Comment by 11thEarlOfMar | Hacker News Reader

Comment by 11thEarlOfMar | Hacker News Reader

The fundamental design of the Internet was to be robust against various forms of damage to the network. I see Silicon Valley as a similar type of system. It is not difficult to look back 40 years and see how at each inflection point, The Valley's constituent technologies, and the companies they spawned, led the rest of the world and scaled The Valley up.

- In the 1980s, Silicon Valley's Intel lost it's dominance in DRAM production to Japan. The economic impact was dire, and yet

- In the early 1990s, networking and workstations emerged from the likes of SUN and Cisco. They carried through until global competition stole their wind, and it was on to

- The late 90s and the .COM boom. And what a boom it was, Amazon, Google, followed by another death knell for myriad .COM corpses. Promptly engendering

- The 2000s birth of social media. MySpace faltered, then LinkedIn, then Facebook, then Twitter, came up and are still going strong on the foundation of

- 2010s open source platforms. Still mind-blowing: At one point WhatsApp had 40 software engineers and 400,000,000 users. At 3 years old.

I've heard about the exodus from California, usually citing so many thousands or 10s of thousands of people leaving. But looking a the net population changes, Santa Clara County is down 5,000 from 2018-2019. Alameda, San Mateo, San Francisco are all up.

Silicon Valley is a system that regenerates from one generation to the next, and so far, always bigger and more influential than the last.

The difference between all those eras and today is the bandwidth of a home Internet connection. Virtually everywhere in America, and much of the world, now has cheap access to 100+ mbps connections. Even during the 2008 recession, ultra-clear high-definition video conferencing wasn't possible.

Add on top that the Covid quarantine has completely removed all social stigma or weirdness around remote work. You have a never before seen threat to high-cost/high-productivity powerhouse metros like SF, NYC and DC.

I’m curious to know whether it is your definition of “virtually everywhere” or “cheap” that is very broad?

Yeah, I definitely disagree that it is "virtually everywhere" or "cheap", but I definitely agree with the parent's overall point that it is way more ubiquitous these days by orders of magnitude. To the point where it enables a lot of things that were pretty much impossible back then, both in technical aspects and societal/job market aspects.

Maybe he is writing from the near future where Starlink is fully operational :-)

Joking aside, globally available broadband from space would be a huge game changer.

85% of Americans have access to 250 mbps broadband in their local market.[1] Prices for Internet only packages are typically cheap in the US. For example I pay $40 a month for 100 mbps (and usually get 125+ mbps). This price is about typical for the major providers.[2]

[1] https://docs.fcc.gov/public/attachments/FCC-20-50A1.pdf [2] https://www.allconnect.com/blog/cost-of-high-speed-internet

> 85% of Americans have access to 250 mbps broadband in their local market.

It's meaningless if it's available “in your local market” but not at your address. I really can't imagine any real use for that stat except exaggerating broadband access.

It’s hard to look at your list and be impressed with Silicon Valley since around 2010.

The 2010s seem to be a decade where existing giants scaled, without any fundamentally new technological developments.

What makes me despondent is back in the 1970's 1980's much of the commercial work in the valley was about creating new technologies to empower people. Since 2010 it seems it's now mostly about exploiting people.

1975: National Semi, our new audio amp allows people to buy cheap high quality stereo's.

2010: Ubber, our app that ratfucks the taxi industry.

Or Uber: the business that allows me to drastically reduce the probability of me being scammed by a taxi driver, as well as increase the quality of the cars themselves

Source: my numerous experiences with taxis in multiple cities in the US and around the world before and after Uber

Or Uber: A failed Randian play to use VC money to squelch out every independent taxi company in the United States and the world by subsidizing rides to well below their cost. To the tune of $1B per quarter. I suspect they thought they could drive them all out of business and then take over and raise prices. Unlike their patchwork of independent competitors, Uber didn't have to cover the cost of a ride from fares.

I guess now they deliver lunch so that's pretty cool.

I for one look forward to the movie.

If it was a physical product it would be considered dumping and be illegal.

