6 ms·

I genuinely don't get it. Sure, you want some of that VC money for your startup, so you start building in SV, where the exorbitant costs of living and doing bus

I genuinely don't get it. Sure, you want some of that VC money for your startup, so you start building in SV, where the exorbitant costs of living and doing business necessitate taking VC money to even stay afloat. Do investors really not invest in companies that don't start in the Valley? I have a hard time believing that, but to hear anybody from the Bay Area tell it, it seems to be the default.

cycrutchfield 7y ago
Talent is the lifeblood of tech companies. Ergo, tech companies set up where it is easier to recruit talent.
- Consultant32452 7y ago
  I agree with you, but I also find it to be confusing. These same companies, when they do open offices in "2nd tier" cities, they offer "2nd tier" salaries. If you go to Houston and offer something close to SF salary, you will be over-run with great talent. I feel like there's some social status or something that comes from paying the higher salaries in places like the valley that just aren't attainable by attracting talent in other cities.
  - inetknght 7y ago
    > If you go to Houston and offer something close to SF salary, you will be over-run with great talent. I live in Houston and I concur. The company I work for has a lot of trouble finding talent that we need. That's not to say the talent doesn't exist here. It absolutely does. It's just that we can't afford Silicon Valley level compensation.
    - lonelappde 7y ago
      You can't afford something you need? How are you still in business?
  - SpicyLemonZest 7y ago
    "Talent" includes other roles that aren't so fungible. If a VC-backed startup starts a major widget spinning project, they often want to poach a director of spinning widgets from a top company, and Houston won't necessarily have one.
    - lonelappde 7y ago
      That doesn't explain why companies DO hire in Houston but refuse to pay close to what they'd pay the same person if the person moved to Mountain View or SF. It's simple status garbage to sustain the illusion that people in SV are "better"
      - SpicyLemonZest 7y ago
        I mean, I dunno, I feel like you have to look at it from the other direction. A lot of companies agree that that the premium for SV engineers is "simple status garbage", and therefore they don't want to pay it in markets where they don't have to. It only makes sense to pay your developers in Houston the same as the ones in SF to the extent that you believe the higher paid engineers really are more skilled.
dredmorbius 7y ago
Industry clusters are a very real thing. Talent, support industries, and VC money are found principally in a few hubs. SF-SJ, Austin TX, NYC, Seattle. Maybe DC. Beyond that, even in what are otherwise major metros, the game is farm league. LA, Chicago, Atlanta, Denver, Boston. Several of which still have expensive housing, relatively. The US are digging their own asset-inflated graves.
- Keverw 7y ago
  Yep, I've been reading about how the rust belt is having a huge brain drain problem. Young people go to college or get jobs and leave to never return. My goal's been to get my own startup going and when money isn't a stopper move somewhere nicer like Austin or Miami. I feel I'd be a lot happier even if a higher cost of living. While my family is going through a cold winter I can be walking around in shorts. More things to do, warmer, less taxes especially if I was a successful tech person. Depending on how successful, even traveling full time is an option I've thought about. I feel like many places aren't even on the radar for companies or people. States in the South are attracting a lot of people like AZ, TX, FL. TN is very nice too, and I doubt their winters would be as bad as here. I think weather is part of it, but things like less red tape and taxes draw people in too. ID and SD are growing too, even though they get pretty cold I feel like the cost of living and smaller more efficient government helps. I follow some full time RVers and people pick SD as their domicile and the state makes it easy to do since still need to live somewhere on paper legally but I was amazed you can renew your license online every other time. I'm surprised a state with less population is more technically advanced than larger states. I feel if they wanted to do something like that here, there'd be too much bickering going back and forth that nothing would ever get done. They kept arguing back and forth about getting rid of front license plates and it passed, but now someone is wanting to repeal that change before it comes into effect next July. So I think some of these states are organized and more efficient too which is drawing people. I like to look at data on a site called Where Money Walks and it shows that the Northern States, California and parts of the midwest are losing a lot of people and money. I can't wait to see what the 2020 census will be, as I feel that will show more details. Maybe states will lose federal dollars and wake up where they need to come up with a strategy to compete for people, tech, tourism and many other areas. I think some of these politicians are too comfortable as we've seen a huge shift. Last time the census was done the iPhone was only a few years old and that changed phones are we know it for example. I know states can't compete with weather, but there's many other things that they seem to be leaving on the table. Why would anyone want to live in a cold place like New York with high taxes, vehicle inspections, ugly yellow license plates which in some states get confused with party plates (people who were convicted of a DUI get them as a punishment in my state, but I think it's only if more than once), people who like sports cars get turned off by front plates when they could enjoy Miami with a lot less bs and warmer? If they had infomercials for both, I know which one I'd prefer. I know I was reading NJ is one of the most moved out states, these places are driving people away. Wouldn't surprise me if the schools were even better in FL. I think NYC would be cool to visit, but I don't think you could pay me to live there. California and Maryland have a bunch of problems too, so hopefully looking at the data is a wake up call for places to improve and start competing. In California you are more likely to be arrested over smog than committing a federal crime, plus people can't afford to live there so Austin is a growing tech hub full of California license plates, Apple is expanding there too and is going to be the cities largest employer. Then you have Facebook, Google, Oracle, etc too in Austin.
609venezia 7y ago
Investment happens outside the Bay Area, but there is, to quote CityLab, an "extreme geographic inequality." https://www.citylab.com/life/2018/03/the-extreme-geographic-inequality-of-high-tech-venture-capital/552026/ https://www.citylab.com/life/2018/03/the-extreme-geographic-... Or, as PitchBook puts it, "traditional hubs still account for preponderance of activity" (https://pitchbook.com/news/articles/the-state-of-us-venture-capital-activity-in-15-charts https://pitchbook.com/news/articles/the-state-of-us-venture-...) NY and Boston get their share of funding dollars, too, but compared to the rest of the United States they aren't cheap places to live, either.
buss 7y ago
The agglomerative effects of cities are real and extremely positive, both in terms of technological innovation and cultural progress. Cities tend towards liberalism and breed new ideas. Advocating that we collectively abandon the Bay Area and try again someplace new would result in a massive destruction of wealth and human potential. There is no universe where bootstrapping a brand new region with world class universities and infrastructure is cheaper than just fixing a broken bureaucracy.
- xvilka 7y ago
  I would not call SF infrastructure "world class". It is nothing compared to big cities of almost any other developed, and many still developing countries. Compared to EU and Asian biggest cities it's next to not existing.
  - rficcaglia 7y ago
    It’s embarrassingly bad. Potholes everywhere, poor transit options, no police, no resources for homeless....I could go on.
    - Decade 7y ago
      No homes for the homeless. The city government’s budget for 2019–2020 is $12 billion, including $300 million on homelessness. A lot of that money goes toward programs to prevent people from becoming homeless, though we don’t quite know the effectiveness of it. Mayor London Breed has promised to improve accountability there. The major problem is NIMBYism. It is extremely difficult to create new homes for homeless people. Even trying to build a new shelter, there is a lawsuit filed by nearby landlords trying to stop it. NIMBYs also make market-rate housing expensive, and make transit difficult to expand. Thus, the pay scales that the city can afford are not high enough to fill the vacancies in SFMTA and SFPD and other agencies.
- inflatableDodo 7y ago
  >There is no universe where bootstrapping a brand new region with world class universities and infrastructure is cheaper than just fixing a broken bureaucracy. I think some tea got thrown in a harbour once in an argument about almost this exact point.

