patrick.net

Ceffer says

Cities won't go by the wayside simply because suburbs and their infrastructure are unsupportable without cheap and abundant energy, and even then, the cost to maintain them is too high.

Facts. Figures. Quantification?

I maintain the suburbs with people using their cars for last mile transportation to warehouse-retail is highly efficient.

I do agree with the rest of the argument...but in regard to the 30 obsolete metro areas. The only reason to sell density in these decaying cities is to land grab.

The numbers don't appear to be adjusted for inflation over the 22 year period. Without using constant dollars and specifying the base year, it's just a map of each city without much information about economics.

zzyzzx says

Obligatory....

No, it isn't. BTW, most of the naked guys weren't gay and didn't even live in the neighborhood; the district supervisor, who is gay and does live in the neighborhood, introduced legislation that limits public nudity. It was not something he had campaigned on, but it became necessary due to the excessive number of exhibitionists who descended upon the area, competing for attention with the usual deranged panhandlers.

What we already knew about SF is illustrated by this report of a certain doctor who got shut down for allegedly selling Oxycontin via a network of homeless (who probably got the pills at taxpayer expense via Medicaid). The local homeless industrial complex, which is a subsidiary of the national medical industrial complex, makes vast fortunes this way. With Medicaid expanding in 2014, we can expect 10 more Rx sellers to replace every 1 that gets shut down, and every industry participant gets a cut. Working families who had been living happily in the city's gayest neighborhood end up leaving SF entirely because of the scary drug addicts.

thomaswong.1986 says

you think our real competition from Korea, Japan, China and

Europe are also fooled over these media companies -- Facebook, Google, and

Twitter. They couldnt give a RATS ASS as they create real scientist/engineers in electronics, physics and chemistry to drive the next century

Here's the thing, what's happened in SV is that a lot of firms have developed a follow the leader mentality. Thus, they seem to need to hire from Stanford, UCB, Ivies, and like schools. And thus, they generate a Private Idaho mentality which is that that pool is the only talent in America. And of course, being in SV, well, it just feeds on itself as an endless loop.

In reality, you can just as easily form a programming & design talent pool of graduates, taking advantage of the i-90 rust belt schools: Rose-Hulman, Rensselaer Polytechnic Institute, Clarkson, RIT, WPI, etc, since these schools aren't targeted by management consulting and investment banking firms. I've also used interns from one or more of those places and it's worked out quite well, as they don't seem so *Goldman Sachs* oriented, as the Ivy Leaguers, but instead, put out good work. Typically, they look to get recruited by the likes of an IBM, Honeywell, T.I., & the US govt over Goldman, McKinsey, & Google which is pretty much the top 5 for Stanford & Ivy grads.

Since my firm is only focused on hiring top prop traders, they give me a lot of latitude in working with these students. What we don't have is that gaga attitude of "Oh, he's an MIT-to-Wharton man with 4 yrs programming *a terminal* at MSDW, let's get him & pay $200K+" and then, get into a bidding war with that guy's friends over at JPM. You see, our partners interview prop traders, who bring their dealbooks, and show much they've made money and in what types of markets. Those elite traders are worth millions whereas the current staff handles the existing support work of the pretenders, which is half of Wall St today.

Rin says

To elaborate a little ... the fact of the matter is that the *internet*, doesn't service a cohort of clients, based in the SF Bay area. Therefore, this eliminates the region as a key determinant in the need for internet based services there. Next, if I were a tech company, I'd rather recruit engineering students at a Rensselaer Polytechnic Institute in upstate NY over Stanford Univ in SV, because I wouldn't want to lose my potential recruits to a Goldman Sachs/MSDW or management consulting firm, since what I need them for is technical work, not selling BS.

You are correct that you can hire plenty of engineering graduates elsewhere, but if what you need is engineers experienced in building high-volume sites or a myriad of other technical issues related to internet development, then you need to hire in SF/SV. I work for a company that has offices in much cheaper locations, and all things equal I would rather hire in those cheaper locations, but I can't find the engineers that I need.

Also, you are overlooking the fact that access to VC money is still a lot easier in SF/SV.

Overall, it's going to be a while before SF/SV is supplanted.

thomaswong.1986 says

all it takes to have Silicon Valley, in your region, is what SV had in the beginning, but no long can provide.... Cheap Land ! and that will provide for Cheap Skilled Labor ( incl Engineers).

This is a ridiculous comment. Cheap land doesn't produce cheap skilled labor in sufficient quantities absent other reasons for people moving there. SV's cheap land lured people, because it also had a great climate, and other amenities. Cheap land isn't luring anyone to upstate New York.

JFP says

and all things equal I would rather hire in those cheaper locations, but I can't find the engineers that I need.

Right now, the cheaper locations. i.e. Dallas, are considered cultural wasteland, esp by folks who'd grown up on the coasts and thus, those companies don't attract the talent nor experience pool, as needed.

On the other hand, IBM R&D in Burlington VT has attracted a lot of candidates from those rust belt schools, as well as professionals in New England/upstate NY because it's in a quieter region with better quality of living standard.

