20 ms·

Peak California

384 points by cobbzilla 8y ago

crimsonalucard 8y ago
Where to go next?
- dominotw 8y ago
  austin. denver.
- rmason 8y ago
  Detroit, it provides a startup with a longer runway than nearly anyplace else.
- anonymous5133 8y ago
  Jackson, Wyoming No income tax, need I say more? and amazing outdoor activities.
- scythe 8y ago
  All of the usual suggestions are too small, IMO, except Seattle (4M) which is already expensive and facing similar problems to the Bay. Austin (2M), Raleigh-Durham (2M), Denver (3M), Portland (2.5M) are not suited to compete with the Bay (8M). Baltimore-Washington (9M), Boston (7M), New York (20ishM) and San Diego (3.5M) are already very expensive. Climate isn't king, but Phoenix (4.5M) and Minneapolis (3.5M) are too uncomfortable for most people. That leaves Chicago (9.5M), Dallas (7M), Detroit (4M), Houston (6.5M) and Atlanta (6M), of which the first and last have a more mature tech sector, denser urban geography and better public transit (Atlanta's transit ridership is five times Houston's). Of the two, Chicago has much better infrastructure, but Atlanta has much nicer weather. Both are far too small currently to pose a threat to California's dominance, so I wouldn't expect to see any changes any time soon.
freehunter 8y ago
I don't know when Peak California will come, but I'm fairly certain it will happen at some point, and this opinion article actually does a great job at summarizing my opinion as to why in its very last sentence: "Californians will end up like the landed gentry in interwar England. Lovely houses, illustrious history, and no conceivable way to pay their bills." Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1]. If they're willing to move from their home to California for work, it's safe to assume they're willing to move from their home to almost anywhere else for work. It's not due to cheap housing or even available housing. It's not due to the great commute into work. It's not due to the low cost of living. The only argument I hear is that tech companies move to SF/LA because lots of tech workers are there, and lots of tech workers are there because lots of tech companies are there. So if there's nothing holding technology to SF/LA, when does it become a competitive advantage to have your offices anywhere but California? At some point it will. And it will be long overdue. [1] https://www.mercurynews.com/2018/01/17/h-1b-foreign-citizens-make-up-nearly-three-quarters-of-silicon-valley-tech-workforce-report-says/ https://www.mercurynews.com/2018/01/17/h-1b-foreign-citizens...
- deleted 8y ago
  [deleted]
- joshuamorton 8y ago
  > Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1]. 2 flaws here: 1. The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies. 2. Being close to technical universities is good if it gives you a recruiting edge, even if only some of your employees come from that school.
  - jldugger 8y ago
    > The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies. Who do you think those companies contract out to?
- jlrubin 8y ago
  Unenforceable non-compete clauses played a non-minor role in the success of CA as a tech-hub. Sure take a job in MA or NYC as an engineer, but come back in 2 years when your employer is preventing you from working or building a company.
  - ghaff 8y ago
    Note that: 1.) Massachusetts recently passed a law significantly limiting non-competes 2.) I've never been able to find specific numbers, but my experience in Massachusetts is that they're far from universal. I've only had one in my career and that one was quite narrow. (That was EMC which was one of the local employers who fought hardest against the weakening of non-competes.) I don't like non-competes and personally think the new law should have been stronger than it was. But, historically people jumped around employers like the Route 128 computer companies all the time.
    - 80386 8y ago
codingdave 8y ago
> There’s a consensus among smart people that the Bay Area is the place to be I'd correct that to: There’s a consensus among smart people in the Bay Area, that the Bay Area is the place to be. Trust me, there are plenty of smart people out here that wouldn't touch the Bay area with a 10 foot pole.
- dang 8y ago
  No doubt. But can you please not post unsubstantive comments here?
  - codingdave 8y ago
    I'll accept that chastisement, especially respecting that this is your site. But I do feel that the Bay Area vs. not discussions are as relevant to our industry as ageism, or any other criteria that causes us to judge each other unfairly. I'll seek better ways to engage in those discussions, though.
    - dang 8y ago
      Sure, I'm not saying the article is off topic. If it were, we would demote it (or rather, it would already have been heavily flagged). The issue is simply that when people respond with shallow dismissals, especially with a provocative edge like "wouldn't touch region X with a ten foot pole", it leads to lousy discussion. Worse, in a case like this, it pours fuel on regional resentments, which unfortunately are a lot stronger than one might have hoped. Admittedly the article set itself up for such a dismissal by making a provocative generalization about "smart people" in the first place. But commenters here need the discipline not to take the shallowest bait in a piece, but respond to the parts that are actually interesting. In a way, that's the article-scoped version of this guideline: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - wbronitsky 8y ago
    I would argue your selective enforcement of moderation is more harmful to the commentary than the original comment. This is your site, do what you want, but I really don’t think this is the comment you want to fight, considering the other pendatry, bickering and outright hate I’ve seen around here.
nostromo 8y ago
For all of the talk about California’s immense wealth, most people are unaware that the state also has a higher rate of people in poverty than any other state when you correct for local cost of living and taxes. https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_poverty_rate https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr... (See the column of the Census’ supplemental poverty measure.)
- ajmurmann 8y ago
  I'd love to see some numbers that take the origins of the homeless people into account. Did these people become homeless in California or did they become homeless elsewhere and then migrated to California? The mild weather and liberal attitude make CA a lot more attractive to the homeless than many other states.
  - laurencerowe 8y ago
    For San Francisco, 71% had housing in the city before becoming homeless, 19% were from CA and only 10% from the rest of the USA. http://www.socketsite.com/archives/2016/02/san-franciscos-homeless-crisis-is-homegrown.html http://www.socketsite.com/archives/2016/02/san-franciscos-ho... The homeless rate here is similar to that in New York, but New York has a right to shelter so far fewer sleep on the streets than in San Francisco. It's less that the mild weather makes CA more attractive, more that it lets CA governments ignore the problem.
    - abvdasker 8y ago
      I had not heard these statistics before but they are very informative. I live in New York but visit SF often for my job. Every time I visit I am shocked all over again at the extent of the homelessness and poverty right next to obscene levels of wealth from tech. I always assumed New York just had fewer homeless but these statistics prove that the CA government has instead completely and utterly failed to support this population of people. In general, San Francisco seems like a terrible place to live.
  - 8y ago
witcherchaos 8y ago
Counterpoints > It’s no longer the best place in the world to start a startup. The place with most active investors with the largest investments? The place with the biggest pool of programmers and pms and designers? The place with the best legal system to foster entrepreneurship? Where else in the world would you get all of this? (Not even including beaches, attractive people, weather, food, top hospitals and universities, diversity, optimism, etc) And to the author. San Francisco != all of tech in California > The gains from the existing tech industry increasingly accrue to a) passive investors, and b) lucky landlords. Sure, but compare that to any other industries. Tech industry is still very very mericratic. (Low startup capital, barrier to entry) Besides, every company is a tech company now > The state government is a levered bet on tech compensation. Why would you not want to bet on the best industry going forward? The one that eats all the other industries?
- alkibiades 8y ago
  >>> The place with the biggest pool of programmers and pms and designers? right but if you want a halfway decent one you have to compete with FANG and pay 300k a year.
  - twblalock 8y ago
    There is no shortage of people in Silicon Valley willing to work at startups, and that's why there are so many startups. Among those people are successful FAANG employees who already made a bunch of money and feel safe trying something new, because if it doesn't work out they are not going to go broke and will probably end up back working at a FAANG.
- vonmoltke 8y ago
  > The place with the biggest pool of programmers and pms and designers? Why do we have regular discussions on how hard hiring in SV is, then?
  - seem_2211 8y ago
    It's hard to hire in SV because it's the most competitive talent landscape for technology in the world. I work in recruiting (software salespeople), and this is by far the best market in the world for hiring in that niche. The talent you get here is significantly better than anywhere else. I make the analogy that it's like hiring for finance in London or New York. Outside of a global city, working at Goldman Sachs is impressive. However when you're hiring in NYC you can get much more granular - getting someone who's worked in the right team, on the right sort of deals etc. There are plenty of actors in the world, but Hollywood is where entertainment deals are done. We'd laugh at someone trying to hire the worlds best Oil & Gas team in San Francisco. These are the big leagues.
ohples 8y ago
I was visiting downtown San Jose once for WWDC. In broad daylight at 11a on a Tuesday I saw a hooker shooting up while crossing a crosswalk. It was at this moment I became confident in my decision to avoid moving to the hell hole that is California It was literally the dirtiest, shitiess, most unpleasant place I have ever been. California peeked in the 60s, you guys just need to get your heads out of your asses and look around you and see how shitty it is. INB4: you think I am some right winger California bashing. I am a Berine voting, AOC loving socialist. California doesn't have real progressive, just neoliberals who think they are.
- sonnyblarney 8y ago
  San Jose is firmly 'NoCal'. 'Socal' is LA, San Diego.
  - ohples 8y ago
    Sorry about that, I edited it according.
- dang 8y ago
  You can't post like this to HN, regardless of how strongly you felt when you were someplace. Name-calling rants and slurs are not allowed, regardless of which people or region you have a problem with. Please don't do it again. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
kitsune_ 8y ago
Not a single word about climate change?
- Animats 8y ago
  California does OK with climate change. Rising ocean levels aren't a big deal, because the coast of California is mountainous. Even where it looks flat, like Venice Beach, go 3 blocks inland and you're usually 20 feet up. San Francisco has some low-lying areas near the coast, but they're small enough and valuable enough to justify big seawalls if necessary. It's not like Florida or New Orleans, which are barely above sea level now. Hotter is a problem, but CA isn't going to heat up to unlivable levels, like parts of India.
nextstep 8y ago
I guess I’m not a smart person and my friend group must be full of idiots because concensus among all of us — many of which who have lived in there — is that the Bay Area is terrible. I would never move back. The lifestyle is very hard, even if you make a lot of money, because the public transportation is insufficient to cover everything you want to do in your life. And the culture is boring and getting worse. I can understand why Americans who have never lived in NY or a nice city outside of the US might think it’s “really hard to find any place on planet earth that’s nicer to live in and to work in”. But this attitude says more about the author than anything inherent to the Bay Area.
- witcherchaos 8y ago
  I am American who has lived in tokyo, Los Angeles, Seoul, Singapore, New York, Paris, and San Francisco. I can tell you you are wrong. Too long to go into it.
- sethhochberg 8y ago
  I was guilty of the same kind of thinking when I first moved to San Francisco - it was, at the time, worlds better than the suburban Florida environment that I'd grown up in or the other mid-sized southern cities I'd visited frequently. I fell in love immediately. But after a couple of years, the little cracks in the armor start to show up - outside of a very narrow strip of Market St and the Mission, getting around to other parts of the region is difficult. The weather is good, but certainly not the perfect beachy warmth I was used to as a kid and got monotonous. Most people I met seemed to already have their circles of friends and they centered mostly around who worked where or what hackathons you wanted to do, and that wasn't my ideal weekend scene. Rampant, aggressive homelessness made simply walking through many neighborhoods saddening at best, actively hostile at worst. Credit where its due, I found a lot of solace riding my bike around in the Marin headlands, but I could only really do that a couple of days a week at best. NYC, by comparison, I moved to and didn't immediately fall in love. It was huge and intimidating and I showed up in August when it was humid and moving into my 5th floor walkup was painful. It took a few months to feel comfortable with transit options and like I wasn't solely reliant on maps. But I had an easier time making friends who didn't want to code 24/7, yet still take their professional life seriously. Nightlife is waaaayyy better in NYC, and there are hundreds more options. There is still a homelessness problem, but its generally less in-your-face and less aggressive. Its still expensive, but less so than SF. Sometimes I call a car to go somewhere because the weather is bad or I'm in a hurry, but I rarely feel like there is somewhere I simply cannot get to on public transit. Its the only place I've ever lived where the longer I've been here, the more I've liked it. SF definitely has charm, but like you and your friends, many of my friends and I who have done both find NYC to be a much better example of a functional, diverse, very livable city. I wouldn't trade my time in SF for anything else, it was valuable to a younger version of myself - but I'm happy it propelled me elsewhere.