cycrutchfield 7y ago

Talent is the lifeblood of tech companies. Ergo, tech companies set up where it is easier to recruit talent.

Consultant32452 7y ago
I agree with you, but I also find it to be confusing. These same companies, when they do open offices in "2nd tier" cities, they offer "2nd tier" salaries. If you go to Houston and offer something close to SF salary, you will be over-run with great talent. I feel like there's some social status or something that comes from paying the higher salaries in places like the valley that just aren't attainable by attracting talent in other cities.
- inetknght 7y ago
  > If you go to Houston and offer something close to SF salary, you will be over-run with great talent. I live in Houston and I concur. The company I work for has a lot of trouble finding talent that we need. That's not to say the talent doesn't exist here. It absolutely does. It's just that we can't afford Silicon Valley level compensation.
  - lonelappde 7y ago
    You can't afford something you need? How are you still in business?
- SpicyLemonZest 7y ago
  "Talent" includes other roles that aren't so fungible. If a VC-backed startup starts a major widget spinning project, they often want to poach a director of spinning widgets from a top company, and Houston won't necessarily have one.
  - lonelappde 7y ago
    That doesn't explain why companies DO hire in Houston but refuse to pay close to what they'd pay the same person if the person moved to Mountain View or SF. It's simple status garbage to sustain the illusion that people in SV are "better"
    - SpicyLemonZest 7y ago
      I mean, I dunno, I feel like you have to look at it from the other direction. A lot of companies agree that that the premium for SV engineers is "simple status garbage", and therefore they don't want to pay it in markets where they don't have to. It only makes sense to pay your developers in Houston the same as the ones in SF to the extent that you believe the higher paid engineers really are more skilled.

dredmorbius 7y ago

Industry clusters are a very real thing. Talent, support industries, and VC money are found principally in a few hubs. SF-SJ, Austin TX, NYC, Seattle. Maybe DC. Beyond that, even in what are otherwise major metros, the game is farm league. LA, Chicago, Atlanta, Denver, Boston. Several of which still have expensive housing, relatively. The US are digging their own asset-inflated graves.

