Silicon Valley is changing, and its lead over other tech hubs narrowing
economist.com
economist.com
That doesn't for a moment mean that northern California isn't still the place with the maximum idea flow.
Three major things in SV that aren't declining:
a) Intelligent risk capital being deployed by scientists and engineers, not MBAs
b) Stanford
c) Ambitious unmarried 20- and 30-somethings for whom quality of home life is very unimportant
I'm not bullish on California politics. Single-party psuedo-progressive rule can, eventually, ruin the state by driving people away.
But for density and quality of ideas, it seems to me that the gap between SV and elsewhere is as wide as it has ever been.
...it costs at least four times as much to base a startup in the Bay Area as it would in most other cities in America.
EDIT: I shouldn't say "the Bay", but rather, "the Bay/LA/NYC/Seattle". I more mean "top tier startups cities" rather than strictly just the Bay, per se.
Most of the interesting startups I've seen recently have a small office in the Bay Area to go with a preference for real operations in other cities. Probably an efficient way to raise money from VCs who apparently think Google maps is the tool for investments and yet not have to excrete rainbows to reach profitability.
As a US citizen, the idea of being able to work anywhere is appealing. If your infra is everywhere, then I guess you could be anywhere too.
That's the dream, right?
[1] http://www.siliconvalleyoneworld.com/2018/03/25/new-census-d...
Having ceilings based on a % of company number of employees or some other mechanism would go a long way (or the chance of draw being related to their salary)
They already have a legal requirement to pay prevailing wage before they can get a visa. That means at least six figures in the bay area.
There are a few reasons Americans don't take these six figure jobs:
1. Don't want to live in California/too expensive
2. This is the more common reason: Americans don't do STEM much, cannot compete with internationals. Obviously not all Americans are incompetent but given the number of open positions in the bay area, there are just not enough of them.
As an anecdote, my manager has had 2 open positions for 7 months now, paying $125k base + sign on + relocation + bonus + stock for a new grad. Guess how many we've filled after 7 months? A big fat zero.
The only way our product would sustain is by hiring people. So we eventually ended up hiring an h1b Chinese guy who was very very smart and capable. Then, because legal immigration process is choked off, he still couldn't join after 4 months. So we just had him join an offshore satellite office and moved his projects there.
If he plays his cards right, the project will grow and he will help us hire more in the offshore site.
Does this sound good for America?
Why would anyone move to California for $125K when they could live in one of 20 other major cities, make the same amount with a lower cost of living?
Cash is king. Anything else shifts the risks away from the better capitalized corporation to the less capitalized potential employee.
Sign-on bonuses don't have a vesting period. That's why they're called "sign-on" - you get them when you sign on. You might have to give them back, pro-rated, if you leave the company within a certain time period (typically a year).
> Cash is king.
I'm not disagreeing here. I'm just pointing out that the fixed $125k number in your mind is inaccurate in reality. The total value of the stock+sign-on+bonus may not be $75k (that might be the ideal case) but it's not $0 either. The total comp is a lot of money for any new grad in any city in the world (again, outside of finance and law at the top end).
Realistically, what are the chances of Apple, Google, Microsoft or Facebook who are all circling $1 trillion to see the same types of returns over the next ten years?
And this kind of over-generalization and over-rationalization is exactly the reason why Americans cannot be found.
Sorry, if you want the job, take it else the jobs are going elsewhere. We have a product to sell.
So you have better opportunities elsewhere. Whats your problem with me hiring legal taxpaying smart international people?
Do you want to kill my razor thin business causing layoffs? Do you want me to move to another country? Do you not want smart people here in the US? Do you not want growth in the US?
On the other hand, the original post did imply that there was something morally wrong with employees not being “loyal” and jumping ship to a better offer or not accepting your offer at all because it was in their best interest.
But at the end of the day, it is your business not mine. That informs where both of our loyalties will lie.
You can live comfortably in a nice area in the burbs in many American metro areas off of $70K - $90K.
