11 ms·

Investing Outside the Bay Area

99 points by andygcook 8y ago

joefranklinsrs 8y ago
Ignoring all the risk-tolerant VCs and angels, with billions (trillion?) of capital in the silicon valley ecosystem for a sec. If one simply looks at the big non-US tech companies development offices and hiring activities Rakuten: San Mateo having most job openings outside Japan, next closest is Toronto samsung: US having 1100 opening, next is india with 26. in US, there's 114 jobs in california, next is texas with 81 Tencent: only offices outside China is Palo Alto and Seattle It's clear that most tech companies are aware that all the talents are in Silicon Valley - and because of chicken and egg effects, all the talents come to and stay in Silicon Valley. And when one forms a network in silicon valley, she would be bombarded with job requests with silicon valley companies every day, and if she chooses a better job, it would be still in silicon valley.
- closeparen 8y ago
  Maybe true if you’re targeting the senior talent who got in early enough to buy houses and have kids, but all the 20-somethings I know (myself included) plan to get out within 5 years, barring a drastic increase in compensation. I suspect there is a large, untapped market of disaffected young engineers who moved here to start their careers but would move to a second-tier city for the right job.
  - joefranklinsrs 8y ago
    There are still alot of cheap real estates along the BART and caltrain stops https://www.estately.com/bay-area-home-affordability-transit-stop https://www.estately.com/bay-area-home-affordability-transit... Pittsburg/Bay Point $430,000 Blossom Hill $657,000 San Jose $680,000 And the largest job growth recently has been East Bay, around Pleasanton. If you are young and starting out, making $110-140k, try living in east bay or san jose and rent a room for $1k - 1.5k, you should be able to save enough money for a down payment for a house soon enough. The stories I've heard for people that couldn't afford their rent, are people living in $3k apartments in SF.
    - closeparen 8y ago
      Sure, you can always trade off privacy and commute time to make the numbers work out. But not having to do that is an incredibly compelling form of compensation that companies can provide at minimal cost by offering work elsewhere. This is not a thing for white collar workers almost anywhere else in the US.
    - WillEngler 8y ago
      Let me try and complicate this :) First, I submit that $430,000 is still expensive. Instead of buying the median home in Pittsburg and commuting 60+ minutes on BART to downtown SF, I could add an h and buy a huge home in my favorite neighborhood in Pittsburgh PA for about the same price and have a chill bicycle commute: https://www.zillow.com/homes/for_sale/Pittsburgh-PA/pmf,pf_pt/house,condo_type/11288076_zpid/26529_rid/ https://www.zillow.com/homes/for_sale/Pittsburgh-PA/pmf,pf_p... (Obvious and legitimate objections: fewer job options, snow.) This is just me trying to say, $430k for that arrangement does not strike me as "cheap" given alternatives in other metros. I agree that with a tech salary it's possible to save up for a down payment and buy in the Bay Area. But the risk seems unacceptable to me. Paying ~$1M for a house is a big bet that the Bay Area housing market stays hot. I don't want my wealth to be so tied up in a hyperlocal bet like that. I see things going one of two ways (and this is probably over-simplistic). Option 1: A $1M starter home is the new normal. Prices stay flat or keep rising over the long haul. In that case my investment is sound. But I don't want to live in that kind of place. Where will my kids' teachers live? How will I cope with the moral ickiness of living in a place where housing costs create extreme spatial segregation of the professional class from the service class? Option 2: The vision painted above is unsustainable. Something has to give (maybe a big financial crash; maybe just state-mandated upzoning that quickly increases housing supply) and the value of my investment drops by a lot. Either way, I'm planning to save up on the West Coast and use my nest egg back in the Rust Belt.
      - joefranklinsrs 8y ago
        You make compelling arguments. For me, a house isn't an investment but it's a place where I house my family. (sure, houses in silicon valley have gone up 1.5-2X in a few years. However, stocks have gone up 2-10X). If you're young, there's no point of getting a house. If you are close to have a family, one of the most important thing is KEEPING your job. If you are remote in Pittsburg, and you have to get a new job, it might take a few months of interviewing and flying in for interviews to find a remote job that pays your old salary. Do you want to risk that even to your family? most likely you wouldn't. You have 18 years of mortgage and college tuitions to pay for.
  - trevyn 8y ago
    FWIW, Purchasing a house and having children are no longer desirable goals for a substantial number of people. Looking at trendlines and extrapolating is a pretty good way to see the future.
    - closeparen 8y ago
      The goal is shifting from “large suburban house” to “central urban condo,” I suppose, but is there evidence for decline in desire to have kids? Actual both rate can be explained by people delaying gratification for economic reasons.
    - nimish 8y ago
      This was the same "millennials don't want to do X" argument you heard a few years ago. That started to stop once millennials got enough cash to do X. A major, major confounding issue is simply not having the money. Of course you'll see a trend of fewer people buying homes if home prices are so high that fewer people can afford them.
  - WillEngler 8y ago
    I think some smart companies in "third tier" cities are tapping this. There are some hilarious targeted ads I see for an Austin company (HomeAway) that prominently shows the median home price in Austin and a link to their open jobs. Similarly, Duolingo (Pittsburgh-based) put up a billboard in SF advertising the prospect of working in tech AND owning a home: https://venturebeat.com/2018/03/23/duolingo-to-silicon-valley-workers-move-to-pittsburgh-where-you-can-actually-afford-a-home/ https://venturebeat.com/2018/03/23/duolingo-to-silicon-valle...
