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Comment by code4tee | Hacker News Reader

The worst kept secret in Silicon Valley is that 90+% of the so called 'unicorns' are just donkeys with a plastic cone on their head.

It long since stopped being about innovation and disrupting markets and became mostly about shuffling piles of imaginary units around so a select few could get rich. Sadly the pawns in this whole game will be all the employees holding options that are soon to be worthless... and who were convinced to take those options in exchange for taking a proper cash salary.

The only good thing this time around is that (unlike the last big Silicon Valley implosion) most of these companies are still private. So it will be really messy for some private investors and the greater San Francisco area is going to have a mess on its hands, but the broader US economy isn't going to get impacted as much. The stock market of 2015 also isn't propped up by bloated tech stocks in the way it was in 1999-2000.

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The worst kept secret in Silicon Valley....

I would argue this is the best kept secret, because this flush out needs to occur to wash away all the so called disrupters who, as you put, are really just shuffling piles of money around instead of actually doing any innovation.

I hate to invoke schadenfreude here, but the past few years have been incredibly insulting to those of us who have been running highly profitable bootstrapped businesses, and so I eagerly await this flush. Picture Mr. Burns from the Simpsons tapping his fingers together.

Like you, I am a co-owner of a bootstrapped, profitable, conservatively managed technology company. I am happy to have built what I have. But I can't find a whit of pleasure at the prospect of a disastrous reversal in private technology financing. There are a lot -- a lot -- of bad deals receiving favorable financing from out-of-touch or non-traditional institutionals. That's true. And painful but non-combustive reversals are part of the functioning of markets, sure.

But SV remains the one place in the world where smart investors with genuine science and technology backgrounds are willing to play the long game with entrepreneurs. I spend a lot of time in London and New York. The generally hidebound nature of their investment cultures, which make perfect sense when you're doing an Exotic Pet Vet Tax-Free Rollup, or a Midwest Refrigerated Storage Debt-Chummed Dividend Fête, would never have made a bet on Google, Oracle, Nvidia, PayPal, Oculus, to take a few at random.

So while there are a good dozen $1b liquidation preference-cap companies that are fundamentally silly, wishing for a tidal reversal in private tech funding isn't a good idea. VC qua asset class is important.

Why I want the bubble to burst: I can't afford to pay Google, et al and unicorn salaries. My bootstrapped, profitable, conservatively managed company isn't swimming in cash. 10 years ago the pay we offered was competitive, but now... salaries (+ benefits) have gone through the roof.

Comp is being driven by Google, Facebook, Apple, etc, generally not unicorns.

But before this bubble, as a bootstrapped startup one could beat Google by offering very early stage employees an attractive mix of cash and a lot of stock: Google's stock options are not that attractive since it has gone public. Now on paper you cannot beat the offerings of the unicorns, since they also offer cash and stock options. From experience, the existence of unicorns made the life for a bootstrapped startup in San Francisco very difficult. In our office building in SF, we had probably about 6 bootstrapped companies in 2012, now only mine is left: the other 5 moved elsewhere (most are still open). The smaller offices were joined and the companies were replaced by the larger funded ones. Also the building was bought by a more greedy landlord.

Google's stock is very attractive. employees are generally paid in actual stock, and not options. there's a huge difference between options, and stock.

options in a startup, especially since ~95% of startups fail, are generally worthless.

I am talking about very early employees. What is the typical dollar amount in RSUs or stock a new engineer after MEng is getting in Google?

>$100k over a few years at the initial date of the grant. You can roll the dice all you want on startup options or take RSUs with actual value

They may be the leaders, but they have to compete so fiercely because VC money is employing a lot of engineers and programmers. If that VC money stops, there will be an oversupply of labor. And prices will fall.

I wouldn't say an oversupply of labour, but much less competition for the currrent supply, for sure.

Ours has offices mainly in South Bend, Indiana and Denver, Colorado. ;)

I wish I could relocate, but I can't. As I mentioned in other places, because I'm in the SF Bay Area, people from low cost of living areas expect us to pay SF Bay Area salaries, even when they telecommute. I agree, if I was in a low cost of living place, that wouldn't be the case. I just wish it was, though.

As an example of the cost of living in South Bend, I easily afforded an apartment in the converted Studebaker family guest home, around the corner from the Studebaker mansion.

On my grad student stipend.

Google and Apple are very different from a unicorn. They are profitable public companies, and they'll still be around even if all the unicorns suddenly disappear.

See rhino369's reply:

https://news.ycombinator.com/item?id=10946880

He's spot on.

Low wages are one of the biggest reasons (if not THE reason) we're in so much trouble in this country to begin with.

Yeah, but I don't think the wages paid to developers in SV (or pretty much anywhere in the western world) would be classed as 'low'.