Keverw 7y ago
Yep, I've been reading about how the rust belt is having a huge brain drain problem. Young people go to college or get jobs and leave to never return. My goal's been to get my own startup going and when money isn't a stopper move somewhere nicer like Austin or Miami. I feel I'd be a lot happier even if a higher cost of living. While my family is going through a cold winter I can be walking around in shorts. More things to do, warmer, less taxes especially if I was a successful tech person. Depending on how successful, even traveling full time is an option I've thought about. I feel like many places aren't even on the radar for companies or people. States in the South are attracting a lot of people like AZ, TX, FL. TN is very nice too, and I doubt their winters would be as bad as here. I think weather is part of it, but things like less red tape and taxes draw people in too. ID and SD are growing too, even though they get pretty cold I feel like the cost of living and smaller more efficient government helps. I follow some full time RVers and people pick SD as their domicile and the state makes it easy to do since still need to live somewhere on paper legally but I was amazed you can renew your license online every other time. I'm surprised a state with less population is more technically advanced than larger states. I feel if they wanted to do something like that here, there'd be too much bickering going back and forth that nothing would ever get done. They kept arguing back and forth about getting rid of front license plates and it passed, but now someone is wanting to repeal that change before it comes into effect next July. So I think some of these states are organized and more efficient too which is drawing people. I like to look at data on a site called Where Money Walks and it shows that the Northern States, California and parts of the midwest are losing a lot of people and money. I can't wait to see what the 2020 census will be, as I feel that will show more details. Maybe states will lose federal dollars and wake up where they need to come up with a strategy to compete for people, tech, tourism and many other areas. I think some of these politicians are too comfortable as we've seen a huge shift. Last time the census was done the iPhone was only a few years old and that changed phones are we know it for example. I know states can't compete with weather, but there's many other things that they seem to be leaving on the table. Why would anyone want to live in a cold place like New York with high taxes, vehicle inspections, ugly yellow license plates which in some states get confused with party plates (people who were convicted of a DUI get them as a punishment in my state, but I think it's only if more than once), people who like sports cars get turned off by front plates when they could enjoy Miami with a lot less bs and warmer? If they had infomercials for both, I know which one I'd prefer. I know I was reading NJ is one of the most moved out states, these places are driving people away. Wouldn't surprise me if the schools were even better in FL. I think NYC would be cool to visit, but I don't think you could pay me to live there. California and Maryland have a bunch of problems too, so hopefully looking at the data is a wake up call for places to improve and start competing. In California you are more likely to be arrested over smog than committing a federal crime, plus people can't afford to live there so Austin is a growing tech hub full of California license plates, Apple is expanding there too and is going to be the cities largest employer. Then you have Facebook, Google, Oracle, etc too in Austin.

609venezia 7y ago

Investment happens outside the Bay Area, but there is, to quote CityLab, an "extreme geographic inequality." https://www.citylab.com/life/2018/03/the-extreme-geographic-inequality-of-high-tech-venture-capital/552026/ https://www.citylab.com/life/2018/03/the-extreme-geographic-... Or, as PitchBook puts it, "traditional hubs still account for preponderance of activity" (https://pitchbook.com/news/articles/the-state-of-us-venture-capital-activity-in-15-charts https://pitchbook.com/news/articles/the-state-of-us-venture-...) NY and Boston get their share of funding dollars, too, but compared to the rest of the United States they aren't cheap places to live, either.

buss 7y ago

The agglomerative effects of cities are real and extremely positive, both in terms of technological innovation and cultural progress. Cities tend towards liberalism and breed new ideas. Advocating that we collectively abandon the Bay Area and try again someplace new would result in a massive destruction of wealth and human potential. There is no universe where bootstrapping a brand new region with world class universities and infrastructure is cheaper than just fixing a broken bureaucracy.

xvilka 7y ago
I would not call SF infrastructure "world class". It is nothing compared to big cities of almost any other developed, and many still developing countries. Compared to EU and Asian biggest cities it's next to not existing.
- rficcaglia 7y ago
  It’s embarrassingly bad. Potholes everywhere, poor transit options, no police, no resources for homeless....I could go on.
  - Decade 7y ago
    No homes for the homeless. The city government’s budget for 2019–2020 is $12 billion, including $300 million on homelessness. A lot of that money goes toward programs to prevent people from becoming homeless, though we don’t quite know the effectiveness of it. Mayor London Breed has promised to improve accountability there. The major problem is NIMBYism. It is extremely difficult to create new homes for homeless people. Even trying to build a new shelter, there is a lawsuit filed by nearby landlords trying to stop it. NIMBYs also make market-rate housing expensive, and make transit difficult to expand. Thus, the pay scales that the city can afford are not high enough to fill the vacancies in SFMTA and SFPD and other agencies.
inflatableDodo 7y ago
>There is no universe where bootstrapping a brand new region with world class universities and infrastructure is cheaper than just fixing a broken bureaucracy. I think some tea got thrown in a harbour once in an argument about almost this exact point.