7 ms·

Silicon Valley used to be a place with cheap land where people went because the cost of living was low, and they could tinker with cool ideas whereas, in the ex

Silicon Valley used to be a place with cheap land where people went because the cost of living was low, and they could tinker with cool ideas whereas, in the expensive East Coast cities, they'd have to work themselves to death just to tread water. California was this place where you could come and do cool stuff and build on land the East Coast elite didn't want. It's no longer cheap to live there. Tinkering with new ideas on some modest amount of savings and "odd jobs" or consulting is no longer possible. Expensive real estate leads to calcification and risk-aversion and cultural death. It's why urban ecosystems (including VC-istan, which is not a city per se) turn into hellholes shortly after their peak of greatness. Enter VC, which connects people with the resources (funding) to try out their ideas and, better yet, enough resources that they have a "rocket fuel" advantage over any competitors. Over time, the VCs and "tech press" became king-makers. Then, the well-connected became a new, informal, executive suite who care more about protecting each other than genuine competition. Hence, VC-istan. It's the first postmodern corporation, cleverly designed to look like a free market. Reputable investors are the executive suite. People with the authority to write welfare-checks-I-mean-acqhires at big companies are The Compensation Board because they decide on bonuses. "Tech press" are another part of the HR department that writes performance reviews. So-called startup "CEOs" are semi-independent PMs. Software engineers are peons who work long hours because they haven't figured out yet that they work at a big company and aren't actually going to getting investor contact and made founders in 7.35 months-- that was a degenerate empty promise. VC-istan has clever marketing. It doesn't look like a stodgy corporate behemoth, but it is. That is why it has ceased to innovate.

eli_gottlieb 14y ago
It's no longer cheap to live there. Tinkering with new ideas on some modest amount of savings and "odd jobs" or consulting is no longer possible. Expensive real estate leads to calcification and risk-aversion and cultural death. It's why urban ecosystems (including VC-istan, which is not a city per se) turn into hellholes shortly after their peak of greatness. Many of the world's top cities are expensive as all hell, but in the American case at least it's largely because you're simply not allowed to build denser dwellings. Silicon Valley is stuck with huge towns full of two-story single-family housing in an area where demand can easily support multifamily apartment buildings :-/.
- michaelochurch 14y ago
  Expensive real estate is a symptom of one of two things: 1. A rapid upward change in desirability or job market health. In the long run, this will even out as housing is built-- it's just slower to build new houses than create new jobs or reasons for people to live somewhere. If it's demand-based, expensive housing doesn't mean that it's a good place to live; only that it became a better place to live faster than builders could react. 2. Pathology, including NIMBYism (Silicon Valley, the Village) and outright crime (New York's rent-control scams) or problems with the transportation system (again: Silicon Valley). The dumbshits who cheer on high real estate prices think it's a demand improvement, when it's almost always (over 95%) a supply problem, that causes real estate to go up. The most expensive city in the country is Luanda. Next is Moscow. Neither is known for a robust, healthy economy. People tend to mistake the second for the first and assume that expensive real estate is a sign of something good. It's not, and the long-term effects of expensive real estate are extremely undesirable.
  - WildUtah 14y ago
    You didn't give examples for #1, but it describes NoDak and Wyoming near oil and gas finds. #2 is classic NYC, SF, and the like. Luanda and Moscow are in different countries. And neither is all that expensive if you're a native (neither is Tokyo); they're really expensive for expats. The most expensive cities in the world are the ones that artificially limit housing supply with mandated sprawl development laws. Those cities like SF and NYC are mostly in the USA.
te_chris 14y ago
This rings true and people always seem to forget that it's much easier to innovate when the cost of living is lower. I'm currently living in Auckland, New Zealand, which by NZ (and world standards I think, though can't cite anything off hand) is quite expensive, but myself and my girlfriend have been contemplating moving to Sydney, Australia, a city which is one of most expensive in the world but where we would both be paid more. The cost of living there makes it a complete non-starter if you're not just wanting to work full time - and then trying to eek out a pleasurable life at the weekends. I currently contract 3 days a week to support myself while working on my startup and trying to fit in some time for music as well in the other 4 days (and try to get relaxation each week too). The money I make wouldn't last very long in Sydney or any world city for that matter, I guess that's where the VC is supposed to kick in, but if it doesn't then you're in trouble. If it's one thing I've worked out recently, full time, 40 hour week style employment is the enemy of me being able to pursue any sort of interesting side project, I'm sure it's similar for others. It's a realisation that, now I've had it, I can't imagine ever working under those conditions on anything but my own projects. High costs of living such as those in SF and Sydney (and even Auckland) can necessitate such income just to live with a modicum of dignity however, and then trap you with dining out at weekends and such, resulting in not actually achieving any progress on the projects that matter most to you. Worst of all this is the debilitating feeling that socialising and being a functional human being is preventing you from achieving your goal.
- michaelochurch 14y ago
  This rings true and people always seem to forget that it's much easier to innovate when the cost of living is lower. The problem, or the balance that must be struck, is that it's hard to innovate without being surrounded by other innovative people. You need a city with a critical mass of innovative, talented people and a low cost-of-living. California in the 1970s had that. I don't know what the 2013 analogue is, or if it's even in the US. The Midwest would qualify, but it's hard to raise any kind of money (VC, bank loans) out there. When real estate is expensive, money dominates peoples' lives-- even seemingly wealthy people who still don't make enough to raise a family. When it's cheap, people focus on other things and money is just one thing in it. I'm ideologically against expensive real estate. I think that the government should buy, build and own about 60% of housing and set the prevailing rent per square foot. Rich people will still have the ability to buy property and to rent or own nicer private housing, but the basic prevailing rate will be set. This actually doesn't bring along the negatives of price ceilings (shortage) because the government can also build more housing and transportation infrastructure to increase available supply. I think we should hold the government responsible for that. No one should have to pay more than 1/4 of post-tax income to live within 20 minutes of work. The reason New York is expensive is that people like me-- ambitious, hard-working, extremely capable-- are able to find jobs here. People like me make the fucking city great. For each person like me, there are 9999 who want to be around (or employ, or exploit) people like me and they drive up the fucking rent. Instead of benefitting from our contribution, however, we get charged for it when we pay these enormous housing costs. We should be rioting in the fucking streets over this.