We're talking about premium developers here. People making $150K/yr or more. I literally had people stolen by Google that were offered more than $250K/yr.

You are talking about something completely different than the rest of us.

Google aren't paying those salaries out of dumb VC money. They're paying them because developers can generate that much value for them.

Not really- but Google probably thinks they might be able to. Applying it's monopoly power, Google can easily charge more for its services if required. If it's moonshot projects fail to generate returns or its monopoly is threatened, then it may have to resort to Microsoft style 10,000 layoffs to readjust. Till then they can outspend you and anyone else to get what they want. We are in the Developer's market- in time we will be in Employer's market. Cycle of Life.

You did not have people literally "stolen by Google". People don't belong to you.

I think you know what I meant. I don't, literally, think they belonged to me.

$250K would be about my minimum to coax me into moving to SV. Maybe (probably) more, I haven't done the math lately.

Hell, I'd probably still keep a better lifestyle staying put here in Florida where I make about half of that (and I'm considered highly paid around here). I would never expect SV pay for a 100% remote job that allowed to me to stay in my lowish COL beach town, and I don't know who would. That doesn't even make any sense.

250k total compensation or base? I can only imagine a good senior developer (10-15 years) getting paid 250k base.

I'm in Seattle, and $125k (which you mentioned elsewhere) is definitely on the thrifty end of the spectrum these days around here, and I'd expect that to be really low for SV. You might be able to pull it off if your company is extremely cool or if you're offering crazy equity (which a profitable, conservatively managed company most certainly is not doing), but even up here, the big boys are easily hitting $300k total comp for senior developers. I can't imagine expectations are any lower in SV.

Obviously, this just underscores your point, but I wanted to give you some datapoints since you seemed surprised that someone might not take the $125k offer. It's a seller's market.

I'm pretty sure there are, even right now, plenty of decent developers who would take seemingly lower salaries in exchange for working in a much lower cost of living area, provided the company itself is still fairly modern and forward-thinking both technically and culturally.

This is doubly so if you're not in need of Google-caliber talent. Then you're not even directly competing with Google et. al. in the first place.

No matter what the actual number is, if your salary translates into a sales pitch that looks like "comfortably afford a 3-4 bedroom house in a beautiful neighborhood, and enjoy an easy 15 minute commute by car while your kids go to a safe, reliably decent public school nearby", then you're going to get people interested.

Relocating outside of major hyper-expensive tech hubs shouldn't be seen as a failure. It should be seen as opportunity. There are reasons to be in San Francisco, and there are just as many reasons not to be in San Francisco or anywhere close to it.

You would think, right? The last two offers I made where to people in very low cost of living places. I offered them our "Bay Area, not Google $$ salary" and they both said they expected Google salaries and turned down the offer. Until that point, everything had been clicking perfectly.

EDIT: last three people.

I know it's awkward, so I understand if you don't answer, but even wide number ranges would make this a lot less abstract. What is the range of "Bay Area, not Google $$ salary", and what do you alternatively think is reasonable and affordable to you?

Salaries of $125/yr were turned down. They were looking in the range of $150-175/yr. They where in areas where the $125/yr was equivalent to $75k/yr. We were looking at experienced developers only.

As I said elsewhere, we had a developer poached from Google for $250k.

Thanks for the data!

> They were in areas where the $125/yr was equivalent to $75k/yr. We were looking at experienced developers only.

It sounds like you offered $75k a year [which you calculated as equivalent to a $125k/year offer for their location].

I'd turn that down too. People try to pull that adjustment trick on me all the time when I was looking to relocate, I'd go up there and they'd give me a number the day after I got home and I'd be like "...that isn't equivalent at all." and then politely decline.

Just fyi, maybe I misunderstood.

No, I offered $125k.

The other question is where and how you're doing your recruitment. There are a lot of "under the radar" developers who work primarily for non-tech companies in a tech role. These folks are not rockstars, but many are competent enough and much cheaper (sub-6 figures) than a startup/tech developer.

You may be surprised by how many hidden gems, you have in your own network. It probably applies if you have worked for a long time (10+ years). Some months back, I was able to hire an ex-colleague, who is a great developer. Who took a paycut to join my company for privileges like work from home, and freedom to work on cutting-edge tech (relatively, by leaps, from his prior long held position in a corporate).

FYI... My monthly living expenses in the midwest, for everything, are less than $1500, and I have a family and a mortgage. If I were single, I could live nicely on < $1K/mo. Starting salaries here are $60K and senior engineers expect > $100K.

Value drives the discussion. If you're not paying $120k + 25% overhead for skilled/good tech people, you're catching people who don't know the market, are in a bind or underestimate their worth.

