that's because the talent pool is where it is and many engineers will not be willing to relocate. Moving is disruptive and for married couples where both work at different locations, it may be effectively impossible.
wjoe 10y ago
I think it's mostly just because the concentration of the industry is convenient. In the UK, there are tech jobs all over the country. But there are probably more in London than everywhere else combined, especially if you're looking for the start-up unicorn types. I lived in a smaller city for a while after university, but there were very few jobs to choose from that interested me. I moved to London for one job in particular at the time, but also safe in the knowledge that it would be easy to find another job. I've had 4 different jobs in London since then, and it's never been very hard for me to find something else that's suitable and interesting for me. The same holds true for most of my friends from university - many of the moved to London because it was the most obvious option for finding a tech job. So it has a further concentrating effect, that people are more likely to know others who are working in the capital city than elsewhere in the country. If I was seeking a new job and open to moving anywhere in the country, I could find one somewhere outside of London. But if I was already living in another city, it might be harder to find a job without moving. It might not be quite the same in US, where there are a number of cities around the country that are a similar size to London, but in the UK there are maybe only 2-4 other cities that are large enough to have a wide selection of jobs in one industry, and none besides London with a population of over 1 million.
pascalxus 10y ago
SV companies are not price sensitive. They'll pay alot, even just for the benefit of having them in the office. Software companies either win big or lose big. If they win big, they can easily cover whatever cost of salary in SV and there's still a plethora of talent out here in the bay area, for a well funded company.
- acchow 10y ago
  I think you're describing a certain type of software company - one that doesn't have to answer to shareholders (Google, Facebook, Snap, etc) and thus behave according to what their leader and employees want. Most of the tech industry (including for example Apple and Amazon) isn't like this.
  - mercutio2 10y ago
    Why do you think Amazon and Apple aren't like this? All of the big software houses compete for the same engineers, and they're all paying their incremental new engineers +/- 10% the same total comp across the experience spectrum. I would agree with pascalxus, the big tech companies aren't price sensitive. That doesn't mean the average engineer can easily finagle a drastically out-of-band salary, but the bands are already exceptionally high and grow faster than inflation in the aggregate.
jes5199 10y ago
> City centers simply get voided of average earning people and replaced by high earning ones. As soon as they are the average earners, even more wealthy people move okay but how do you run a city like San Francisco once all of the service industry workers get priced out? Do you start paying people 6 figures to clerk a convenience store?
- conanbatt 10y ago
  Yes? And thats not really a problem at all.
  - ghaff 10y ago
    Except it doesn't work that way. Instead 7-11 simply decides that it can't run a convenience store profitably in that location. For other types of service workers, wages/fees may well go up but it probably also just gets harder to find people.
    - Atheros 10y ago
      Of course it works that way. If almost all the stores close then the remaining ones can raise prices. If All the stores close, the quality of life goes down and rents go down until it equalizes with a few stores open.
    - conanbatt 10y ago
      Where do the rich people get their groceries then. Its clear that service jobs pay a lot more in SF that they do in other places, for the very reasons you mention before.
dllthomas 10y ago
> Talented people already move from one coast to the other, so they could as well move to any other place. There is less risk in moving to a place with more options when the current one falls through.
