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Expensive real estate ruins the culture, makes personal burn rates high, and creates a sense of transience. You don't feel like you really belong until you have

Expensive real estate ruins the culture, makes personal burn rates high, and creates a sense of transience. You don't feel like you really belong until you have enough money that you don't need to work and (for most) have ceased to be a productive part of society. When people have to beat others down just to afford to live in the city, it's bad, and most people lack the talent or opportunity to make that amount of money (300k+, for a family) through decent means. The transience, I think, is behind a lot of the build-to-flips that are degenerate gambles on social trends. Silicon Valley happened because California land was cheap-- at one time.

ahlatimer 14y ago
I recently left SF, and the culture, along with the rent, are two big reasons why I decided to leave. I hadn't put the two together, though, but I think it's a pretty accurate conclusion. The sheer number of startups and engineers in the same place can be pretty fantastic, and there isn't anywhere else that can compete (NYC to some extent, I suppose). In the end, though, it's just an unusually large collection of tech-minded individuals in what amounts to a fairly terrible place to live. YMMV, of course.
muzz 14y ago
> Silicon Valley happened because California land was cheap-- at one time. You're being facetious here, hopefully. In any case, San Francisco was never cheap, where OP's startup is.
- michaelochurch 14y ago
  Silicon Valley started in the 1950s: http://en.wikipedia.org/wiki/Shockley_Semiconductor_Laboratory http://en.wikipedia.org/wiki/Shockley_Semiconductor_Laborato... . It was affordable until the mid-90s.
carlio 14y ago
Which is why Berlin is very much a good place for startups right now. The rent is still very cheap, but there's a huge concentration of creative people wanting to create companies. This will fade over time just like in SV, but for now, it's one of the best places to be for small companies.
keithpeter 14y ago
"and most people lack the talent or opportunity to make that amount of money (300k+, for a family) through decent means" Effing Norah, that would get you a small stately home in the North of the UK. I'm talking 15 bedrooms and a small park. You could buy a normal family house for a year's rent at that level almost anywhere outside London or Edinburgh Second decade, 21st century and location still matters so much? What did we do wrong?
- peacemaker 14y ago
  You most certainly could live in a mansion up north in the UK for that sort of money. Good luck finding anyone willing to pay anything close to that though! I think it's common goal for people to try and make their millions in such a place as SF so they can leave the area and live like kings elsewhere. This is fairly obvious just looking at the rents here, and in places that have the perception of creating more millionaires (usually through business) than others. You know the mindset: live rough and work hard for 5 years to earn what most people take a lifetime to earn. Personally, I think that is possible in many places around the world, certainly places that will have a nicer standard of living, however you wish to measure that.
  - michaelochurch 14y ago
    You know the mindset: live rough and work hard for 5 years to earn what most people take a lifetime to earn. The percentage of people who get that is small, and it's mostly noise, not talent. I'd be happy to have boring old 7-8% per year growth in exchange for autonomy and interesting work. Once you reach a certain point of development, your DFA light (DFA = Done Fucking Around) comes on and you're no longer happy if you don't call the shots regarding how you spend your time. The appeal of the idiocy it takes to reach $5m per year disappears after that.
    - peacemaker 14y ago
      You've described what's happened with me recently. My DFA light is flashing and it's time to get out of the rat race and control my own time. That's worth far more than the tiny chance at the jackpot. I do, however, still hold onto the romantic notion that if you find a way to earn a living while doing what you love, the chances of hitting that jackpot are significantly higher.
freshhawk 14y ago
> ... creates a sense of transience. You don't feel like you really belong until you have enough money that you don't need to work and (for most) have ceased to be a productive part of society Very well said, I think you just put a feeling/idea into words that I was having difficulty putting into words.
tptacek 14y ago
This was exactly my experience living both in SOMA and in Noe Valley at two different times in San Francisco. There was never any sense that the place we lived would be the place we'd be living 5 years from then. There was no realistic chance we'd ever raise kids there.
- fourspace 14y ago
  You echoed my thoughts exactly about Noe Valley. We absolutely loved living there, but when it came time to raise a family it wasn't even an option. That's coming from a couple who both worked at Google! Obscene indeed. I absolutely love SF, but I never felt like home there. I think what we were missing was that sense of permanence, resulting from the high cost of housing (and therefore lack of future options).
ryguytilidie 14y ago
My girlfriend and I both work at startups and make about 170 combined. No chance we could afford a house though. That realization can make this a pretty depressing place though...
- geebee 14y ago
  My wife and I make less than that combined. We bought a 2br in a very unfashionable corner of the city, during the boom. You could do better now. So 170k is workable... as long as you're willing to lower your expectations.
gjm11 14y ago
> that amount of money (300k+, for a family) What's that number intended to represent? It seems (1) too small to be the cost of a house in SF suitable for a family, (2) too large to be the annual (still less the monthly) cost of renting somewhere in SF suitable for a family, and (3) too large to be the salary you need to be making in SF to afford the rent or mortgage on a house suitable for a family. Is it intended to be the amount you need for a realistic downpayment when buying a house, perhaps? (It looks to me as if you can rent a pretty decent house in SF for, say, $6k/month, which is certainly a whole lot of money but far less than $300k/year. If you want to buy, it seems like the figure is somewhere around $1M.)
- michaelochurch 14y ago
  300k per year to raise a family in the star cities-- a conservative estimate. That includes a mortgage (you don't want to be renting once you have kids), enough cleaning that you can both focus on your careers, nannies, vacations, and various educational assistance (possibly prep schools, possibly buying internships) needs to overcome the fact that your kids face a huge disadvantage in college admissions on account of where they live. (It might be a good idea, if you can't afford prep schools whose guidance counselors were hired because they know top-college admissions officers personally, to have your kids go out to Montana for two years to overcome this geographic adversity.) For a $1 million house, you're looking at a $4300 per month mortgage. You shouldn't be spending more than 30% of after-tax money on housing, so that means you should be making $14,000 per month post-tax, which puts you right around $300k.
  - wyclif 14y ago
    Why don't you want to rent once you have kids? Full disclosure: we have a 2-year old.

