6 ms·

Salary (which leads to brain-dump). It is a very effective strategy for a country.

by sva_ 4y ago

skissane 4y ago
US firms can pay higher R&D/engineering salaries because they have a lower cost of capital. Part of the explanation for the lower cost of capital, is that US investors have a higher risk appetite than those in most other OECD economies; also, the US has an arguably more efficient pipeline (VC firms, etc) for getting money from investors to entrepreneurs. Some of it is no doubt influenced by regulatory issues (such as taxation differences), but cultural differences likely also play a role.
- bhc 4y ago
  I often hear US investors have a higher risk appetite, but why is that the case? I imagine it can't be just cultural differences.
  - p_l 4y ago
    Availability of capital for investors is one thing. A lot of the VC pipeline also reaps rewards from how USA was the one country with untouched industry at the end of WW2 and then funneled huge amounts of moneys into expanding, not reconstruction.
  - jandrewrogers 4y ago
    It is difficult to separate the culture from the consequences of the culture. In the US there is minimal social stigma for trying something ambitious and failing, the culture respects the ambition and courage to try even if it doesn't work out or the idea was slightly idiotic. In many parts of the world, trying something and failing is held against you and becomes a social black mark; Americans just shrug and move on to the next thing. Investors in the US reflect that culture. A lot of American cultural difference relative to the rest of the world can be explained almost entirely by the unusual absence of Tall Poppy Syndrome[0] that is a hallmark of most other industrialized societies. American culture respects those taking large risks for concomitant rewards, and doesn't begrudge the rewards that might accrue to someone taking those risks. It is easy to have a high risk appetite when it increases one's social status. [0] https://en.wikipedia.org/wiki/Tall_poppy_syndrome https://en.wikipedia.org/wiki/Tall_poppy_syndrome
    - DeathArrow 4y ago
      > In the US there is minimal social stigma for trying something ambitious and failing I think fear of bankruptcy can be a higher deterrent for foolish risks than social stigma. > In many parts of the world, trying something and failing is held against you In Europe you don't lose people's sympathy if you try something and fail.
      - jandrewrogers 4y ago
        I can't say that I know any Americans that fear bankruptcy. That doesn't seem like a serious objection.
  - rtpg 4y ago
    I have to imagine there are simply more people with so much money that they can throw it around easily. Isn't the whole thing that (for example) when a big startup gets bought you suddenly have loads of millionaires with money to burn in their pocket?
- Terry_Roll 4y ago
  > is that US investors have a higher risk appetite than those in most other OECD economies Certainly here in the UK and certainly upto the mid 00's, if someone ended up bankrupt their life was over, blocked from credit in most cases, massively high interest rates in the future if they could get credit, the lenders certainly got their pound of flesh so it wasnt worth feeding the parasites, the population became risk averse. Repression comes back to bite... The other problem is the Class system, something Royalty holds onto dearly, and what some euphemistically call the old boys network, but it keeps people in their place so the [European] Caste system acts as a drag on the economy.
  - toyg 4y ago
    The UK classism is not an EU-wide phenomenon - although a degree of classism is obviously still there (as it is in the US, in practice), it's not as utterly dominant in France or Italy as it is in the UK. The legislation around bankruptcy, however, is definitely very repressive on the continent too. TBH I don't think it's particularly lenient in the US either, but over there creating and operating companies is easier and cheaper, which means people can more easily offload debt obligations.
    - Terry_Roll 4y ago