Waterluvian 10y ago
Silicon Valley is basically one giant hackathon. Half the fun is being there.
api 10y ago
It's not talent that's concentrated. It's capital. The SF bay is the undisputed headquarters for smart technology investment capital, both angel and venture.
bante 10y ago
"Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places." It's concentrated _because_ it doesn't have to be at certain places. Your post office that had to be close to you is now run by a couple of thousand people at Google. "Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines?" Again, without being to annoying, why does it have to be in Dallas? It doesn't, so it mostly isn't.
- amyjess 10y ago
  > Again, without being to annoying, why does it have to be in Dallas? It doesn't, so it mostly isn't. Actually, the answer is that Dallas is already a tech hub. https://en.wikipedia.org/wiki/Silicon_Prairie https://en.wikipedia.org/wiki/Silicon_Prairie https://en.wikipedia.org/wiki/Telecom_Corridor https://en.wikipedia.org/wiki/Telecom_Corridor
  - bante 10y ago
    As far as I know that only tells you why it might have had to be Dallas at some point when regional centers made sense. Which changed somewhere around Paypal if not earlier. I'm not saying that Dallas (or any other city) can't have some, even quite successful, startups. Just that you can't really compete being say "the third to fifth best choice for startups". At that point you're competing with too(!) many different cities. You have to be the obvious choice in a few, preferably large, categories; capture a lot of local talent (which is harder in the US), and most likely both.
Futurebot 10y ago
Clustering effects are real, even for software. The ability to meet with clients by taking a (relatively) quick trip from SOHO to Chelsea (to initiate, pitch, or close deals) or the ability to meet with the developers of company that created a service with an API you're going to integrate with is actually helpful ( "warm currents" of communication). Software technology ecosystems could certainly succeed in other places if one could bootstrap them in the first place; the clustering (and self-reinforcing network) effects mean that people gravitate to where the action is already happening. Getting started in a new location is challenging, so only those willing to shoulder additional risk (beyond the often-high risk of starting and running a startup) are going to try.
superioritycplx 10y ago
Companies and people that are sitting pretty in SV will tell you that you absolutely need to be there to get anything of importance done. It's job security and protects them from most outside competition. Freedom of speech and expression will suffer as long as all Western world's social media is controlled by a few city blocks in SF.
Kalium 10y ago
You're absolutely right! It could be anywhere in the world! Talented people can easily move anywhere! Startups can be successful in San Antonio, Phoenix, or Ithaca! So why do so many smart people insist on concentrating themselves so? Is it possible that perhaps there may be reasons for people to choose such an obviously irrational thing? What do they think they're getting out of it? Many companies have found that they benefit significantly from physically proximate workers. There are distinct benefits to putting people in offices in person. On top of that, having many such companies in one place is beneficial to the specialist worker. It mitigates risks of unemployment, and enables workers to take greater risks. Myself, I've done what you suggest. I took a job in a cheap place. It was great in some ways, and terrible in others. When I decided I was done with the job, I had to leave that city. There just weren't many options for me there. I understand why a businessperson would like it - you get more leverage over cheaper employees - but it's not the best choice for me.
pix64 10y ago
> Talented people already move from one coast to the other, so they could as well move to any other place. But any-town, USA has nothing else to offer them in terms of entertainment, arts, food. I live in the 77th largest city in the US and this place is dead.