> I offered them our "Bay Area, not Google $$ salary" and they both said they expected Google salaries and turned down the offer. Until that point, everything had been clicking perfectly.

Can I ask what number you went with?

The reason I ask is I don't live in the Bay Area and do live in a lower cost of living area [but still not cheap] but the figures for any decent senior engineer here are still $100k+.

See my reply here: https://news.ycombinator.com/item?id=10948416

How many times does it have to happen before it makes sense to offer a higher rate?

That would create problems for existing developers. Last thing I want to do is piss off my current, valuable staff who absolutely love working for me. Many have been on the job for 10+ years.

Okay, but then the question becomes, how often would it have to happen before you increased the salary of your current staff as well as the offer to new hires, to reflect the new market reality?

I mean, the broader question seems to be, is this just a thing we're going through or has the world changed and are developers just demanding more money for the kind of work you're doing?

I think there is a phenomena where people measure themselves by salary more strongly than quality of life, because it is easier to compare apples to apples. When I was graduating from Business school (twenty years ago when people did that so don't throw shade) people compared themselves against their other classmates in terms of salary almost exclusively.

In retrospect it may have been more important to get your foot in the door of a company or industry that you wanted to stick with for a career. Alternately, if you get paid a lot when you are young it becomes your quote. In my experience, people who don't get paid a lot at the start tend to get paid less for the rest of their working lives.

So... what does that practically mean? Bay Area salary = $100k+benefits, Google salary = $200k?

I definitely know folks who claim Bay Area $ to be $60-$70k and play the numbers game... but then they play the numbers game (and 3 isn't a numbers game).

See my reply here:

https://news.ycombinator.com/item?id=10948416

A good chunk of that is not the bubble. It is due to ending the anti-poaching collusion between top tech companies that had been letting companies keep salaries down.

This is wrong on two levels:

1. That was deemed illegal and they've stopped.

2. Salaries are not being kept down in SV. The whole topic here is that they are out of control. Have you actually tried to hire anyone? I have. Even people that telecommute from low cost of living areas want SV salaries. I've had to go outside the US for my last 2 hires.

I think you're getting downvoted because you seem to have misunderstood the parent commenter. They were saying the same thing as what you're saying here. Ie. that salaries are high because "that was deemed illegal and they've stopped".

You misunderstood me. I'm saying that the fact that they stopped means that we should expect salaries to go up. Because they were artificially lowering salaries before, and now they stopped that.

Right. Thanks for the clarification.

I highly doubt they have stopped. Just got smarter about how they do it

>Why I want the bubble to burst: I can't afford to pay Google, et al and unicorn salaries. My bootstrapped, profitable,

that is called market economy. Whoever can use programmer more efficiently and thus pay higher salary would get that programmer. In a big picture, using a resource less efficiently means pretty much wasting it. Do you make revenue per programmer like Google? If not, may be you need to look at where is a waste in your business process. Your employees wanna be productive and as result wanna do a lot of money for you and the themselves. You owe them efficient organization of business.

> 10 years ago the pay we offered was competitive,

the point of technology industry is to facilitate the process of natural selection out of anybody anywhere who hasn't changed in 10 years.

I'm not trying to offend you. I've been sitting in my current BigCo for 4 years already, and see how i myself starting to be the candidate for being selected out if don't do something in the near future. 10 years is a historic epoch in the industry. The industry did look completely different back then.

True, but imagine how many more new Google-like companies VCs could have helped to create if they hadn't spent money on silly "Uber for Pets" start-ups. It almost seems like investing in early stage, but serious companies is a thing of the past. Now, it is more like "pump-and-dump".

Excellent

I have read more than one post on hn about freelance developers bragging about how much money they are making and handing out advice to others for how to make more. When this 'bubble' deflates, dev salaries are going to take a big hit and it is going to be painful.

The best advice for those of you getting paid $150+ an hour is save your money and don't take on long term liabilities.

Why would contractors suffer? Generally when the economy dives it's full-time employees that get replaced by contractors.

Also, $150 /hr is a pretty low rate even in the leanest of times.

EDIT: Really surprised at the down votes on this. What I'm saying is hardly radical. There seems to be a lot of sour grapes in this thread sadly.

My tip: don't envy those doing better than you, learn from them.

Yeah, practically a McDonald's salary.

I am reminded of that lovely remark once made by Boris Johnson's, London's blond bombshell of a mayor, when asked about his £250,000 a year contract to write a column for The Daily Telegraph: "It's chicken feed."

You do realize that most contractors don't have 100% utilization (far from it) and also don't get paid for time it takes to make sales, find clients, they pay for their own health insurance...

$150 /hr is basically the least you're going to want to charge. Realistically you're going to be looking at 90-120k /year depending on how much work you land at that rate.