  - lsc 8y ago
    The problem with second-tier cities, as I see them, is that you have to move every time you get a new job, if you are maximizing your income/career. (I mean, not doing that is totally valid, but it's important to factor in the "I took a worse job because it was closer to the house that it would be expensive for me to abandon" thing into your expense/utility calculations. keep in mind that reduced job choice can mean increased stress and unpleasantness as much or more than it can mean simply getting less money.) I think if you work in tech, silicon valley is pretty unique in that there are so many really desirable employers within a short distance. I'd be comfortable buying a house here even if it meant that it makes it really expensive if I want a job more than 15 miles out.
    - closeparen 8y ago
      The novelty of eye-popping direct deposits has worn off; the rate at which I shovel money from venture capital to real estate brings me no particular joy. Maximizing income can only inch me closer to the quality of living situation I'd have elsewhere. The point at which I'd be done increasing housing budget, and actually free to increase other investments or luxury consumption, does not appear attainable. (Consider savings for a down payment as part of housing budget here. And if I could buy a starter home, my next priority would be fixing either the commute time or neighborhood safety compromise that made it a starter home). I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living (and my parents who got me accustomed to it were in much less lucrative fields). I stay becuase I like the work and the company, because why not take this opportunity while I'm young? But it's an indulgent youthful adventure, not a sustainable long-term plan.
      - lsc 8y ago
        >I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living so, assuming you are a medium density type and can stomach an apartment with reasonable soundproofing, you are spending $3000/month on rent here, for a reasonably okay 1 bedroom apartment. (if you are willing to take a hit in quality, you can get more bedrooms or even a bad single family home for about that price) So you move to a second-tier city and you get the same thing for $1500/month. Now, I don't make twice here what I would in a second-tier city, but I do make rather more than an extra $1500 a month.
- codingdave 8y ago
  I've lived in numerous locations outside SV. They all have talent, they all have recruiters bombarding you, and when you take a new job, is would be still wherever you live. I'm not denying that SV has a strong presence in this industry -- to do so would be silly. But denying that other places also have talent and jobs is equally silly.
  - joefranklinsrs 8y ago
    I have lived in LA, New York, and Tokyo. They all have talents. However, it isn't created equal. The companies outside silicon valley aren't using the best technologies, don't have the best processes, don't use the best softwares, which in turn affects the talents. The talents aren't attending the latest tech meetups in SV, aren't using the best tools, aren't doing the best coding practices, using the best frameworks, etc. IMO, there's a 10X difference currently between tech startups in SF and tech startups in LA or New York; I've worked with teams inside and outside silicon valley. The calibur of talent/progress difference is just insane.
    - yesimahuman 8y ago
      And Google uses Java and Facebook uses PHP. The idea that SF startups are so much more advanced from a tech standpoint than other cities is just ridiculous
      - sidlls 8y ago
        It's not ridiculous at all. I've worked outside the Bay Area and in it the last several years. There is a huge difference in culture and approach to solving problems. Lots of startups are boring CRUD trying to look more advanced, but plenty are actually trying new things and exploring tech in ways that most other places just can't or won't support.
        jmspring 8y ago
        There is a difference between trying to do new things and needing to use the latest and hottest webscale technology to try said new things...
- xivzgrev 8y ago
  Yea there is a huge network effect here. I just recently wrapped up a job search after moving back here from Chicago, and the difference in depth was night and day. I kept my marketing job pipeline full and I did not come close to bottoming out all relevant opportunities. In Chicago, there were maybe 10 relevant opportunities for me at a tech startup.
- nopinsight 8y ago
  Well-known corporations like Samsung and Tencent should be able to recruit most junior talent they need from their own country or a lower-cost location. The major reason they set up offices in the US is to recruit top talent who are not willing to move and sometimes more senior than those they can recruit from elsewhere. In other words, they have little incentives to set up offices in other US locations which are not lower cost than their home base and have too few talent at the level they cannot get elsewhere. The needs of many startups could be different from them.
dawhizkid 8y ago
Bay Area startup scene is dying as is. With few exceptions no small startup can hire talent here anymore. IMO it’s a good thing that other cities will have a chance.
- codeafin 8y ago
  I'm not from the Bay Area so I'm not aware, how is it dying?
  - vadym909 8y ago
    not the op- but I think what he's implying is that all the good engineers are in golden handcuffs with the FANG or unicorn startups making $300k. In the old days you could match the base salary and say my stock is better. Today its harder when MSFT is 3x or Netflix has 5x in the last few years. Your startup stock of 100K with 10% probability of becoming worth 10x in a few years just doesn't sound attractive enough to a good engineer. If all the good engineers are taken, it sucks the life out of other startups.