I could do much better making $90K in most major metros that are not on the west coast or New York than I could do in SV for $125K.
Beyond immigration talk, the constant spewing of racism coming from the administrations is a clear signal that immigrants of different backgrounds are not wanted.
To that end, they simply pack up and build their business and wealth elsewhere. We won't feel those effects right now but it will hit hard in a few years.
Curious to see some examples cited.
I feel a strange need to show fairness to Trump here. The CNN headline is very misleading, it says "Trump basically called Mexicans rapists again" but then goes on to quote him and the quote doesn't contain any such statement. He doesn't even mention Mexicans. Rather he makes a general statement that women get raped a lot on the paths used for illegal immigration into the USA, a statement CNN actually agrees with according to their article:
"Nobody is arguing that the trip from Central America to the US is easy or that women are not attacked or exploited on it. That is a well-documented problem, one that Trump brought up to bolster his own case for tougher immigration laws."
Trump expressing concern about abuse of women on the paths used by illegal immigrants is an odd form of 'racism'.
You act as if CNN and ACLU are convincing sources,even though they have obvious agendas against the current administration.
As for Trump, he is only talking about illegal immigration. Nobody with an engineering degree is going to care about his views on immigration, they may even welcome them because Trump apparently (I did not know this until reading the sibling links) wants to move to merit based immigration instead of a lottery scheme, which would help high skilled workers.
He also wants to cut the quota to a third of its current value.
It can still be better for engineers though, if they are in the top third of desired immigrants from a jobs perspective.
I don't mind long wait time, but I hate to live under fear and some bureaucrat's mercy and being assumed as job thieves.
The America brand has essentially been tainted.
The sad thing is that I studied in America for two years and can't reconcile the current rhetoric with the memories I had
Passports are being denied to US citizens and their documentation is being deemed invalid based on no evidence and no due process: https://www.yahoo.com/news/trump-administration-denying-pass...
Steve Bannon talks about how even legal immigrants from South Asia don't fit into America's "civic society" (whatever that means): https://boingboing.net/2016/11/17/steve-bannon-wants-to-depo...
ICE reserves the right to detail and interrogate people about their immigration status as a matter of course, and their only rubric for "suspicion" is "person is Brown." http://www.witf.org/news/2018/07/how-racial-profiling-goes-u...
If you haven't seen rhetoric against legal immigration, you haven't been paying attention.
What is for example, the second largest tech hub and how narrow is silicon valley's lead over it.
I would guess that the bay area if way way ahead of anywhere else (I don't like it, but it seems to be self apparent) and the lead is not narrow at all.
Seattle's a tiny fraction of either and not growing in that area.
https://www.citylab.com/life/2018/03/the-extreme-geographic-...
Obviously, that's only one measure of a tech scene, but I don't think Seattle's that large.
i raise capital in silicon valley. but i do not want to hire people there.
i hire amazing engineers in russia at a fraction of the cost and they: - are loyal instead of jumping to new shiny stuff at every opportunity. - have skin in the game - are focused on building products and not on things like "we need to hire more female engineers even though none are applying."
and lifestyle-wise the bay area is just unpleasant. aggressive homeless people. abysmal dating environment. awful traffic.
and of course the costs, taxes etc. top it all off.
that being said in terms of concentration of smart people that one can connect with at a moment's notice, and in terms of fundraising, the Bay Area is absolutely unparalleled.
my conclusion is to spend couple months a year there but live and hire elsewhere.
Mmm...could you elaborate on the abysmal dating environment? :-)
1. Single men vastly outnumber single women in Silicon Valley due to the unfortunate gender demographics of the tech industry, making for a very competitive dating environment for single men.