      I agree its not as widespread in Europe, but you do find Royalty lurking in some EU countries and they do cause an increasing drag on their economies whether they want to admit it or not. Its the same in other parts of the world, Royalty is becoming increasingly toxic. > The legislation around bankruptcy, however, is definitely very repressive on the continent too. Europe has the largest slice of banking and financial interests but thats being slowly chipped away by the US. Look at some of the old banks which have gone bust or been swallowed up for liquidity reasons since the financial crisis in 2008. You have the US and UK printing money to dilute China's hard work, the Weimar republic has a lot of parallels.
- DeathArrow 4y ago
  I thought the low cost of capital comes from FED printing money and the fractional reserve system inventing money out of thin air.
  - toyg 4y ago
    The ECB similarly prints "thin-air" money. That's not it. What makes the difference is the regulatory environment around corporations.
AussieWog93 4y ago
I used to work at a company in Australia that was a pretty big feeder for the FAANGs in the US, and I don't think the salary alone explains it. So many of my coworkers were completely aware that they could double (or even triple) their salaries by moving to San Francisco/Seattle, but chose not to. Nasty politics, homelessness, crime, public defacation, a general "fuck the poor" culture (on both sides of the political isle), gun violence, cost of living and the fact you'd be leaving your family behind if you left made it an easy choice to stay in Melbourne. The people that did go often intended on going there for 5-10 years then coming back rich. Point is, I think the reason that so many huge tech companies are there is much more complex than just "more money attracts more smart people" and perhaps some other factor at play too.
- tluyben2 4y ago
  Large market with the same language and more or less the same culture. I am working on a b2b saas product in the EU; so far capital was not an issue really, nor good people. The marketing strategies per country and in different languages are pretty annoying and, unless you somehow go viral for the US and UK, you kind of have to have different plans (including prices) for every country here. French companies are prepared to pay for subtly different things than Spanish companies etc. In a previous product we did, we noticed this massive difference between NL and DE. It was just things that worked in NL really was a complete ‘nope’ in Germany and vice versa. It’s details but enough for companies to not take you over a local solution.
- nwiswell 4y ago
  > Nasty politics, homelessness, crime, public defacation, a general "fuck the poor" culture (on both sides of the political isle), gun violence Not to be an apologist for any of this, but I find it hard to believe any of these were more important deterrents to the emigration of your peers than our capricious, byzantine, and dehumanizing immigration system. People seem to have the bizarre attitude that San Francisco and its suburbs (which make up the great majority of the population of the SFBA) are some post-apocalyptic hellscape, which is mostly a narrative promulgated by the right-wing media, and with the exception of cost of living and homelessness/housing issues (which are hardly unique among major metros, including Melbourne) it's pretty far from the objective truth. Try visiting sometime.
epolanski 4y ago
I don't think it is just money otherwise you would have plenty of silicon valleys in switzerland. I think that large part of the reason is that government, public companies, academia and private investors in US have funneled a lot of resources into tech, or even invented it. This created an ecosystem the rest of the world has consistently had a hard time to follow.
- p_l 4y ago
  Silicon Valley literally started thanks to US Navy and later general DoD funding, which brought more companies interested in local integration of services (even if you weren't taking government contracts, your clients might be, etc.) and this spiralled up
raverbashing 4y ago
It's not only salary I'd say the scale/vision/management of American companies is also "on average" better (of course, helped by generous and realistic financing) Try financing facebook (think - at the beginning) outside of the US. Or every other service that has been net negative so far. Also, I don't think it's so much "risk appetite" but the fact that they know how to manage the risks and expectations (on tech startups) better.