by geff82 10y ago

bpicolo 10y ago

There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a company to hire top tech talent if they're in Miami / Des Moines, because the Bay Area has a much higher concentration of tech workers. Convincing people to move is hard, especially so for more experienced tech workers who have a life/family somewhere. You need to be getting an insane deal for it to be worth abandoning your friends and family/forcing your partner to find a new job (and I've yet to see tech companies trying to compete on comp vs SF/SV outside of them). Can't run off middle-road new grads alone (Edit: Good point below that top grad talent wants to hit the big cities too).

amyjess 10y ago
You could always do what the founders of TI did: start your own university and grow your own talent. The University of Texas at Dallas, established explicitly for this reason, is probably the reason why Dallas is a tech hub.
- startupdiscuss 10y ago
  Every large city has some schools. Why is it that Austin is a tech hub (UT) but Houston is not (U of H, Rice)? One theory: it is not the school, but the kinds of jobs people get after. Austinites went to work for Dell, and Houstonians went to work for Exxon.
  - CPLX 10y ago
    Exactly. As I watch Downtown Brooklyn seemingly magically transform itself overnight from a collection of third-tier forgotten university offerings to a genuine nexus of tech and engineering education[0] I'm reminded that this dynamic does indeed work in both directions. [0] https://thebridgebk.com/engineering-hub-downtown-brooklyn/ https://thebridgebk.com/engineering-hub-downtown-brooklyn/
  - vonmoltke 10y ago
    Houston is, for some definition of "tech". It's just more focused on petroleum and ocean engineering, which don't get a lot of play I'm these circles.
    - ghaff 10y ago
      Exactly, people in certain circles have this somewhat self-referential definition of tech that means "what they do a lot of in Silicon Valley." And ignore things like the oil industry or pharma/biotech which are very much tech but just don't happen to have much presence in SV.
    - mturmon 10y ago
      This whole thread, unfortunately, is conflating "tech" with "information tech". When talking about "big picture" stuff like national real estate trends and macro-economics, the HN bubble is limiting.
    - _delirium 10y ago
      There are a ton of even pretty straight-up tech jobs in those industries, e.g. ExxonMobil's Houston office has a large machine learning group.
deleted 10y ago
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zimzam 10y ago
See, here's the thing about coastal types: they are obsessed with getting the "top" talent, as if every project or startup requires it. What if most startups only need "good" developers to develop their mostly CRUD apps and don't need "the best" developers?
- bpicolo 10y ago
  It's true that not everybody needs it, that's a separate argument probably. Companies that feel they don't are often outsourcing though, no? There's definitely the argument of "talent pays for itself (in multiples)" to think about.
- crispyambulance 10y ago
  What they say they're getting ("the top talent") and what they actually get are two separate things.
  - mcguire 10y ago
    Hey, the worst graduate from Stanford is better than the best graduate of Ohio State, right?
    - jamiek88 10y ago
      Sarcasm?
      - mcguire 10y ago
        Yup.
    - deleted 10y ago
      [deleted]
    - deleted 10y ago
      [deleted]
- deanCommie 10y ago
jimlawruk 10y ago
Exactly right. Young people today would rather be poor in a "trendy" city, than rich in a not so trendy one. It has almost become a badge of honor of how much you can rough it to stay afloat in X trendy city. I am guessing it was not like this for previous generations, and I think it leads to too much homogeneity of culture. I think we should start to encouraging people to go to a uncool city and help build it up and make it cool.
- bpicolo 10y ago
  I was speaking with a friend about this recently. I do think we'll see growth in smaller cities, kind of like how Austin exploded. I think an interesting aspect of this is the job problem. Jobs are getting more scarce outside cities as industries change it seems, and I wonder how that might affect population movement.
- pantalaimon 10y ago
  > I think we should start to encouraging people to go to a uncool city and help build it up and make it cool. While this is a laudable project and it works in some places, many rural citys are very conservative and against anything new the youth might be interested in.
  - iamatworknow 10y ago
    This is the issue I face in the area where I grew up and still reside in rural New York. If you read the newspaper editorials it's a constant string of racist and homophobic garbage. I'm approaching 30 and it's very hard to find like minded people here, much less single women with ambitions and who aren't just looking for a baby daddy. So why haven't I moved? Frankly I'm scared that I can't cut it elsewhere. My job is secure and pays very well for the area (as a single person I make about 160% of the median family income). I could move and work remotely for the same amount which would result in a drastic decrease in quality of life, or try to get another job that I'm probably not qualified for. I've been trying to figure it out for the better part of a decade now.
    - 10y ago
ryandrake 10y ago
> People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country We're talking about tech workers though. I don't know about you, but my whole life as a tech worker, I've gotten up at the crack of dawn, worked all day, come home late at night exhausted and passed out sleeping until the next day. I don't even know what city I live in because I NEVER SEE IT. Culture? Nightlife? What the hell are they? It doesn't make sense that tech workers would care about these things because we never get to take advantage of them.
- dpark 10y ago
  You should get a better job if you spend all your waking hours working. "Better than 16 hours a day" isn't a high bar.
- pavel_lishin 10y ago
  > It doesn't make sense that tech workers would care about these things because we never get to take advantage of them. Not all tech workers are 12-hour-a-day workaholics. Why are you killing yourself at work?
  - bradstewart 10y ago
    Because I legitimately find work more stimulating and enjoyable than most other things. Which isn't to say I don't do other things I find enjoyable, but I have no qualms about working 10+ hours a day.
  - QuantumGravy 10y ago
    Why would you get paid six figures as a tech worker unless you're a workaholic? If you're not putting those hours in at work, surely you're putting in those hours in for both fun and personal growth at home, right? You're passionate about code, aren't you? ...no, I'm not honestly asking that, but those are the questions I'd expect to fend off.
    - pavel_lishin 10y ago
steffan 10y ago
My counter-anecdote - it seems to have been very hard to hire a Consulting Engineer in the Bay Area for my team. We've had plenty of candidates (some very good) from other cities, but haven't yet found anyone in SF or the surrounding areas. Could be issues with our sourcing, perhaps, but it seems surprisingly difficult. (PM me if you'd like to be a counter-example)