For highly skilled intellectual work, that's not very much money.

Hello form planet Earth:

It is not what you "want to charge", it is what they are willing to pay you, that counts.

Right and plenty of companies will pay > $150 /hr, on planet Earth.

$150/hr for a contract that will last 5 hours is terrible, because of all your overhead costs. If the contract lasts 8 months, is likely to be renewed, and you are expected to bill around 40 hours a week, the overhead is pretty much gone, so it's very easy to make comparisons with salaried work.

Around here in the midwest, under those long-term circumstances, many contractors don't hit the three figures. A whole lot of senior devs around here are slumming it at a $50-$80/hr range.

> $150/hr for a contract that will last 5 hours is terrible, because of all your overhead costs.

That was my point about how $150 isn't some insane amount of money. Depending on the length of contract, it may be almost nothing at all with the overhead factored in.

Out of curiosity are those senior devs keeping their skills up, or are they programming in Java/.NET or something similar?

At those rates I'd definitely be interested in taking a look at their CVs since I often need to hire developers. It's WAY below market.

Platforms such as Java or .NET make up a lot of the developer community, just not the visible (startup/tech) community. I'm classified as a "senior developer" at my day job ($90K/year) and I also do contracting ($60/hour). I could probably eek up both of those numbers a little bit, but not a lot without having to move to the cutting edge of technology.

There's a lot of folks like me who program on older, non-sexy, maintenance roles on established systems which use older technologies. Outside of big cities, these positions don't generally command a big wage.

> I could probably eek up both of those numbers a little bit, but not a lot without having to move to the cutting edge of technology.

That's my point. As a developer (especially a contractor) you must always be learning new things and technology. It also helps to specialize in a field/domain.

If you're a senior developer you could absolutely make double $60/hr as a contractor by just focusing on the business side of contracting a bit more.

I've been paid $109k a year for work on Smalltalk. And yes, it was this century, in Houston. (As of this writing, 4th largest city in the US.)

> Out of curiosity are those senior devs keeping their skills up, or are they programming in Java/.NET or something similar?

Those two things aren't mutually exclusive. There is very good money to be made consulting at the enterprise level doing Java/.NET or something similar, but you also have to keep your skills up.

Presumable some/many of those full time employees will become contractors. Increasing the supply of available contractors.

What happened to contractor pay in 2000?

> Presumable some/many of those full time employees will become contractors. Increasing the supply of available contractors.

My experience is most of these people will leave the industry. Very few have the skillset to become an independent contractor because of all the sales and marketing involved (in addition to the tech skill set you're actually selling).

> What happened to contractor pay in 2000?

I have no official data, but I was contracting at the time and continued to raise my rate a reasonable amount at semi-regular intervals (every year or two). During that time, people needed to get work done but they wanted one super contractor to do the work that a team of middling engineers used to do, for 1/5 the cost.

$150/hour is rare for anyone except so-called 10x developers on shortish term contracts.

Absolutely not, it's a base rate for most full-time consultants. "10x developers" and specialists make MUCH more.

Hey look it's a bubble deflating comment again for the millionth time in the last 5 years.

> The best advice for those of you getting paid $150+ an hour is save your money and don't take on long term liabilities.

That's good advice, regardless of how much you earn (but it might need a 'save your money when you can').

Spending money when you don't actually have to is a bad strategy when you're young and you can still materially alter you later-in-life situation with relatively little funds.

That's why I hate student debt of any form, it saddles those that would benefit the most from some savings with debt so they can't start to save until they're in their mid 30's or even later.

Given it was obvious to people on the sidelines for awhile that something was off, I'm not sure if its well kept.

> I hate to invoke schadenfreude here, but the past few years have been incredibly insulting to those of us who have been running highly profitable bootstrapped businesses, and so I eagerly await this flush.

I wouldn't say its insulting. Business is business. You'll have a company when this mess implodes, they won't.

> It long since stopped being about innovation and disrupting markets and became mostly about shuffling piles of imaginary units around so a select few could get rich.

As someone mentioned on another thread a day or two ago, just look at the latest YC batches, particularly the IT companies. They're largely "X for Y" sorts of companies that already have significant traction. It's unlikely that the Airbnb founders would be able to get into YC in 2016.

> Sadly the pawns in this whole game will be all the employees holding options that are soon to be worthless... and who were convinced to take those options in exchange for taking a proper cash salary.

And on the other side, once the bubble bursts and the options are exposed as worthless at many of these companies, it's going to be much harder for startups to recruit employees with equity compensation, which will only make it more difficult to control burn rates.

Which seems like a good thing to me, because then maybe, just maybe, startups with steady revenue growth will get funded again.