    - nojvek 8y ago
      It’s not that all the good engineers are taken. It’s that the good engineers are doing mindless ad blasting to make a bigger buck. There’s an opportunity cost of inventing things that actually make people’s lives considerably better. The valley was the place where this would happen, now that culture and spirit is slowly dying. Mostly because you can’t take those kinds of risks. Just the living expensive would kill you. VC money needs a quick buck so that kills those ideas in their infancy too. Innovation is hard!
      - propman 8y ago
        Hit the nail on the head right here. You just can’t take the risks anymore. Everything is too expensive and it isn’t worth it anymore when Facebook dangles such a fat pay check in front of you. Entrepreneurship and free thinking has turned into copycat, quick bucks how to make quick money and complete group think. This is especially true in the sf start up scene
arbuge 8y ago
> Redfin, the Seattle-based home buying site/app, has been beating this drum for years, recently stating that we will see “mass migration” from the Bay Area based on housing. The CEO writes “Silicon Valley is going to leave Silicon Valley… the technology companies… they’re chasing talent, and talent is chasing affordable housing.” Redfin specifically identifies Denver, San Antonio, and Houston as the next hubs newer generations will seek out. Rather odd choice of Texas cities in my opinion. If you're going to go with Texas, I'd think Dallas and Austin are more obvious choices for technical people.
- toomuchtodo 8y ago
  San Antonio is a bit more conservative than Austin, but much cheaper and still very nice. My financial services firm is slowly moving everyone from NYC to Texas and Florida, for obvious reasons.
  - twblalock 8y ago
    Are people quitting because they don’t want to move?
    - toomuchtodo 8y ago
      Not to my knowledge. To be more specific, roles are being moved, not people. New roles only in target market, old roles slowly attritioned out as people leave or retire. No one has been forced to move yet. That day may come, but it’s a long ways off.
  - crack-the-code 8y ago
    I don't think the price differential between San Antonio and Austin housing is high enough to offset the level of talent and appeal that Austin (or even Dallas for that matter) currently provides for the tech scene.
    - deleted 8y ago
      [deleted]
chmaynard 8y ago
Advice to talented professionals everywhere: If you have reached the age of 30, you should already own your home. If not, buy a home immediately. NOW. If you can't afford anything decent close to your place of employment, quit your job and move somewhere where homes are more affordable. Your future happiness depends on it.
- eat_veggies 8y ago
  Can you elaborate on this? I'm nowhere near 30 yet, but I'm curious as to why my future happiness will depend on it.
  - toomuchtodo 8y ago
    The longer you wait, the more you’re priced out of the market and reliant on the whims of a landlord. Now, one could argue we’re at the peak of the current business cycle and asset prices are overly inflated. And there might be merit to that. In that case, look for real estate bargains where you’ll have equity on day one (short sales, foreclosures, assets priced below their fair market value).
    - usaar333 8y ago
      > The longer you wait, the more you’re priced out of the market and reliant on the whims of a landlord. That's only true if the value of your portfolio or salary aren't increasing faster than the market. I've personally teared up in housing about every other year. It would have been much more difficult to do this is I owned rather than rented.
      - ci5er 8y ago
        > teared up in housing What does this mean? Moved? Every two years? Sounds horrible. Don't you have any hobbies to fill your time?
        usaar333 8y ago
PowerfulWizard 8y ago
It would be interesting to calculate: - cost of living in the SFBA - cost of living somewhere other than SFBA but generally "equivalent" in the sense that living there wouldn't be seen as a negative - a average-ish amount of VC funds that must be invested in a company before capital is returned. - average amount of capital raise that goes to salary - what amount of salary is due to cost of living. It is getting a little bit convoluted, but that would allow you to approximate how much VC money is going to SFBA landlords due to the chokehold on housing supply. We're seeing a shade of this in the Amazon HQ2 process, but if you have actual physical mobility as an organization over different real estate markets and political jurisdictions it will shift the balance of power in terms of rents and taxation. I don't think it applies to small companies for various reasons, but the motive is there.
- mattnewton 8y ago
  As a note, make sure cost of living is determined in real terms, not percentages. Oftentimes places with a 80% cost of living will also pay 80% the other wage, which is a bad deal for an engineer because cost of living is not the total of all expenses- so savings and discretionary income actually goes down quite a bit.
  - PowerfulWizard 8y ago
    Yeah, my thinking is if you just eliminate the component of salary that is purely dependent on cost of living, and not the part that is due to the extremely high demand for tech skills generally at the globally competitive level -- because that is all that you can eliminate by moving. Both of these factors push salaries up but you only eliminate one of them by moving.
    - mattnewton 8y ago
      There is also the fact that moving costs time and energy, and an engineer in the Bay Area will have a lot more options for employment if they stay in the Bay Area- they can walk between interviews for large multinational tech companies in a lot of cases. Moving from a hub like that has the implicit cost that you may have to move back at some point to find work, or accept the lesser options and negotiating position.

