Eventually the price of real estate and labor will be so high that the relative disadvantages of other locations will not matter.
They went up and down sandhill road/SF, and got a couple really lousy offers for funding, and were shocked at how harsh the VC community can be.
Their board member (one of our closest/best mentors) recommended they go back, but make the first slide in their pitch deck "We're moving to San Francisco." They got five term sheets in the first two days, ended up raising from a top-tier firm.
Yes, this is anecdotal, but no, this is not an exaggeration. You can raise money being unwilling to go to the bay area, but you have to have a really compelling vision/growth rate. People have to be fighting over you.
VCs are weird.
Oakland or something may be a different situation (not sure if doing the South Bay thing would even save you any money - Palo Alto ain't cheap), but anecdotally people in Utah get told the same thing again and again. You can stay in Utah, and costs will be way lower, but you'll probably pay for it. (Note: our company is remote with headquarters in Utah)
(East Texas is famous, or notorious, as where patent trolls like to file their lawsuits.)
Although given the history of this sort of thing, I guess it'd be more appropriate to call it the Maryland Shuffle.
[1] http://fortune.com/2015/07/28/zenpayroll-jobs-denver-colorad...
Things are not cheap here in Bend, but I have more of a feeling of getting in earlier, while things are still growing.
Didn't seem like much business was happening when I visited, though (other than tourism).
Is there a tech scene now?
Yeah - it's small, but seems to be taking off.
http://www.entrepreneur.com/article/223997
I had some doubts about moving back to the US from Italy, but so far we're really happy in Bend. We'll see how the winter goes.
I'm seeing the other side of the coin, where getting hired is proving very difficult. The joke here is even the dirtbag climbers have PHDs.
Or you could always move to Amsterdam: http://blog.booking.com/
Booking does have a somewhat strange reputation when it comes to their coding style, I'm not sure if I could really come on board fully with their workflow.
Ha. I haven't gotten a Perl job in Boulder since 1999, and I don't know if I've seen one posted since then, either. My expertise is a little broader than just slinging Perl, fortunately, but I do find it to be a most agreeable language to a creative, visually-oriented mind.
What am I referring to is the scenario where you can apply for a job, and rarely even expect to hear back from a potential employer, as the total number of people also applying makes that impossible. This, I don't think, is very different from other areas of the country.
Google moving to Boulder is sort of a mixed bag, and there is a number of people who are not looking forward to them coming.
Luckily there there are countries not far away (closer than most US states to Colorado) that provide some serious mountains. Imagine living in a large (fictional) cultural and tech hub in the plains 100 miles east of Boulder. That's what Amsterdam may be like in this regard (distances are off, but infrastructure looks much denser in the Netherlands and its neighbors).
The mountain side is still more distant than in Boulder, but "different country" means a different thing in Europe.
Right, I think that is a function of resume spraying, to be honest. I agree that it is pretty common.
Note to employers! You can stand out by treating applicants as human being and simply replying 'no, it doesn't seem like a good fit' when someone applies for a job. I love what Zapier does, for example--they respond to everyone.
I know they are building a bigger campus[0] so maybe they are having a hard time because it is a bigger number of reqs than in the past?
0: http://www.denverpost.com/business/ci_27063628/google-build-...
For a small company, I'd say the time/cost of hiring a few good engineers is way more than a few months rent. You'll certainly pay a respectable headhunter quite a bit.
We'll see. Perhaps it really will be an exogenous event which will halt the San Francisco craziness.
Many of the really amazing labor pool members are recognized as being amazing and are compensated and rewarded in such a way that it will be difficult to draw them away.
Then those that are looking are being courted by every other company.
The converse can be true - it can be much easier to get very high quality talent somewhere that there is not a massive labor pool. You'll attract the people who don't want to live in SF or NYC, or want a certain lifestyle, or to be close to where they went to college, etc. etc.
I'm not saying that starting a company not in SF is inherently better, but that "insurmountable advantage" is also one of the biggest disadvantages about SF. Your mileage may vary.
http://recode.net/2015/07/29/yelp-admits-the-unicorn-bubble-...
For some reason it has only occurred to them now that hiring for offices in cities other than San Francisco might help them get talented developers.
They're not opening up new offices, they're looking to hire where they already have offices like New York and Phoenix.