rco8786 10y ago

Technology has a long way to go before it completely disrupts human evolution and the desire to be close to people with similar values.

geff82 10y ago
You are right. But still I don't quite understand why there are not more smaller dynamic centers popping up. Of course it is NOT only SV and NYC any more. But there would be many other places that are nice enough to attract IT in a substantial way.
- bpicolo 10y ago
  I think there are some popping up. Austin comes to mind. Takes time for cities to grow, though. Hipsters, microbreweries, and fancy lattes will continue to spread I am sure!
- dcosson 10y ago
  It seems riskier to employees if that were the case - if you get laid off or tired of one company in one of these small regional centers and there's only say 5 companies total to choose from, chances are you'll have to uproot your life and move to a new city for your next job which is a big inconvenience. I think some part of the network effect of big tech hubs is the option value. If you're in the Bay Area you can have the best of both worlds - stay in one place as long as you want for your personal life/family, and still have the possibility of working at any of thousands of the best companies of all sizes and switching between them if you need to.
Finnucane 10y ago
Technology has been disrupting human evolution since we learned to bang the rocks together.

pjmlp 10y ago

I work in the world of enterprise consulting where offshoring and remote work are a daily part of the job. Yet many companies don't allow remote working to their own employees, even though all contractors (including freelancers) are doing it mostly remotely.

xienze 10y ago

> Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. Startups are built on young talent. Young people are obsessed with living in "the big city" and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable. So if you want young talent, you better set up shop in SF.

eli_gottlieb 10y ago
That's a bit silly to say, considering SF and SV are about as suburbanized as can be. If you wanted "the big city", you'd go to New York, London, Paris, Tokyo, or some other place with actual urban density.
- xienze 10y ago
  SV is very suburban, yes, but SF is densely-populated. "Big city" in this case doesn't necessarily imply that the city proper is 10M+ in population. And the lengths to which this insanity will go is that (e.g.) Google workers will live in SF and commute into SV. Talk about turning the "live in the suburbs, work in the city" paradigm on its head!
  - ghaff 10y ago
    I also think it's something of a SV/SF anomaly. I've lived and worked mostly west of Boston/Cambridge (which until quite recently is where basically all the tech was located) for a very long time and I've known relatively few people who commuted out from the the city.
coldpie 10y ago
> and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable Motor vehicle accidents are the largest cause of death for people in the US under the age of 24 so it is, arguably, the worst thing imaginable ;) https://www.cdc.gov/injury/wisqars/leadingcauses.html https://www.cdc.gov/injury/wisqars/leadingcauses.html

Finnucane 10y ago

You might have to think twice about Berlin: https://www.nytimes.com/2017/03/18/world/europe/berlin-rent-fight-against-gentrification.html?_r=0 https://www.nytimes.com/2017/03/18/world/europe/berlin-rent-...

eli_gottlieb 10y ago

>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Because the real commodity being sold with the apartments and offices isn't net access or even land. It's proximity to rich people. It's not an open market economy; it's a feudal system in which you need to stick close to your patrons.

