4 ms·

The Valley has changed. If you started in the 1990s, you got real equity and housing costs were low. You could get into the low millions just by working hard an

The Valley has changed. If you started in the 1990s, you got real equity and housing costs were low. You could get into the low millions just by working hard and living frugally. It was a different time-- more egalitarian and far more engineer-driven. The question is: if you're 22-25 now and move into the Bay, do you have a good chance of ending up a made man (or woman)? The answer is "no". It's been overrun by MBA culture and has severe founder quality problems and I don't think it's salvageable.

saryant 12y ago
What qualified as "real equity" back then?
ChuckMcM 12y ago
The valley constantly changes. Your question is identical to the one posed in 1999 during the first 'bubble' people saying "Oh but now it has gotten so inflated and ridiculous, someone moving here now doesn't stand a chance" and yet here we are in 2014 with a bunch of new LinkedIn, Google, Facebook, and other millionaires. In '84 when I moved here it was the 'great semiconductor dying' where places like Intel argued they were a good company because they were losing money less quickly than any other semiconductor company. Or had you been here in the 70's when cutbacks on defense work was the 'death knell' for the valley. What the observations miss is that the value is in the change not in the status quo. If you move here as a 22 - 25 year old I think you continue to have a better chance of becoming financially independent than you would elsewhere. But its not a 'done deal', there is always luck, choices, and opportunities. Every time something fundamental changes, it creates a shift. In the last part of the 20th century it was the arrival of cheap computation, in the early 21st century the arrival of the Internet. Both created big shifts and opened up big opportunities to create value and wealth. They appear and vanish. I find it amusing that much of the money that went into my house came from Sun stock which, when I sold the last bit was worth very little, but during that time when it was valuable it became a part of my house. I see three candidates leading the next wave, adding autonomy to normally non-autonomous products (cars, trucks, lawn mowers), ubiquitous sensing to achieve better efficiencies in raw material usage (farming, manufacturing, housing, etc) and information economics (changing the way information is priced, bought, and sold). These are all emerging even as we're exploiting the tail end of social and Internet everywhere. But here is the thing, if your 22, thing about being 'made' when you are 52, not when you are 25. And if you are suddenly "rich" at 25 think about how to make sure you are still rich enough when you're done working for others.
brandnewlow 12y ago
Good chance compared to what? The only "scene" I know of that has a better chance of "making" someone than the Bay area startup scene is Wall Street, but the barriers to entry there are much, much higher.
nemothekid 12y ago
>if you're 22-25 now and move into the Bay, do you have a good chance of ending up a made man (or woman)? The answer is "no". Of myself and all my acquaintances in the 21-25 age range, most grads are either: 1.) Working in SV/Tech for Corp X, making 6 figures, and independent 2.) Working in NYC/Finance for Corp Y, making 6 figures, and independent 3.) Post-grad (masters, medical, law) 4.) Back at home with mom & dad, with crippling debt, bombarded with the rhetoric that "millennials don't want to work, can't move out of their parents homes, are selfish," and so on and so forth. So I'd say it depends on what means to be a "made man." Did the workers who worked for Ford and GM aspire to be the Zuckerbergs and Brin's of their time, or were they just happy to have a relatively stable, high paying job? Were the auto workers of the 50s and 60s made men?
flipped_bit 12y ago
I fully agree with you and I have my theories: 1) The early 2000 dot-com crash + the Enron crash that changed the regulatory landscape to make it harder for companies to IPO. This has resulted in start-ups being formed for the pure purpose of the acquisition route - fund, and flip strategy. 2) I see the Netscape IPO as the transition point - I like to call the eras, BN and AN (before-Netscape, and after-Netscape) which coincided with the commericialization of the internet. Netscape IPO with its cult of the young founder started this trend. All you have to do is list the companies that were formed in the BN vs the AN era, and get a feel of the 'engineering quotient' of these companies. Of course it also coincides with software overshadowing hardware companies where the former requires less upfront capital than the latter. The capital requirements have gone down even further thanks to virtulization and consolidated infrastructure services like AWS. 3) Paradoxically larger involvement of the state. All the UC system and other universities occurred due to the threat of the cold war. Almost all the success of technology companies since the 1980s' can be traced back to the investments made in the earlier decades in universities (eps. in STEM fields), infrastructure (inter-state highways) and so forth. How the same forumula can be replicated is going to be a challenge. Some signs like allowing private companies like Space-X to compete and augment govt. agencies might be the first steps - it will create new markets that will drive innovation. The American triangular replationship between the State, Universities, and Private Enterprise are the 3 legs of the proverbial stool, and when one or the other legs weakens, the whole edifice starts to stumble. 4) Larger numbers of H1Bs who are legalized indentured labor that makes it harder for them to be confrontational with their employers. Note I myself went thru. the process, so I am not your garden-variety bigot here. My answer to this is to streamline the immigration process to: a) Delink H1Bs' from a spnosoring employer. Allow H1Bs' to freely move to any companies to allow a more fluid labor market. b) Allow H1Bs' to start companies - i.e. if they get VC funded (as founders, co-founders or early founding member teams), they get immediate upgrade to green cards. DHS can keep a list of certified VCs' where this program can apply, and it can also get a % of equity as a one-time fee (along with other concrete fees), so the immigration department can be self-sustaining, and overall encourge more entrepreneurship. c) Reduce the 6 year process to 3 years for H1Bs to acquire green-cards, and remove country-based quotas (a holdover from 1920s regulations to limit immigrants were certain undesired countries which is really an anachronism in todays globalized economy). Note from an IRS pespective, you are as good as a American citizen or a green-card holder after the 6 months residing in the US - i.e. you are submitting full taxes as anyone else, and IRS treats you as a resident.

saryant 12y ago

What qualified as "real equity" back then?