Not to mention Uber and Lift don't pay for the roads their businesses depend on. And then Uber and Lift have dramatically increased congestion in a lot of cities. Which negatively impacts people that live in those cities. Finally both Uber and Lift are applying political pressure to eliminate mass transit.

No idea what ratfucking is, but the willful ignorance in your examples is almost comical.

Example 1: innovations in technology & clever business model put previously expensive thing in reach for an order of magnitude wider audience, leads to significant qualitative shift in behavior/capabilities for the average person.

Uber: Exactly the same thing.

Why are you so offended about the harm to the taxi industry, what about all the vacuum tube manufacturers put out of business by semiconductors? Innovation has always involved creative destruction, but for some reason there's a bigger than usual portion of society now that is completely unwilling to acknowledge utilitarian benefits and wants to make all change illegal. And the even greater tragedy is it's always the comfortable, well-off upper middle class making these arguments on behalf of the working class, with absolutely no skin in the game because they will never be the first ones affected by the negative consequences of their absolutist worldview.

Couldn't vacuum tube manufacturers pivot to semiconductors, at least somewhere in the production process.

Nope - only in the sense of your great grear grandfather's axe after your grandfather replaced the head three times and your father replaced the haft twice and the head is now a sledgehammer. Vacuum tube making is about metalworking essentially. Sure you can swap components between the wires but manufacturing of vacuum tubes is entirely different than silicon and even they needed new fab processes for nanometer changes.

Lightbulbs and would have been a better pivot (with or without a gas in the medium for neon lights or CFBs) at least until LEDs finished them off.

Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).

The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.

Also, the argument on Uber/Lyft drivers not being contractors since they can't set their own rates and decide which ride they take strikes me as weird since medallion drivers were contractors, had to charge the price set by the city and could only pick-up customers in the (arbitrary) zones covered by their medallions.

And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).

[0] https://news.ycombinator.com/item?id=24225648

Maybe the cure can eventually become worse than the disease? Also, as terrible as the medallion system is, the taxi industry weren't uniformly as bad as SF's in every region, so ridesharing probably unintentionally wiped out some quality cab companies in the process.

I've never heard anyone say that pre-Uber cab companies were better. But I could always be wrong.

Taxi industry had its karma coming. Prior to Uber, ratfuckers would sit behind the wheel and rip off the clients.

Maybe there was some place in the world where taxis were clean and taxi drivers honest, but in my corner of the world they were synonymous with low-key mafia.

In Prague (in 1997, at least), the taxis were literally run by the (Russian) mob.

Oh, yeah, I was 19 at that time and I avoided them, they were up to no good. This strange combination of sleazy and menacing at the same time. Precisely the type of people you do not want to join in their car.

Therefore they mostly preyed on international tourists at the airport.

It's a fair point. What's engaging is that typically, the nature of the next emerging cycle is not evident until you're well into it. I started to write a list of possible break-out technomarkets for the 2020s from The Valley, but I decided I'd rather not and be 'surprised'.

One aspect of the scale these companies are achieving is the political implications. Yes, the worry in DC over their manipulation of human nature, but it's also issues like the headbutting of the gig-labor lifestyle against tax policy right in California. Pushing technology forward eventually encounters politics and it's interesting to watch these firms gird up for that battle.

If you want fundamental new technological innovations, startups are a better place to look.

Altough, for example, the work Google did in the 2010's in machine learning does seem fundamental.

Wait what about smartphones, tablets, IoT, etc? I know that they started earlier than 2010 but I feel like the huge improvements and democratization of cloud computing, machine learning, etc (available via the "open source platforms" I believe the parent is referring to) made the 2010s the era of ubiquitous smart devices. Alexa, smart TVs, drones, misc tracking/monitoring technologies are the new normal, not to mention the sharing economy tech of the Ubers and AirBnBs, and digital payment tech like Square/Venmo + cryptocurrency in general.

Am I, like, way off?

No, you're entirely correct. People frequently mislead about the advancements Silicon Valley has made because it makes them feel good to bash it.

There are dozens of companies not named Uber or Airbnb that have come out of SV in the past 10-15 years that lead the world at what they do. You won't see the SV bashers talk about any of that, they go out of their way to avoid that point in fact.

Where is the Cloudflare of Europe? Doesn't exist.