Exactly - good entrepreneurs/companies can raise money and hire employees in any capital climate. It's the companies that lack basic building blocks, like a mission that resonates with employees on a non-financial level and sustainable sources of revenue, that will go under.

Square is a great example of a company that people joined for all the wrong reasons. Not only are they incredibly unfocused when it comes to their mission, products and customer base, but the people joining it seemed to be doing so out of a mercenary instinct triggered by an expectation that Jack's second company would of course be a hit.

Just like Andreesen's second company was destined to be a hit. Ex Loudclouder here. I'd say 90% of us were there for that reason.

And Andreessen left Loudcloud in 2005, well before the final Opsware exit, to found his third company Ning (which he never talks about), which ate $134M in funding, only to be acquired for $150M.

If you actually look at what Andreessen did at Netscape, he was little more than the pawn of Jim Barksdale and Jim Clark, who trotted him out as the "boy genius" every time they needed to do some PR or developer/community outreach. The vast majority of the code was written by the far better software engineers than Andreessen who joined the founding team (Lou Montulli, Jamie Zawinski, Ramanathan Guha, Aleksandar Totic, and more).

Other than that, I'm not even sure why Clark approached Andreessen to co-found Netscape. There were multiple people who worked on NCSA Mosaic, which was itself based on open standards (and the source could be obtained). And Andreessen didn't really believe in its commercial potential at first - he moved to SV to work at Enterprise Integration Technologies, only to quit his job after a few months, when Clark emailed him.

I guess there is just a limited solution space for the current problems, and many possible points have been farmed at a certain point of time. Until legislative or technologic changes come in, the eco-system will go more and more into bubble mode.

Please explain the downvotes. Sure, the comment was a quick shot comment about 'X for Y' ventures, but I do indeed guess that many current IT unicorns are not straying so much into bleeding edge technology, but are following a market grab/lockdown strategy on platforms (www/mobile) that are fairly well developed. And I do not want to claim that any of those approaches are bad - people seem to speculate that they can make a lot of money from them.

> and the options are exposed as worthless at many of these companies, it's going to be much harder for startups to recruit employees with equity compensation, which will only make it more difficult to control burn rates.

As someone who lived through TechBubble v1: People said exactly the same thing back then. There's always a new batch of graduates with dollar signs in their eyes who believe "it's different this time".

I'm trying to coin the term "portmanco" for these companies. Just like a portmanteau in linguistics simply mashes two words together, a portmanco just mashes two familiar companies together and calls it a new one.

> mashes two familiar companies together and calls it a new one.

Hasn't that always been what "merger" meant? :p

Edit: My joke is that corporations have been making dumb amalgamations for many many years now. Anybody remember "Mr. Sparkle" from The Simpsons, where two companies in fish vs. heavy-industries combined to sell detergent? That was amusingly-relatable even when it came out 18 years ago.

AirBnB for Dogs isn't a merger between AirBnB and dogs.

Wait, I thought he said two companies merged, not a company plus an arbitrary concept. (Or is there really a company just named "Dogs" involved in canines?)

Sorry, I down-voted you before I understood your joke. :(

I'm actually still confused about whether it's a joke or if the guy is making a pedantic criticism of my choice of words.

That's disturbingly like what I hear film industry people complaining about for nigh-on decades now. Script pitches are too commonly derivatives starting out with "like X [already super-successful film], but|with|and|except|etc. Y [another successful film]".

The general explanation for this phenomena that I've read bandied about (but have no idea of its veracity as I'm just an industry outsider): financing films has gotten so expensive and risky, that only proven models of making money are commonly given green lights. It's considered innovation at the financial level to mix-and-match proven models, because that's all the risk that is willing to be absorbed. What the purchasing side actually wants is too opaque/non-linear/unpredictable/take-your-pick-of-explanation for the big name finance people to consistently figure out what really is innovative. That's probably why YC attracts a lot of attention from the big names, because they hold out the promise of piercing that veil.

I'll be a little bit more cynical than you, and give you my opinion. In the movie industry[1], just like with the start-up industry, we see these types of behaviors pop up when the company or the art stops being the object of the creators affections, but instead it's the money or power. It's the "MBA" attitude that gets railed against on HN, where the only reason these people participate is to cash out, or in some cases with people who are already rich, they want to feel like they're important.

Now, these people are plenty smart. They usually have gotten great educations and whatnot, but they lack the drive to be motivated by a love of doing this great thing, rather than accumulating some money. Some of the greatest creations in tech were not motivated by money at all. When a great film maker goes to bed or on vacation, he's sometimes kept awake with ideas on how to make a better film or pondering a new concept. He takes no real vacations, because he loves his art so much that he never even wants to escape it. The money-driven type doesn't. When they go on vacation, they escape. And professionally, they tend take the easiest path to their destination. And the easiest path to cashing out is to look at how other people became successful, and make a small deviation from their path then copy or exploit rent seeking advantages or be unethical.