electricslpnsld 8y ago
> However, the current crop of big companies will still be the big tech companies in 2030 and 2040. What’s the reasoning here? Rewinding to 1999, Microsoft is the only (then) big tech company still doing interesting things. Apple was mostly irrelevant and on the brink of collapse, Google was an academic curiousoty, and Facebook wouldn’t exist for another half decade. A lot will change in 20 years. I suppose Yahoo, Oracle, and IBM are still kicking and probably will for a long while, but they are hardly forerunners at this point.
- HillaryBriss 8y ago
  the reasoning is that everything is basically advertising/marketing and FB + Google have that stuff locked up from here till eternity
  - deleted 8y ago
    [deleted]
Shebanator 8y ago
I think its a good article, but I'm confused about the author's implication that the state government is consciously choosing to depend on income and capital gains tax revenues. California does depend on those taxes, but not by choice: Prop 13 made it basically impossible for property tax revenues to grow at the same rate as the economy. I also agree with the other comments here that this author seems to think SF == Bay Area. Much of his comments about hippies and landlords conspiring make no sense in the rest of the bay, where it is actually relatively wealthy homeowners conspiring to prevent growth in order to ride the surge in home prices.
- JMTQp8lwXL 8y ago
  A couple years after Prop 13 was enacted in 1978, the California legislature approved of Mello-Roos Community Facilities District taxes in 1982. They exist on top of regular property taxes (they do not replace them). While I agree with your narrative that it's hard for California to raise property taxes (beyond two percent per year), CFD's help bring in new property tax revenue to ease the gap.
freewilly1040 8y ago
>>I’ve lived in the Midwest, on the Texas/Mexico border, and in New York, and when I moved to San Francisco I was surprised to see that anti-immigrant sentiment was quite socially-acceptable there The author is not an immigrant as the word is commonly understood if he’s only lived in these places.
- wilg 8y ago
  That is obviously intentional, and (I think) an interesting perspective.
true_tuna 8y ago
California is fucked because normal people can’t afford to live here anymore. At least not in the Bay Area, LA, and San Diego. In San Francisco a favorite pastime is to blame tech workers for “driving up rents” anyone who has taken economics knows prices don’t work that way. Prices go up when demand exceeds supply. We also are quite aware of WHY demand exceeds supply. 1) People keep coming here because we keep hiring, and 2) people who already live here block new housing construction. The objection we see in every community meeting is “we don’t want to change the character of our city”. I assure you, driving out your teachers, bus drivers, baristas and librarians is changing your city even worse. It leads to congestion, increased homelessness, loss of diversity. For every ten jobs we create we build two new houses. It’s not the people with new jobs that suffer. Here’s the solution. A new state law saying if a city adds a job it also has to permit the construction of a unit of housing. Done. I assure you if the City of Mountain View has to follow that rule, the muddy lot next to Google campus (currently zoned for hotel) would have a ten story apartment building in it next year. Why hasn’t it happened yet? Not allowed. Well who doesn’t allow it? The city. Why won’t the city allow it? Residents don’t want new housing. Why don’t residents want new housing? A mistaken belief that blocking new housing will preserve their city. Blocking new housing will in fact destroy our communities. We can get out of this mess, but we have to build our way out.
- option 8y ago
  An alternative/additional solution to "just built more, denser housing" is making remote work much more widely adopted. A lot of roles in software, research, etc. are very well suited for remote work. Bay Area companies should: (1) make remote work more widespread and (2) build more offices outside of Bay Area.
  - bproven 8y ago
    Yep - I agree with the increased dense housing is needed (although I would also argue that with this construction infrastructure / public transit comes for the ride or it is a failure too), but it seems that one of the stop gaps is to promote /incentive remote at companies...
- 8y ago
jamisteven 8y ago
Author clearly has never lived anywhere but CA, perhaps ever left the bay area. Its interesting because alot of people that have never left have this same mindset, that Cali is this epicenter of all things good, and somehow the best overall place to live. How anyone could think this, not sure, unless they just have never lived anywhere else or are that uneducated as to the state of the government in California, or are filthy loaded. What I saw from my time living in San Diego was a culture highly consumed with itself, people stuck on eachother, crazy high cost of living, and insane taxes that hardly made it justifiable. It has a beach, and much like florida, if it didnt have one nobody would live there.
- fuckyah 8y ago
  Wrong he wrote lived in Texas and New York too
- josephmosby 8y ago
  Direct quote from the piece: "I’ve lived in the Midwest, on the Texas/Mexico border, and in New York, and when I moved to San Francisco..." Additionally, the argument in the entire piece is about California not being the epicenter of all of the things it claims to be.
williesleg 8y ago
On to destroy Texas, Arizona and Florida!
rafaelc 8y ago
This is interesting but he kind of jumps all over the place; it strikes me more as a brain dump of ideas and hypotheses. There are a few areas where he’s playing pretty fast and loose with the facts, too. For example: NYC has way more homeless people than SF, but they aren’t as visible because under city law, the city is required to provide shelter to all of them. It has nothing to do with the weather, and in that sense NYC is way nicer to its homeless than SF.
rsync 8y ago
California is the United States, writ large. It's not qualitatively different, it's just more so. Or, from a slightly different standpoint, the rest of the country is California, just 20 years behind schedule. I have lived in many different places all over the United States, including twice in California, where I have settled with my family, and it's very easy to fall into a "crazy california" narrative - especially when comparing with "sensible" places like Minnesota. But it's not true. Right this very moment in Minneapolis there is a heated, polarized debate about housing affordability and homeless services and zoning that is indistinguishable from the SFBA debate (save for the pricing numbers difference).
- trophycase 8y ago
  Interestingly enough, Minneapolis just upzoned the entire city. https://www.nytimes.com/2018/12/13/us/minneapolis-single-family-zoning.html https://www.nytimes.com/2018/12/13/us/minneapolis-single-fam...
- pascalxus 8y ago
  You're right as far as blue cities/states go. But Some other cities (some red ones and some blues that are less liberals) don't stop housing from being built as much. The less rules and regulations and zoning, the more supply is created. Houstan, Dallas for instance are much more affordable.
- notacoward 8y ago
  I'm not so sure that California is ahead of the rest of the country. The effect of the tech industry on the Bay Area's fortunes is not that unlike the effect of the auto industry on Detroit or even the textile mills on New England. Silicon Valley is just the latest iteration of a cycle that has existed for a long time.
  - HillaryBriss 8y ago
    it seems like global competition is the force that ultimately damaged both Detroit's auto industry and New England's textile mills. on the surface at least, it seems reasonable to guess that, somehow, global competition will be the force that ultimately dethrones Silicon Valley.
josephmosby 8y ago
Something touched on with the piece, but not quite hammered nearly as much as it should have been: switching costs, which have dramatically changed in the past 10-15 years. The initial round of California VC money came from hardware startups cashing out. Hardware is tied to the physical realm, and thus locality is important - if you need to buy leftover equipment or supplies, it's way easier to get them if you're in the neighborhood as your vendor. The next round of software startups in the 90s through early 00's had a similar switching cost with VC funding. Though we obviously had telephones and email, we had not fully transitioned into the "remote work" mindset that allows teams to collaborate regardless of distance. It was challenging for VCs to work effectively with their founders, and for founders to work effectively with their teams - which forced teams to co-locate with founders, and founders to co-locate with VCs. You don't need the world's best software engineers to launch a startup - you can launch something with sufficient complexity to start making money in Denver, or Austin, or Chicago, or anywhere else with a reasonable supply of engineers. And now, VCs are far more tolerant of remote founders given how easy it is to stay in communication. If all that is true, why make things more economically challenging than they need to be by trying to fight the economic headwinds of California?
_Codemonkeyism 8y ago
California will be Elysium [1] in 50y. https://en.wikipedia.org/wiki/Elysium_(film) https://en.wikipedia.org/wiki/Elysium_(film)
deleted 8y ago
[deleted]
shriphani 8y ago
I have always what it is about places with a mediterranean climate that causes some sort of renaissance mindset to form there - Greece (well at least a while ago), Roman empire, Italian renaissance, Silicon Valley.... Maybe it is the air.
- 80386 8y ago
  On the East Coast, there are maybe two months out of the year when the weather doesn't strongly disincentivize going outside. And those months aren't in contiguous blocks - there's usually a week in January where it's nice out, and then it's crap until one afternoon in February and a randomly selected third of the days in March, and so on. I bet that has something to do with it - especially since you need cities for this stuff, and cities have to care about the weather more than suburbs, since people aren't just driving everywhere. And, having lived in both regions, the only difference between the Northeast and the South is that the Northeast rolls fewer of these days (it still gets way too hot in the summer in Massachusetts) - but the Northeast is where most of the cities are, because a few hundred years ago, colder overall weather meant 1) you couldn't develop a primarily agricultural economy the way the cotton and tobacco belt did, but 2) you had fewer parasites and disease carriers to worry about. (It's a little harder to build major economic centers when half your population has hookworm, malaria, or both, which was true of the South until the mid-20th century.) Lee Kuan Yew called the air conditioner the most important invention of the 20th century.
  - Baeocystin 8y ago
    Having lived in Bethesda for a few years, I am convinced that a non-negligible fraction of our governmental dysfunction comes from the collision of formal work attire and 100% humidity swamp. Not even joking.
    - shriphani 8y ago
      I developed a mildly negative opinion of Singapore and HK when I saw their brightest minds enter the finance industry and wear three piece suits in sweltering weather every single day of the year. Never again have I seen so many successful people so determined to be uncomfortable for a majority of their workday.
pkaye 8y ago
I'm expecting the "tech bubble" to burst at some point. Looks at this way. Desktop and laptop market is saturated. Phone market soon. Semiconductor industry reaching its limits. Ad revenue will trend down as governments clamp down on a lot of the sketchy stuff. A lot is riding on self driving cars and machine learning. What else is new in the horizon that people really need?
- speeq 8y ago
  That sounds like "640KB RAM is more than anyone will ever need" to me.
- CptFribble 8y ago
  The tail of what's possible with ML is very long. We've just only picked the low-hanging fruit. Medtech is going to be big this century, as biocompatible nanotech and the shockwaves of CRISPR reverberate through industry over the next couple decades. Not saying immortality is coming or anything, but within 20-30 years we'll probably see a slew of new therapies and products. And if anyone figures out a really good, affordable BCI, then that's another Pandora's box of possibilities. Also, I respectfully disagree on a downward trend of ad revenue. The rise of advertorials in news outlets, product-placement-driven subscription media a la Netflix, and the whole influencer thing indicates our future will be even more fully integrated with advertisement. The per-impression cost may still fall, but look forward to the day when anyone with friends is micro-compensated in realtime for mentioning Coke at a party.