I live in the South of France in a big house that costs me $800 per month. I am about a 10 min walk from the TGV station that can take me to Paris in just over 2 hours. My kids are in French pre-k, I have top notch medical insurance that costs $139 per month to cover the whole family beyond the government insurance and I don't have to worry about my wife getting harassed by urine soaked homeless people at BART stations.
I can't speak for all engineers but given that there is an entire word outside of San Franscisco, I can see zero advantage to living there. Talent is there because they have to be. I'm sure a huge percentage would rather be working from a beach in Thailand or Tulum.
As far as investors, who cares? If you have a product people want to buy, investors will come to you. It's a myth that proximity matters. There were investors long before Silicon Valley startups were a thing. Plenty of billion dollar companies founded everywhere else. At this point, San Fran and the valley are prestige locations as opposed to offering any competitive advantages.
We could likely build an accomplished team in any major metropolitan area, but since our investors and board members are here (as are the other companies they invest in and manage), it makes sense to have the company here. (not entirely our choice, when someone invests millions of dollars into a company, they want to be close to it)
FOSS proved over two decades ago that you can build complex competitive systems with people you have never met. The fact that you couldn't make it work doesn't mean that it doesn't work. It means your company could not figure out how to make it work for you.
The experience of large companies that have large remote workforces and FOSS projects that have workers so motivated that they'll work for no pay probably doesn't translate well to a small startup that doesn't have the resources of a large company, nor the employees so motivated that they'll work for free.
Remote work, as you say, has it's challenges, and sometimes it's better to pay the money avoid the challenges than to pay the money to confront the challenges.
Large companies often have a ton of inertia, not a lot of competition, and they often take a very long time to fail. Just because they've started doing it, and are getting away with it for now, does not mean it's a good idea.
I'm not saying it's NOT a good idea, I'm just saying you can't tell based merely on the fact that they're doing it. They also have lots of employees who put in the bare minimum and punch a clock to draw a paycheck. Does that fly in a smaller, less well-funded company?
It takes work to establish your culture to work remotely well -- if you just hire some people that you only ever hear on Skype during standup and give them work, they don't become enmeshed in the fabric of the company. Cliques form everywhere but they can be especially brutal in excluding remote workers from the 'core' teams that are seen as successful within a company.
I'm sorry to hear it hasn't worked for you. If you attempt it again, make sure you evaluate whether you've built a culture based on 'being there' before hiring people who can't be. Lots of people make this mistake and just see cheaper workers.
Yeah, some teams like to take advantage of the far richer communication that's available in person rather than handicapping everyone to the lowest common denominator.
If you attempt it again, make sure you evaluate whether you've built a culture based on 'being there' before hiring people who can't be.
IOW, discourage informal social interactions between employees. Don't permit them to go to lunch together and talk at leisure about things.
Companies do not like spending money they don't have to. So since the Internet hasn't killed business travel, there must be a very good reason its still worth it.
I honestly do not believe for one second that this is a thing, or that it's a significant thing.
I would much prefer that my company let me work remotely. The Bay Area is full, seriously, and I'd be happy to work from many other places.
But denying reality doesn't help.
I think there are potential technical solutions to this problem (VR office at home), but I suspect it'll take legislation (aimed at getting vehicles off the road) to make remote work a real thing that a lot of people do every day.
And easier to disseminate. Searchability is far superior with tools than with voice conversations.
Two engineers talking to each other will share far more useful info than they will directly.
Is this really true? Seems far-fetched. Isn't that $20-30k higher than the Google base starting salary?
If you're willing to live a bit further out (like Milpitas/Santa Clara), you can live somewhere for under/around 2000, which (when split with a spouse/partner/roommate) can be reasonable given the salaries in the area.
Looks like I'd have to live with roommates if I moved out there.
Assume you're making 140k, after 10% retirement contribution and CA taxes leaves about $6400 per month net. With the average 1 bd apartment at $3200 now that's half your take home wage. Leaving $3200 per month is $800 / week. Or $20.00 an hour at 40 hours. Given typical start-up hours and not even counting the typical food/internet/car expenses. So, if you want to look at it as an all-in after expenses, yeah, even that kind of salary can feel like minimum wage. The economics of minimum wage here in SF are a LOT worse...