startupdiscuss 10y ago
That's a very interesting and original way of looking at it. It would also explain clustering in other areas (finance in NYC, Oil and gas in Houston etc). Do you have any links or references exploring that idea in greater detail?
- CPLX 10y ago
  I don't mean to have this come across as snarky, at all, but really the reference for this is the whole of human history. Wealth is basically self-concentrating. Our political systems tend to end up with a few capital (and often Capitol) cities where the spoils from the plundering, both metaphorical and literal, end up. The original article does present some interesting and relevant examples of countervailing forces at work as well, and is insightful. But the elephant in the room, as always, is that returns to capital and rent extraction are the primary drivers of wealth, and that the winners tend to keep winning and vice versa.
  - startupdiscuss 10y ago
    That's not snarky, and you have a point. But even if things seem "really obvious" and we can tell "just by looking at the facts", I feel better if someone has looked at the data and shown that to be the case. We aren't living in the feudal era, and a lot of people like to think that the reason people move to the cities is because of (for instance) bars and restaurants, museums and the opera, high-paying jobs and so on. This proximity to wealth may be a symptom of some third factor or it may be the driving factor. That's why I appreciate it when smart, hard-working people take their time to figure it out for me.

maccard 10y ago

I wouldn't have any interest in living in many of those cities you listed, and as a result wouldn't be willing to move and work there. I'm sure there are many out there who feel the same.

pc86 10y ago
But most people would be willing to work remotely regardless of where the company headquarters is.
- maccard 10y ago
  That's not what the parent comment said. > Talented people already move from one coast to the other, so they could as well move to any other place.

sparkling 10y ago

I think more than anything else, this problem is caused by a old mindset. Some managers really believe that "if he ain't in the office, he ain't working". Especially when working with external consultants, even if that means paying them to commute a total of 5+ hours daily.

amyjess 10y ago

> Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? I agree in general, and I think it's likely that the future of growth is in sprawling inland metro areas like Dallas-Fort Worth, Kansas City-Overland Park, and Minneapolis-St. Paul. Well, in the case of Dallas, this is largely going to depend on whether or not the Texas state legislature can ever get their heads out of their asses. If SB6 passes, expect Texas's economy to crater. On the other hand, I'm not sure if your exact list of cities is feasible. Amarillo is too small to really become a hub for anything in the near future (it would take a dedicated effort, like how Bugsy Siegel transformed Las Vegas). And Miami is limited in its ability to sprawl because it's on a coast. Des Moines is a distinct possibility, though. The suburbs have room to sprawl out forever. The city centers can become high-rent places for the rich, and everyone else can live in the suburbs and exurbs. Furthermore, the inner ring suburbs can become "edge cities" where businesses prefer to locate themselves (this is already how Dallas is laid out) so people from both the exurbs and the city center can have short commutes.

AJ007 10y ago

This book does a good job of explaining why: https://www.amazon.com/New-Geography-Jobs-Enrico-Moretti/dp/0544028058/ https://www.amazon.com/New-Geography-Jobs-Enrico-Moretti/dp/... Pretty much it is a networking effect issue. The same reason why you are posting this on hackernews instead of reddit. Physical proximity matters a lot, even when work is digital.

bpicolo 10y ago
Ordered a copy. Thanks for the suggestion! I've been looking to read a bit more non-fiction :)

AlexB138 10y ago

My understanding is it's largely demands of VC. They want to be able to check in on their investments, and having to hop on a plane to do that isn't convenient. That has always struck me as odd, since the invested money would go further in a cheaper market, but that's the explanation I've heard many times.

reverend_gonzo 10y ago

I live in Chicago. I love it here because of everything else it has to offer. I have everything almost everything I need available to me within walking distance from home. That includes grocery store, dive bars, cheap restaurants, high end restaurants, clubs. For anything else I may want to do (concerts, sports games, plays, comedy), there are dozens of world class options within a ten minute cab drive / 30 minutes on public transportation. It's gotten to the point, where if there's a band I want to see, but they're in the suburbs, I'll just wait til they're back in the city. I grew up and went to college two different small beach towns. There wasn't much of anything to do besides drink. If you wanted culture, you'd have to get in your car and drive at least an hour. I have no desire to live outside of a big city, unless it is in the middle of nowhere, but in that case, I will still have a home in a city. My guess is a lot of other people feel the same way.