- mikeg8 8y ago
  There are going to be many, many more ways we utilize software and connected devices to optimize existing industures (construction, healthcare, logistics etc). Some of them will seem so obvious in retrospect, others will be exceptionally creative and thus hard to predict. We may have reached a saturation point for hardware (but even that will need constant replacing), but the ways we deploy technologies out into our economy will continue moving forward for many years to come. Tech changes, but always moves forward.
skepticmoron1 8y ago
If Bay Area and tech is a talking point. For most of the tech existence, Silicon Valley has always been the go to place. Then, it got too expensive. The next stop was sf and now even soma is crazy shit expensive. The natural progression i see is to start looking at the east bay (Hayward, Oakland..). They still are comparatively affordable. Work with the local governments where it is a win win for both. I live in Hayward and I can’t imagine there are no startups here. It is so close to the city.
beatpanda 8y ago
In every article like this, I'm always looking for the author's orientation to place. It's important to me whether they consider the Bay Area, or any other place, an actual home, with some transcendent quality besides a collection of objectively measurable attributes. This author clearly does not. The author is annoyed that people like him (according to him, the smart people, the good people, the people on whom the entire society and economy depends!) are treated with such disrespect. But how does this author treat the people around him? He writes about the Bay Area like he's observing it from an alien spacecraft, as if he's entirely separate, outside of time and space. He evaluates the various objective factors of the Bay Area solely in terms of their benefit to him, and finds it wanting. And the author, with an unlimited ability to simply uproot himself, darkly insinuates that he, and all the other good, smart people like him, are going to do it, and soon. But why should anyone care? By the author's own admission, he and his fellow good, smart people aren't meaningfully a part of the culture or the social fabric of the place. The author clearly has contempt for the people around him ("If you can afford Pacific Heights rents and rideshare everywhere you can pretend you don't live here!"). He clearly has no intention of contributing to the place. He clearly sees it as a pool of resources for extraction and nothing else. It's clear that the author sees it this way because if this wasn't the case, he would be involved in some effort, any effort at all, to fix some of the problems that he's describing. Yes, California and the Bay Area have their problems. And our problems and our fortunes are the result of generations-long processes. Whatever comes next will be the outcome of people digging in, working to fix the problems, putting their shoulders to the wheel, and not just bailing out because moving somewhere else would maximize certain values in their personal spreadsheets. A few people that I consider friends were doing that work before the current round of good times. They're people who've been in San Francisco back when it was considered frightening and dangerous, and the set of problems the city had were completely different than the current ones. They stuck it out. They made the city a much better place. As a result, we now have a new set of problems to fix. The cycle repeats itself. Right now, we don't need any more people who are just looking to extract resources for themselves. We need people who are willing to engage, to become part of the social fabric of this place, and to figure out what the future looks like. So I want to enthusiastically encourage this author, everyone else who's written a functionally identical article in the last few years, and everyone on Hacker News who constantly complains about how much they hate San Francisco, to get out. If you're among that group, and you don't leave, you're actually cheating yourself. There's likely some place in the world with which you could find the same profound, transcendent connection that I and many others have with San Francisco. It's a tragic waste of a life to live in a place you hate, and that you have neither the commitment nor the desire to make any better. It doesn't benefit you, and it doesn't benefit the people around you whose home you hate so much. Everyone would be so much better off if you would simply show yourself the door, and find a place you can call home, for better or worse.
gumby 8y ago
I've seen this article over and over through the years. I moved to Palo Alto in 1984 when all the houses were under water and people told me that I'd missed the boom. California has plenty of issues, but always muddles through them. California's economy is more diversified and resilient than that of, say, Detroit. There's much more to the state than startups. Sure, eventually it will be superseded in some way or another, but I doubt it will happen in my lifetime.
nitwit005 8y ago
You'd think an article about the fate of California would mention Los Angeles, or agriculture, or anything other than the SF bay area and tech. Even the mention of the state government is a reference to the tech industry.
- Toine 8y ago
  California is almost as big as my own country (France) and yet when people use the word it's a synonym for the bay area. Seems crazy from that perspective.
  - anonymous5133 8y ago
    Well yeah, if you're going to sell how great California is then of course you are going to point to the place that basically puts California on the map in recent years.
jarjoura 8y ago
Oh boy, here we go again, another article proclaiming that California is too expensive and you're better off starting your company elsewhere. California has been expensive for a very very long time, decades. Yet, every year, someone gets hopeful that this is it, this is some sign, tech is finally moving on from California. When I moved to California in 2007, startups in Austin were the next big thing. SXSW celebrated a huge number of Austin startups, and then once they grew to a larger size, they all migrated here to California and the scene seemed to evaporate overnight. The problem these types of articles fail to grasp is that even with paying a tech worker over $200 to 500k a year, that is still an amazing return on investment. Not even considering just the FAANG companies, but all the other ones like LinkedIn and Square, Twitter and DropBox, they're raking in billions a year in revenue. They make so much raw cash, they have stock buybacks and investment arms of their companies that just invest in other things. There are other tech cities, of course, Seattle being another hub. You don't have to pay as much for your employees and the cost of living is adjusted for that expectation. LA and NYC have a pretty decent cluster of workers as well. The problem is, you can find generalists, but once you start to need specialized engineers or roles, it gets exponentially harder and you end up creating remote offices in the Bay Area to capture that. I'm not going to defend that it's not exhausting living here. It's hyper-competitive and the politics of "live and let live" create pockets of very seedy places in all the strange areas. Yet, some of the brightest people in the world live here doing some of the most amazing things in the world. It's super easy to find a meetup where, for example, the guest speaker invented Rust, for free, with pizza, on a random Tuesday! Other places around the world have to create these specialized conferences to make it worth their effort.
- HillaryBriss 8y ago
  > that is still an amazing return on investment. bingo. to first order it's a winner take all game. it doesn't matter how much cash the VCs need to pay to start one of these contraptions. what matters is that the contraption succeeds. if the chance of success is 0.01% in SV, but it's 0.0000001% in Austin, it doesn't matter at all if the costs are 10 times as much in SV. VCs are not starting companies to save cash. they're starting companies to dominate an industry. so they buy the biggest guns and it doesn't matter how much they cost.
ajmurmann 8y ago
TL;DR: California is too crowded, nobody goes there anymore.
bypasspaywalls 8y ago
If you are getting a paywall, try https://github.com/iamadamdev/bypass-paywalls-firefox https://github.com/iamadamdev/bypass-paywalls-firefox
malchow 8y ago
Peak California is real and this is a quite good summary of it. One redeeming aspect not well understood, though, is the role of capital. We're temporarily in an odd age of overabundance in venture capital (overabundance relative to investable ideas and people) but in general, and pretty much at all times except for 1997 to 2000 and 2014 to 2018, the people willing and able intelligently to invest in $0 revenue / 0 progress companies with wild ideas have tended to be in just one place. Nothing about this demands that the companies stay in California. But it means that they'll probably keep coming here to find capital being allocated by risk-loving Ph D-holders. I have only been in the Valley for 10 years, but even I remember, in 2009, how fast the tourist capital vanished. And some pretty cool companies were founded in 2009. When the next cyclical downturn arrives, the same determined VCs are still going to be in the same MPK and SF offices, plugging away on new ideas, while oil kingdoms and plutocrats are going to be off cleaning money in some other, hotter corner of the globe.
deleted 8y ago
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phkahler 8y ago
One word for those looking to get out. Detroit.
- anonymous5133 8y ago
  I'll take Wyoming, thanks :)
ngngngng 8y ago
I've had a few casual conversations about the collapse of California recently. In my opinion, zoning laws will be the death of San Francisco. The greed of the NIMBY's will eventually drive prices too high for anyone that didn't buy 20 years prior (i'm amazed it hasn't happened already). I've been entertaining the idea of a state putting extreme limits on zoning laws. I'm not an economic expert so i'm not sure what it would look like, but I can't help but compare to Tokyo with their ballooning population and stable cost of living.
- jdhn 8y ago
  Japan has fantastic zoning laws. Here's[0] a great blog post about it. [0]http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
- JMTQp8lwXL 8y ago
  If rent goes up too high, and businesses cannot afford to raise wages to keep up, units will go unfilled, and they'll pivot downwards again.
dmode 8y ago
Just how much ink needs to be spilled about how California and Bay Area are doomed. I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. The gap between SF and rest of the country when it comes to venture investment has actually grown as the cost of living has gone up. For example, in 2018, $45bn was invested in Bay Area startups whole only $1.5bn was invested in Austin and even less in Denver, Utah etc. It is not even close. Weirdly, the other fast growing tech regions are similar to California - expensive, dense, and left leaning (NYC, Boston, Seattle). Maybe this time the prediction will be true, but I am willing to take a large bet against it. And this is because several things, but the primary reason is that California continues to overindex it's policies towards people, while other competing states overindex on business friendliness. But in the knowledge economy, a thirivng talent market is far more relevant to a business than some tax breaks. If you can't execute and be profitable, what's the point of a tax break. California optimizes for people through various mechanisms - non competes, inclusivity, diversity, environment, labor protection, safety net etc. If a place is great for people, it is great for business.
- aylmao 8y ago
  > I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. Maybe I just wasn't paying attention before, but I've read a lot about it lately, especially in the context of New York being the next Silicon Valley. I feel like this was especially true when Amazon was considering it as a location for HQ2, but even now that it's not I keep seeing NYT articles about NYC being #2 in tech (ignoring Seattle, for example) and how it's definitely gonna surpass SV at some point because it's "a so much better place to live", has "so many more creative professionals", etc. This article doesn't say it outright, but it kinda alludes to it making NYC the primary example it compares The Bay against.
  - freddie_mercury 8y ago
    Here's one that is 8 years old: https://www.city-journal.org/html/cali-business-get-out-13419.html https://www.city-journal.org/html/cali-business-get-out-1341... Here's one that is 11 years old: http://articles.latimes.com/2008/dec/18/business/fi-leaving-california18 http://articles.latimes.com/2008/dec/18/business/fi-leaving-... Here's one that is 14 years old: https://www.ppic.org/press-release/are-businesses-fleeing-california-myth-busting-study-says-no/ https://www.ppic.org/press-release/are-businesses-fleeing-ca... Here's one from 24 years ago: https://www.nytimes.com/1995/03/29/us/a-changing-california-emerges-from-recession.html https://www.nytimes.com/1995/03/29/us/a-changing-california-...
temp1928384 8y ago
San Francisco is just...dystopian at this point. In-your-face poverty mingling with obscene wealth, human feces and used needles everywhere downtown/SoMa, decrepit 1 bedroom homes that sell for $1m, very few families/kids, and to make things worse stores that would be open til 10pm in any other city don't seem to stay open past 5-6 (at least in the Castro). Edit: I thought it was weird for me as a single youngish male to "care" that there are kids and families in a city, but you're reminded when you go to basically any other city how much "realer" a city feels when you actually see families (moms, dads, kids, grandparents) walking around and enjoying each other's company and life in general.
