Bringing Silicon Valley to the Midwest
blog.expensify.com
blog.expensify.com
They'll speak English, share a common-ish culture, and have gone through the American educational system so interfacing with them isn't nearly as hard as real offshored employees or contracted firms. They'll also be within continental U.S. time-zones. You want to solve work visa problems? This is how you do it.
I've met a few entrepreneurs who were self-funding and thus really cared about their burn rate while building their product who opted for teams of devs in overlooked places in the U.S.
If you want a starting point, checkout towns near DOE National Labs. They're usually out in the middle of nowheresville (because of nukes) and are full of incredibly educated, qualified people, who may have moved there for lab work and ended up not like the stifling academic environment of National Labs. There resumes may not be a string of startups, but they're used to working on bleeding edge stuff and the cost of living in these areas is generally pretty low.
The rest are in major metropolitan areas, or very close by, such as: Livermore, Brookhaven, Argonne, and NREL (among others).
One thing you might notice is that many of the more out-of-the-way labs are on or next to the campuses of large universities with strong technical bases that maybe you didn't know about, like Iowa State for Ames and West Virginia University for NETL.
It was a bit surprising to me, but each lab really seems to have a completely different overall culture set, and then it splinters even further within each group. I worked at Livermore one summer, and the differences between them and Oak Ridge (my current employer) are stark. Part of it is that these labs do a lot of local hiring, so they get shaped by regional values.
Conversely, my significant other is an experimental nuclear physics PhD candidate who works at Brookhaven. Their stuff is open and international, while the labs I've worked at have very strict guards on information sharing and international collaboration.
Livermore may be fundamentally a nuclear security/weapons lab, but they also morphed into a HPC and biotechnology lab, while I worked in more of their general energy research directorate, which covers everything from hydraulic fracturing and carbon sequestration, to novel enzymes for breaking down free methane. To give an exmaple, I never interacted with the people working at the National Ignition Facility, nor was I allowed in their building except on a tour (it was an awesome tour).
Oak Ridge has a general Environmental Sciences Division, which ranges from genetic engineering, to ecology, to soil sampling, to water power technologies research. That's just in the single building where I work, and these are just small subsets of current missions, while labs have specialties in certain areas, such as Livermore being great for lasers, or Argonne being known for transportation research. Oak Ridge has a big campus, and it's easy to never interact with other buildings. I believe both Oak Ridge and Livermore have 7k+ employees.
The labs are also managed completely differently. Livermore is technically run by a corporate board after it was restructured away from the University of California system, maybe 10 or so years ago. Lawrence Berkeley Lab I believe is still in the UC system. Oak Ridge is managed by a combination of Batelle and the University of Tennessee. I want to say Fermi and Brookhaven are managed by national physicist groups or something, although I'm not certain.
And finally, of course, the overall lab culture is influenced by their hiring practices and regionality. Before I became involved in this system I had no idea they were all so different, and the really amazing breadth of projects across all the labs. Hope this helped elucidate it a bit.
I don't think they think things through very well when it comes to labor relations in general.
A house in Palo Alto, CA costs more than the exact same house in Dexter, Michigan. If they were made of the exact same materials on the exact same size of land, you wouldn't expect them to cost the same either.
Pay levels based on location seem like a good way for companies to "save" money by providing a convenient excuse to pay someone less for the same work.
If, after the obligatory expenses like housing and food, the employee has more after tax dollars to spend on whatever he wants and in many ways a higher quality of living (better housing, better control over crime although that's looking to change WRT California, etc.), is he getting cheated as you imply?
I've lived in the Boston area and the D.C. area for a dozen years each, and have now moved back to my smallish home town in SW Missouri ... the differences are staggering.
Look at imroot's policies: https://news.ycombinator.com/item?id=7568217
Officially the same pay, but the people in California get an extra 1K/month for their higher living expenses. Heck, the Federal government does this for civil servant compensation.
Flip side: if the company is nasty, it'll tie up it's outside of California employees with non-competes---although that could be a bit tricky, given that it would get no support in the California state courts. How would you establish jurisdiction in the employee's home state?
Don't think of it in terms of gross dollars. Think of it in terms of standard of living. A skilled engineer is going to have an upper-middle-class standard of living, regardless of location.
It doesn't. Your unwillingness to relocate does.
Everyone has their own reasons for where they're willing to look for work and why. But those reasons, your reasons, have a price tag attached. To you, your reasons + your salary is equivalent to a SV salary. (Else you'd relocate.)
Similarly, companies who are unwilling to allow remote workers and/or choose not to build remote teams aren't paying more because of their location. They're paying more because they value having their employees at their location and that value is greater (to them) than the difference in SV salaries vs the midwest.
