5 ms·

I lived in NYC at one point, and I'd agree that the two cities are fundamentally different, but I think he missed what may be the biggest source of the differen

by pg 13y ago

I lived in NYC at one point, and I'd agree that the two cities are fundamentally different, but I think he missed what may be the biggest source of the difference: the proportion of people playing zero-sum games. A lot of the most ambitious people in NYC work in finance, whereas in SF hardly any do. Nearly all the most ambitious people in SF make money by creating things that other people are willing to pay them for. That means SF attracts different people than NYC, and changes people who live there in different ways. You get the money later when you do that, which is another big reason people in SF don't spend so much. In finance you get paid as you go, and a lot of people in NYC spend it as they go. Indeed, friends who've worked in the finance industry have told me firms have a deliberate policy of encouraging new recruits to spend all their salaries and bonuses, as way of getting them hooked. Whereas in SF a lot of people's net worth is tied up in illiquid stock.

rayiner 13y ago
In don't think "zero sum game" means what you think it means. Lots of people in San Francisco engage in transactions, and lots of people in New York engage in reducing transaction costs. Neither are "zero sum" endeavors. Insurance is a great example. My office used to sit in the shadow of the Met-Life building. They don't make anything, so they must be zero sum. Wrong. Insurance enables transactions to happen that wouldn't otherwise happen, adding value to the economy. That's the crux of many of New York's economic sectors: finance, advertising, insurance, law, consulting. Its abstract, and service oriented rather than product oriented, but its not zero sum. Now one can argue about the amount of value created by these industries, or rather how much of the value created is absorbed by the industries themselves. You can also question how much value is created by yet another web app getting funded in SV, so I don't know if you're on firm ground there.
- cwp 13y ago
  Sure, finance is valuable, up to a point. We reached that point about 100 years ago. Since then, the geniuses of Wall Street have been figuring out how to capture more of the value created by other people. That's a zero sum game.
- wpietri 13y ago
  Having worked in finance, I can promise you that a lot of people in finance are playing zero-sum games. All trading is basically zero sum. No trader goes home saying, "Hey, honey, I imperceptably increased global liquidity today; yay me!" They say things like, "I'm fucking awesome. I gutted those chumps in the LIBOR pit. Whores for everybody!" [1] Anybody working for those people is also essentially playing a zero-sum game, in that their activity is just aiding in shifting value from one pocket to another. Which is why I no longer work in finance; I wanted to do something useful. [1] Yes, I have actually heard traders say "Whores for everybody!" in the office. At least in the office they were joking.
  - dennisgorelik 13y ago
    Even if some traders think that they are playing zero-sum game - it does not mean that traders actually play zero-sum game. Benefit of trading is increased liquidity.
    - wpietri 13y ago
      It matters entirely for the psychology of the industry's culture. However, increased liquidity is of no direct value. It only matters if people get better prices, or get deals closed significantly sooner. For a trader's participation to be positive sum, the benefit of their capital has to be larger than the costs they impose. Given that every trader is working to make the opposite true, surely many of them are negative sum. Especially given that capital can be deployed to reduce liquidity just as well as increase it.
wtvanhest 13y ago
Your essay http://paulgraham.com/cities.html http://paulgraham.com/cities.html really hit the differences between Boston, NYC and SF the best way I have seen. As someone that spends time in NYC for work, lives in Boston, has lived in DC and Santa Clara the largest and most important distinction are how people measure each other. While ideas are worthless on their own, they seem to be the currency that matters in conversations in SF. Money matters in NYC. Political affiliation and who you are affiliated with matter in DC. Boston has the most odd culture because people weigh each other on something that happened far in the past rather than in the future, the choice of school that they went to. The thing that really makes SF stand out is that people are ambitious toward being part of something bigger than themselves and growing it to benefit many others.
fidotron 13y ago
The culture in the Bay Area seems to be to get people addicted to their employer as fundamental to their identity, not just the money it gives them. This may be because SF doesn't have the level of services you get in NYC, but that's a cause/effect problem from lack of disposable income and lack of population density. For example, a Google employee that moved from elsewhere in the country to San Francisco, and takes the Google bus to Mountain View because they don't have a car has an absolutely terrifying dependency on Google that they would not have if they were freely spending their own money to get the same services.
- raldi 13y ago
  How is it terrifying? If they left Google, they could ride another big company's bus, or ride a bike, or take public transit, or purchase a car, or move to a different neighborhood.
iansimon 13y ago
Other people being willing to pay for something doesn't necessarily make it positive-sum or economically productive. A lot of startups (certainly not all) seem to be trying to win tournaments: http://en.wikipedia.org/wiki/Tournament_theory http://en.wikipedia.org/wiki/Tournament_theory In that sense, SF is is similar to Hollywood. And the result is that society devotes too many resources to the next big social network or the next big summer blockbuster, and not enough to, say, making comfortable chairs.