Salary (which leads to brain-dump). It is a very effective strategy for a country.

by sva_ 4y ago

Salary (which leads to brain-dump). It is a very effective strategy for a country.

US firms can pay higher R&D/engineering salaries because they have a lower cost of capital. Part of the explanation for the lower cost of capital, is that US investors have a higher risk appetite than those in most other OECD economies; also, the US has an arguably more efficient pipeline (VC firms, etc) for getting money from investors to entrepreneurs. Some of it is no doubt influenced by regulatory issues (such as taxation differences), but cultural differences likely also play a role.

bhc 4y ago
I often hear US investors have a higher risk appetite, but why is that the case? I imagine it can't be just cultural differences.
- p_l 4y ago
  Availability of capital for investors is one thing. A lot of the VC pipeline also reaps rewards from how USA was the one country with untouched industry at the end of WW2 and then funneled huge amounts of moneys into expanding, not reconstruction.
- jandrewrogers 4y ago
  It is difficult to separate the culture from the consequences of the culture. In the US there is minimal social stigma for trying something ambitious and failing, the culture respects the ambition and courage to try even if it doesn't work out or the idea was slightly idiotic. In many parts of the world, trying something and failing is held against you and becomes a social black mark; Americans just shrug and move on to the next thing. Investors in the US reflect that culture. A lot of American cultural difference relative to the rest of the world can be explained almost entirely by the unusual absence of Tall Poppy Syndrome[0] that is a hallmark of most other industrialized societies. American culture respects those taking large risks for concomitant rewards, and doesn't begrudge the rewards that might accrue to someone taking those risks. It is easy to have a high risk appetite when it increases one's social status. [0] https://en.wikipedia.org/wiki/Tall_poppy_syndrome https://en.wikipedia.org/wiki/Tall_poppy_syndrome
  - DeathArrow 4y ago
    > In the US there is minimal social stigma for trying something ambitious and failing I think fear of bankruptcy can be a higher deterrent for foolish risks than social stigma. > In many parts of the world, trying something and failing is held against you In Europe you don't lose people's sympathy if you try something and fail.
    - jandrewrogers 4y ago
      I can't say that I know any Americans that fear bankruptcy. That doesn't seem like a serious objection.
- rtpg 4y ago
  I have to imagine there are simply more people with so much money that they can throw it around easily. Isn't the whole thing that (for example) when a big startup gets bought you suddenly have loads of millionaires with money to burn in their pocket?
Terry_Roll 4y ago
> is that US investors have a higher risk appetite than those in most other OECD economies Certainly here in the UK and certainly upto the mid 00's, if someone ended up bankrupt their life was over, blocked from credit in most cases, massively high interest rates in the future if they could get credit, the lenders certainly got their pound of flesh so it wasnt worth feeding the parasites, the population became risk averse. Repression comes back to bite... The other problem is the Class system, something Royalty holds onto dearly, and what some euphemistically call the old boys network, but it keeps people in their place so the [European] Caste system acts as a drag on the economy.
- toyg 4y ago
  The UK classism is not an EU-wide phenomenon - although a degree of classism is obviously still there (as it is in the US, in practice), it's not as utterly dominant in France or Italy as it is in the UK. The legislation around bankruptcy, however, is definitely very repressive on the continent too. TBH I don't think it's particularly lenient in the US either, but over there creating and operating companies is easier and cheaper, which means people can more easily offload debt obligations.
  - Terry_Roll 4y ago
    I agree its not as widespread in Europe, but you do find Royalty lurking in some EU countries and they do cause an increasing drag on their economies whether they want to admit it or not. Its the same in other parts of the world, Royalty is becoming increasingly toxic. > The legislation around bankruptcy, however, is definitely very repressive on the continent too. Europe has the largest slice of banking and financial interests but thats being slowly chipped away by the US. Look at some of the old banks which have gone bust or been swallowed up for liquidity reasons since the financial crisis in 2008. You have the US and UK printing money to dilute China's hard work, the Weimar republic has a lot of parallels.
DeathArrow 4y ago
I thought the low cost of capital comes from FED printing money and the fractional reserve system inventing money out of thin air.
- toyg 4y ago
  The ECB similarly prints "thin-air" money. That's not it. What makes the difference is the regulatory environment around corporations.

AussieWog93 4y ago

I used to work at a company in Australia that was a pretty big feeder for the FAANGs in the US, and I don't think the salary alone explains it. So many of my coworkers were completely aware that they could double (or even triple) their salaries by moving to San Francisco/Seattle, but chose not to. Nasty politics, homelessness, crime, public defacation, a general "fuck the poor" culture (on both sides of the political isle), gun violence, cost of living and the fact you'd be leaving your family behind if you left made it an easy choice to stay in Melbourne. The people that did go often intended on going there for 5-10 years then coming back rich. Point is, I think the reason that so many huge tech companies are there is much more complex than just "more money attracts more smart people" and perhaps some other factor at play too.

tluyben2 4y ago
Large market with the same language and more or less the same culture. I am working on a b2b saas product in the EU; so far capital was not an issue really, nor good people. The marketing strategies per country and in different languages are pretty annoying and, unless you somehow go viral for the US and UK, you kind of have to have different plans (including prices) for every country here. French companies are prepared to pay for subtly different things than Spanish companies etc. In a previous product we did, we noticed this massive difference between NL and DE. It was just things that worked in NL really was a complete ‘nope’ in Germany and vice versa. It’s details but enough for companies to not take you over a local solution.
nwiswell 4y ago
> Nasty politics, homelessness, crime, public defacation, a general "fuck the poor" culture (on both sides of the political isle), gun violence Not to be an apologist for any of this, but I find it hard to believe any of these were more important deterrents to the emigration of your peers than our capricious, byzantine, and dehumanizing immigration system. People seem to have the bizarre attitude that San Francisco and its suburbs (which make up the great majority of the population of the SFBA) are some post-apocalyptic hellscape, which is mostly a narrative promulgated by the right-wing media, and with the exception of cost of living and homelessness/housing issues (which are hardly unique among major metros, including Melbourne) it's pretty far from the objective truth. Try visiting sometime.

epolanski 4y ago

I don't think it is just money otherwise you would have plenty of silicon valleys in switzerland. I think that large part of the reason is that government, public companies, academia and private investors in US have funneled a lot of resources into tech, or even invented it. This created an ecosystem the rest of the world has consistently had a hard time to follow.

p_l 4y ago
Silicon Valley literally started thanks to US Navy and later general DoD funding, which brought more companies interested in local integration of services (even if you weren't taking government contracts, your clients might be, etc.) and this spiralled up

raverbashing 4y ago

It's not only salary I'd say the scale/vision/management of American companies is also "on average" better (of course, helped by generous and realistic financing) Try financing facebook (think - at the beginning) outside of the US. Or every other service that has been net negative so far. Also, I don't think it's so much "risk appetite" but the fact that they know how to manage the risks and expectations (on tech startups) better.