- aphextron 8y ago
  It always makes me chuckle to see a work of fiction set in modern San Francisco that treats it like a normal city where normal people live. The NBC show “About a Boy” is a perfect example [0]. It’s hilarious to see just how out of touch most Americans are with what this city has become. San Francisco may have been an actual city in the past, but it’s just a filthy office park at this point. [0] https://m.youtube.com/watch?v=PytVvfY3jiU https://m.youtube.com/watch?v=PytVvfY3jiU
  - eweise 8y ago
    A lot of SF feels the same as when I lived there in the 90's. I'm mostly familiar with the inner richmond and sunset areas. Most of the same restaurants and stores are still there.
mlinsey 8y ago
I wonder if it is actually the case that YC believes 150K is the necessary number to operate over the course of the program. As I recall, the chain of events was YC provided 16-20K, then Yuri Milner decided to index over all YC companies by offering an extra 150K on a no-cap/no discount note, then it became a lot easier for YC to just manage the investment themselves, then the money was rolled into the main YC investment so there wouldn’t be this weird two rounds of investment from the same investor, the latter for a TBD amount of equity. Each decision along this step had other motivations, like DST reaching more early stage companies or YC simplifying their investment, which were unrelated to how much money it takes to get through the YC program, a number which has undoubtedly gone up but probably not by 7.5X
dvduval 8y ago
Seems this article is not about California, but the SF Bay Area. Greater Los Angeles housing is not nearly as over priced, nor is it as dependent on the tech sector.
dsfyu404ed 8y ago
The most worrying part of this is that when the system described in TFA crashes and burns and people flee they will not realize that it was the sum of all parts that created the system that they fled and will unwittingly attempt to enact it piece by piece wherever they relocate (see Denver, Portland, Austin, etc. for examples).
hn_throwaway_99 8y ago
Wow, I thought this writing was really superb. I read one of the author's other linked articles, https://medium.com/@byrnehobart/alchian-allen-and-agglomeration-explaining-economic-inequality-and-nice-golf-courses-in-vegas-379eae5ddc5 https://medium.com/@byrnehobart/alchian-allen-and-agglomerat... , and it was the first time I read a convincing argument for the relationship between high real estate values and industry concentration in specific urban areas in the age of globalization. Fascinating read IMO.
jelliclesfarm 8y ago
There are landlords everywhere. It’s not a uniquely California problem. London, NYC, Hong Kong are all notoriously expensive places to live. But they are not Bay Area. I don’t get the oft repeated hatred and contempt towards landlords. Bay Area is better than most other places in the world..more diverse..more philanthropic and inclusive. Things grow and flourish in the Bay Area. We want everyone to succeed. We rise and we rise others. That has been my experience.
- jeffdavis 8y ago
  Landlords are natural scapegoats, and have been most of recorded history.
- rcpt 8y ago
  It's not the landlords. It's the $30B per year in tax cuts we handout to landowners that gives them super powers here. And NYC far better for housing. In New York you can get an apartment in Jackson Heights for $200k and take the F train to work. https://www.redfin.com/NY/Corona/112-50-Northern-Blvd-11368/unit-6B/home/113180232 https://www.redfin.com/NY/Corona/112-50-Northern-Blvd-11368/... In the Bay Area it's expensive near job centers but it's still expensive 40 miles away. California's problem is property taxes. Tax people fairly - not based on the time they joined the class of property owners - and our problems go away.
  - prop13throwaway 8y ago
    100% this. It also can't be emphasized enough that these property tax breaks have disproportionately benefited older, white Californians (due to both historic property ownership rates and demographics). Edit: For the folks downvoting, well, here are a few links: * https://www.census.gov/hhes/www/housing/census/historic/ownershipbyrace.html https://www.census.gov/hhes/www/housing/census/historic/owne... * http://www.nahbclassic.org/generic.aspx?genericContentID=261136&fromGSA=1 http://www.nahbclassic.org/generic.aspx?genericContentID=261...
  - jelliclesfarm 8y ago
    But that doesn’t make sense. The reason we have prop 13 is because someone 30 years ago bought a property for a couple hundred thousand dollars and by the time they pay off the mortgage, it’s worth a few million dollars but they are retirees and can’t pay the property tax. If prop 13 is repealed, older Californians should have to move out of state. Remember..no one makes money unless they SELL the property. However there is room for reform with : 1. Investment property 2. second homes 3. Foreign investments in CA properties 4. Inheritance of property and tax breaks on that..5. Prop 13 repealed for commercial properties. A retiree shouldn’t be penalized for their primary home after paying it off for 30 something years and when they are on fixed retirement incomes.
cantrevealname 8y ago
I love seeing all the speculation here on HackerNews about why tech companies flock to California, and especially to the Bay Area. Everyone has their own theory: access to money, the great weather, non-competes not being enforceable, great universities, the “pay it forward” attitude, immigrant diversity and tolerance, "good" public transit (as compared to other parts of the US), network effect (because the best developers, investors, and tech companies are already there), beautiful landscapes and the ocean, concentration of VCs, etc. It reminds me of a similarly long discussion here on HN about why Americans were generally thin in the 1950s but much fatter today. Again, everyone was pretty sure of their reason, the leading theories being: fast food, food being cheaper, rise of sedentary jobs, less physical activity due to more cars & labor saving devices, wives now working outside and not cooking at home, big reduction in smoking (because it keeps you thin), more sugar in foods, more carbs in our diet, etc. All of the theories above sound reasonable. The problem is that there is almost no way to do controlled experiments to find the true answer. And the true answer could be quite complex, like it was initially 38% factor A, 22% factor B, and the C,D, & E making up the rest, but over time it's become 5% factor A, 11% factor B, with factor D now dominating at 58%. I'm resigned to the conclusion that we're not going to know the answer. It's a complex interaction of millions of individual decisions and interrelated changes over a period of decades in a way that's not reproducible.
- Felz 8y ago
  I'm skeptical of any model that throws up its hands and says "this is so for a number of reasons I guess". Multifactor trends are unlikely [1], bad at explanation and prediction, and easy to fit to anything. It's better to admit you don't know than say it's a combination of N things. Remember, most things are hard to explain until you know the truth. That doesn't mean the truth is super complicated. [1] https://slatestarcodex.com/2015/02/14/how-likely-are-multifactorial-trends/ https://slatestarcodex.com/2015/02/14/how-likely-are-multifa...
- scottlocklin 8y ago
  It is probably first mover effect. Bay Area had silicon valley. Remember silicon? Many things involving semiconductors and electronics grew up in the Bay Area because of Fairchild and the traitorous 8. In fact, you could make the argument that the first generation of electronics businesses involving vacuum tubes were in the area as well (in Oakland). Software companies growing there happened later when the semiconductor money needed something to invest in, and computers were something semiconductor people understood. Nobody wonders at Wall Street being a center of finance after some 18th century traders met under a buttonwood tree, nobody wonders at Hollywood continuing to be a center of film and TV production, and nobody should wonder at Bay Area being a center of software development.
Animats 8y ago
We've had "peak San Francisco" three times since the 1980s. Late 1980s, when the heavy industry moved out. 2001, the dot-com crash. 2008, the real estate crash. Looks more cyclical than fundamental.
bronz 8y ago
maybe its silly but i think california will always attract lots of great people because the weather everywhere else fucking sucks. i did a huge road-trip across the US last year and the biggest lesson i drew from it was that california is paradise compared to the rest of the country. i never traveled as a kid, so i assumed that things were nice in other places too. seriously, i dont understand why anyone chooses to live somewhere else. other places are cheap but they also suck massively. and people who live in NY? its just as expensive over there, even more restrictive gun laws (you cant even carry a fucking taser) and the weather SUCKS. why someone would know about both places and choose NY over CA is a mystery to me.
tomc1985 8y ago
Yet another Medium moron that lumps lots of disparate ideas (about people) into just a handful of neatly-formed but incorrect blabs. Only in the Bay Area would "hippies" "conspire" with landlords to keep the engineers out.
taivare 8y ago
Aside from the homeless in Southern California a lot of young people are living out of vans. See Vanlife on Youtube, eventually these young couples living a Nomadic lifestyle will want to settle down and start families. Also, a lot of middle aged people are also living out of vans.
ChuckMcM 8y ago
I enjoy Silicon Valley obituaries. I've read them every time some bubble bursts, whether it was the video game bubble, the integrated circuit bubble, the dot-com bubble, or the social media bubble. What the authors usually miss is that the things they call out as killing the Bay Area (home prices, job shifting, taxation, Etc.) have been true for at least the last 60 years. What they miss are the things that power the engine. Those things are an at will work force, with legislative protection against non-competes, combined with wealth sharing/creation that is unlike any other place in the world. There are more IPOs coming out this year, Lyft, Uber, and others. And already the real estate folks have said "prepare for the shock of higher prices." That is because there will likely be thousands of millionaires minted over the course of the year. And while that wealth will be distributed unevenly, some will be lucky, and others will not, once again there will be a refreshing of the 'who got rich with some big event' sorts of stories and people will "know" someone who got rich. I got to experience that when Sun went public, lots of people I knew as co-workers were now much much wealthier than I was, they were buying houses in Palo Alto and Saratoga and I thinking about private school for their kids. Sometimes, or or the other of a married pair dropped out of the workforce. And with that wealth people left the companies where they made their money and went to other companies to grow them. Some of them got to experience that IPO burst, two, three, and even four times. You get groups of people who "self fund" their adventure/idea and work for free on some new topic. That is hard to do if you don't already have independently wealthy engineers to start with. Think for a moment if your city was full of people in their 30's and 40's whose lifestyle and needs was fully funded by their existing wealth. Do they sit around and sip drinks on the porch? Not here they don't. They get together and start building stuff. Sometimes small things, sometimes big things. And when they do, there is no shortage of capital companies that are willing to augment their efforts in exchange for a piece of the pie. And some times that explodes again into another pile of wealth. It is certainly a pretty unique place to hang out. And I expect that is part of why it is so hard to "replicate."
- fro0116 8y ago
  Well said. Reminds me of something I heard in some interview about what makes the valley special that really stuck with me. It goes something along the lines of: "There's no other place quite like the valley for starting and scaling a company from the ground up. No other place in the world can even come close to the valley in terms of the sheer number and concentration of engineers, leaders, and investors who have experienced the scaling of a company from the ground up first hand. And those are the people you want by your side when starting your own company, because they can apply their learnings to help your company grow at an accelerated pace and avoid the pitfalls they encountered along the way."
austincheney 8y ago
Arguably, the reason why the valley was the best place for startups is due to the density of the VC economy there and the wisdom of founders who have exited startups there. Once other factors have provided enough competing negative value the only thing that is left is empty consensus (trend chasers, vanity, popularity admirers), which is healthy for marketing but is horrid for innovation. With those things in mind if you have no problem achieving early investment and a healthy base of users/clients there is no reason to be in the valley (or any high cost market).
- deleted 8y ago
  [deleted]
purplezooey 8y ago
Like most Medium articles it consists of about 90% general ranting and unsubstantiated opinion, and this one is particularly tedious.
deleted 8y ago
[deleted]
AtlasBarfed 8y ago
A discussion of "Peak California" without mention of freshwater? This appears to basically be a NIMBY property values complaint by a rich person... either someone with property or who wants property under the current conditions.

