4 ms·

As sad as it may be that the current California-centered incarnation of technology has fallen to become Yet Another Feudal Reputation Economy, I think the only

As sad as it may be that the current California-centered incarnation of technology has fallen to become Yet Another Feudal Reputation Economy, I think the only thing worth doing is to figure out what comes next. It's dead, we won't be able to save it, so let's move on. The established players aren't going to quit their shitty behaviors just because a few negative blog posts are written about the death of meritocracy in the Valley (which is old news; they're the ones who killed it). Rather than complain about MBA culture and colluding VCs and Stanford Welfare, we should be figuring out a way to replace these assholes. What are we, as a generation, going to build that shows them up? The same inefficiency that beset large corporations in the 1990s is hitting the mainstream startup scene now. Maybe Austin will take the lead, possibly somewhere else like Portland, Chicago, Baltimore, or Durham. It might not even be in the US. What does make me sad was that I thought (being extremely naive) that the Crash of 2008 might have a positive effect on technology, by reversing the "talent graveyard" effect of finance. However, quants (the ones we'd want) mostly stayed in high demand; the ones who moved into tech from finance were the MBA-culture types who ruined New York's potential to ever be taken seriously as a startup scene. It had the exact opposite effect of what I was hoping for.

jacquesm 13y ago
> It's dead, we won't be able to save it, so let's move on. I think rumours of the California start-up scene's demise are vastly exaggerated. Maybe we should wait proclaiming it 'dead' until it is no longer the top foundry for new start-ups world wide?
- michaelochurch 13y ago
  It's dead in the "Microsoft is Dead" sense, which means that it's not actually out of business, but that it has ceased to be exciting, innovative or useful. Microsoft is still in business, but no one finds it very interesting anymore. The VC-funded game that has taken over the Valley is now just a way for those who were preselected to win at birth to launder their inherited connections and make it look like they built something. It's for legacy rich kids to make the appearance that they created something, when the hard work was done by hired-gun software engineers getting 0.05% equity slices.
  - nickpinkston 13y ago
    > Hard work 'Replaceable work' you mean? It's far easier to engineer good software than to pick a problem worth solving and actually fund & execute on this idea. This replaceability is why you get 0.05% - take no risk, come late to the party - your reward will be less.
    - mahyarm 13y ago
      But many engineers are choosing to do exactly that with their micro-startup idea vs work for that 0.05% equity slice. Start up recruiters have a hard time and have to compete against Google hours & compensation or engineers going into business for themselves. On top of the equity slice can often disappear from a firing whim, since they often expire soon after you stop working for the company. On top of that many employees who leave startup's don't actually buy the options, as the founders of ESO fund found out.
- mjn 13y ago
  Is it the top foundry? It depends on what sectors you look at, I believe. It's definitely still top in web technology. But in other areas I'm less sure. One slice of the successful startup market is looking at tech IPOs, which are on the upswing again. This probably downplays the Valley scene, which focuses more on quick smallish exits (acquihires and other kinds of acquisitions), but does give a view of where the next-gen of large tech companies is coming from. According to PWC's Q2 2013 tech IPO report [1], there were 13 North American tech IPOs: EVERTEC: $505m, Puerto Rico CDW: $395m, Chicagoland Tableau Software: $254m, Seattle Blackhawk Network: $230m, SF Bay Area Gogo: $187m, Chicagoland Gigamon: $128m, SF Bay Area Cyan: $88m, SF Bay Area Rally Software: $84m, Boulder CO ChannelAdvisor: $81m, Research Triangle NC Marketo: $79m, SF Bay Area Tremor Video: $75m, NYC Textura: $75m, Chicagoland Halogen Software: $55m, Ottawa Canada The SF Bay Area is still the largest single source, with 4/13, but not in a dominating sort of way. [1] http://www.pwc.com/gx/en/technology/publications/assets/ipo-review-q2-2013.pdf http://www.pwc.com/gx/en/technology/publications/assets/ipo-... edit: Oops, those are millions, not billions; fixed. Nobody is raising a half-trillion dollars in an IPO...
  - sashagim 13y ago
    your numbers are off - took me a lot of tab switching on my tablet to figure out the mistake :) it should be millions, not billions, and they represent the proceedings (the amount raised on IPO), not the market cap.
- qwerta 13y ago
  It is just too expensive. I would like to see stats which shows it as 'the top foundry', perhaps only companies which raised $1M qualify?
philwelch 13y ago
I'm disappointed in you, O'Church. I was a single "VC-istan" away from bingo.
slurry 13y ago
What does make me sad was that I thought (being extremely naive) that the Crash of 2008 might have a positive effect on technology, by reversing the "talent graveyard" effect of finance. The crash, and the policy response to it, are basically the reason why The Startup Scene looks like it does. We have banks full of cheap capital from QE but nowhere to lend it because aggregate demand is weak, large corporations with lots of cash on hand from cheap labor and asset appreciation, but nowhere to spend it because aggregate demand is weak. Banks can't just sit on the money because they're not allowed to, and large corporations can only use so much as dividends or cash reserve before people start to wonder if they have any business plan at all. The current startup scene is mostly an arbitrage trade on this scenario. You acquire liquid capital on the cheap, convert it into a little unit of fixed capital (i.e. startup firm) and sell it at a markup to a motivated buyer (i.e. cash-rich BigCorp who desperately needs the appearance of a forward looking business plan). And really, this is the kind of inefficient market where something like credentials would become more important.