"One". Wish this was in more standard use.
If you don't understand it further, feel free to take the midwest salary and try and live in San Francisco or NYC.
You're thinking of this as advantaging you, getting SF pay for working in Idaho Falls, but you need to think of is that salary in Idaho Falls is the "normal" base salary, everybody earns at that rate, and cost of living adjustments are paid on top of that base salary for people in expensive areas to create as equal of living conditions as possible in more expensive areas.
This is so commonly understood that nobody bothers to break it out that way except for the Federal Government pay scale. Everybody from Podunk, Nowhere gets excited when they get a job in the big city because of this pay differential on what they'd make where they live. Except the cost differential is similar and when they arrive they suddenly realize it doesn't buy them anything more.
By paying people "the same" at the base salary, your salary model would disadvantage people working and living in cities such that they could not do it and companies that need to be in cities would be unable to function.
Companies with large workforces in cheaper areas could also not pay their workers SF/NYC salaries or their costs would simply overcome their revenue or if they can manage it, they may as well have just hired in SF/NYC in the first place and realized better efficiencies of physically working together. Your robot is a poor substitute for actual face-to-face interaction and introduces lots of inefficiencies into communication.
Not all jobs for a company need to be in the expensive areas, so it would make more sense for companies to push those jobs to cheaper areas. But some jobs do need to be in expensive areas for efficiency. Cities exist because of those efficiencies. However, being a city with 5x population of Idaho Falls doesn't mean you have 5x the resources, so demand drives up the cost of goods and thus the cost of services rise and thus it simply costs more to live there.
Companies wish to continue operating, so they need people to be able to afford to live near where the company needs to be (which is dictated by the efficiencies of the city). This is reflected by pay differentials for people that need to live and work in these cities. Nobody can live in SF or NYC on Idaho Falls pay.
Unfortunately, the dominant housing policy regime of restrictive single-family zoning and auto-oriented transportation, which significantly limits new housing production in the most productive areas of the US, causes high wages and growing populations to lead to lead to extraordinarily expensive, overcrowded housing.
Our HQ is in Chattanooga, TN. Many of our engineers interned or worked with Oak Ridge Nat'l lab while at university.
The majority of our employees are not from Chattanooga, but ended up choosing the southeast or midwest over SV - we constantly hear from amazing engineers/ designers/ sales people in Nashville or Atlanta (both ~ 90 miles away), as well as Memphis, Knoxville, Birmingham, research triangle (NC), and of course SV, NYC, Chicago, etc.
In our opinion, great people live all over the place for a multitude of great reasons. In our case, Chattanooga had A. excellent quality of life & B. reasonable cost of living. We still spend a lot of time in the Bay Area and have built an incredible network, but not every 10x engineer wants to live in SoMa.
It would be a great triumph if the tech industry found a way to function without needing to move every software developer internationally into a the 48 square miles of SF plus a small corridor down the peninsula.
I've read about startups in Baltimore, St. Louis. These are bustling, interesting old cities with cool architecture, walkable downtowns, great old gardens and museums, and vastly lower rents. If the tech industry could find a way to convert some of those 110K a year jobs in SF into a large number of $95k a year jobs in cincinatti or st. louis, it would have an exceptional effect on the world.
And you know, if you are paying $110k in a place where a reasonably nice 3br house can be had for $300k, I'd be a lot more receptive to worries of a worker "shortage" than if you're offering that salary in a place where a 3br house is $1.1.
So all I'm really saying here is good luck, I hope this works for everyone involved.
Most of the Midwest doesn't have a dying need for "The Valley". This article reads a bit like SV is the saving grace of the Midwest, If only those people had access to tech.
I think there's a very healthy tech scene in many areas of the Midwest. I live in Minneapolis and there are plenty of local companies doing well with local people. There are also quite a few local resources for entrepreneurs without the need to be involved in SV.
For starters: http://tech.mn/
The only real job offer I got in Indiana was a one year contract for $30k/year in Fort Wayne, which was less than half the salary for the non-contract position I took in California. There is no sane cost of living adjustment that will cause those to be comparable.
TL;DR Don't overlook low-cost locales for talent.
Checking online in Kansas City, MO. 13,000 SF of office space runs < $10k/mo. That's a bargain. Spot checking other places (Colorado Springs, Nashville) doesn't run too much different.
To me, it's shocking that anyone would start a business out there. (Okay, not really... there is a lot of money out there and it flows much more freely. But I couldn't personally justify spending my cash on 2.5x more expensive real estate!)
One point that should be mentioned it that both STL and KCMO have significant violent crime problems. The STL crime rate has been improving impressively. When I went there recently, I was shocked by relative improvement. Neighborhoods that were dilapidated in the mid-00s are now happening spots.