ChuckMcM 12y ago

The valley constantly changes. Your question is identical to the one posed in 1999 during the first 'bubble' people saying "Oh but now it has gotten so inflated and ridiculous, someone moving here now doesn't stand a chance" and yet here we are in 2014 with a bunch of new LinkedIn, Google, Facebook, and other millionaires. In '84 when I moved here it was the 'great semiconductor dying' where places like Intel argued they were a good company because they were losing money less quickly than any other semiconductor company. Or had you been here in the 70's when cutbacks on defense work was the 'death knell' for the valley. What the observations miss is that the value is in the change not in the status quo. If you move here as a 22 - 25 year old I think you continue to have a better chance of becoming financially independent than you would elsewhere. But its not a 'done deal', there is always luck, choices, and opportunities. Every time something fundamental changes, it creates a shift. In the last part of the 20th century it was the arrival of cheap computation, in the early 21st century the arrival of the Internet. Both created big shifts and opened up big opportunities to create value and wealth. They appear and vanish. I find it amusing that much of the money that went into my house came from Sun stock which, when I sold the last bit was worth very little, but during that time when it was valuable it became a part of my house. I see three candidates leading the next wave, adding autonomy to normally non-autonomous products (cars, trucks, lawn mowers), ubiquitous sensing to achieve better efficiencies in raw material usage (farming, manufacturing, housing, etc) and information economics (changing the way information is priced, bought, and sold). These are all emerging even as we're exploiting the tail end of social and Internet everywhere. But here is the thing, if your 22, thing about being 'made' when you are 52, not when you are 25. And if you are suddenly "rich" at 25 think about how to make sure you are still rich enough when you're done working for others.

brandnewlow 12y ago

Good chance compared to what? The only "scene" I know of that has a better chance of "making" someone than the Bay area startup scene is Wall Street, but the barriers to entry there are much, much higher.

nemothekid 12y ago

>if you're 22-25 now and move into the Bay, do you have a good chance of ending up a made man (or woman)? The answer is "no". Of myself and all my acquaintances in the 21-25 age range, most grads are either: 1.) Working in SV/Tech for Corp X, making 6 figures, and independent 2.) Working in NYC/Finance for Corp Y, making 6 figures, and independent 3.) Post-grad (masters, medical, law) 4.) Back at home with mom & dad, with crippling debt, bombarded with the rhetoric that "millennials don't want to work, can't move out of their parents homes, are selfish," and so on and so forth. So I'd say it depends on what means to be a "made man." Did the workers who worked for Ford and GM aspire to be the Zuckerbergs and Brin's of their time, or were they just happy to have a relatively stable, high paying job? Were the auto workers of the 50s and 60s made men?

flipped_bit 12y ago

I fully agree with you and I have my theories: 1) The early 2000 dot-com crash + the Enron crash that changed the regulatory landscape to make it harder for companies to IPO. This has resulted in start-ups being formed for the pure purpose of the acquisition route - fund, and flip strategy. 2) I see the Netscape IPO as the transition point - I like to call the eras, BN and AN (before-Netscape, and after-Netscape) which coincided with the commericialization of the internet. Netscape IPO with its cult of the young founder started this trend. All you have to do is list the companies that were formed in the BN vs the AN era, and get a feel of the 'engineering quotient' of these companies. Of course it also coincides with software overshadowing hardware companies where the former requires less upfront capital than the latter. The capital requirements have gone down even further thanks to virtulization and consolidated infrastructure services like AWS. 3) Paradoxically larger involvement of the state. All the UC system and other universities occurred due to the threat of the cold war. Almost all the success of technology companies since the 1980s' can be traced back to the investments made in the earlier decades in universities (eps. in STEM fields), infrastructure (inter-state highways) and so forth. How the same forumula can be replicated is going to be a challenge. Some signs like allowing private companies like Space-X to compete and augment govt. agencies might be the first steps - it will create new markets that will drive innovation. The American triangular replationship between the State, Universities, and Private Enterprise are the 3 legs of the proverbial stool, and when one or the other legs weakens, the whole edifice starts to stumble. 4) Larger numbers of H1Bs who are legalized indentured labor that makes it harder for them to be confrontational with their employers. Note I myself went thru. the process, so I am not your garden-variety bigot here. My answer to this is to streamline the immigration process to: a) Delink H1Bs' from a spnosoring employer. Allow H1Bs' to freely move to any companies to allow a more fluid labor market. b) Allow H1Bs' to start companies - i.e. if they get VC funded (as founders, co-founders or early founding member teams), they get immediate upgrade to green cards. DHS can keep a list of certified VCs' where this program can apply, and it can also get a % of equity as a one-time fee (along with other concrete fees), so the immigration department can be self-sustaining, and overall encourge more entrepreneurship. c) Reduce the 6 year process to 3 years for H1Bs to acquire green-cards, and remove country-based quotas (a holdover from 1920s regulations to limit immigrants were certain undesired countries which is really an anachronism in todays globalized economy). Note from an IRS pespective, you are as good as a American citizen or a green-card holder after the 6 months residing in the US - i.e. you are submitting full taxes as anyone else, and IRS treats you as a resident.