Comment by epenn | Hacker News Reader

Comment by epenn | Hacker News Reader

I would love to see something like this. I think this shouldn't just be limited to one city or industry though. Assuming that this is successfully attempted in one city, it might be a good idea to try it in other cities while focusing on various industries that speak to the existing core competencies of that city. So for example, a Detroit version of the Autonomy Fund could focus on funding autonomous individuals within the automotive industry.

As for choice of initial tech hub, my vote goes to Pittsburgh. The population size is [roughly] what you're going for at ~300K. The housing market here is great. It already has a tech-friendly local government. Plus Carnegie Mellon is here, ready to feed top young CS talent directly into the autonomous positions.

For what it's worth Pittsburgh was also voted as the most livable city in the U.S. a couple years ago [1]. I might be biased since I live/work in Pittsburgh and take CS classes at CMU, but by that same token it also means I'm speaking with first-hand experience.

[1] http://www.marketplace.org/topics/life/news-brief/its-offici...

Pittsburgh would be a great choice, I agree.

Do you think the local government would invest?

As I work on the idea, I'm starting to realize that it needs to involve public and private investment. The problem seems to be to convince investors that we can audit the programmers. I'd probably need to hire a well-known programmer as, at least, an advisor. Even if he didn't want to make the decisions and conduct the interviews, it'd be huge to have his name on the letter.

The cities where I see the best odds of this taking shape are: Austin, Pittsburgh, Madison, and Portland. Apologies if I missed one; there are plenty of other good places, but those are the 4 that would be the big targets.

I agree that one city is just a start. The concept needs a pilot, but ultimately the goal isn't to make one specific city a new Silicon Valley (if that happens, I've failed) but to encourage more equidistribution of talent and, as a nice side effect, also squeeze out the real estate assholes (who take advantage of the fact that our career needs force us to crowd into expensive cities).

Once it's going multi-city, though, I'd need someone else to run it. I could be the lion for a couple years, but eventually I'd want to get back into code.

I don't think Pittsburgh has the funding to do it. You're looking at a budget of ~$450mm.

I think the funding, rather than the locale, is the blocker here.

How much money do you think it'll take? I'm thinking single-digit millions per year. First class would be about 28 people. So that's $3.5 million per year.

Salary plus tech budget is $125,000. That's half-decent but not great, and by design. I'm looking for entrepreneurs, not salarymen (who'd command $150-250k at the level I'm looking to hire). It's not the extreme low salary of bootstrapping (negative including business expenses) but it's not cozy either. That's sort of what I'm aiming for: a middle path between might-fuck-up-your-family-life-bootstrapping and not-really-an-entrepreneur-VC-funded-salaryman.

I'm also thinking that it would be useful to find private investment with 1:1 matching. So local governments would only have to kick in half the initial funding requirement

But doesn't it cost more than $125k to pay a $125k salary? I've been told that it's about 1:1 if typical benefits are involved. So a $125k salary costs $250k.

Not sure why you'd think benefits are involved here. And a $125k salary does not cost $250k.

It would be great if an HR director could weigh in on how much a $125K salary might cost in total compensation with a "standard benefit package" range for a technologist/programmer/engineer role.

The only other data point is from the Bureau of Labor Statistics Employer Costs for Employee Compensation (BLS ECEC) where it shows at the bottom that benefits accounted for around 30% of total compensation and 70% going to wages & salary[1]. On average, this means that a $125K salary would cost a company $179K overall.

[1] http://www.bls.gov/news.release/ecec.nr0.htm

It doesn't cost that much either. [1]

[1] Ex-CTO

Those ratios are for average salaries, not $125k salaries.

Assuming total compensation of $200K, 1:1 private/public funds, cohort of 28 gives a yearly burn of $5.6M ($2.3M for the local municipal to raise) for, say, 5 years = $28M (3yrs = ~17M) during (or hopefully after) which they want to see a payout coming directly from the AF's revenues.

You mentioned 37.5% earlier, but the city would probably expect you to model this in such a way that X% will be duds, so their return will most likely be much lower than 37.5%. 10x-100x VC-istan-like hits should not be banked on given the sole purpose of the Autonomy Fund is to create medium-growth companies (10%-40% p.a. growth rates).

Perhaps factor in a legal, HR, accounting, IT and facilities teams for AF-backed individuals (i.e. backend G&A organizational infrastructure) @ 10-15% and your baseline burn rate should be adjusted accordingly. Let's say $6.5M per year, of which $3.25M comes from municipal/state/federal public funding.

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