robterrin 10y ago
I've heard this pitch for Chicago many times, and it seems reasonable if you are in the one of the industries, Tyler mentions, that are more diffuse. The main problem with Chicago is it lacks an anchor industry. Is it the best place to be for finance? No, that's NYC. Is it healthcare? Boston, Baltimore, Cleveland or Rochester. Energy? Houston. Technology? SF. Entertainment? LA or NYC. Politics? DC. What exactly is Chicago good at? They have Wilco, so that's cool.
- ntdef 10y ago
  I think you're a bit misinformed. Chicago has two large keystone industries that serve the global economy: (1) Industrial large scale manufacturing (Boeing, John Deere, Caterpillar), (2) Insurance (all of them); not to mention a ton of Food and Agriculture HQs are based there as well.
  - acchow 10y ago
    Isn't Boeing in Washington? Also, not too many people aspire to be in insurance. I don't think you can put it on the same level as finance, arts, software, fashion, film, etc.

saiya-jin 10y ago

same logic that makes off-shoring (okay, near-shoring in this case) to not work, or be at least occasionally painful experience. to quote one client - I'll rather have a mediocre dev sitting right here so we can discuss/plan/design behind one single desk/board rather than having a star 500 (or 5000) km away. even if there wouldn't be time difference, in person contact has high value. and seeing this daily, cannot agree more.

kazagistar 10y ago

Software Companies only have two real requirements on their location... skilled programmers, and money. Both are easier to come by in megacities, so that's how it ends up working most of the time.

Arizhel 10y ago

A lot of people don't want to live in boring, conservative places like Amarillo and Des Moines. More importantly, tech company executives and managers really don't want to live there. The workers have to work on-site with managers, so the workers obviously can't live there either. Everyone has to be co-located in the same place.

csense 10y ago
> Everyone has to be co-located in the same place. Why?
- Arizhel 10y ago
  You can't question this. It's known to be true to executives and managers.
  - passiveincomelg 10y ago
    Preach the gospel sister, brother or other gender identity! Executives and managers are the priests and offices are their temples. Amen.
mercutio2 10y ago
Have you ever been to Des Moines? Not picking on you specifically, but boring and conservative aren't the adjectives I'd use for it. It's possibly slightly more conservative than Ann Arbor or Madison, but the area around Drake feels like a college town to me when I visit.

lkrubner 10y ago

> Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Some of the burden is on you to prove what has failed so far. If it is possible to build a successful large scale startup in Amarillo, why hasn't it happened? I'll point out the theory of agglomerative clustering also includes the contrary point: a city that is great at something tends to exclude other activities, for any given amount of population. A city like Amarillo, which plays a role in the oil industry, is less likely to be great at software, because it plays a role in the oil industry. It's population would have to grow before it could be good at both. Also, if two 20-somethings build a successful startup in Amarillo, they may want to move to San Francisco as soon as they have money. The "this startup can be anywhere" argument works both ways: yes it could be Amarillo, but if it can be anywhere then it doesn't need to stay in Amarillo. And the startup can also move to Poland, or Romania, or India. If you believe the startup can be anywhere, then you basically believe that a startup would only be in Amarillo by random chance. If there are 100,000 great cities in the world, and all of them equally good for a software startup, then the chance of a startup being in Amarillo is 1 in 100,000. But in fact, there are good reasons why startups tend to cluster into certain cities. You should read "Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv" : https://pando.com/2012/11/20/why-tiny-stockholm-has-the-most-stunning-startup-ecosystem-since-tel-aviv/ https://pando.com/2012/11/20/why-tiny-stockholm-has-the-most...