EDIT: And some that may not all be income tax? E.g. in Ontario one pays fed income tax, provincial income tax, Canada Pension Plan, Employment Insurance, and a few other I may have forgotten. In London, UK one pays income tax, national insurance, and council tax (property tax paid by property occupiers).
And for all that, we get to pay for our own health care and retirements too!
That said, I'd believe that if you include expenses like health care your net pay would be ~40% less than your gross pay. :P
Sure, a single guy can rent a single room and walk everywhere. Add in wife and kids and you need three rooms, a car, somewhere to park it. Schooling, activities, shoes and clothes, stuff...suddenly 140k isn't looking too flash anymore.
It's particularly jarring given how many of the same investors are arguing we should tear town universities and replace them with MOOCs, demolish shops for Amazon, and so on and so forth. Apparently face time and interpersonal interaction is an irrelevant artefact of the old world except when it comes to their own industry.
Many of them want to "influence' the companies they invest in, to give them the best chance of seeing a return. They feel they can't do that as effectively if they can't hop in a car and drive to the office quickly.
"I also don't understand why most startups need an office."
Many managers, startup or not, are afraid of remote work, and feel that not being able to see butts in seats means that people are slacking off.
"As far as 'access to talent,' that's a bullshit metric as well. Remote workers can be anywhere. "
But as we've established, most of these companies are not set up for remote work. As such, remote workers being anywhere isn't relevant.
"As far as investors, who cares? If you have a product people want to buy, investors will come to you."
Ahh yes, the old "meritocracy" myth. As it turns out, simply having a good product isn't enough to succeed.
"It's a myth that proximity matters."
Except reality has not followed your logic.
"There were investors long before Silicon Valley startups were a thing. Plenty of billion dollar companies founded everywhere else."
Yes there were. But it's significantly harder to do it elsewhere given the realities of the situation.
Feel free to start your company wherever you want and show us that we're wrong. I'd be happy to have the pool of startup locations be more diverse.
No, it's on the Chesapeake Bay.
Baltimore can be anything it wants to be, but what it's aiming at right now are a batch of far more conservative startups than you'd likely see in the valley.
B2B, marketing, government and fortune 500-based startups have every much the right to succeed in Baltimore as anywhere else, and with access to DC, certain markets are even better suited to Baltimore than to SF... but from everything I've seen, it would be a great deal harder to make something like Twitter work for a Baltimore-area VC, and where SF is killing it is in understanding the potential of network-effect startups that don't necessarily deliver immediate value, and to my eye, Baltimore VCs aren't remotely ready for that sort of gamble.
Shortmail and Sickweather are probably the closest I've seen to breaking that trend to date, but Shortmail's already shuttered, and I hope that doesn't sour the pool.
There's still incredible problems with getting good engineers to come to the general area as well: Baltimore/DC has SF-level cost of living but not nearly the amenities of the Bay Area. The weather here sucks most of the time, the general culture leans suit & tie, the traffic is just as bad if not worse, you don't have the redwoods/beaches/outdoor things nearby that many engineers tend to value. Moreover, there's still a major stigma against working remotely out here that hurts many East Coast businesses when looking for software folks.
It's a map of all murders in Baltimore, filterable by time period, race, gender, district, zip code, age, and cause of death. There are also some yearly charts below on the page.
What is going on with murders? 164 in the last six months, and they seem to be spread widely over the city, with just a couple murder-free sections (including one decent sizes one in the north part of the city, between 83 and 139).
Is those SF like art quirky culture areas, and the tech company areas, in the apparently murder-free areas?
For comparison Los Angeles has had 150 murders so far in 2015, even though it has 6 times the population [2]. Los Angeles county, with 16 times the population of Baltimore, has had 332 murders so far in 2015, so just over twice as many as Baltimore in the last 6 months.
(Both of the sites I cite are pretty interesting. Anyone happen to have a list of similar homicide exploration tools for other major cities?)
Note: I'm not trying to rag on Baltimore. Just astonished at the number and the geographic distribution of the murders there.
[1] http://data.baltimoresun.com/bing-maps/homicides/index.php?s...