Where is the ServiceNow of Europe? Doesn't exist.

Where is the WorkDay of Europe? Doesn't exist.

Where is the Palo Alto Networks of Europe? Doesn't exist.

Where is the Twilio of Europe? Doesn't exist.

Where is the Snowflake of Europe? Doesn't exist.

Where is the Splunk of Europe? Doesn't exist.

Where is the Okta of Europe? Doesn't exist.

Where is the Veeva Systems of Europe? Doesn't exist.

Where is the Zoom of Europe? Doesn't exist.

Where is the DataDog of Europe? Doesn't exist. (DataDog is NY, however they have an office in the SV area as well)

And on the list goes. These are massive, wild success stories. Most of them are already big companies and they're growing fast. With few exceptions meanwhile most of the rest of the world not named China is asleep, and SV keeps on conquering markets and building giant software companies.

Where is the global competition for these companies? It largely doesn't exist, they're going to keep on with the SV traditional of pushing out of the homogeneous US market and scaling up globally and building giant companies.

The comparison being made was of SV of today vs the SV of yesterday not SV vs Europe.

By the way, of all the companies you listed, only Zoom and Snowflake were actually founded after 2010. And that's the point. In the past 10 years, we haven't seen any Googles, Apples, or Microsofts emerge, despite eye-popping levels of venture investment -- which is a bit disappointing.

Isn't SAP the WorkDay of Europe? Some of the other companies you've mentioned are also in spaces that likely have European (or non-SV) players. Auth0 is based in Seattle, for instance.

As an aside, ServiceNow just become a $100 Billion company today.

>The 2010s seem to be a decade ... without any fundamentally new technological developments.

I wouldn't go that far. The cloud became a thing in 2010 and from that big data appeared allowing data science to appear.

The 2010s is the era of data science and ML, which is a larger leap than many give credit for. The 2010s are just like the '80s in that new technology appeared, but end consumers didn't see much of a difference until the late '90s. Just yesterday CA gave a license to GM to legally allow fully self driving cars.

I think one difference is the existing giants have smarted up to the fact that new competing startups can be existential threats to their business like they were to their former incumbents, and have started putting much more focus on gobbling them up with cash before they become fully fledged competitors instead of trying to out-compete them.

The problem here, innovation toxic venture capital, that outspend the old risk capital guard.

These new - "outsiders" usually spend huge sums on leveraging what is essentially just technology used for union busting and abstracting away wage slavery.

Its a capitalists idea of innovation, and it small dreams. You don't need to invent a alexa (the device), if you can drive down the wage of a person to near zero and own a alexa (the person).

They already had that back in ancient rome- and thus never developed the Greek steam engine.

To become really innovative at scale again, the valley needs to exorcise those tech external investors.

Smartphones? iPhone 3G came out in mid-2009 and Android brought smartphones (and computing in general) to hundreds of millions or billions more price sensitive users

Detroit was the Silicon Valley of its day (roughly from 1900 to 1960 or 1970). Center of the tech universe. Cranking out modern wonders on a seemingly weekly basis. Awash in cash.

Look at it now. Things go on as before, until suddenly they can't.

Certainly no city is recession-proof, but Detroit _was_ almost totally invested in a single economic industry: car manufacturing.

Silicon Valley's emphasis - digital computing devices and software - fuels multiple economic sectors. It seems far more diversified than the auto industry.

But tech can also pick up and leave much faster and required less reason to stay clustered (factories, transporting materials, supply chain etc). Add in the fact the world in general turns faster, I don't think SV can keep the tech industry for how long Auto Manufacturing remained in the Mid-West.

Doesn't SV also have a significant chunk of the biotech industry? Even if software departs doesn't mean other forms of high-tech, with talent and research funneled in by Stanford, Berkeley, etc. will follow suit.

SV is also great for the non-compete (it's a California thing but shines especially bright in the Valley), formal mentoring with a strong presence from Stanford and incubators like YC and informal mentoring where the younger generations are inspired by what was built by the previous ones.

And the lack of stigma for failing plus having a world class city right at the door. Very few places can replicate that.

"the exodus from California"

AFAIK California tends to bleed wealthy taxpayers, not population as a whole.

