8 ms·

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 n

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.

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.