I think that's where all these portmancos come from. It's really really easy to look at existing business models, and come up with a way to blend them into new company.

[1] I'll assume everything you just told me is correct

> it's going to be much harder for startups to recruit employees with equity compensation,

Ageism in the valley is probably caused in part by that. Older developers have already been burnt in 2000 and are less willing to try another round (I have known a few of the virtual millionaire) and even those that have been working through the crisis are going to have a cautious approach. So that tilt the balance even more toward the younger developer working in hot startup and it becomes easy for their owner to mistake correlation for causation and assume older developer simply don't have what it takes.

I remember raising my eyebrows when my grand father was skeptical of banks and government guarantees. I have now lived through banks failing, government taking money off private account, ... Today I wouldn't be so dismissive of his concerns. So easy to mistake wisdom for old age stubbornness when you only have had an uneventful short existence.

> it's going to be much harder for startups to recruit employees with equity compensation

Great. The employees who don't want to, or can't accept potentially risky future compensation for their work, no matter what the reasons, shouldn't have to. That's why investors exist. They take on the risk, you get to pay employees actual money, win/win.

In addition, equity is just as much a "burnable resource" as money is. Those percents add up. If you're using it as an infinitely-growing imaginary carrot because you find that your runway is getting shorter and shorter as the months go by... well, that's probably not a good sign.

I think the definition of Unicorn doesn't work -- it made sense when it was Uber, AirBnb, Dropbox and a few others. But when a dead man walking MDM vendor like Good is a "unicorn" that is subsequently purchased by a zombie like BlackBerry, something is wrong.

Even some of the more legit "unicorny" companies like Dropbox have issues. I've been a happy user of Dropbox for many years, but they refuse to provide a service offering that I can actually justify paying for in my personal life. And while they have an awesome service, they refuse to make the security investments that would allow my employer (who desperately needs a good solution in the space) to give them money. Anecdotally, I've found a few people with the same takeaway -- they want to give them money, but can't justify it at home or deal with service gaps in a business settings.

Can you share the requirements that you employer needs? Box has been trying to get into enterprise for a long time, and has many 'enterprise' features, but we all know how well Box is doing financially. I think the problem with Box is "it's just a feature, not a product", especially in the presence of other alternatives like One Drive, Google Drive, Amazon Drive and what not. It might be a feature done better than the others, but it's not a product by itself to be bought in a stand alone package. There is no differentiation, actually it's even worse as I can't edit my documents unlike with Google/MS. Pricing is definitely not better than any of the competitors.

We have a lot of compliance requirements that I'd rather not get into. In general, the FedRAMP Moderate baseline is where we start, and depending on what/who the data/users are we may add more requirements.

OneDrive claims to do this at the service level, but the implementation is poor and the controls aren't very robust when you implement. (Unless you buy Azure AD and double the cost or wait for their rewritten sync engine) Google & Box (although Box wants a high premium $$) are a lot better, but Dropbox is still best in class for sync.

In some cases, we are forced to throw features away. For example, we have some users where a solution that encrypts data, limiting editing & search capability is a requirement for some information.

Beyond that, a broader concern that would be of interest to me would be narrowing the scope of some of Dropbox's features like dedupe and "forever" files. (It's been awhile since I looked, so this may have changed) I would prefer a solution where there was a key isolating our data from other data in the Dropbox cloud. (bonus points if we controlled that key) That way, nobody outside of our enterprise would have a way to know if a specific piece of information was already uploaded to Dropbox.

To me, it's great tool for a single person or a team of 8-25 people. It's missing stuff and is expensive for a real big org, and doesn't scale low enough for a family. (at least at a price that I'm willing to pay)

I suspect Box (and many small cloud vendors) is simply ahead of its time, as a large factor.

No one bats an eye at Google Docs today, but when Corel tried to do it earlier, they suffered for it. It takes time for markets, people, and processes to adapt to new ways of doing business.

why would u not call GOOD MDM a unicorn, look at their customer which is very strong. With fierce competition that i thought good customer base.

Do you have any data to support these statements? This reads as FUD as-is. Not saying that's the case, I'm not in the startup scene per se, but on the face of it, this seems overly pessimistic.

Data to support what? It's well known that common stock gets wiped out in any kind of devaluation.

The OP is suggesting there is a trend of sorts. My interpretation is that she/he is suggesting there is something akin to a "pump and dump" scheme going on in SV right now. That's a bold accusation. I've not seen evidence of this, but perhaps I'm missing something here.

What I have seen evidence of is a slowing economy and a shift towards more conservative investments. It happened in the early 2000s, in 2008, and it seems to be happening now.