Data indicate the opposite, that is the wealthy who can afford to stay and the poor who cannot afford to live here: https://calmatters.org/california-divide/2020/01/not-the-gol...

I wonder how the tax burden is distributed. I know next to nothing about California system, but here in Europe it is typical that financial investment gains etc. fall into a low bracket (usually 10-20 pct), while highly paid professional employees pay through the nose, easily more than 50 pct of their gross wages.

Taxes are not the problem, the astronomical cost of housing is. The problem is arguably that property taxes are comically low, and thus there is no penalty for the older anti-growth population that has worked so hard to pull the ladder up behind them, and instead they become rich by destroying the poor and leeching off the tech industry via its workers rents.

It's the same in the US.

I did the math on my taxes somewhat recently and between federal income taxes, social security, and medicare mine was about 27% on 221k income as a single person with no kids in washington state and I'm including the employer payroll costs and taxes as part of that because it's basically the same thing as income taxes. Long term cap gains is 15-23%. For California, you'd probably add like 10% to both income tax and cap gains as it is a high income tax state whereas washington has no income tax.

I get about 33% for that simple case (single, $221K W-2, WA, add the employer portion of payroll costs [same as employee contribution]). It's ~28%% without the addition of employer FICA.

210 w-2, 19k 401k, 50k income taxes, 11k employer FICA, so about 61/221 = ~27.6%

You’re eventually going to pay ordinary income tax on the 401(k) money, so I think you need to either include it in both or exclude it from both rather than treat it as entirely non-taxable as you’ve done above.

California doesn't really care how you earn money. For the most part they tax it in the same set of tax brackets.

The federal government is a different story though.

The California state income tax rate is basically the same as for capital gains. But there is a difference federally. So in some states you would indeed pay a lower capital gains rate, and because the federal rates are lower on capital gains, Californians do pay lower overall taxes on capital gains than regular income (there are technical words differentiating capital gains from other income, don't remember it right now).

I think a rough rule of thumb is that very high earners will pay slightly more than 50% of income of wages on taxes (state and federal) in CA and about 24% of capital gains income on taxes, before various deductions.

But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; making up that difference is partially why other taxes and fees are so much higher in California.

> But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states;

Well, the assessment rule is part of it, but prop 13 also limits the property tax rate as well as the assessments. Even with full-value assessment, California property taxes would be in the bottom half of states due to Prop 13 rate limits alone.

wasnt whatsapp built on 2000s technology (in fact much older, Erlang)? The 2010s were a net negative to technology, it's big corps sucking up everything to their "cloud" monopolies, and the deterioration is very visible in lots of older products (whatsapp would now need 4000 growth hackers and a gazillion dollars in AWS credits to boot). AI is keeping the hopes up though

Silicon Valley survives because VCs with more money than they know what to do with like the local weather. It's like Hollywood, which has had many boom and bust cycles of its own, yet it's always there because the people with the money decide to stay, so that's where you go if you want your film project financed.

Do the VCs tend to insist that the projects they fund are also located in the Valley? If so, why?

It's not so much insisting as it is the path of least resistance.

It's just that things tend to happen much more quickly, easily, and serendipitously if you live in the VCs' neighborhood. It's the same thing as why people advocate for being physically in the office, for face-to-face meetings and "passing in the hall" moments.

Lots of them do or at-least require the project to move here. It's not for a nefarious reason but rather to help them. If they need advice, more engineers, a CTO, some PR people, etc the VC has all their connections here so bringing the project here is more feasible.

VCs have some set percentage invested in commercial and residential real estate there as well as a hedge

Hollywood is an artificial monopoly. I just hope with the recent surge of more "indiehackers" and bootstrapped businesses, it means VCs arent held up as arbitrary gatekeepers to capital and starting a startup.

Hollywood is not a monopoly. There are thriving movie industries in other countries and even with the US (see NY and Georgia, for example). Hollywood is simply the biggest and most successful of the movie industry centers.

There is also an entire system of independent film studios and theaters in the US.

I think I read on HN a while back that Silicon Valley is mostly a gigantic wealth transfer from investors to landlords by way of tech workers.

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