lkrubner 10y ago
Why is this getting downvoted? I can not see a single sentence in this comment that is not accurate.
mcguire 10y ago
It's also important to note that "successful large scale startup" in this context means "a new web application with a lot of users". The Dept. Of Energy, Southwest Airlines, Texas Instruments, and Principal Financial Group need not apply.
- Kalium 10y ago
  DoE may be slightly different from the others...

nojvek 10y ago

Talent attracts talent. Wealth attracts wealth. This cities work because there is a high concentration of wealth, talent and resources for them to produce big wins over and over. Google and Facebook couldn't have been this successful anywhere else. Pg had a nice article on how other places can become sv like hubs.

laughingman2 10y ago

Rational behind Zoho's new office in rural Tamil Nadu (their engineering base is primarily in city Chennai) is to reduce clustering in mega cities. https://www.youtube.com/watch?v=lyHgMNuftL0 https://www.youtube.com/watch?v=lyHgMNuftL0 Zoho's CEO feels that good software products can be developed not only in silicon valley or even big cities like Chennai and Bangalore, it can be developed in non-descript towns like Tenkasi too. I think with more accessibility to digital media, and expansion of skills through internet education, skills can be diffused across geography, atleast in our field.

dpark 10y ago

>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Because face to face is high bandwidth. You can have everyone work from home but it will reduce your ability to collaborate effectively. Teams worry about being in separate buildings or even just split across floors because the friction introduced reduces impromptu face to face conversations significantly. Now, if you're asking why an entire company can't move, that's because the talent pool is where it is and many engineers will not be willing to relocate. Moving is disruptive and for married couples where both work at different locations, it may be effectively impossible.

wjoe 10y ago

I think it's mostly just because the concentration of the industry is convenient. In the UK, there are tech jobs all over the country. But there are probably more in London than everywhere else combined, especially if you're looking for the start-up unicorn types. I lived in a smaller city for a while after university, but there were very few jobs to choose from that interested me. I moved to London for one job in particular at the time, but also safe in the knowledge that it would be easy to find another job. I've had 4 different jobs in London since then, and it's never been very hard for me to find something else that's suitable and interesting for me. The same holds true for most of my friends from university - many of the moved to London because it was the most obvious option for finding a tech job. So it has a further concentrating effect, that people are more likely to know others who are working in the capital city than elsewhere in the country. If I was seeking a new job and open to moving anywhere in the country, I could find one somewhere outside of London. But if I was already living in another city, it might be harder to find a job without moving. It might not be quite the same in US, where there are a number of cities around the country that are a similar size to London, but in the UK there are maybe only 2-4 other cities that are large enough to have a wide selection of jobs in one industry, and none besides London with a population of over 1 million.

pascalxus 10y ago

SV companies are not price sensitive. They'll pay alot, even just for the benefit of having them in the office. Software companies either win big or lose big. If they win big, they can easily cover whatever cost of salary in SV and there's still a plethora of talent out here in the bay area, for a well funded company.

acchow 10y ago
I think you're describing a certain type of software company - one that doesn't have to answer to shareholders (Google, Facebook, Snap, etc) and thus behave according to what their leader and employees want. Most of the tech industry (including for example Apple and Amazon) isn't like this.
- mercutio2 10y ago
  Why do you think Amazon and Apple aren't like this? All of the big software houses compete for the same engineers, and they're all paying their incremental new engineers +/- 10% the same total comp across the experience spectrum. I would agree with pascalxus, the big tech companies aren't price sensitive. That doesn't mean the average engineer can easily finagle a drastically out-of-band salary, but the bands are already exceptionally high and grow faster than inflation in the aggregate.

jes5199 10y ago

> City centers simply get voided of average earning people and replaced by high earning ones. As soon as they are the average earners, even more wealthy people move okay but how do you run a city like San Francisco once all of the service industry workers get priced out? Do you start paying people 6 figures to clerk a convenience store?

