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If the artificially-created real estate "shortage" problem in the Bay Area was solved, lots of other problems would be solved. - Companies raising money just t

If the artificially-created real estate "shortage" problem in the Bay Area was solved, lots of other problems would be solved. - Companies raising money just to pay inflated (yet still insufficient) labour costs - People who would love to work for startups but realize that most startup salaries barely gets you a studio apt, pretty cool until you have a family - Companies who "cant find" talent Is it any surprise companies need to raise so much funding, esp when operating out of the Bay Area?

dmitrygr 9y ago
> Companies raising money just to pay > inflated (yet still insufficient) labour costs This does not match reality since most startups in SV pay very very very little. In many cases barely enough to live with roommates (and forget having a family)
- abritinthebay 9y ago
  Based on nearly 15 years of working at startups: wut? This is absolutely not true in any way. They sometimes pay less because they try to trade options for salaries but that’s becoming less popular given the lack of cashing out and people’s better understanding of the economics of it. You can get low to mid six figures at a startup easily... which absolutely does not match your description
  - perfmode 9y ago
    We're all talking past each other in a way. Startups are paying a lot because they're raising a lot of money. Round and round we go.
    - mrep 9y ago
      They're raising lots of money because their competition for exployees (companies like Facebook and Google) pay even more.
      - eloisant 9y ago
        They're raising a lot of money because they can, because money is flowing to VCs.
        perfmode 9y ago
        As I insinuated, we are going in circles.
  - thaumasiotes 9y ago
    > You can get low to mid six figures at a startup easily... Mid six figures? $500,000? If that's what's easy, what are they paying above-average people?
    - abritinthebay 9y ago
      Depends on your role. I’m not saying a junior engineer gets that. I would have thought that was obvious.
      - thaumasiotes 9y ago
        Hmm. What does "easy" mean to you?
        abritinthebay 9y ago
        “Being hired without much fuss when you are a qualified applicant for the role”. If we’re saying experience and training are things that exclude “easy” then we’re in crazy town.
        thaumasiotes 9y ago
        Ah, so you don't think anyone would lift an eyebrow if you told them "you can easily get a billion dollars working at Microsoft"?
  - TuringNYC 9y ago
    >> You can get low to mid six figures at a startup easily Firstly, mid-six figures is 500,000 -- please share which startup's comp range is in this area. Secondly, you cant pay rent with options.
usaar333 9y ago
I'm not sure how much bay area real estate shortages drive this; I suspect little. 1. It's unclear how much additional housing will drop prices. There's enormous demand and denser housing costs more to build per square foot. Realistically, we're talking 10 to 20% drops as upper bounds of cuts (think Seattle costs) 2. [Edited to clarify price driving] These companies have decided to be in the bay area for some reason (mainly talent pool?) At that point, you are competing with very high paying companies. (Top prices for senior eng being set by companies like Google which pay $300k TCO; Series B stage startups need to do $170k+ cash to be competitive.. while not everyone can command these jobs, land costs are being set by them) 3. Sure, there might be some people excited enough to take a pay cut. But I suspect a lot of the problem is how poor the expected outcome is for first employees. Companies still seem unwilling to give out equity levels that justify pay cuts (i.e >10%)
- isuckatcoding 9y ago
  Thing is though it’s not that easy to get a big4 job. It takes several weeks or even months to land those competitive roles whereas startups are much easier. Not all of us have the talent to land that big4.
  - ves 9y ago
    “Good” startups are definitely much harder to recruit for than big4 — there’s a lot of variance in startup engineering quality.
  - user5994461 9y ago
    Most good startups have interviews as hard, if not harder, than the big 4.
- perfmode 9y ago
  Consider how much of the pay of well-paid big Corp talent goes to real estate rentiers in the Bay Area. 30% of base? That’s almost greater than the US gov’t’s cut.
  - 9y ago
killjoywashere 9y ago
San Diego's real estate is quite reasonable. So, kindly, stay in the Bay area. Please.
- usaar333 9y ago
  Except it has much lower income levels than the Bay Area - so it's only marginally better. In fact, SD is in the top 10 least affordable metro areas: http://www.nusinstitute.org/assets/resources/pageResources/Economic_Ledger_Housing_Sept2013.pdf http://www.nusinstitute.org/assets/resources/pageResources/E...
  - phamilton 9y ago
    But, in circling back to the origin of this comment thread, lower income levels translate to lower fundraising requirements for startups.
cjf4 9y ago
To me this leads to a question about the Bay Area centric techno-spehere: at what point do the prices become so high that companies/ecosystems in other parts of the country become relatively attractive? I understand that the SV network is a real and powerful thing, but holding all else equal (indulge me), wouldn't it make the cost of startups more attractive for all stakeholders if an alternative, viable network were in Buffalo or Nashville or Boise or wherever? Is it just a matter of lack of coalescence?
- Mtinie 9y ago
  Yesterday.
- jtmarmon 9y ago
  When you're shooting for one company to return 100x your investment per fund, a 2x difference in cost to get the best possible environment for the company you're funding is worth it.
  - buro9 9y ago
    One wouldn't need a 100x if one hadn't over-funded all the bad bets.
    - jopsen 9y ago
      And lots of bets would do fine if they didn't have to perform 100x Note: there are lots of successful small startups that never explode..
    - jt2190 9y ago
      This is not the investment strategy of venture capital, though; they're not trying to be "smart" by picking a few good bets. They're placing a lot of small (small for them, "overfunded" for you) bets in order to increase their odds that one of the bets is really, really good. The more bets they make, the more likely they've bet on a 100x winner.
- usaar333 9y ago
deleted 9y ago
[deleted]
saturdaysaint 9y ago
I wonder if companies consider filtering out older workers with families to be more of a feature than a bug.