99 points by andygcook 8y ago

Ignoring all the risk-tolerant VCs and angels, with billions (trillion?) of capital in the silicon valley ecosystem for a sec. If one simply looks at the big non-US tech companies development offices and hiring activities Rakuten: San Mateo having most job openings outside Japan, next closest is Toronto samsung: US having 1100 opening, next is india with 26. in US, there's 114 jobs in california, next is texas with 81 Tencent: only offices outside China is Palo Alto and Seattle It's clear that most tech companies are aware that all the talents are in Silicon Valley - and because of chicken and egg effects, all the talents come to and stay in Silicon Valley. And when one forms a network in silicon valley, she would be bombarded with job requests with silicon valley companies every day, and if she chooses a better job, it would be still in silicon valley.

closeparen 8y ago
Maybe true if you’re targeting the senior talent who got in early enough to buy houses and have kids, but all the 20-somethings I know (myself included) plan to get out within 5 years, barring a drastic increase in compensation. I suspect there is a large, untapped market of disaffected young engineers who moved here to start their careers but would move to a second-tier city for the right job.
- joefranklinsrs 8y ago
  There are still alot of cheap real estates along the BART and caltrain stops https://www.estately.com/bay-area-home-affordability-transit-stop https://www.estately.com/bay-area-home-affordability-transit... Pittsburg/Bay Point $430,000 Blossom Hill $657,000 San Jose $680,000 And the largest job growth recently has been East Bay, around Pleasanton. If you are young and starting out, making $110-140k, try living in east bay or san jose and rent a room for $1k - 1.5k, you should be able to save enough money for a down payment for a house soon enough. The stories I've heard for people that couldn't afford their rent, are people living in $3k apartments in SF.
  - closeparen 8y ago
    Sure, you can always trade off privacy and commute time to make the numbers work out. But not having to do that is an incredibly compelling form of compensation that companies can provide at minimal cost by offering work elsewhere. This is not a thing for white collar workers almost anywhere else in the US.
  - WillEngler 8y ago
    Let me try and complicate this :) First, I submit that $430,000 is still expensive. Instead of buying the median home in Pittsburg and commuting 60+ minutes on BART to downtown SF, I could add an h and buy a huge home in my favorite neighborhood in Pittsburgh PA for about the same price and have a chill bicycle commute: https://www.zillow.com/homes/for_sale/Pittsburgh-PA/pmf,pf_pt/house,condo_type/11288076_zpid/26529_rid/ https://www.zillow.com/homes/for_sale/Pittsburgh-PA/pmf,pf_p... (Obvious and legitimate objections: fewer job options, snow.) This is just me trying to say, $430k for that arrangement does not strike me as "cheap" given alternatives in other metros. I agree that with a tech salary it's possible to save up for a down payment and buy in the Bay Area. But the risk seems unacceptable to me. Paying ~$1M for a house is a big bet that the Bay Area housing market stays hot. I don't want my wealth to be so tied up in a hyperlocal bet like that. I see things going one of two ways (and this is probably over-simplistic). Option 1: A $1M starter home is the new normal. Prices stay flat or keep rising over the long haul. In that case my investment is sound. But I don't want to live in that kind of place. Where will my kids' teachers live? How will I cope with the moral ickiness of living in a place where housing costs create extreme spatial segregation of the professional class from the service class? Option 2: The vision painted above is unsustainable. Something has to give (maybe a big financial crash; maybe just state-mandated upzoning that quickly increases housing supply) and the value of my investment drops by a lot. Either way, I'm planning to save up on the West Coast and use my nest egg back in the Rust Belt.
    - joefranklinsrs 8y ago
      You make compelling arguments. For me, a house isn't an investment but it's a place where I house my family. (sure, houses in silicon valley have gone up 1.5-2X in a few years. However, stocks have gone up 2-10X). If you're young, there's no point of getting a house. If you are close to have a family, one of the most important thing is KEEPING your job. If you are remote in Pittsburg, and you have to get a new job, it might take a few months of interviewing and flying in for interviews to find a remote job that pays your old salary. Do you want to risk that even to your family? most likely you wouldn't. You have 18 years of mortgage and college tuitions to pay for.
- trevyn 8y ago
  FWIW, Purchasing a house and having children are no longer desirable goals for a substantial number of people. Looking at trendlines and extrapolating is a pretty good way to see the future.
  - closeparen 8y ago
    The goal is shifting from “large suburban house” to “central urban condo,” I suppose, but is there evidence for decline in desire to have kids? Actual both rate can be explained by people delaying gratification for economic reasons.
  - nimish 8y ago
    This was the same "millennials don't want to do X" argument you heard a few years ago. That started to stop once millennials got enough cash to do X. A major, major confounding issue is simply not having the money. Of course you'll see a trend of fewer people buying homes if home prices are so high that fewer people can afford them.
- WillEngler 8y ago