Flee the coasts! Opportunities await in the country!
The team here in STL started out in late 2012 as one guy in a coworking space. I hired on eight months later. Another few months after that we picked up a third person and the company leased us a space, bought us video conferencing gear, gave us a budget for supplies and stocking the fridge, and has been super supportive of whatever else we might need.
I've been really happy with the whole arrangement. Collaborating over video conferencing and chat is pretty easy and I've rarely run into situations where I really felt out in left field. I've found that when I've visited the actual office, people have a fairly "heads-down, get your stuff done, and generally use asynchronous methods to bug people" work style anyway (and a lot of people prefer to work from home one or two days a week rather than ride Caltrain), which lends itself ok for remote teams.
There are quite a few companies I'd love to work for as a Product Manager, Solution Architect, or Community Manager (I've done a lot). But I can't even entertain the idea because I can't leave MN.
I'd even consider a part time commute story as well (fly there once a month or something).
It's rough!
Still looking for a way to get back home, though. There have been so few options, and none where I felt I'd be able to advance my career. Self employment has always been the most attractive option.
I loved the upper peninsula when I visited years ago. and it seemed /dirt/ cheap, I paid $20/night for a motel. Plus any place with Cornish pasties at every stop steals my heart.
If that's true, I for one hope they don't change their position. We're building one hell of an engineering team and much of it is from the midwest. If other folks figure this out, I'd have to actually compete for the best developers!
Alternatively you can get in the door of a brand name company by doing QA for a year or so.I have multiple friends that transitioned from a liberals arts degree to being developers by first starting in QA. It's totally possible.
Internships are also a good way to get your foot in the door.
The way to play this is to go into an organization with a good brand name, work hard, focus on automation as much as possible and if they won’t help you transition over to being a developer leave after two years for a place that will. Having a good brand on your resume will open a lot of doors. Also, if you are going down this road its a good idea to build a portfolio of software on github.
Devops is also a good option to consider. It really depends on what your background is and what skills you bring to the table.
The one thing I would note, is that QA generally has lower prestige/pay then dev, so if you want to move to dev, be careful about things. Make sure any QA job you take has a significant development component, ideally letting you design and implement decent-sized projects you can point to when interviewing for a dev role.
If you have more questions, email is in profile.
Outsourcing is exactly what it is. Nothing to be offended about.
If they are actually hiring the people (as it seems the author of the post had happen to him eventually), then it isn't outsourcing anymore.
I think outsourcing is either motivated by 1. cost, which does not necessarily have anything to do with quality, might just be that the cost of living is very different, and the cost of living difference in this case seems to be non-negligible. 2. Expertise; we, as a company, don't want to/can't have an X department, so you guys can take care of it.
A possible barrier to productive outsourcing is a mismatch in cultures. In that case, you can't really blame the outsourced party for not being American/German/Austrian... This is a thing that can mask itself as incompetence.
The situation described in the article has nothing to do with outsourcing, but building a remote team, both foreign and domestic.
Using the term "outsourcing" does a disservice to those employees. Since the Midwest was mentioned specifically, I had a similar reaction to the one you had for my comment.
Also, virtually every company in the world outsources. Do you use an external account for tax compliance? Outsourcing. Do you have a lawyer that's on a contract? Outsourcing. You got that advertisement created for your online ad campaign from a marketing company? Outsourcing.
Using the word outsourcing here is not correct. They are paying full-time employees and managing them as such.
I have two teams -- one in Cincinnati, and one in Walnut Hills, CA. On my teams, I have a blend of about 60% onsite and 40% remote workers. I pay equally across the board, with the guys in CA getting an extra $1K/month due to the insane cost of living. I hire wherever I can find talent, and I find technology that works to bring us together as a team regardless of our location.
I have since heard that there were plans to upgrade backbone service to the local town 13 miles away. Supposedly, an insurance company was going to host a call center there -- although that part of the story and the party involved sounded suspicious.
If you all want to explore whether this location might be one you want to add to your list, shoot me an email. (Regardless of whether it does anything for me, personally. I'd like to see the town do well.)
Approximately 15 miles of Lake Superior shoreline, extending inward 3 - 5 miles, in the eastern part of the park over a series of parallel ridges that are remant uplift of the old Lake Superior syncline.
One road around the boundary, and another up to a scenic overlook. The rest of the park is accessed by trails.
If you like hiking and camping, or want to spring for one of the better cabin rentals, it's a gorgeous, peaceful place.
I'm also on the market for remote work. Same username on Twitter.
I live in California, two hours away from the Bay Area, and I still cannot convince employers to hire remote. Yet they still send me recruiting emails.
37signals.com/remote/