2. Due to the Bay Area's high housing prices, single people living in the Bay Area who are not Bay Area natives tend to be highly-paid young professionals. These people tend to be driven, ambitious, and have very high dating standards. There's nothing wrong with having high standards, but it makes the dating scene more difficult since you have to work on meeting those standards in order to be successful with the dating scene. It seems like a man has to be in excellent physical shape, make a ton of money, and have the right pedigree in terms of degrees and credentials in order to be attractive in Silicon Valley since there are so many young professional single men in this area.
3. There's a big problem with "flaking" in the Bay Area, where some people have a bad habit of standing people up on dates and other social outings. This has happened to me, and it is very rude and inconsiderate, especially with the busy schedules that many people in Silicon Valley have, as well as the traffic.
4. This is probably my most controversial point, but despite the Bay Area's reputation as a politically progressive place, ethnic minorities seem to have a harder time dating than non-minorities. This matters to me since I'm black, a rarity in Silicon Valley. While the statistics on this page from OkCupid (https://theblog.okcupid.com/race-and-attraction-2009-2014-10...) are not confined to the Bay Area, based on my personal experience and on empirical research I've done by reading other sites regarding the dating scene in the Bay Area, it is a problem here.
To be frank, while I enjoy Silicon Valley's career opportunities, the high cost of living and the difficulties I've experienced dating here make me want to research some alternatives, although as a lifelong Californian (but not a Bay Area native), I'm a bit apprehensive about leaving the state since I enjoy California's diversity and weather. I've thought about Tokyo, which I've lived before as an intern and absolutely loved, but it would be a massive cut in salary.
This has nothing to do with the dating scene, and I risk deviating from the topic, but I felt this indescribable, overwhelming sense of freedom as an African-American in Japan that I never felt in America. I felt the difference in treatment, where I was treated better in Japan than in America. Women in Japan wouldn't walk on the opposite side of an alley whenever I walked by, nor would they act scared whenever I was alone in an elevator with them (I had an incident in Sacramento as a teenager when a white woman refused to enter an elevator with me and another black guy.) I felt like I was in a place where I could finally be myself. To me, being a "gaijin" in Japan was an upgrade from being an African-American in America.
But at the same time I can sympathize in that street interactions in California have grown openly hostile across the board. The level of polite hospitality is so low and paranoia so high that it is actually hard to go outside and do business without ending up in a confrontation of some kind. Just the other week I was crossing the street in SF after seeing a movie[1] and a lady(a white lady) crossing the other direction gave me the finger and screamed "fuck you, fuck you" for no reason I could fathom.
We passed, and then I had a feeling of deja vu and thought, "didn't that happen the last time I saw a movie here too? Does this woman just go around in the evening cursing out strangers for self-care?"
And that is the kind of thing that sounds dreadfully believable for SF these days. The privilege spares me from most avenues of material loss, but that's hardly something to be proud of.
[1] The film was Sorry to Bother You, if it matters. I enjoyed it
Now if you are a girl, things are actually tougher in Asia.
I am also speaking from experience here.
Isn't this universally true and not based on location at all? I'm a bit confused by this point TBH.
I think what is universally true is that the ladies will go for the highest ranking guys they can get. What seems to be happening there is that gender imbalance accentuates the effect by raising the bar higher than it otherwise would be.
Whilst the no-poach agreements were wrong, I don't think comp was kept artificially low in the way you mean. What drives up comp in the valley at the moment is the existence of companies that make tons of money but have voting, share structures and cultures that don't incentivise them to return any to investors. The combination of huge profits, endless vanity hiring and no dividends or share buybacks is fairly new and it's not clear to me it's a good trend. I don't believe Facebook, Google or Twitter actually need all those engineers they're hiring.
And yes, I think that'd be the right thing to do. The sums of money we're talking about here are vast. They're not going to go into the pockets of some stereotyped "fat cat" capitalist. Outside of pension payouts they'll be reallocated to other companies that may be doing important things of the sort that big internet firms just won't tackle, like biotech/drugs research.
Look at it like this. Does Google really need to create yet another instant messaging product for the seventh time? Or would the capital used to do that be better re-allocated to some other part of the economy?