  I think some smart companies in "third tier" cities are tapping this. There are some hilarious targeted ads I see for an Austin company (HomeAway) that prominently shows the median home price in Austin and a link to their open jobs. Similarly, Duolingo (Pittsburgh-based) put up a billboard in SF advertising the prospect of working in tech AND owning a home: https://venturebeat.com/2018/03/23/duolingo-to-silicon-valley-workers-move-to-pittsburgh-where-you-can-actually-afford-a-home/ https://venturebeat.com/2018/03/23/duolingo-to-silicon-valle...
- lsc 8y ago
  The problem with second-tier cities, as I see them, is that you have to move every time you get a new job, if you are maximizing your income/career. (I mean, not doing that is totally valid, but it's important to factor in the "I took a worse job because it was closer to the house that it would be expensive for me to abandon" thing into your expense/utility calculations. keep in mind that reduced job choice can mean increased stress and unpleasantness as much or more than it can mean simply getting less money.) I think if you work in tech, silicon valley is pretty unique in that there are so many really desirable employers within a short distance. I'd be comfortable buying a house here even if it meant that it makes it really expensive if I want a job more than 15 miles out.
  - closeparen 8y ago
    The novelty of eye-popping direct deposits has worn off; the rate at which I shovel money from venture capital to real estate brings me no particular joy. Maximizing income can only inch me closer to the quality of living situation I'd have elsewhere. The point at which I'd be done increasing housing budget, and actually free to increase other investments or luxury consumption, does not appear attainable. (Consider savings for a down payment as part of housing budget here. And if I could buy a starter home, my next priority would be fixing either the commute time or neighborhood safety compromise that made it a starter home). I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living (and my parents who got me accustomed to it were in much less lucrative fields). I stay becuase I like the work and the company, because why not take this opportunity while I'm young? But it's an indulgent youthful adventure, not a sustainable long-term plan.
    - lsc 8y ago
      >I'm not sure why maximizing income in the Bay Area is worthwhile. The pay here, while much higher in nominal terms, seems to level off well below my level of comfort for standard of living so, assuming you are a medium density type and can stomach an apartment with reasonable soundproofing, you are spending $3000/month on rent here, for a reasonably okay 1 bedroom apartment. (if you are willing to take a hit in quality, you can get more bedrooms or even a bad single family home for about that price) So you move to a second-tier city and you get the same thing for $1500/month. Now, I don't make twice here what I would in a second-tier city, but I do make rather more than an extra $1500 a month.
codingdave 8y ago
I've lived in numerous locations outside SV. They all have talent, they all have recruiters bombarding you, and when you take a new job, is would be still wherever you live. I'm not denying that SV has a strong presence in this industry -- to do so would be silly. But denying that other places also have talent and jobs is equally silly.
- joefranklinsrs 8y ago
  I have lived in LA, New York, and Tokyo. They all have talents. However, it isn't created equal. The companies outside silicon valley aren't using the best technologies, don't have the best processes, don't use the best softwares, which in turn affects the talents. The talents aren't attending the latest tech meetups in SV, aren't using the best tools, aren't doing the best coding practices, using the best frameworks, etc. IMO, there's a 10X difference currently between tech startups in SF and tech startups in LA or New York; I've worked with teams inside and outside silicon valley. The calibur of talent/progress difference is just insane.
  - yesimahuman 8y ago
    And Google uses Java and Facebook uses PHP. The idea that SF startups are so much more advanced from a tech standpoint than other cities is just ridiculous
    - sidlls 8y ago
      It's not ridiculous at all. I've worked outside the Bay Area and in it the last several years. There is a huge difference in culture and approach to solving problems. Lots of startups are boring CRUD trying to look more advanced, but plenty are actually trying new things and exploring tech in ways that most other places just can't or won't support.
      - jmspring 8y ago
        There is a difference between trying to do new things and needing to use the latest and hottest webscale technology to try said new things...
xivzgrev 8y ago
Yea there is a huge network effect here. I just recently wrapped up a job search after moving back here from Chicago, and the difference in depth was night and day. I kept my marketing job pipeline full and I did not come close to bottoming out all relevant opportunities. In Chicago, there were maybe 10 relevant opportunities for me at a tech startup.
nopinsight 8y ago
Well-known corporations like Samsung and Tencent should be able to recruit most junior talent they need from their own country or a lower-cost location. The major reason they set up offices in the US is to recruit top talent who are not willing to move and sometimes more senior than those they can recruit from elsewhere. In other words, they have little incentives to set up offices in other US locations which are not lower cost than their home base and have too few talent at the level they cannot get elsewhere. The needs of many startups could be different from them.

