Why Silicon Valley could become tomorrow's Detroit | Hacker News Reader

Why Silicon Valley could become tomorrow's Detroit

politico.com

28 pointscryptozeus9 comments

The thing that the article hints at most correctly is regulation. There is very little regulation on software practice and as that sets in, as the industry matures, talent and funding will be more widely available by redefining common practice.

For example, speaking to increased regulation, today I noticed a senate bill that chips away at section 230 so that victims of sexual exploitation can sue porn content hubs.

That has to be one of the most ridiculous titles.

Nowhere does the article come close to explaining a ‘Detroit’ like scenario.

It does talk about realistic challenges SV must face.

A Detroit like scenario means effectively an exodus of jobs, which technically is happening in smaller companies due to remote working and stuff - although FAANG are trying their best to force their employees to come back.

I don't think we'll get a Detroit, but we surely might get an OnlyFAANGs situation in California, as startups soon realize that value can be unlocked in places other than SV.

Force? Silicon Valley engineers are not serfs.

You are still serfs if your job is tied to your Healthcare and/or possibly work visa, and if you can't survive otherwise. I'm sure you'd find a job very quickly, but I assume a lot of FAANG engineers still love their paychecks.

Article makes the right thesis, with the wrong points. Just because the biggest financier is Saudi owned doesn't mean Sand Hill road is going down. But in a way, the biggest SV VCs such as Sequoia, Accel, a16z, have all begun focusing outside of SV and looking at more regional companies - and a number of former classmates who are partners at these firms tell me that's not going to change any time soon.

Tbh, I feel remote work and big corporations moving out will further accelerate the decline. It's far easier for a tech firm to be a regional monopoly, than to come to SV and fight it out with an SV tech firm, eg: Lyft vs Ola or Didi or Grab.

The biggest appeal of SV is the startup environment, which admittedly does feel a bit suffocating at times.

They may be shifting their focus now because there’s more capital to invest than good opportunities in SV. But two things- that’s not going to last forever, and the pay off for non SV could be fundamentally lower due to worse access to target markets and talent, and different regulatory regimes.

It’s very much TBD that you can take Sand Hill road and move it to Texas.

Not at all. They all mentioned effectively "better opportunities". There's a high chance that a copycat product in a developing market will give much better returns than a copycat in SV, and since the business model might have been fairly validated, they don't have questions on that front either. Capital doesn't explain setting up multiple offices in the same countries/regions and hiring more investment partners to scour for opportunities.

The payoffs in non-SV are precisely higher because of worse access to target markets and talent, and different regulatory regimes. That creates a large barrier for entry, where only tried and tested localized business models can succeed. For instance, Uber is still throwing all they have into India and yet losing more than Ola, Uber had to give away a lot of ground to local players in South East Asia and Europe such as Grab or Meituan, a lot of unicorns are being made possible because of legal gray areas, and different regulations effectively trounce foreign business models while boosting local ones.

I think you're making a key mistake of conflating non-SV as within US. A lot of Sand Hill road funding goes abroad, often a lot to India and China. And apart from say a 3-month sojourn at YC, there really isn't much value for even a SaaS startup to continue on in SF. On the contrary, I know a few founders personally who didn't find any fit with YC's proposition, and still got funded by the likes of Sequoia and Kleiner Perkins without even stepping foot in the Bay area.

It's going to require some extreme climate change effects for silicon valley to come anywhere close to approaching a "Detroit of today" scenario.

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