ahlatimer 14y ago

I recently left SF, and the culture, along with the rent, are two big reasons why I decided to leave. I hadn't put the two together, though, but I think it's a pretty accurate conclusion. The sheer number of startups and engineers in the same place can be pretty fantastic, and there isn't anywhere else that can compete (NYC to some extent, I suppose). In the end, though, it's just an unusually large collection of tech-minded individuals in what amounts to a fairly terrible place to live. YMMV, of course.

muzz 14y ago

> Silicon Valley happened because California land was cheap-- at one time. You're being facetious here, hopefully. In any case, San Francisco was never cheap, where OP's startup is.

michaelochurch 14y ago
Silicon Valley started in the 1950s: http://en.wikipedia.org/wiki/Shockley_Semiconductor_Laboratory http://en.wikipedia.org/wiki/Shockley_Semiconductor_Laborato... . It was affordable until the mid-90s.

carlio 14y ago

Which is why Berlin is very much a good place for startups right now. The rent is still very cheap, but there's a huge concentration of creative people wanting to create companies. This will fade over time just like in SV, but for now, it's one of the best places to be for small companies.

keithpeter 14y ago

"and most people lack the talent or opportunity to make that amount of money (300k+, for a family) through decent means" Effing Norah, that would get you a small stately home in the North of the UK. I'm talking 15 bedrooms and a small park. You could buy a normal family house for a year's rent at that level almost anywhere outside London or Edinburgh Second decade, 21st century and location still matters so much? What did we do wrong?