Pump and dump implies that it is being done on purpose. I think what we have here is a kind of functional pump and dump. Most or at least many of the participants are sincere but there are some who get paid either way. They are just siphoning off some of the cheap money all the central banks have been printing

To me, it seems like some people are looking forward and are excited about a silicon Valley collapse.

Excited might not be the right word, but there's no question a lot of people are encouraged to see this happening. That's not schadenfreude but rather for the tech sector to have long term health and innovation built around solid businesses with real revenues and profits the silliness of the last few years needs to stop.

It will have a cleansing effect for our ecosystem, much as forest fires do for theirs. The arrogance and irrational exuberance that has become commonplace among founders and VCs will be curtailed, and rent & traffic may become somewhat manageable.

And lots of engineers will be out of work (or working for much less pay, in much more traditional organizations)...at least if the last bubble pop is any indication.

Which is certainly unfortunate, but it has to happen sooner or later. The whole "STEM shortage" hysteria (see FWD.us[0]) is nothing more than a shameless attempt to drive down engineering wages by increasing enrollment in CS programs, pumping up H1B allocations, and wage fixing[1]. Tech execs and investors love to complain about having to pay six figure salaries to the engineers doing all the real work, all while carting home hundreds of millions themselves in just severance pay[2], despite running companies into the ground, often because of their inability to perform basic management tasks correctly[3,4,5].

0: http://www.fwd.us/

1: https://pando.com/2014/01/23/the-techtopus-how-silicon-valle...

2: http://www.usatoday.com/story/money/markets/2015/12/04/maris...

3: http://nypost.com/2016/01/18/marissa-mayers-job-safety-joke-...

4: http://www.businessinsider.com/eric-jackson-slams-yahoo-for-...

5: https://www.atlantic.net/blog/how-elon-musk-ceo-of-telsa-mot...

Any productive activity is a sum of the 3 factors of production: Land/Natural Goods + Labor + Capital

If you increase any one of these factors, you get more production (i.e. more prosperity). For instance, Capital: if Chinese/Russian billionaires decide to invest all their money in American companies in America, then it would result in huge economic growth.

Similarly Natural Goods: If prices of oil fall drastically, or lots of natural goods (even land) are discovered, then again there will be increased production of goods (i.e. more prosperity).

Finally, Labor: if labor prices fall drastically, or labor force is increased, again more production will happen. Prosperity will ensue.

The first two makes sense to most people, but somehow the third point doesn't because most people are part of the labor force therefore emotions kick in. The simple logic you're demonstrating is a childish whining:

> Tech execs and investors love to complain about having to pay six figure salaries to the engineers doing all the real work, all while carting home hundreds of millions themselves in just severance pay<

The whole job of tech execs and investors is to increase production. Acquiring capital for cheap (lower interest rates) would do the job, acquiring land/natural goods for cheap (like moving office to a cheaper part of the town) would also do the job, and finally getting cheap labor would also do the same thing.

Complaining against a businessman trying to find cheaper labor is like complaining against the QA for trying to find bugs in your code.

> splintercell

> if labor prices fall drastically ... more production will happen. Prosperity will ensue.

> somehow the third point doesn't because most people are part of the labor force therefore emotions kick in. The simple logic you're demonstrating is a childish whining

Next time a bubble pops and I get a 30% pay cut I will take comfort in the fact that the prices of goods & services around me will soon fall by >30% to compensate (because of all the prosperity) thus preserving my quality of life and proving that my concerns were merely "emotions kicking in" and "childish whining" rather than predictions that the terms of my social contract were about to get dramatically worse.

The post I was responding to was about how companies want relaxed immigration rules because they make more profit.

My post was responding to the fact that increased immigration (of high tech or white collar, both) helps people in general by increased prosperity (nothing in this post was about an emotional outburst of the conditions and welfare of immigrants).

You respond by talking a non-sequitur about a bubble. It doesn't make any sense.

Funny thing is, what you wrote rhetorically is exactly what happens in a crash.

As a consumer you don't care whether your salary is $100K or $50K, what matters is what you can buy from your salary. If you can buy a home on mortgage on $50K salary and save for your kid's education, but can barely pay rent and groceries on $100K then the $50K Salary is higher 'real salary' (albeit a lower 'nominal salary').

Any recession is only cleared when real wages fall faster than the real prices of the goods (because only then businesses can be profitable again).

According to free market economists, let wages and goods of prices fall. This will eventually clear the market.

According to non-free market economists (which includes Keynesians and monetarists) increasing the money supply is the solution because it lowers the real wages (albeit keeping the nominal wage high). So at the end of a recession you still make same salary as you did at the start of the recession, but you can afford fewer goods now. This ALSO clears out the market and businesses become profitable again.