conanbatt 10y ago
Yes? And thats not really a problem at all.
- ghaff 10y ago
  Except it doesn't work that way. Instead 7-11 simply decides that it can't run a convenience store profitably in that location. For other types of service workers, wages/fees may well go up but it probably also just gets harder to find people.
  - Atheros 10y ago
    Of course it works that way. If almost all the stores close then the remaining ones can raise prices. If All the stores close, the quality of life goes down and rents go down until it equalizes with a few stores open.
  - conanbatt 10y ago
    Where do the rich people get their groceries then. Its clear that service jobs pay a lot more in SF that they do in other places, for the very reasons you mention before.

dllthomas 10y ago

> Talented people already move from one coast to the other, so they could as well move to any other place. There is less risk in moving to a place with more options when the current one falls through.

Waterluvian 10y ago

Silicon Valley is basically one giant hackathon. Half the fun is being there.

api 10y ago

It's not talent that's concentrated. It's capital. The SF bay is the undisputed headquarters for smart technology investment capital, both angel and venture.

bante 10y ago

"Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places." It's concentrated _because_ it doesn't have to be at certain places. Your post office that had to be close to you is now run by a couple of thousand people at Google. "Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines?" Again, without being to annoying, why does it have to be in Dallas? It doesn't, so it mostly isn't.

amyjess 10y ago
> Again, without being to annoying, why does it have to be in Dallas? It doesn't, so it mostly isn't. Actually, the answer is that Dallas is already a tech hub. https://en.wikipedia.org/wiki/Silicon_Prairie https://en.wikipedia.org/wiki/Silicon_Prairie https://en.wikipedia.org/wiki/Telecom_Corridor https://en.wikipedia.org/wiki/Telecom_Corridor
- bante 10y ago
  As far as I know that only tells you why it might have had to be Dallas at some point when regional centers made sense. Which changed somewhere around Paypal if not earlier. I'm not saying that Dallas (or any other city) can't have some, even quite successful, startups. Just that you can't really compete being say "the third to fifth best choice for startups". At that point you're competing with too(!) many different cities. You have to be the obvious choice in a few, preferably large, categories; capture a lot of local talent (which is harder in the US), and most likely both.

Futurebot 10y ago

Clustering effects are real, even for software. The ability to meet with clients by taking a (relatively) quick trip from SOHO to Chelsea (to initiate, pitch, or close deals) or the ability to meet with the developers of company that created a service with an API you're going to integrate with is actually helpful ( "warm currents" of communication). Software technology ecosystems could certainly succeed in other places if one could bootstrap them in the first place; the clustering (and self-reinforcing network) effects mean that people gravitate to where the action is already happening. Getting started in a new location is challenging, so only those willing to shoulder additional risk (beyond the often-high risk of starting and running a startup) are going to try.

superioritycplx 10y ago

Companies and people that are sitting pretty in SV will tell you that you absolutely need to be there to get anything of importance done. It's job security and protects them from most outside competition. Freedom of speech and expression will suffer as long as all Western world's social media is controlled by a few city blocks in SF.

Kalium 10y ago

You're absolutely right! It could be anywhere in the world! Talented people can easily move anywhere! Startups can be successful in San Antonio, Phoenix, or Ithaca! So why do so many smart people insist on concentrating themselves so? Is it possible that perhaps there may be reasons for people to choose such an obviously irrational thing? What do they think they're getting out of it? Many companies have found that they benefit significantly from physically proximate workers. There are distinct benefits to putting people in offices in person. On top of that, having many such companies in one place is beneficial to the specialist worker. It mitigates risks of unemployment, and enables workers to take greater risks. Myself, I've done what you suggest. I took a job in a cheap place. It was great in some ways, and terrible in others. When I decided I was done with the job, I had to leave that city. There just weren't many options for me there. I understand why a businessperson would like it - you get more leverage over cheaper employees - but it's not the best choice for me.

pix64 10y ago

> Talented people already move from one coast to the other, so they could as well move to any other place. But any-town, USA has nothing else to offer them in terms of entertainment, arts, food. I live in the 77th largest city in the US and this place is dead.