dawhizkid 8y ago

Bay Area startup scene is dying as is. With few exceptions no small startup can hire talent here anymore. IMO it’s a good thing that other cities will have a chance.

codeafin 8y ago
I'm not from the Bay Area so I'm not aware, how is it dying?
- vadym909 8y ago
  not the op- but I think what he's implying is that all the good engineers are in golden handcuffs with the FANG or unicorn startups making $300k. In the old days you could match the base salary and say my stock is better. Today its harder when MSFT is 3x or Netflix has 5x in the last few years. Your startup stock of 100K with 10% probability of becoming worth 10x in a few years just doesn't sound attractive enough to a good engineer. If all the good engineers are taken, it sucks the life out of other startups.
  - nojvek 8y ago
    It’s not that all the good engineers are taken. It’s that the good engineers are doing mindless ad blasting to make a bigger buck. There’s an opportunity cost of inventing things that actually make people’s lives considerably better. The valley was the place where this would happen, now that culture and spirit is slowly dying. Mostly because you can’t take those kinds of risks. Just the living expensive would kill you. VC money needs a quick buck so that kills those ideas in their infancy too. Innovation is hard!
    - propman 8y ago
      Hit the nail on the head right here. You just can’t take the risks anymore. Everything is too expensive and it isn’t worth it anymore when Facebook dangles such a fat pay check in front of you. Entrepreneurship and free thinking has turned into copycat, quick bucks how to make quick money and complete group think. This is especially true in the sf start up scene