Peak California

384 points by cobbzilla 8y ago

crimsonalucard 8y ago

Where to go next?

dominotw 8y ago
austin. denver.
rmason 8y ago
Detroit, it provides a startup with a longer runway than nearly anyplace else.
anonymous5133 8y ago
Jackson, Wyoming No income tax, need I say more? and amazing outdoor activities.
scythe 8y ago
All of the usual suggestions are too small, IMO, except Seattle (4M) which is already expensive and facing similar problems to the Bay. Austin (2M), Raleigh-Durham (2M), Denver (3M), Portland (2.5M) are not suited to compete with the Bay (8M). Baltimore-Washington (9M), Boston (7M), New York (20ishM) and San Diego (3.5M) are already very expensive. Climate isn't king, but Phoenix (4.5M) and Minneapolis (3.5M) are too uncomfortable for most people. That leaves Chicago (9.5M), Dallas (7M), Detroit (4M), Houston (6.5M) and Atlanta (6M), of which the first and last have a more mature tech sector, denser urban geography and better public transit (Atlanta's transit ridership is five times Houston's). Of the two, Chicago has much better infrastructure, but Atlanta has much nicer weather. Both are far too small currently to pose a threat to California's dominance, so I wouldn't expect to see any changes any time soon.

freehunter 8y ago

I don't know when Peak California will come, but I'm fairly certain it will happen at some point, and this opinion article actually does a great job at summarizing my opinion as to why in its very last sentence: "Californians will end up like the landed gentry in interwar England. Lovely houses, illustrious history, and no conceivable way to pay their bills." Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1]. If they're willing to move from their home to California for work, it's safe to assume they're willing to move from their home to almost anywhere else for work. It's not due to cheap housing or even available housing. It's not due to the great commute into work. It's not due to the low cost of living. The only argument I hear is that tech companies move to SF/LA because lots of tech workers are there, and lots of tech workers are there because lots of tech companies are there. So if there's nothing holding technology to SF/LA, when does it become a competitive advantage to have your offices anywhere but California? At some point it will. And it will be long overdue. [1] https://www.mercurynews.com/2018/01/17/h-1b-foreign-citizens-make-up-nearly-three-quarters-of-silicon-valley-tech-workforce-report-says/ https://www.mercurynews.com/2018/01/17/h-1b-foreign-citizens...

deleted 8y ago
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joshuamorton 8y ago
> Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1]. 2 flaws here: 1. The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies. 2. Being close to technical universities is good if it gives you a recruiting edge, even if only some of your employees come from that school.
- jldugger 8y ago
  > The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies. Who do you think those companies contract out to?
jlrubin 8y ago
Unenforceable non-compete clauses played a non-minor role in the success of CA as a tech-hub. Sure take a job in MA or NYC as an engineer, but come back in 2 years when your employer is preventing you from working or building a company.
- ghaff 8y ago
  Note that: 1.) Massachusetts recently passed a law significantly limiting non-competes 2.) I've never been able to find specific numbers, but my experience in Massachusetts is that they're far from universal. I've only had one in my career and that one was quite narrow. (That was EMC which was one of the local employers who fought hardest against the weakening of non-competes.) I don't like non-competes and personally think the new law should have been stronger than it was. But, historically people jumped around employers like the Route 128 computer companies all the time.
  - 80386 8y ago

codingdave 8y ago

> There’s a consensus among smart people that the Bay Area is the place to be I'd correct that to: There’s a consensus among smart people in the Bay Area, that the Bay Area is the place to be. Trust me, there are plenty of smart people out here that wouldn't touch the Bay area with a 10 foot pole.

dang 8y ago
No doubt. But can you please not post unsubstantive comments here?
- codingdave 8y ago
  I'll accept that chastisement, especially respecting that this is your site. But I do feel that the Bay Area vs. not discussions are as relevant to our industry as ageism, or any other criteria that causes us to judge each other unfairly. I'll seek better ways to engage in those discussions, though.
  - dang 8y ago
    Sure, I'm not saying the article is off topic. If it were, we would demote it (or rather, it would already have been heavily flagged). The issue is simply that when people respond with shallow dismissals, especially with a provocative edge like "wouldn't touch region X with a ten foot pole", it leads to lousy discussion. Worse, in a case like this, it pours fuel on regional resentments, which unfortunately are a lot stronger than one might have hoped. Admittedly the article set itself up for such a dismissal by making a provocative generalization about "smart people" in the first place. But commenters here need the discipline not to take the shallowest bait in a piece, but respond to the parts that are actually interesting. In a way, that's the article-scoped version of this guideline: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- wbronitsky 8y ago
  I would argue your selective enforcement of moderation is more harmful to the commentary than the original comment. This is your site, do what you want, but I really don’t think this is the comment you want to fight, considering the other pendatry, bickering and outright hate I’ve seen around here.

nostromo 8y ago

For all of the talk about California’s immense wealth, most people are unaware that the state also has a higher rate of people in poverty than any other state when you correct for local cost of living and taxes. https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_poverty_rate https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr... (See the column of the Census’ supplemental poverty measure.)

ajmurmann 8y ago
I'd love to see some numbers that take the origins of the homeless people into account. Did these people become homeless in California or did they become homeless elsewhere and then migrated to California? The mild weather and liberal attitude make CA a lot more attractive to the homeless than many other states.
- laurencerowe 8y ago
  For San Francisco, 71% had housing in the city before becoming homeless, 19% were from CA and only 10% from the rest of the USA. http://www.socketsite.com/archives/2016/02/san-franciscos-homeless-crisis-is-homegrown.html http://www.socketsite.com/archives/2016/02/san-franciscos-ho... The homeless rate here is similar to that in New York, but New York has a right to shelter so far fewer sleep on the streets than in San Francisco. It's less that the mild weather makes CA more attractive, more that it lets CA governments ignore the problem.
  - abvdasker 8y ago
    I had not heard these statistics before but they are very informative. I live in New York but visit SF often for my job. Every time I visit I am shocked all over again at the extent of the homelessness and poverty right next to obscene levels of wealth from tech. I always assumed New York just had fewer homeless but these statistics prove that the CA government has instead completely and utterly failed to support this population of people. In general, San Francisco seems like a terrible place to live.
- 8y ago

witcherchaos 8y ago

Counterpoints > It’s no longer the best place in the world to start a startup. The place with most active investors with the largest investments? The place with the biggest pool of programmers and pms and designers? The place with the best legal system to foster entrepreneurship? Where else in the world would you get all of this? (Not even including beaches, attractive people, weather, food, top hospitals and universities, diversity, optimism, etc) And to the author. San Francisco != all of tech in California > The gains from the existing tech industry increasingly accrue to a) passive investors, and b) lucky landlords. Sure, but compare that to any other industries. Tech industry is still very very mericratic. (Low startup capital, barrier to entry) Besides, every company is a tech company now > The state government is a levered bet on tech compensation. Why would you not want to bet on the best industry going forward? The one that eats all the other industries?

alkibiades 8y ago
>>> The place with the biggest pool of programmers and pms and designers? right but if you want a halfway decent one you have to compete with FANG and pay 300k a year.
- twblalock 8y ago
  There is no shortage of people in Silicon Valley willing to work at startups, and that's why there are so many startups. Among those people are successful FAANG employees who already made a bunch of money and feel safe trying something new, because if it doesn't work out they are not going to go broke and will probably end up back working at a FAANG.
vonmoltke 8y ago
> The place with the biggest pool of programmers and pms and designers? Why do we have regular discussions on how hard hiring in SV is, then?
- seem_2211 8y ago
  It's hard to hire in SV because it's the most competitive talent landscape for technology in the world. I work in recruiting (software salespeople), and this is by far the best market in the world for hiring in that niche. The talent you get here is significantly better than anywhere else. I make the analogy that it's like hiring for finance in London or New York. Outside of a global city, working at Goldman Sachs is impressive. However when you're hiring in NYC you can get much more granular - getting someone who's worked in the right team, on the right sort of deals etc. There are plenty of actors in the world, but Hollywood is where entertainment deals are done. We'd laugh at someone trying to hire the worlds best Oil & Gas team in San Francisco. These are the big leagues.

ohples 8y ago

I was visiting downtown San Jose once for WWDC. In broad daylight at 11a on a Tuesday I saw a hooker shooting up while crossing a crosswalk. It was at this moment I became confident in my decision to avoid moving to the hell hole that is California It was literally the dirtiest, shitiess, most unpleasant place I have ever been. California peeked in the 60s, you guys just need to get your heads out of your asses and look around you and see how shitty it is. INB4: you think I am some right winger California bashing. I am a Berine voting, AOC loving socialist. California doesn't have real progressive, just neoliberals who think they are.

sonnyblarney 8y ago
San Jose is firmly 'NoCal'. 'Socal' is LA, San Diego.
- ohples 8y ago
  Sorry about that, I edited it according.
dang 8y ago
You can't post like this to HN, regardless of how strongly you felt when you were someplace. Name-calling rants and slurs are not allowed, regardless of which people or region you have a problem with. Please don't do it again. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

kitsune_ 8y ago

Not a single word about climate change?

Animats 8y ago
California does OK with climate change. Rising ocean levels aren't a big deal, because the coast of California is mountainous. Even where it looks flat, like Venice Beach, go 3 blocks inland and you're usually 20 feet up. San Francisco has some low-lying areas near the coast, but they're small enough and valuable enough to justify big seawalls if necessary. It's not like Florida or New Orleans, which are barely above sea level now. Hotter is a problem, but CA isn't going to heat up to unlivable levels, like parts of India.

nextstep 8y ago

I guess I’m not a smart person and my friend group must be full of idiots because concensus among all of us — many of which who have lived in there — is that the Bay Area is terrible. I would never move back. The lifestyle is very hard, even if you make a lot of money, because the public transportation is insufficient to cover everything you want to do in your life. And the culture is boring and getting worse. I can understand why Americans who have never lived in NY or a nice city outside of the US might think it’s “really hard to find any place on planet earth that’s nicer to live in and to work in”. But this attitude says more about the author than anything inherent to the Bay Area.

witcherchaos 8y ago
I am American who has lived in tokyo, Los Angeles, Seoul, Singapore, New York, Paris, and San Francisco. I can tell you you are wrong. Too long to go into it.
sethhochberg 8y ago
I was guilty of the same kind of thinking when I first moved to San Francisco - it was, at the time, worlds better than the suburban Florida environment that I'd grown up in or the other mid-sized southern cities I'd visited frequently. I fell in love immediately. But after a couple of years, the little cracks in the armor start to show up - outside of a very narrow strip of Market St and the Mission, getting around to other parts of the region is difficult. The weather is good, but certainly not the perfect beachy warmth I was used to as a kid and got monotonous. Most people I met seemed to already have their circles of friends and they centered mostly around who worked where or what hackathons you wanted to do, and that wasn't my ideal weekend scene. Rampant, aggressive homelessness made simply walking through many neighborhoods saddening at best, actively hostile at worst. Credit where its due, I found a lot of solace riding my bike around in the Marin headlands, but I could only really do that a couple of days a week at best. NYC, by comparison, I moved to and didn't immediately fall in love. It was huge and intimidating and I showed up in August when it was humid and moving into my 5th floor walkup was painful. It took a few months to feel comfortable with transit options and like I wasn't solely reliant on maps. But I had an easier time making friends who didn't want to code 24/7, yet still take their professional life seriously. Nightlife is waaaayyy better in NYC, and there are hundreds more options. There is still a homelessness problem, but its generally less in-your-face and less aggressive. Its still expensive, but less so than SF. Sometimes I call a car to go somewhere because the weather is bad or I'm in a hurry, but I rarely feel like there is somewhere I simply cannot get to on public transit. Its the only place I've ever lived where the longer I've been here, the more I've liked it. SF definitely has charm, but like you and your friends, many of my friends and I who have done both find NYC to be a much better example of a functional, diverse, very livable city. I wouldn't trade my time in SF for anything else, it was valuable to a younger version of myself - but I'm happy it propelled me elsewhere.

electricslpnsld 8y ago

> However, the current crop of big companies will still be the big tech companies in 2030 and 2040. What’s the reasoning here? Rewinding to 1999, Microsoft is the only (then) big tech company still doing interesting things. Apple was mostly irrelevant and on the brink of collapse, Google was an academic curiousoty, and Facebook wouldn’t exist for another half decade. A lot will change in 20 years. I suppose Yahoo, Oracle, and IBM are still kicking and probably will for a long while, but they are hardly forerunners at this point.