Introduction of educated immigration labor would actually result in faster recovery (just like lowering of interest rates would make businesses more profitable).

You understand how the economy as an aggregated whole behaves. What you're ignoring -- intentionally or not -- is the other face of economics, the hairy & ugly one, distribution. The way that any given person experiences the economy is a product of prosperity (as you put it) and distribution. In this day and age the volatility in distribution reliably dwarfs trends in overall prosperity. There are a large number of individuals who will be hurt by this (or any other) shift many orders of magnitude more than they will be helped. You invoke a collectivist argument to defend these groups' suffering on the basis that it will benefit the whole according to the economic dogma you hold dear.

Fair enough. You might even be right. Even if one were to assume that you are, however, why does it follow that those involved should be happy with their fate as a stepping stone for society? That their complaints are nothing but "childish whining"?

Furthermore, the fact that an action creates winners and losers is far less open to interpretation than its ultimate connection to the progression (or regression) of society. If you substitute faith in one system for faith in another then the same argument you made earlier has been made in a million other contexts to defend acts that you would consider unconscionable. In this context "It's for the best, honest!" is a weak argument regardless of how convinced you are that your model of ultimate benefit/detriment to society is correct.

You say that, but a huge proportion of working software engineers have almost no idea how to be a professional and do the job correctly. Which I used to be all about, since I cleaned up their messes at inconvenient rates.

The problem isn't a shortage of engineers, it's a shortage of quality engineers who don't subtract more value than they produce.

> working for much less pay, in much more traditional organizations

When the tech bubble crashed in 2000, and I moved from a startup to a Fortune 500 company, my job became less enjoyable, but my salary did not go down. Then again, I began looking for a job in April 2000, as I had been anticipating a correction - some people with no college and no non-startup experience rode it out to 2001 at their startup, were laid off and had trouble finding work.

Being based in a big job market outside the Bay area where I am rooted and networked was also helpful in 2000.

One difference between now and 2000 - the only real capital expense to start many software businesses nowadays is payroll. It is much less expensive to start a business. This may affect things.

I actually got a small pay increase when I moved to Big Corp. But I think that had more to do with luck than anything else. Lots of my colleagues took pay cuts and/or dealt with wage stagnation for a fair bit of time afterward.

The ones that were really hit were new grads who had accepted jobs that went away before they got there or had only been on the job a couple of months.

Another big difference (I hope) was that 9/11 came along right after and changed things in a much more macro scale. Don't know how much we can draw from that.

After SF collapses, housing prices will drop and the Phoenix will rise again.

That's not a consistent scenario with what happened last time the tech bubble burst. Believe it or not most folks in the Bay Area don't work for tech startups. It would take a combination of a bunch of market forces to drive housing prices down here.

You call it collapse, I call it normalization.

Bubbles are incredibly inefficient, they send huge amounts of very valuable resources (money, but also things like people, creativity, press attention) into situations where they are ultimately squandered. They are like wars, they can waste the promise of an entire generation, never to be recovered.

Nobody wants to see a collapse for collapse's sake, but there is quite a bit of social good in avoiding or deflating an asset bubble, be it in residential mortgages or late stage technology companies.

As if the government does a better job managing money, which is why the concept of 'exit' is appealing to some in Silicon Valley. New technologies emerge from bubbles. The only way to do away with the boom bust cycle is to do away with capitalism itself.

You don't have to argue for government to notice that bubbles are inefficient and therefore not desirable.

THIS

>To me, it seems like some people are looking forward and are excited about a silicon Valley collapse.

There is absolutely this attitude present. I've heard it both in the Midwest and out west in San Francisco and Oakland both.

I can even understand it to an extant, because although I am in the not-a-bubble camp, I am annoyed when I see media and others acting like "Uber for pizza" is a mind-blowing idea.

I am. Maybe rents will stop going up. Maybe the Harvard MBAs will take off their red hoodies and go work on Wall Street or maybe for old companies that make stuff in the Midwest

If the web were not funded by advertising, these hollow-corns could never exist. Advertising is arthritis to the invisible hand.

It's utter bullshit that advertising is good for the web because it gives us stuff "for free": https://news.ycombinator.com/item?id=7485773

This site exists to worship the imaginary money shufflers. It was established by the same.

Good points.

Why aren't there more publicly traded "Venture Capital" firms?

Transparency, investor scrutiny and ability to vote out the board is good thing.

Silicon Valley would benefit by having good old fashioned one share, one vote governance

>The worst kept secret in Silicon Valley is that 90+% of the so called 'unicorns' are just donkeys with a plastic cone on their head.

that isn't a secret, that is a celebrated strategy of "fake it until you make it"

Do you think unicorns are paying lower than market salaries?

What ever the price paid is the market.

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