arbuge 8y ago

> Redfin, the Seattle-based home buying site/app, has been beating this drum for years, recently stating that we will see “mass migration” from the Bay Area based on housing. The CEO writes “Silicon Valley is going to leave Silicon Valley… the technology companies… they’re chasing talent, and talent is chasing affordable housing.” Redfin specifically identifies Denver, San Antonio, and Houston as the next hubs newer generations will seek out. Rather odd choice of Texas cities in my opinion. If you're going to go with Texas, I'd think Dallas and Austin are more obvious choices for technical people.

toomuchtodo 8y ago
San Antonio is a bit more conservative than Austin, but much cheaper and still very nice. My financial services firm is slowly moving everyone from NYC to Texas and Florida, for obvious reasons.
- twblalock 8y ago
  Are people quitting because they don’t want to move?
  - toomuchtodo 8y ago
    Not to my knowledge. To be more specific, roles are being moved, not people. New roles only in target market, old roles slowly attritioned out as people leave or retire. No one has been forced to move yet. That day may come, but it’s a long ways off.
- crack-the-code 8y ago
  I don't think the price differential between San Antonio and Austin housing is high enough to offset the level of talent and appeal that Austin (or even Dallas for that matter) currently provides for the tech scene.
  - deleted 8y ago
    [deleted]

chmaynard 8y ago

Advice to talented professionals everywhere: If you have reached the age of 30, you should already own your home. If not, buy a home immediately. NOW. If you can't afford anything decent close to your place of employment, quit your job and move somewhere where homes are more affordable. Your future happiness depends on it.

eat_veggies 8y ago
Can you elaborate on this? I'm nowhere near 30 yet, but I'm curious as to why my future happiness will depend on it.
- toomuchtodo 8y ago
  The longer you wait, the more you’re priced out of the market and reliant on the whims of a landlord. Now, one could argue we’re at the peak of the current business cycle and asset prices are overly inflated. And there might be merit to that. In that case, look for real estate bargains where you’ll have equity on day one (short sales, foreclosures, assets priced below their fair market value).
  - usaar333 8y ago
    > The longer you wait, the more you’re priced out of the market and reliant on the whims of a landlord. That's only true if the value of your portfolio or salary aren't increasing faster than the market. I've personally teared up in housing about every other year. It would have been much more difficult to do this is I owned rather than rented.
    - ci5er 8y ago
      > teared up in housing What does this mean? Moved? Every two years? Sounds horrible. Don't you have any hobbies to fill your time?
      - usaar333 8y ago

PowerfulWizard 8y ago

It would be interesting to calculate: - cost of living in the SFBA - cost of living somewhere other than SFBA but generally "equivalent" in the sense that living there wouldn't be seen as a negative - a average-ish amount of VC funds that must be invested in a company before capital is returned. - average amount of capital raise that goes to salary - what amount of salary is due to cost of living. It is getting a little bit convoluted, but that would allow you to approximate how much VC money is going to SFBA landlords due to the chokehold on housing supply. We're seeing a shade of this in the Amazon HQ2 process, but if you have actual physical mobility as an organization over different real estate markets and political jurisdictions it will shift the balance of power in terms of rents and taxation. I don't think it applies to small companies for various reasons, but the motive is there.

mattnewton 8y ago
As a note, make sure cost of living is determined in real terms, not percentages. Oftentimes places with a 80% cost of living will also pay 80% the other wage, which is a bad deal for an engineer because cost of living is not the total of all expenses- so savings and discretionary income actually goes down quite a bit.
- PowerfulWizard 8y ago
  Yeah, my thinking is if you just eliminate the component of salary that is purely dependent on cost of living, and not the part that is due to the extremely high demand for tech skills generally at the globally competitive level -- because that is all that you can eliminate by moving. Both of these factors push salaries up but you only eliminate one of them by moving.
  - mattnewton 8y ago
    There is also the fact that moving costs time and energy, and an engineer in the Bay Area will have a lot more options for employment if they stay in the Bay Area- they can walk between interviews for large multinational tech companies in a lot of cases. Moving from a hub like that has the implicit cost that you may have to move back at some point to find work, or accept the lesser options and negotiating position.