peacemaker 14y ago
You most certainly could live in a mansion up north in the UK for that sort of money. Good luck finding anyone willing to pay anything close to that though! I think it's common goal for people to try and make their millions in such a place as SF so they can leave the area and live like kings elsewhere. This is fairly obvious just looking at the rents here, and in places that have the perception of creating more millionaires (usually through business) than others. You know the mindset: live rough and work hard for 5 years to earn what most people take a lifetime to earn. Personally, I think that is possible in many places around the world, certainly places that will have a nicer standard of living, however you wish to measure that.
- michaelochurch 14y ago
  You know the mindset: live rough and work hard for 5 years to earn what most people take a lifetime to earn. The percentage of people who get that is small, and it's mostly noise, not talent. I'd be happy to have boring old 7-8% per year growth in exchange for autonomy and interesting work. Once you reach a certain point of development, your DFA light (DFA = Done Fucking Around) comes on and you're no longer happy if you don't call the shots regarding how you spend your time. The appeal of the idiocy it takes to reach $5m per year disappears after that.
  - peacemaker 14y ago
    You've described what's happened with me recently. My DFA light is flashing and it's time to get out of the rat race and control my own time. That's worth far more than the tiny chance at the jackpot. I do, however, still hold onto the romantic notion that if you find a way to earn a living while doing what you love, the chances of hitting that jackpot are significantly higher.

freshhawk 14y ago

> ... creates a sense of transience. You don't feel like you really belong until you have enough money that you don't need to work and (for most) have ceased to be a productive part of society Very well said, I think you just put a feeling/idea into words that I was having difficulty putting into words.

tptacek 14y ago

This was exactly my experience living both in SOMA and in Noe Valley at two different times in San Francisco. There was never any sense that the place we lived would be the place we'd be living 5 years from then. There was no realistic chance we'd ever raise kids there.

fourspace 14y ago
You echoed my thoughts exactly about Noe Valley. We absolutely loved living there, but when it came time to raise a family it wasn't even an option. That's coming from a couple who both worked at Google! Obscene indeed. I absolutely love SF, but I never felt like home there. I think what we were missing was that sense of permanence, resulting from the high cost of housing (and therefore lack of future options).

ryguytilidie 14y ago

My girlfriend and I both work at startups and make about 170 combined. No chance we could afford a house though. That realization can make this a pretty depressing place though...

geebee 14y ago
My wife and I make less than that combined. We bought a 2br in a very unfashionable corner of the city, during the boom. You could do better now. So 170k is workable... as long as you're willing to lower your expectations.

gjm11 14y ago

> that amount of money (300k+, for a family) What's that number intended to represent? It seems (1) too small to be the cost of a house in SF suitable for a family, (2) too large to be the annual (still less the monthly) cost of renting somewhere in SF suitable for a family, and (3) too large to be the salary you need to be making in SF to afford the rent or mortgage on a house suitable for a family. Is it intended to be the amount you need for a realistic downpayment when buying a house, perhaps? (It looks to me as if you can rent a pretty decent house in SF for, say, $6k/month, which is certainly a whole lot of money but far less than $300k/year. If you want to buy, it seems like the figure is somewhere around $1M.)

michaelochurch 14y ago
300k per year to raise a family in the star cities-- a conservative estimate. That includes a mortgage (you don't want to be renting once you have kids), enough cleaning that you can both focus on your careers, nannies, vacations, and various educational assistance (possibly prep schools, possibly buying internships) needs to overcome the fact that your kids face a huge disadvantage in college admissions on account of where they live. (It might be a good idea, if you can't afford prep schools whose guidance counselors were hired because they know top-college admissions officers personally, to have your kids go out to Montana for two years to overcome this geographic adversity.) For a $1 million house, you're looking at a $4300 per month mortgage. You shouldn't be spending more than 30% of after-tax money on housing, so that means you should be making $14,000 per month post-tax, which puts you right around $300k.
- wyclif 14y ago
  Why don't you want to rent once you have kids? Full disclosure: we have a 2-year old.