eli_gottlieb 14y ago

It's no longer cheap to live there. Tinkering with new ideas on some modest amount of savings and "odd jobs" or consulting is no longer possible. Expensive real estate leads to calcification and risk-aversion and cultural death. It's why urban ecosystems (including VC-istan, which is not a city per se) turn into hellholes shortly after their peak of greatness. Many of the world's top cities are expensive as all hell, but in the American case at least it's largely because you're simply not allowed to build denser dwellings. Silicon Valley is stuck with huge towns full of two-story single-family housing in an area where demand can easily support multifamily apartment buildings :-/.

michaelochurch 14y ago
Expensive real estate is a symptom of one of two things: 1. A rapid upward change in desirability or job market health. In the long run, this will even out as housing is built-- it's just slower to build new houses than create new jobs or reasons for people to live somewhere. If it's demand-based, expensive housing doesn't mean that it's a good place to live; only that it became a better place to live faster than builders could react. 2. Pathology, including NIMBYism (Silicon Valley, the Village) and outright crime (New York's rent-control scams) or problems with the transportation system (again: Silicon Valley). The dumbshits who cheer on high real estate prices think it's a demand improvement, when it's almost always (over 95%) a supply problem, that causes real estate to go up. The most expensive city in the country is Luanda. Next is Moscow. Neither is known for a robust, healthy economy. People tend to mistake the second for the first and assume that expensive real estate is a sign of something good. It's not, and the long-term effects of expensive real estate are extremely undesirable.
- WildUtah 14y ago
  You didn't give examples for #1, but it describes NoDak and Wyoming near oil and gas finds. #2 is classic NYC, SF, and the like. Luanda and Moscow are in different countries. And neither is all that expensive if you're a native (neither is Tokyo); they're really expensive for expats. The most expensive cities in the world are the ones that artificially limit housing supply with mandated sprawl development laws. Those cities like SF and NYC are mostly in the USA.

te_chris 14y ago

This rings true and people always seem to forget that it's much easier to innovate when the cost of living is lower. I'm currently living in Auckland, New Zealand, which by NZ (and world standards I think, though can't cite anything off hand) is quite expensive, but myself and my girlfriend have been contemplating moving to Sydney, Australia, a city which is one of most expensive in the world but where we would both be paid more. The cost of living there makes it a complete non-starter if you're not just wanting to work full time - and then trying to eek out a pleasurable life at the weekends. I currently contract 3 days a week to support myself while working on my startup and trying to fit in some time for music as well in the other 4 days (and try to get relaxation each week too). The money I make wouldn't last very long in Sydney or any world city for that matter, I guess that's where the VC is supposed to kick in, but if it doesn't then you're in trouble. If it's one thing I've worked out recently, full time, 40 hour week style employment is the enemy of me being able to pursue any sort of interesting side project, I'm sure it's similar for others. It's a realisation that, now I've had it, I can't imagine ever working under those conditions on anything but my own projects. High costs of living such as those in SF and Sydney (and even Auckland) can necessitate such income just to live with a modicum of dignity however, and then trap you with dining out at weekends and such, resulting in not actually achieving any progress on the projects that matter most to you. Worst of all this is the debilitating feeling that socialising and being a functional human being is preventing you from achieving your goal.

michaelochurch 14y ago
This rings true and people always seem to forget that it's much easier to innovate when the cost of living is lower. The problem, or the balance that must be struck, is that it's hard to innovate without being surrounded by other innovative people. You need a city with a critical mass of innovative, talented people and a low cost-of-living. California in the 1970s had that. I don't know what the 2013 analogue is, or if it's even in the US. The Midwest would qualify, but it's hard to raise any kind of money (VC, bank loans) out there. When real estate is expensive, money dominates peoples' lives-- even seemingly wealthy people who still don't make enough to raise a family. When it's cheap, people focus on other things and money is just one thing in it. I'm ideologically against expensive real estate. I think that the government should buy, build and own about 60% of housing and set the prevailing rent per square foot. Rich people will still have the ability to buy property and to rent or own nicer private housing, but the basic prevailing rate will be set. This actually doesn't bring along the negatives of price ceilings (shortage) because the government can also build more housing and transportation infrastructure to increase available supply. I think we should hold the government responsible for that. No one should have to pay more than 1/4 of post-tax income to live within 20 minutes of work. The reason New York is expensive is that people like me-- ambitious, hard-working, extremely capable-- are able to find jobs here. People like me make the fucking city great. For each person like me, there are 9999 who want to be around (or employ, or exploit) people like me and they drive up the fucking rent. Instead of benefitting from our contribution, however, we get charged for it when we pay these enormous housing costs. We should be rioting in the fucking streets over this.