[2] http://homicide.latimes.com/neighborhood/la-city/year/2015
If you're interested, there are several excellent explorations of the particulars of Baltimore's problems (which are present, usually to a lesser extent, in many other cities) from David Simon:
- Homicide: A Year on the Killing Streets (book)
- Homicide: Life on the Streets (TV series)
- The Corner: A Year in the Life of an Inner-City Neighborhood (book)
- The Corner (TV miniseries)
- The Wire (TV series)http://www.baltimoresun.com/features/baltimore-insider-blog/...
You may not agree with or value those things, but a lot of tech people do.
The largest single employer of tech workers in the world is probably the US military, and those tech workers definitely don't trend liberal.
As an SF Bay Area resident since 2009, there's no better place if you want a career in tech.
Yes, you can still have a great career outside of SF but it's a lot easier here.
I have lived and worked in 4 US cities and the best engineers are here. The selection of good jobs is immense. If you are a decent engineer, you have so many choices.
From what I've read in this topic and elsewhere, the cost of living is very high.
I'd rather not live in a city with as much of a chance of an earthquake as SF has. Living in a known disaster area just seems kinda off...
Then there's just personal preference.
I live in a city of less that 200K, and I find it to be larger than I like. The other day I hit stop and go traffic in a larger city, and found myself wondering why anyone would subject themselves to that on a regular basis. Or subject themselves to crowded mass transit systems, those crowds are a big part of why I use my car instead in my city.
And so on...
Consider someone who likes walking to work, groceries, and everything they need; hates driving and owning a car; loves having top caliber arts and entertainment; feels more alive living in a place where people are on the street; and enjoy an evening walking bar to bar drinking with friends and not having to worry about a DUI on the way home, cities offer a lot.
That is Boston, Manhattan, and SF in this country.
(Oh, and I can hold my husband's hand in the city without getting weird stares. That's not possible in many parts of the country.)
Some things I like about a few of those: Pittsburgh is the 2nd-safest major U.S. city for pedestrians (after Boston) [1], is nice and compact, and a beautiful setting in a valley at the intersection of two rivers. Chicago has one of two 24-hour rapid-transit systems in North America (NYC is the other one), a beautiful lakefront, great deal of ethnic diversity, and is possibly the best American city for skyscrapers (NYC is the only other contender). Atlanta is walkable/bikeable if you live in the city, has the 3rd-largest gay population in the U.S. (after SF and NYC), and is one of the leading centers of Black American culture.
Overall imo there are lots of interesting urban places to live, the main issue is just making sure to live in the actual city rather than the suburbs, if you want a city lifestyle.
[1] http://www.smartgrowthamerica.org/documents/dangerous-by-des...
Yeah but then your cost of living shoots up. I mean, I've priced Austin real estate. If I want to buy 2BR apartment in downtown Austin (the closest analogy to where I currently live in Brooklyn) I'm looking at half-million dollar properties. Which is fine for an NYC boy like me, it's what I'm used to, but then why am I moving again?
The value you are receiving is location.
If you do not care for location, then rent office space in Tennessee where you can pay less than 1/4 of SF prices.
Okay, you got the occasional clashes with other clans for land but hey, you could always move somewhere else. That's impossible now, given the massive numbers of humans on this planet.
http://tarlton.law.utexas.edu/exhibits/aztec/aztec_property....
I doubt there's ever been an urban culture that didn't have some concept of property ownership, whether by individuals, "nobles", or the state.
That said, it was never as simple as "everyone holds land in common and can do whatever they want with it individually."
There were full-scale cities in the Midwest and South, of course, but I don't think we know enough about those cultures to say what their property rights were like. I'd bet money they were a lot closer to the Aztecs than to a typical hunter-gatherer band, though.
The Tlingit of the Northwest also had a complicated system of property rights, including something akin to what we call "intellectual property" (though there were significant differences to our system). They also kept large numbers of slaves.
They only get to be parasitic when the real estate market is dysfunctional and supply is constrained, possibly artificially. In some sense they are acting as gatekeepers to a limited resource and providing liquidity by setting prices high enough that only those with need are willing to pay.
The landlords are therefore parasitizing the economy.
Although this article is about commercial space, residential space is just as outrageously priced. I think there should be three things that should never be allowed to be artificially restricted just for the greed of a few: food, water and housing.
Here's a good Economist article on this: http://www.economist.com/news/briefing/21647622-land-centre-...