jacquesm 13y ago

> It's dead, we won't be able to save it, so let's move on. I think rumours of the California start-up scene's demise are vastly exaggerated. Maybe we should wait proclaiming it 'dead' until it is no longer the top foundry for new start-ups world wide?

michaelochurch 13y ago
It's dead in the "Microsoft is Dead" sense, which means that it's not actually out of business, but that it has ceased to be exciting, innovative or useful. Microsoft is still in business, but no one finds it very interesting anymore. The VC-funded game that has taken over the Valley is now just a way for those who were preselected to win at birth to launder their inherited connections and make it look like they built something. It's for legacy rich kids to make the appearance that they created something, when the hard work was done by hired-gun software engineers getting 0.05% equity slices.
- nickpinkston 13y ago
  > Hard work 'Replaceable work' you mean? It's far easier to engineer good software than to pick a problem worth solving and actually fund & execute on this idea. This replaceability is why you get 0.05% - take no risk, come late to the party - your reward will be less.
  - mahyarm 13y ago
    But many engineers are choosing to do exactly that with their micro-startup idea vs work for that 0.05% equity slice. Start up recruiters have a hard time and have to compete against Google hours & compensation or engineers going into business for themselves. On top of the equity slice can often disappear from a firing whim, since they often expire soon after you stop working for the company. On top of that many employees who leave startup's don't actually buy the options, as the founders of ESO fund found out.
mjn 13y ago
Is it the top foundry? It depends on what sectors you look at, I believe. It's definitely still top in web technology. But in other areas I'm less sure. One slice of the successful startup market is looking at tech IPOs, which are on the upswing again. This probably downplays the Valley scene, which focuses more on quick smallish exits (acquihires and other kinds of acquisitions), but does give a view of where the next-gen of large tech companies is coming from. According to PWC's Q2 2013 tech IPO report [1], there were 13 North American tech IPOs: EVERTEC: $505m, Puerto Rico CDW: $395m, Chicagoland Tableau Software: $254m, Seattle Blackhawk Network: $230m, SF Bay Area Gogo: $187m, Chicagoland Gigamon: $128m, SF Bay Area Cyan: $88m, SF Bay Area Rally Software: $84m, Boulder CO ChannelAdvisor: $81m, Research Triangle NC Marketo: $79m, SF Bay Area Tremor Video: $75m, NYC Textura: $75m, Chicagoland Halogen Software: $55m, Ottawa Canada The SF Bay Area is still the largest single source, with 4/13, but not in a dominating sort of way. [1] http://www.pwc.com/gx/en/technology/publications/assets/ipo-review-q2-2013.pdf http://www.pwc.com/gx/en/technology/publications/assets/ipo-... edit: Oops, those are millions, not billions; fixed. Nobody is raising a half-trillion dollars in an IPO...
- sashagim 13y ago
  your numbers are off - took me a lot of tab switching on my tablet to figure out the mistake :) it should be millions, not billions, and they represent the proceedings (the amount raised on IPO), not the market cap.
qwerta 13y ago
It is just too expensive. I would like to see stats which shows it as 'the top foundry', perhaps only companies which raised $1M qualify?

philwelch 13y ago

I'm disappointed in you, O'Church. I was a single "VC-istan" away from bingo.

slurry 13y ago

What does make me sad was that I thought (being extremely naive) that the Crash of 2008 might have a positive effect on technology, by reversing the "talent graveyard" effect of finance. The crash, and the policy response to it, are basically the reason why The Startup Scene looks like it does. We have banks full of cheap capital from QE but nowhere to lend it because aggregate demand is weak, large corporations with lots of cash on hand from cheap labor and asset appreciation, but nowhere to spend it because aggregate demand is weak. Banks can't just sit on the money because they're not allowed to, and large corporations can only use so much as dividends or cash reserve before people start to wonder if they have any business plan at all. The current startup scene is mostly an arbitrage trade on this scenario. You acquire liquid capital on the cheap, convert it into a little unit of fixed capital (i.e. startup firm) and sell it at a markup to a motivated buyer (i.e. cash-rich BigCorp who desperately needs the appearance of a forward looking business plan). And really, this is the kind of inefficient market where something like credentials would become more important.