by pg 13y ago

rayiner 13y ago

In don't think "zero sum game" means what you think it means. Lots of people in San Francisco engage in transactions, and lots of people in New York engage in reducing transaction costs. Neither are "zero sum" endeavors. Insurance is a great example. My office used to sit in the shadow of the Met-Life building. They don't make anything, so they must be zero sum. Wrong. Insurance enables transactions to happen that wouldn't otherwise happen, adding value to the economy. That's the crux of many of New York's economic sectors: finance, advertising, insurance, law, consulting. Its abstract, and service oriented rather than product oriented, but its not zero sum. Now one can argue about the amount of value created by these industries, or rather how much of the value created is absorbed by the industries themselves. You can also question how much value is created by yet another web app getting funded in SV, so I don't know if you're on firm ground there.

cwp 13y ago
Sure, finance is valuable, up to a point. We reached that point about 100 years ago. Since then, the geniuses of Wall Street have been figuring out how to capture more of the value created by other people. That's a zero sum game.
wpietri 13y ago
Having worked in finance, I can promise you that a lot of people in finance are playing zero-sum games. All trading is basically zero sum. No trader goes home saying, "Hey, honey, I imperceptably increased global liquidity today; yay me!" They say things like, "I'm fucking awesome. I gutted those chumps in the LIBOR pit. Whores for everybody!" [1] Anybody working for those people is also essentially playing a zero-sum game, in that their activity is just aiding in shifting value from one pocket to another. Which is why I no longer work in finance; I wanted to do something useful. [1] Yes, I have actually heard traders say "Whores for everybody!" in the office. At least in the office they were joking.
- dennisgorelik 13y ago
  Even if some traders think that they are playing zero-sum game - it does not mean that traders actually play zero-sum game. Benefit of trading is increased liquidity.
  - wpietri 13y ago
    It matters entirely for the psychology of the industry's culture. However, increased liquidity is of no direct value. It only matters if people get better prices, or get deals closed significantly sooner. For a trader's participation to be positive sum, the benefit of their capital has to be larger than the costs they impose. Given that every trader is working to make the opposite true, surely many of them are negative sum. Especially given that capital can be deployed to reduce liquidity just as well as increase it.

wtvanhest 13y ago

Your essay http://paulgraham.com/cities.html http://paulgraham.com/cities.html really hit the differences between Boston, NYC and SF the best way I have seen. As someone that spends time in NYC for work, lives in Boston, has lived in DC and Santa Clara the largest and most important distinction are how people measure each other. While ideas are worthless on their own, they seem to be the currency that matters in conversations in SF. Money matters in NYC. Political affiliation and who you are affiliated with matter in DC. Boston has the most odd culture because people weigh each other on something that happened far in the past rather than in the future, the choice of school that they went to. The thing that really makes SF stand out is that people are ambitious toward being part of something bigger than themselves and growing it to benefit many others.

fidotron 13y ago

The culture in the Bay Area seems to be to get people addicted to their employer as fundamental to their identity, not just the money it gives them. This may be because SF doesn't have the level of services you get in NYC, but that's a cause/effect problem from lack of disposable income and lack of population density. For example, a Google employee that moved from elsewhere in the country to San Francisco, and takes the Google bus to Mountain View because they don't have a car has an absolutely terrifying dependency on Google that they would not have if they were freely spending their own money to get the same services.

raldi 13y ago
How is it terrifying? If they left Google, they could ride another big company's bus, or ride a bike, or take public transit, or purchase a car, or move to a different neighborhood.

iansimon 13y ago

Other people being willing to pay for something doesn't necessarily make it positive-sum or economically productive. A lot of startups (certainly not all) seem to be trying to win tournaments: http://en.wikipedia.org/wiki/Tournament_theory http://en.wikipedia.org/wiki/Tournament_theory In that sense, SF is is similar to Hollywood. And the result is that society devotes too many resources to the next big social network or the next big summer blockbuster, and not enough to, say, making comfortable chairs.