Say you make $150k. As far as I know that is around $100k after taxes i.e. $8350 a month. Say your rent is $4k and another ~$1k in miscellaneous expenses. That leaves you ~$3k in discretionary income and probably a bit less for saving if you want to have some "luxuries".
If you have been in the housing market for a long time or otherwise have a better situation your living expenses might be a lot lower. If you are paying $1.5k (upfront or de facto) in housing costs that might effectively double your savings i.e. what you get to actually control from your salary.
But it is sort of worse than that. Because every additional dollar you want to make gets taxed with your marginal tax rate. Meaning if you want to have the same savings as someone with lesser living costs you have to increase you salary quite a bit. In this case you have to go to somewhere close to $200k. Which is a pretty huge gap for something that doesn't have anything to do with your actual work performance.
Of course this can all get better or worse depending on circumstances. Still, it is a big deal.
Why do companies expect “loyalty” beyond the employer gives the employee a paycheck and the employee works X number of hours per week, doesn’t try to compete with the employer while at the company, and doesn’t steal IP?
Does the employee have an ownership stake in the company? If not, the only “skin in the game” they have is will they get paid next week.
The alternative is to admit that he's taking advantage of his employees because he can. Rationalization is much easier.
Most founders that I know do care about their employees, they want them to be happy, productive, and have a great career. It doesn't always work out, but the intention is there.
Companies are run and owned by people, especially the small ones, and people empathize and care about other people.
I’m not saying they wish their employees harm. But if you get hit by a bus tomorrow, your company is going to send flowers to your family and have an open req for your position before your body is buried. The company’s first priority is the well being of the company. Your first responsibility is what’s best for you. As long as those two things intersect, your company won’t let you go and you don’t have any reason to leave.
Everyone who works at a company has an emotional stake in the work, the product, and usually pride in what they do. That matters.
Yes, I take pride in my work and want to see my work get into production. But that’s separate from having any loyalty to the company more than I described above.*
Most founders that I know do care about their employees, they want them to be happy, productive, and have a great career. It doesn't always work out, but the intention is there.
Companies are run and owned by people, especially the small ones, and people empathize and care about other people.
I agree. But no company’s - especially one that is publicly owned or investor funded - first priority is its employees.
More and more companies will eventually recognize the talent abroad is how you want to supply your business, while the market demand you want will still remain in the U.S.
That is until those poor folks at Eastern Europe realise they can charge much more and the circle will repeat.
Generally this doesn't work both ways. If times get tight, engineers are among the first to be canned.
Good engineers command higher prices because they need the buffer to live on after that "loyalty" gets them RIFed.
you're not really making a case against the bay area, you're making a case for why companies outsource: low wages, low labor regulations, and a captive workforce available to be exploited.
Also, I think it's odd that you consider regional median and average wages to be exploitive.
Every Russian I've worked with that went to MSU or MIPT had excellent English, but they also all went to the US for grad school so I don't know how representative they are.
> abysmal dating environment
It's kind of funny you say that you're sick of people complaining about lack of diversity then you yourself follow it up with a complaint about a lack of diversity.
I also don't see how wanting more female engineers could get in the way of building products so I'm not sure why you threw that in there. It's not like people are staring at the wall all day pondering diversity issues instead of building products.
I hope it doesn't strengthen AAGMF further by making acquisitions cheaper.
It is the peak, the absolute peak of humanity's IT pursuits.
I am not American, nor live in US and never been or worked in/for Silicon Valley and yet this is how I feel about it. Sure, there are good times and bad times but just like wallstreet has remained global champion of the commercial world, so will SV. I have zero doubts about it.
Yes, it will remain a metonym.
> I am not American, nor live in US and never been or worked in/for Silicon Valley and yet this is how I feel about it.
All that means is the area has done a good job of branding itself.
Do you really want to have faith in a place that is likely ephemeral?
People once had this same degree of faith in the technology corridor of New Jersey.
Or a more sinister example: Detroit