HillaryBriss 8y ago
the reasoning is that everything is basically advertising/marketing and FB + Google have that stuff locked up from here till eternity
- deleted 8y ago
  [deleted]

Shebanator 8y ago

I think its a good article, but I'm confused about the author's implication that the state government is consciously choosing to depend on income and capital gains tax revenues. California does depend on those taxes, but not by choice: Prop 13 made it basically impossible for property tax revenues to grow at the same rate as the economy. I also agree with the other comments here that this author seems to think SF == Bay Area. Much of his comments about hippies and landlords conspiring make no sense in the rest of the bay, where it is actually relatively wealthy homeowners conspiring to prevent growth in order to ride the surge in home prices.

JMTQp8lwXL 8y ago
A couple years after Prop 13 was enacted in 1978, the California legislature approved of Mello-Roos Community Facilities District taxes in 1982. They exist on top of regular property taxes (they do not replace them). While I agree with your narrative that it's hard for California to raise property taxes (beyond two percent per year), CFD's help bring in new property tax revenue to ease the gap.

freewilly1040 8y ago

>>I’ve lived in the Midwest, on the Texas/Mexico border, and in New York, and when I moved to San Francisco I was surprised to see that anti-immigrant sentiment was quite socially-acceptable there The author is not an immigrant as the word is commonly understood if he’s only lived in these places.

wilg 8y ago
That is obviously intentional, and (I think) an interesting perspective.

true_tuna 8y ago

California is fucked because normal people can’t afford to live here anymore. At least not in the Bay Area, LA, and San Diego. In San Francisco a favorite pastime is to blame tech workers for “driving up rents” anyone who has taken economics knows prices don’t work that way. Prices go up when demand exceeds supply. We also are quite aware of WHY demand exceeds supply. 1) People keep coming here because we keep hiring, and 2) people who already live here block new housing construction. The objection we see in every community meeting is “we don’t want to change the character of our city”. I assure you, driving out your teachers, bus drivers, baristas and librarians is changing your city even worse. It leads to congestion, increased homelessness, loss of diversity. For every ten jobs we create we build two new houses. It’s not the people with new jobs that suffer. Here’s the solution. A new state law saying if a city adds a job it also has to permit the construction of a unit of housing. Done. I assure you if the City of Mountain View has to follow that rule, the muddy lot next to Google campus (currently zoned for hotel) would have a ten story apartment building in it next year. Why hasn’t it happened yet? Not allowed. Well who doesn’t allow it? The city. Why won’t the city allow it? Residents don’t want new housing. Why don’t residents want new housing? A mistaken belief that blocking new housing will preserve their city. Blocking new housing will in fact destroy our communities. We can get out of this mess, but we have to build our way out.

option 8y ago
An alternative/additional solution to "just built more, denser housing" is making remote work much more widely adopted. A lot of roles in software, research, etc. are very well suited for remote work. Bay Area companies should: (1) make remote work more widespread and (2) build more offices outside of Bay Area.
- bproven 8y ago
  Yep - I agree with the increased dense housing is needed (although I would also argue that with this construction infrastructure / public transit comes for the ride or it is a failure too), but it seems that one of the stop gaps is to promote /incentive remote at companies...
8y ago

jamisteven 8y ago

Author clearly has never lived anywhere but CA, perhaps ever left the bay area. Its interesting because alot of people that have never left have this same mindset, that Cali is this epicenter of all things good, and somehow the best overall place to live. How anyone could think this, not sure, unless they just have never lived anywhere else or are that uneducated as to the state of the government in California, or are filthy loaded. What I saw from my time living in San Diego was a culture highly consumed with itself, people stuck on eachother, crazy high cost of living, and insane taxes that hardly made it justifiable. It has a beach, and much like florida, if it didnt have one nobody would live there.

fuckyah 8y ago
Wrong he wrote lived in Texas and New York too
josephmosby 8y ago
Direct quote from the piece: "I’ve lived in the Midwest, on the Texas/Mexico border, and in New York, and when I moved to San Francisco..." Additionally, the argument in the entire piece is about California not being the epicenter of all of the things it claims to be.

williesleg 8y ago

On to destroy Texas, Arizona and Florida!

rafaelc 8y ago

This is interesting but he kind of jumps all over the place; it strikes me more as a brain dump of ideas and hypotheses. There are a few areas where he’s playing pretty fast and loose with the facts, too. For example: NYC has way more homeless people than SF, but they aren’t as visible because under city law, the city is required to provide shelter to all of them. It has nothing to do with the weather, and in that sense NYC is way nicer to its homeless than SF.

rsync 8y ago

California is the United States, writ large. It's not qualitatively different, it's just more so. Or, from a slightly different standpoint, the rest of the country is California, just 20 years behind schedule. I have lived in many different places all over the United States, including twice in California, where I have settled with my family, and it's very easy to fall into a "crazy california" narrative - especially when comparing with "sensible" places like Minnesota. But it's not true. Right this very moment in Minneapolis there is a heated, polarized debate about housing affordability and homeless services and zoning that is indistinguishable from the SFBA debate (save for the pricing numbers difference).

trophycase 8y ago
Interestingly enough, Minneapolis just upzoned the entire city. https://www.nytimes.com/2018/12/13/us/minneapolis-single-family-zoning.html https://www.nytimes.com/2018/12/13/us/minneapolis-single-fam...
pascalxus 8y ago
You're right as far as blue cities/states go. But Some other cities (some red ones and some blues that are less liberals) don't stop housing from being built as much. The less rules and regulations and zoning, the more supply is created. Houstan, Dallas for instance are much more affordable.
notacoward 8y ago
I'm not so sure that California is ahead of the rest of the country. The effect of the tech industry on the Bay Area's fortunes is not that unlike the effect of the auto industry on Detroit or even the textile mills on New England. Silicon Valley is just the latest iteration of a cycle that has existed for a long time.
- HillaryBriss 8y ago
  it seems like global competition is the force that ultimately damaged both Detroit's auto industry and New England's textile mills. on the surface at least, it seems reasonable to guess that, somehow, global competition will be the force that ultimately dethrones Silicon Valley.

josephmosby 8y ago

Something touched on with the piece, but not quite hammered nearly as much as it should have been: switching costs, which have dramatically changed in the past 10-15 years. The initial round of California VC money came from hardware startups cashing out. Hardware is tied to the physical realm, and thus locality is important - if you need to buy leftover equipment or supplies, it's way easier to get them if you're in the neighborhood as your vendor. The next round of software startups in the 90s through early 00's had a similar switching cost with VC funding. Though we obviously had telephones and email, we had not fully transitioned into the "remote work" mindset that allows teams to collaborate regardless of distance. It was challenging for VCs to work effectively with their founders, and for founders to work effectively with their teams - which forced teams to co-locate with founders, and founders to co-locate with VCs. You don't need the world's best software engineers to launch a startup - you can launch something with sufficient complexity to start making money in Denver, or Austin, or Chicago, or anywhere else with a reasonable supply of engineers. And now, VCs are far more tolerant of remote founders given how easy it is to stay in communication. If all that is true, why make things more economically challenging than they need to be by trying to fight the economic headwinds of California?

_Codemonkeyism 8y ago

California will be Elysium [1] in 50y. https://en.wikipedia.org/wiki/Elysium_(film) https://en.wikipedia.org/wiki/Elysium_(film)

deleted 8y ago

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shriphani 8y ago

I have always what it is about places with a mediterranean climate that causes some sort of renaissance mindset to form there - Greece (well at least a while ago), Roman empire, Italian renaissance, Silicon Valley.... Maybe it is the air.

80386 8y ago
On the East Coast, there are maybe two months out of the year when the weather doesn't strongly disincentivize going outside. And those months aren't in contiguous blocks - there's usually a week in January where it's nice out, and then it's crap until one afternoon in February and a randomly selected third of the days in March, and so on. I bet that has something to do with it - especially since you need cities for this stuff, and cities have to care about the weather more than suburbs, since people aren't just driving everywhere. And, having lived in both regions, the only difference between the Northeast and the South is that the Northeast rolls fewer of these days (it still gets way too hot in the summer in Massachusetts) - but the Northeast is where most of the cities are, because a few hundred years ago, colder overall weather meant 1) you couldn't develop a primarily agricultural economy the way the cotton and tobacco belt did, but 2) you had fewer parasites and disease carriers to worry about. (It's a little harder to build major economic centers when half your population has hookworm, malaria, or both, which was true of the South until the mid-20th century.) Lee Kuan Yew called the air conditioner the most important invention of the 20th century.
- Baeocystin 8y ago
  Having lived in Bethesda for a few years, I am convinced that a non-negligible fraction of our governmental dysfunction comes from the collision of formal work attire and 100% humidity swamp. Not even joking.
  - shriphani 8y ago
    I developed a mildly negative opinion of Singapore and HK when I saw their brightest minds enter the finance industry and wear three piece suits in sweltering weather every single day of the year. Never again have I seen so many successful people so determined to be uncomfortable for a majority of their workday.

pkaye 8y ago

I'm expecting the "tech bubble" to burst at some point. Looks at this way. Desktop and laptop market is saturated. Phone market soon. Semiconductor industry reaching its limits. Ad revenue will trend down as governments clamp down on a lot of the sketchy stuff. A lot is riding on self driving cars and machine learning. What else is new in the horizon that people really need?