dmitrygr 9y ago

> Companies raising money just to pay > inflated (yet still insufficient) labour costs This does not match reality since most startups in SV pay very very very little. In many cases barely enough to live with roommates (and forget having a family)

abritinthebay 9y ago
Based on nearly 15 years of working at startups: wut? This is absolutely not true in any way. They sometimes pay less because they try to trade options for salaries but that’s becoming less popular given the lack of cashing out and people’s better understanding of the economics of it. You can get low to mid six figures at a startup easily... which absolutely does not match your description
- perfmode 9y ago
  We're all talking past each other in a way. Startups are paying a lot because they're raising a lot of money. Round and round we go.
  - mrep 9y ago
    They're raising lots of money because their competition for exployees (companies like Facebook and Google) pay even more.
    - eloisant 9y ago
      They're raising a lot of money because they can, because money is flowing to VCs.
      - perfmode 9y ago
        As I insinuated, we are going in circles.
- thaumasiotes 9y ago
  > You can get low to mid six figures at a startup easily... Mid six figures? $500,000? If that's what's easy, what are they paying above-average people?
  - abritinthebay 9y ago
    Depends on your role. I’m not saying a junior engineer gets that. I would have thought that was obvious.
    - thaumasiotes 9y ago
      Hmm. What does "easy" mean to you?
      - abritinthebay 9y ago
        “Being hired without much fuss when you are a qualified applicant for the role”. If we’re saying experience and training are things that exclude “easy” then we’re in crazy town.
        thaumasiotes 9y ago
        Ah, so you don't think anyone would lift an eyebrow if you told them "you can easily get a billion dollars working at Microsoft"?
- TuringNYC 9y ago
  >> You can get low to mid six figures at a startup easily Firstly, mid-six figures is 500,000 -- please share which startup's comp range is in this area. Secondly, you cant pay rent with options.

usaar333 9y ago

I'm not sure how much bay area real estate shortages drive this; I suspect little. 1. It's unclear how much additional housing will drop prices. There's enormous demand and denser housing costs more to build per square foot. Realistically, we're talking 10 to 20% drops as upper bounds of cuts (think Seattle costs) 2. [Edited to clarify price driving] These companies have decided to be in the bay area for some reason (mainly talent pool?) At that point, you are competing with very high paying companies. (Top prices for senior eng being set by companies like Google which pay $300k TCO; Series B stage startups need to do $170k+ cash to be competitive.. while not everyone can command these jobs, land costs are being set by them) 3. Sure, there might be some people excited enough to take a pay cut. But I suspect a lot of the problem is how poor the expected outcome is for first employees. Companies still seem unwilling to give out equity levels that justify pay cuts (i.e >10%)

isuckatcoding 9y ago
Thing is though it’s not that easy to get a big4 job. It takes several weeks or even months to land those competitive roles whereas startups are much easier. Not all of us have the talent to land that big4.
- ves 9y ago
  “Good” startups are definitely much harder to recruit for than big4 — there’s a lot of variance in startup engineering quality.
- user5994461 9y ago
  Most good startups have interviews as hard, if not harder, than the big 4.
perfmode 9y ago
Consider how much of the pay of well-paid big Corp talent goes to real estate rentiers in the Bay Area. 30% of base? That’s almost greater than the US gov’t’s cut.
- 9y ago

killjoywashere 9y ago

San Diego's real estate is quite reasonable. So, kindly, stay in the Bay area. Please.

usaar333 9y ago
Except it has much lower income levels than the Bay Area - so it's only marginally better. In fact, SD is in the top 10 least affordable metro areas: http://www.nusinstitute.org/assets/resources/pageResources/Economic_Ledger_Housing_Sept2013.pdf http://www.nusinstitute.org/assets/resources/pageResources/E...
- phamilton 9y ago
  But, in circling back to the origin of this comment thread, lower income levels translate to lower fundraising requirements for startups.

cjf4 9y ago

To me this leads to a question about the Bay Area centric techno-spehere: at what point do the prices become so high that companies/ecosystems in other parts of the country become relatively attractive? I understand that the SV network is a real and powerful thing, but holding all else equal (indulge me), wouldn't it make the cost of startups more attractive for all stakeholders if an alternative, viable network were in Buffalo or Nashville or Boise or wherever? Is it just a matter of lack of coalescence?

Mtinie 9y ago
Yesterday.
jtmarmon 9y ago
When you're shooting for one company to return 100x your investment per fund, a 2x difference in cost to get the best possible environment for the company you're funding is worth it.
- buro9 9y ago
  One wouldn't need a 100x if one hadn't over-funded all the bad bets.
  - jopsen 9y ago
    And lots of bets would do fine if they didn't have to perform 100x Note: there are lots of successful small startups that never explode..
  - jt2190 9y ago
    This is not the investment strategy of venture capital, though; they're not trying to be "smart" by picking a few good bets. They're placing a lot of small (small for them, "overfunded" for you) bets in order to increase their odds that one of the bets is really, really good. The more bets they make, the more likely they've bet on a 100x winner.
usaar333 9y ago

deleted 9y ago

[deleted]

saturdaysaint 9y ago

I wonder if companies consider filtering out older workers with families to be more of a feature than a bug.