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> wealth transfer from metro areas to rural areas I live in the Rust Belt, and when I visited San Francisco, it was like visiting a different planet. I find i

by csense 6y ago

> wealth transfer from metro areas to rural areas I live in the Rust Belt, and when I visited San Francisco, it was like visiting a different planet. I find it hard to believe that wealth transfer from metro to rural is larger than wealth transfer in the opposite direction. Why does $HOT_TECHBRO_STARTUP invariably choose to locate its offices in the ultra-tight real estate and labor markets of SF, NYC or Austin when there are plenty of small cities who desperately need an employer like them, since they're full of factory ruins, empty storefronts, hordes of unemployed workers, and all the most promising young people leave as soon as they finish high school or college?

steveklabnik 6y ago
As someone who originally is from the Rust Belt (Pittsburgh), ended up moving to LA, then SF, then NYC, then Austin: one reason is that VCs congregate in the valley and need to make board meetings. I did a startup in Pittsburgh (though it’s been 11 years...) and you just don’t get the same opportunity to raise. Another is that folks jump between companies often, and don’t want to move to do it. If you want to attract talent from a FAANG, the people who work there are probably already in these areas and won’t want to move. I love my hometown dearly but I spent most of my life there. I’d rather be elsewhere.
burlesona 6y ago
Because businesses have gravity and naturally condense into gravity wells. Why is the oil industry (executive and R&D) so heavily centered in Houston, or finance so heavily centered in New York? Why don't some of those giant banks move their headquarters to (fill in your struggling town) where they need the jobs? The reason is that businesses aren't charities. The people who work in the industry benefit enormously from proximity to a bunch of other people in their industry. I grew up in the midwest, but I moved (with my family) to the Bay Area a couple years ago, and it's been like rocket fuel to my career and income. It's hard to even describe how advantageous it is when your social network naturally includes so many people in your industry - when your neighbor works at Google, and the other parents at your preschool work Stripe and Apple, and when your friends from the gym work at Github... etc. It's just nuts. Most people, once they've lived some place a little while and established a network, don't really want to leave. So then when they start their business they launch it with a few friends who are all here and either worked with them at their last business or are part of that extended social network, and of course they all live in the Bay Area already so they just stay because why move? I understand the frustration of geographic inequality of jobs, but honestly the hot startups are not who you should target if you want to inject some vitality into a struggling city. By far the better way forward is to combine a mix of training/education, public investment, and attracting some mid-size business to help seed the local market. As one example, this is roughly what they did in Chattanooga, TN, and have turned it into a small but nice little tech outpost.
bsder 6y ago
> Why does $HOT_TECHBRO_STARTUP invariably choose to locate its offices in the ultra-tight real estate and labor markets of SF, NYC or Austin Because it's cool and the $TECHBRO wants to live somewhere cool. As for those of us doing engineering instead of $TECHBRO software: Because I can't drive 10 minutes to go talk to my PCB assembler in the lab to help figure out something that is failing. Because I can't have a realtime chat with my injection molder in front of the machine about the fact that my last order was crap so let's make some adjustments. Because I don't have a choice of colocation facilities which have different connectivity guarantees. Because I can't go grab lunch with a friend who happens to also do RF design, drug development, mechanical engineering, etc. and pick their brains (and vice versa). Outsourcing is only useful when you're in production (and I'd argue it's less useful than people think). If I'm doing engineering R&D, I tend to insource as much as possible and keep the rest local where I can keep an eye on it.
xapata 6y ago
> hard to believe Check the data. It's readily available from various government agencies. As you say, companies invariably locate in cities. What facts from your experience formed your belief?
hunterloftis 6y ago
> I find it hard to believe that wealth transfer from metro to rural is larger than wealth transfer in the opposite direction. Why do you find this hard to believe? I'm curious to learn what wealth transfer from rural to urban metros you're considering, since I'm not aware of many (any?). Rural communities have struggled and are increasingly subsidized by metro areas in the US: https://www.pbs.org/newshour/nation/six-charts-illustrate-divide-rural-urban-america https://www.pbs.org/newshour/nation/six-charts-illustrate-di...

by csense 6y ago

steveklabnik 6y ago

As someone who originally is from the Rust Belt (Pittsburgh), ended up moving to LA, then SF, then NYC, then Austin: one reason is that VCs congregate in the valley and need to make board meetings. I did a startup in Pittsburgh (though it’s been 11 years...) and you just don’t get the same opportunity to raise. Another is that folks jump between companies often, and don’t want to move to do it. If you want to attract talent from a FAANG, the people who work there are probably already in these areas and won’t want to move. I love my hometown dearly but I spent most of my life there. I’d rather be elsewhere.

burlesona 6y ago

Because businesses have gravity and naturally condense into gravity wells. Why is the oil industry (executive and R&D) so heavily centered in Houston, or finance so heavily centered in New York? Why don't some of those giant banks move their headquarters to (fill in your struggling town) where they need the jobs? The reason is that businesses aren't charities. The people who work in the industry benefit enormously from proximity to a bunch of other people in their industry. I grew up in the midwest, but I moved (with my family) to the Bay Area a couple years ago, and it's been like rocket fuel to my career and income. It's hard to even describe how advantageous it is when your social network naturally includes so many people in your industry - when your neighbor works at Google, and the other parents at your preschool work Stripe and Apple, and when your friends from the gym work at Github... etc. It's just nuts. Most people, once they've lived some place a little while and established a network, don't really want to leave. So then when they start their business they launch it with a few friends who are all here and either worked with them at their last business or are part of that extended social network, and of course they all live in the Bay Area already so they just stay because why move? I understand the frustration of geographic inequality of jobs, but honestly the hot startups are not who you should target if you want to inject some vitality into a struggling city. By far the better way forward is to combine a mix of training/education, public investment, and attracting some mid-size business to help seed the local market. As one example, this is roughly what they did in Chattanooga, TN, and have turned it into a small but nice little tech outpost.

bsder 6y ago

> Why does $HOT_TECHBRO_STARTUP invariably choose to locate its offices in the ultra-tight real estate and labor markets of SF, NYC or Austin Because it's cool and the $TECHBRO wants to live somewhere cool. As for those of us doing engineering instead of $TECHBRO software: Because I can't drive 10 minutes to go talk to my PCB assembler in the lab to help figure out something that is failing. Because I can't have a realtime chat with my injection molder in front of the machine about the fact that my last order was crap so let's make some adjustments. Because I don't have a choice of colocation facilities which have different connectivity guarantees. Because I can't go grab lunch with a friend who happens to also do RF design, drug development, mechanical engineering, etc. and pick their brains (and vice versa). Outsourcing is only useful when you're in production (and I'd argue it's less useful than people think). If I'm doing engineering R&D, I tend to insource as much as possible and keep the rest local where I can keep an eye on it.

xapata 6y ago

> hard to believe Check the data. It's readily available from various government agencies. As you say, companies invariably locate in cities. What facts from your experience formed your belief?

hunterloftis 6y ago

> I find it hard to believe that wealth transfer from metro to rural is larger than wealth transfer in the opposite direction. Why do you find this hard to believe? I'm curious to learn what wealth transfer from rural to urban metros you're considering, since I'm not aware of many (any?). Rural communities have struggled and are increasingly subsidized by metro areas in the US: https://www.pbs.org/newshour/nation/six-charts-illustrate-divide-rural-urban-america https://www.pbs.org/newshour/nation/six-charts-illustrate-di...