speeq 8y ago
That sounds like "640KB RAM is more than anyone will ever need" to me.
CptFribble 8y ago
The tail of what's possible with ML is very long. We've just only picked the low-hanging fruit. Medtech is going to be big this century, as biocompatible nanotech and the shockwaves of CRISPR reverberate through industry over the next couple decades. Not saying immortality is coming or anything, but within 20-30 years we'll probably see a slew of new therapies and products. And if anyone figures out a really good, affordable BCI, then that's another Pandora's box of possibilities. Also, I respectfully disagree on a downward trend of ad revenue. The rise of advertorials in news outlets, product-placement-driven subscription media a la Netflix, and the whole influencer thing indicates our future will be even more fully integrated with advertisement. The per-impression cost may still fall, but look forward to the day when anyone with friends is micro-compensated in realtime for mentioning Coke at a party.
mikeg8 8y ago
There are going to be many, many more ways we utilize software and connected devices to optimize existing industures (construction, healthcare, logistics etc). Some of them will seem so obvious in retrospect, others will be exceptionally creative and thus hard to predict. We may have reached a saturation point for hardware (but even that will need constant replacing), but the ways we deploy technologies out into our economy will continue moving forward for many years to come. Tech changes, but always moves forward.

skepticmoron1 8y ago

If Bay Area and tech is a talking point. For most of the tech existence, Silicon Valley has always been the go to place. Then, it got too expensive. The next stop was sf and now even soma is crazy shit expensive. The natural progression i see is to start looking at the east bay (Hayward, Oakland..). They still are comparatively affordable. Work with the local governments where it is a win win for both. I live in Hayward and I can’t imagine there are no startups here. It is so close to the city.

beatpanda 8y ago

In every article like this, I'm always looking for the author's orientation to place. It's important to me whether they consider the Bay Area, or any other place, an actual home, with some transcendent quality besides a collection of objectively measurable attributes. This author clearly does not. The author is annoyed that people like him (according to him, the smart people, the good people, the people on whom the entire society and economy depends!) are treated with such disrespect. But how does this author treat the people around him? He writes about the Bay Area like he's observing it from an alien spacecraft, as if he's entirely separate, outside of time and space. He evaluates the various objective factors of the Bay Area solely in terms of their benefit to him, and finds it wanting. And the author, with an unlimited ability to simply uproot himself, darkly insinuates that he, and all the other good, smart people like him, are going to do it, and soon. But why should anyone care? By the author's own admission, he and his fellow good, smart people aren't meaningfully a part of the culture or the social fabric of the place. The author clearly has contempt for the people around him ("If you can afford Pacific Heights rents and rideshare everywhere you can pretend you don't live here!"). He clearly has no intention of contributing to the place. He clearly sees it as a pool of resources for extraction and nothing else. It's clear that the author sees it this way because if this wasn't the case, he would be involved in some effort, any effort at all, to fix some of the problems that he's describing. Yes, California and the Bay Area have their problems. And our problems and our fortunes are the result of generations-long processes. Whatever comes next will be the outcome of people digging in, working to fix the problems, putting their shoulders to the wheel, and not just bailing out because moving somewhere else would maximize certain values in their personal spreadsheets. A few people that I consider friends were doing that work before the current round of good times. They're people who've been in San Francisco back when it was considered frightening and dangerous, and the set of problems the city had were completely different than the current ones. They stuck it out. They made the city a much better place. As a result, we now have a new set of problems to fix. The cycle repeats itself. Right now, we don't need any more people who are just looking to extract resources for themselves. We need people who are willing to engage, to become part of the social fabric of this place, and to figure out what the future looks like. So I want to enthusiastically encourage this author, everyone else who's written a functionally identical article in the last few years, and everyone on Hacker News who constantly complains about how much they hate San Francisco, to get out. If you're among that group, and you don't leave, you're actually cheating yourself. There's likely some place in the world with which you could find the same profound, transcendent connection that I and many others have with San Francisco. It's a tragic waste of a life to live in a place you hate, and that you have neither the commitment nor the desire to make any better. It doesn't benefit you, and it doesn't benefit the people around you whose home you hate so much. Everyone would be so much better off if you would simply show yourself the door, and find a place you can call home, for better or worse.

gumby 8y ago

I've seen this article over and over through the years. I moved to Palo Alto in 1984 when all the houses were under water and people told me that I'd missed the boom. California has plenty of issues, but always muddles through them. California's economy is more diversified and resilient than that of, say, Detroit. There's much more to the state than startups. Sure, eventually it will be superseded in some way or another, but I doubt it will happen in my lifetime.

nitwit005 8y ago

You'd think an article about the fate of California would mention Los Angeles, or agriculture, or anything other than the SF bay area and tech. Even the mention of the state government is a reference to the tech industry.

Toine 8y ago
California is almost as big as my own country (France) and yet when people use the word it's a synonym for the bay area. Seems crazy from that perspective.
- anonymous5133 8y ago
  Well yeah, if you're going to sell how great California is then of course you are going to point to the place that basically puts California on the map in recent years.

jarjoura 8y ago

Oh boy, here we go again, another article proclaiming that California is too expensive and you're better off starting your company elsewhere. California has been expensive for a very very long time, decades. Yet, every year, someone gets hopeful that this is it, this is some sign, tech is finally moving on from California. When I moved to California in 2007, startups in Austin were the next big thing. SXSW celebrated a huge number of Austin startups, and then once they grew to a larger size, they all migrated here to California and the scene seemed to evaporate overnight. The problem these types of articles fail to grasp is that even with paying a tech worker over $200 to 500k a year, that is still an amazing return on investment. Not even considering just the FAANG companies, but all the other ones like LinkedIn and Square, Twitter and DropBox, they're raking in billions a year in revenue. They make so much raw cash, they have stock buybacks and investment arms of their companies that just invest in other things. There are other tech cities, of course, Seattle being another hub. You don't have to pay as much for your employees and the cost of living is adjusted for that expectation. LA and NYC have a pretty decent cluster of workers as well. The problem is, you can find generalists, but once you start to need specialized engineers or roles, it gets exponentially harder and you end up creating remote offices in the Bay Area to capture that. I'm not going to defend that it's not exhausting living here. It's hyper-competitive and the politics of "live and let live" create pockets of very seedy places in all the strange areas. Yet, some of the brightest people in the world live here doing some of the most amazing things in the world. It's super easy to find a meetup where, for example, the guest speaker invented Rust, for free, with pizza, on a random Tuesday! Other places around the world have to create these specialized conferences to make it worth their effort.

HillaryBriss 8y ago
> that is still an amazing return on investment. bingo. to first order it's a winner take all game. it doesn't matter how much cash the VCs need to pay to start one of these contraptions. what matters is that the contraption succeeds. if the chance of success is 0.01% in SV, but it's 0.0000001% in Austin, it doesn't matter at all if the costs are 10 times as much in SV. VCs are not starting companies to save cash. they're starting companies to dominate an industry. so they buy the biggest guns and it doesn't matter how much they cost.

ajmurmann 8y ago

TL;DR: California is too crowded, nobody goes there anymore.

bypasspaywalls 8y ago

If you are getting a paywall, try https://github.com/iamadamdev/bypass-paywalls-firefox https://github.com/iamadamdev/bypass-paywalls-firefox

malchow 8y ago

Peak California is real and this is a quite good summary of it. One redeeming aspect not well understood, though, is the role of capital. We're temporarily in an odd age of overabundance in venture capital (overabundance relative to investable ideas and people) but in general, and pretty much at all times except for 1997 to 2000 and 2014 to 2018, the people willing and able intelligently to invest in $0 revenue / 0 progress companies with wild ideas have tended to be in just one place. Nothing about this demands that the companies stay in California. But it means that they'll probably keep coming here to find capital being allocated by risk-loving Ph D-holders. I have only been in the Valley for 10 years, but even I remember, in 2009, how fast the tourist capital vanished. And some pretty cool companies were founded in 2009. When the next cyclical downturn arrives, the same determined VCs are still going to be in the same MPK and SF offices, plugging away on new ideas, while oil kingdoms and plutocrats are going to be off cleaning money in some other, hotter corner of the globe.

deleted 8y ago

[deleted]

phkahler 8y ago

One word for those looking to get out. Detroit.

anonymous5133 8y ago
I'll take Wyoming, thanks :)

ngngngng 8y ago

I've had a few casual conversations about the collapse of California recently. In my opinion, zoning laws will be the death of San Francisco. The greed of the NIMBY's will eventually drive prices too high for anyone that didn't buy 20 years prior (i'm amazed it hasn't happened already). I've been entertaining the idea of a state putting extreme limits on zoning laws. I'm not an economic expert so i'm not sure what it would look like, but I can't help but compare to Tokyo with their ballooning population and stable cost of living.

jdhn 8y ago
Japan has fantastic zoning laws. Here's[0] a great blog post about it. [0]http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
JMTQp8lwXL 8y ago
If rent goes up too high, and businesses cannot afford to raise wages to keep up, units will go unfilled, and they'll pivot downwards again.

dmode 8y ago

Just how much ink needs to be spilled about how California and Bay Area are doomed. I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. The gap between SF and rest of the country when it comes to venture investment has actually grown as the cost of living has gone up. For example, in 2018, $45bn was invested in Bay Area startups whole only $1.5bn was invested in Austin and even less in Denver, Utah etc. It is not even close. Weirdly, the other fast growing tech regions are similar to California - expensive, dense, and left leaning (NYC, Boston, Seattle). Maybe this time the prediction will be true, but I am willing to take a large bet against it. And this is because several things, but the primary reason is that California continues to overindex it's policies towards people, while other competing states overindex on business friendliness. But in the knowledge economy, a thirivng talent market is far more relevant to a business than some tax breaks. If you can't execute and be profitable, what's the point of a tax break. California optimizes for people through various mechanisms - non competes, inclusivity, diversity, environment, labor protection, safety net etc. If a place is great for people, it is great for business.

aylmao 8y ago
> I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. Maybe I just wasn't paying attention before, but I've read a lot about it lately, especially in the context of New York being the next Silicon Valley. I feel like this was especially true when Amazon was considering it as a location for HQ2, but even now that it's not I keep seeing NYT articles about NYC being #2 in tech (ignoring Seattle, for example) and how it's definitely gonna surpass SV at some point because it's "a so much better place to live", has "so many more creative professionals", etc. This article doesn't say it outright, but it kinda alludes to it making NYC the primary example it compares The Bay against.
- freddie_mercury 8y ago
  Here's one that is 8 years old: https://www.city-journal.org/html/cali-business-get-out-13419.html https://www.city-journal.org/html/cali-business-get-out-1341... Here's one that is 11 years old: http://articles.latimes.com/2008/dec/18/business/fi-leaving-california18 http://articles.latimes.com/2008/dec/18/business/fi-leaving-... Here's one that is 14 years old: https://www.ppic.org/press-release/are-businesses-fleeing-california-myth-busting-study-says-no/ https://www.ppic.org/press-release/are-businesses-fleeing-ca... Here's one from 24 years ago: https://www.nytimes.com/1995/03/29/us/a-changing-california-emerges-from-recession.html https://www.nytimes.com/1995/03/29/us/a-changing-california-...

temp1928384 8y ago

San Francisco is just...dystopian at this point. In-your-face poverty mingling with obscene wealth, human feces and used needles everywhere downtown/SoMa, decrepit 1 bedroom homes that sell for $1m, very few families/kids, and to make things worse stores that would be open til 10pm in any other city don't seem to stay open past 5-6 (at least in the Castro). Edit: I thought it was weird for me as a single youngish male to "care" that there are kids and families in a city, but you're reminded when you go to basically any other city how much "realer" a city feels when you actually see families (moms, dads, kids, grandparents) walking around and enjoying each other's company and life in general.

aphextron 8y ago
It always makes me chuckle to see a work of fiction set in modern San Francisco that treats it like a normal city where normal people live. The NBC show “About a Boy” is a perfect example [0]. It’s hilarious to see just how out of touch most Americans are with what this city has become. San Francisco may have been an actual city in the past, but it’s just a filthy office park at this point. [0] https://m.youtube.com/watch?v=PytVvfY3jiU https://m.youtube.com/watch?v=PytVvfY3jiU
- eweise 8y ago
  A lot of SF feels the same as when I lived there in the 90's. I'm mostly familiar with the inner richmond and sunset areas. Most of the same restaurants and stores are still there.

mlinsey 8y ago

I wonder if it is actually the case that YC believes 150K is the necessary number to operate over the course of the program. As I recall, the chain of events was YC provided 16-20K, then Yuri Milner decided to index over all YC companies by offering an extra 150K on a no-cap/no discount note, then it became a lot easier for YC to just manage the investment themselves, then the money was rolled into the main YC investment so there wouldn’t be this weird two rounds of investment from the same investor, the latter for a TBD amount of equity. Each decision along this step had other motivations, like DST reaching more early stage companies or YC simplifying their investment, which were unrelated to how much money it takes to get through the YC program, a number which has undoubtedly gone up but probably not by 7.5X

dvduval 8y ago

Seems this article is not about California, but the SF Bay Area. Greater Los Angeles housing is not nearly as over priced, nor is it as dependent on the tech sector.

dsfyu404ed 8y ago

The most worrying part of this is that when the system described in TFA crashes and burns and people flee they will not realize that it was the sum of all parts that created the system that they fled and will unwittingly attempt to enact it piece by piece wherever they relocate (see Denver, Portland, Austin, etc. for examples).

hn_throwaway_99 8y ago

Wow, I thought this writing was really superb. I read one of the author's other linked articles, https://medium.com/@byrnehobart/alchian-allen-and-agglomeration-explaining-economic-inequality-and-nice-golf-courses-in-vegas-379eae5ddc5 https://medium.com/@byrnehobart/alchian-allen-and-agglomerat... , and it was the first time I read a convincing argument for the relationship between high real estate values and industry concentration in specific urban areas in the age of globalization. Fascinating read IMO.

jelliclesfarm 8y ago

There are landlords everywhere. It’s not a uniquely California problem. London, NYC, Hong Kong are all notoriously expensive places to live. But they are not Bay Area. I don’t get the oft repeated hatred and contempt towards landlords. Bay Area is better than most other places in the world..more diverse..more philanthropic and inclusive. Things grow and flourish in the Bay Area. We want everyone to succeed. We rise and we rise others. That has been my experience.

jeffdavis 8y ago
Landlords are natural scapegoats, and have been most of recorded history.
rcpt 8y ago
It's not the landlords. It's the $30B per year in tax cuts we handout to landowners that gives them super powers here. And NYC far better for housing. In New York you can get an apartment in Jackson Heights for $200k and take the F train to work. https://www.redfin.com/NY/Corona/112-50-Northern-Blvd-11368/unit-6B/home/113180232 https://www.redfin.com/NY/Corona/112-50-Northern-Blvd-11368/... In the Bay Area it's expensive near job centers but it's still expensive 40 miles away. California's problem is property taxes. Tax people fairly - not based on the time they joined the class of property owners - and our problems go away.
- prop13throwaway 8y ago
  100% this. It also can't be emphasized enough that these property tax breaks have disproportionately benefited older, white Californians (due to both historic property ownership rates and demographics). Edit: For the folks downvoting, well, here are a few links: * https://www.census.gov/hhes/www/housing/census/historic/ownershipbyrace.html https://www.census.gov/hhes/www/housing/census/historic/owne... * http://www.nahbclassic.org/generic.aspx?genericContentID=261136&fromGSA=1 http://www.nahbclassic.org/generic.aspx?genericContentID=261...
- jelliclesfarm 8y ago
  But that doesn’t make sense. The reason we have prop 13 is because someone 30 years ago bought a property for a couple hundred thousand dollars and by the time they pay off the mortgage, it’s worth a few million dollars but they are retirees and can’t pay the property tax. If prop 13 is repealed, older Californians should have to move out of state. Remember..no one makes money unless they SELL the property. However there is room for reform with : 1. Investment property 2. second homes 3. Foreign investments in CA properties 4. Inheritance of property and tax breaks on that..5. Prop 13 repealed for commercial properties. A retiree shouldn’t be penalized for their primary home after paying it off for 30 something years and when they are on fixed retirement incomes.

cantrevealname 8y ago

I love seeing all the speculation here on HackerNews about why tech companies flock to California, and especially to the Bay Area. Everyone has their own theory: access to money, the great weather, non-competes not being enforceable, great universities, the “pay it forward” attitude, immigrant diversity and tolerance, "good" public transit (as compared to other parts of the US), network effect (because the best developers, investors, and tech companies are already there), beautiful landscapes and the ocean, concentration of VCs, etc. It reminds me of a similarly long discussion here on HN about why Americans were generally thin in the 1950s but much fatter today. Again, everyone was pretty sure of their reason, the leading theories being: fast food, food being cheaper, rise of sedentary jobs, less physical activity due to more cars & labor saving devices, wives now working outside and not cooking at home, big reduction in smoking (because it keeps you thin), more sugar in foods, more carbs in our diet, etc. All of the theories above sound reasonable. The problem is that there is almost no way to do controlled experiments to find the true answer. And the true answer could be quite complex, like it was initially 38% factor A, 22% factor B, and the C,D, & E making up the rest, but over time it's become 5% factor A, 11% factor B, with factor D now dominating at 58%. I'm resigned to the conclusion that we're not going to know the answer. It's a complex interaction of millions of individual decisions and interrelated changes over a period of decades in a way that's not reproducible.

Felz 8y ago
I'm skeptical of any model that throws up its hands and says "this is so for a number of reasons I guess". Multifactor trends are unlikely [1], bad at explanation and prediction, and easy to fit to anything. It's better to admit you don't know than say it's a combination of N things. Remember, most things are hard to explain until you know the truth. That doesn't mean the truth is super complicated. [1] https://slatestarcodex.com/2015/02/14/how-likely-are-multifactorial-trends/ https://slatestarcodex.com/2015/02/14/how-likely-are-multifa...
scottlocklin 8y ago
It is probably first mover effect. Bay Area had silicon valley. Remember silicon? Many things involving semiconductors and electronics grew up in the Bay Area because of Fairchild and the traitorous 8. In fact, you could make the argument that the first generation of electronics businesses involving vacuum tubes were in the area as well (in Oakland). Software companies growing there happened later when the semiconductor money needed something to invest in, and computers were something semiconductor people understood. Nobody wonders at Wall Street being a center of finance after some 18th century traders met under a buttonwood tree, nobody wonders at Hollywood continuing to be a center of film and TV production, and nobody should wonder at Bay Area being a center of software development.

Animats 8y ago

We've had "peak San Francisco" three times since the 1980s. Late 1980s, when the heavy industry moved out. 2001, the dot-com crash. 2008, the real estate crash. Looks more cyclical than fundamental.

bronz 8y ago

maybe its silly but i think california will always attract lots of great people because the weather everywhere else fucking sucks. i did a huge road-trip across the US last year and the biggest lesson i drew from it was that california is paradise compared to the rest of the country. i never traveled as a kid, so i assumed that things were nice in other places too. seriously, i dont understand why anyone chooses to live somewhere else. other places are cheap but they also suck massively. and people who live in NY? its just as expensive over there, even more restrictive gun laws (you cant even carry a fucking taser) and the weather SUCKS. why someone would know about both places and choose NY over CA is a mystery to me.

tomc1985 8y ago

Yet another Medium moron that lumps lots of disparate ideas (about people) into just a handful of neatly-formed but incorrect blabs. Only in the Bay Area would "hippies" "conspire" with landlords to keep the engineers out.

taivare 8y ago

Aside from the homeless in Southern California a lot of young people are living out of vans. See Vanlife on Youtube, eventually these young couples living a Nomadic lifestyle will want to settle down and start families. Also, a lot of middle aged people are also living out of vans.

ChuckMcM 8y ago

I enjoy Silicon Valley obituaries. I've read them every time some bubble bursts, whether it was the video game bubble, the integrated circuit bubble, the dot-com bubble, or the social media bubble. What the authors usually miss is that the things they call out as killing the Bay Area (home prices, job shifting, taxation, Etc.) have been true for at least the last 60 years. What they miss are the things that power the engine. Those things are an at will work force, with legislative protection against non-competes, combined with wealth sharing/creation that is unlike any other place in the world. There are more IPOs coming out this year, Lyft, Uber, and others. And already the real estate folks have said "prepare for the shock of higher prices." That is because there will likely be thousands of millionaires minted over the course of the year. And while that wealth will be distributed unevenly, some will be lucky, and others will not, once again there will be a refreshing of the 'who got rich with some big event' sorts of stories and people will "know" someone who got rich. I got to experience that when Sun went public, lots of people I knew as co-workers were now much much wealthier than I was, they were buying houses in Palo Alto and Saratoga and I thinking about private school for their kids. Sometimes, or or the other of a married pair dropped out of the workforce. And with that wealth people left the companies where they made their money and went to other companies to grow them. Some of them got to experience that IPO burst, two, three, and even four times. You get groups of people who "self fund" their adventure/idea and work for free on some new topic. That is hard to do if you don't already have independently wealthy engineers to start with. Think for a moment if your city was full of people in their 30's and 40's whose lifestyle and needs was fully funded by their existing wealth. Do they sit around and sip drinks on the porch? Not here they don't. They get together and start building stuff. Sometimes small things, sometimes big things. And when they do, there is no shortage of capital companies that are willing to augment their efforts in exchange for a piece of the pie. And some times that explodes again into another pile of wealth. It is certainly a pretty unique place to hang out. And I expect that is part of why it is so hard to "replicate."

fro0116 8y ago
Well said. Reminds me of something I heard in some interview about what makes the valley special that really stuck with me. It goes something along the lines of: "There's no other place quite like the valley for starting and scaling a company from the ground up. No other place in the world can even come close to the valley in terms of the sheer number and concentration of engineers, leaders, and investors who have experienced the scaling of a company from the ground up first hand. And those are the people you want by your side when starting your own company, because they can apply their learnings to help your company grow at an accelerated pace and avoid the pitfalls they encountered along the way."

austincheney 8y ago

Arguably, the reason why the valley was the best place for startups is due to the density of the VC economy there and the wisdom of founders who have exited startups there. Once other factors have provided enough competing negative value the only thing that is left is empty consensus (trend chasers, vanity, popularity admirers), which is healthy for marketing but is horrid for innovation. With those things in mind if you have no problem achieving early investment and a healthy base of users/clients there is no reason to be in the valley (or any high cost market).

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purplezooey 8y ago

Like most Medium articles it consists of about 90% general ranting and unsubstantiated opinion, and this one is particularly tedious.

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AtlasBarfed 8y ago

A discussion of "Peak California" without mention of freshwater? This appears to basically be a NIMBY property values complaint by a rich person... either someone with property or who wants property under the current conditions.