In a sense, my firm is using this model for our technical needs, as a lot of New Englanders would rather be able to work near their hometowns w/o having to rush to the sunbelt or Cali.

And what all of our candidates seem to have in common is this lack of desire to be in SV, if they can help it. Somehow, being trapped in an endless office park is a lot different than being in a New England town where there's always some local culture at any time.

Rin says

On the other hand, IBM R&D in Burlington VT has attracted a lot of candidates from those rust belt schools, as well as professionals in New England/upstate NY because it's in a quieter region with better quality of living standard.

Part of the reason this works is that they have a core of experienced engineers who can guide the new engineers. The real issue I'm grappling with right now is that the product cycle for the internet is so fast that I can't wait for engineers who are early in the learning curve to come up to speed.

JFP says

that they have a core of experienced engineers who can guide the new engineers

I concur.

Rin says

Right now, the cheaper locations. i.e. Dallas, are considered cultural wasteland, esp by folks who'd grown up on the coasts and thus, those companies don't attract the talent nor experience pool, as needed.

The other issue is that people want to know where their next job will be. The concentration of companies in SV means that the people you hire know that they have options if your company doesn't work out. So, the concentration of talent and companies is self-reinforcing.

Rin says

And what all of our candidates seem to have in common is this lack of desire to be in SV, if they can help it. Somehow, being trapped in an endless office park is a lot different than being in a New England town where there's always some local culture at any time.

For Thomaswong, Norman Rockwell is alive and well in New England.

During the past two decades, one of the key reversals is that the Mamas/Poppas "California Dreaming" has been overturned. In my prior meetings with HS and College alumni, one of the big topics was that a lot of our friends/acquaintances have returned from California to the New England/New York region because Cali was rude, cold, and ppl didn't interact outside of their work, hiking, or school associations.

It was the diametric opposite of our childhood conditioning where the northeast was suppose to be rude/alienating but Californians, open and friendly. Now, it's the opposite, esp if you leave the NYC metro area. And given the cheap flights to the Bahamas, many would rather take 2 weeks off to go there, to escape from Jan/Feb, than to live in Cali again. I wouldn't have believed it, decades ago, but I think having a region where there's history and culture, over weighs having buzz/spin but ppl living in their own bubbles. Yeck, even Buffalo NY is known for its friendly ppl & that place has been in an economic depression for over 3 decades but if you're a Bill's fan, you'll always have a friend there.

Rin says

In my prior meetings with HS and College alumni, one of the big topics was that a lot of our friends/acquaintances have returned from California to the New England/New York region because Cali was rude, cold, and ppl didn't interact outside of their work, hiking, or school associations.

Why do you hate bitter, competitive, nasty materialistic yuppies? They make the best liberals. Maybe its the vegan appetite disorders and roughage intoxication combined with too many frustrated expectations. If you tell Cali people there are places where the neighborhoods don't have fences, they will look at you with dazed amazement.

If you smile at somebody in a Cali suburb, their faces contort into an electric mask of snarling confusion. Who the heck do you think you are, and what's your agenda? The faces of some of the older women behind the wheels could peel paint. When people are nice and hold a non-agenda conversation, we always ask where did they come from?

Of course, it is a big place, and there are pockets of niceness and generosity, but finding them sometimes require a major mining operation, and people are always moving away.

Rin says

In reality, you can just as easily form a programming & design talent pool of graduates, taking advantage of the i-90 rust belt schools: Rose-Hulman, Rensselaer Polytechnic Institute, Clarkson, RIT, WPI, etc, since these schools aren't targeted by management consulting and investment banking firms.

this is true, as has also been the case with SV.. while in the past not many from Stanford or UCB... certainly many from local rust belt schools (if you can call it) like
san jose state, Chico, SLO, and Sac... your truly came from San Jose State Univ.
which contributed over 30,000 engineers during its hay day..

And I agree, we have lots of great potential talent from other rust belt schools you
listed. I would throw in future engineering from local community colleges getting their feet .

wet very early.

JFP says

I work for a company that has offices in much cheaper locations, and all things equal I would rather hire in those cheaper locations, but I can't find the engineers that I need.

your never going to find the right candidate who fits all of the 10 points you are seeking. this has always been true, especially in the hay day what was tought
last year in college already became obsolete.

You find the closest candidate with potential to learn and grow... its up to you
to teach and spread knowledge... yep ! the next step is your ability to train
and become a leader...

Rin says

Right now, the cheaper locations. i.e. Dallas, are considered cultural wasteland,

welcome to SV in the 60s-80s and today... but if your spending 50+ hours at work
your not interested in distractions like culture ... mad scientist comes to mind...

JFP says

Part of the reason this works is that they have a core of experienced engineers who can guide the new engineers. The real issue I'm grappling with right now is that the product cycle for the internet is so fast that I can't wait for engineers who are early in the learning curve to come up to speed.

Thats the fun and pain of working in tech.. it moves really really fast.. and YOU are
going to sacrifice much to get up to speed... no one ever said its easy M-F 8-5 job!

JFP says

The other issue is that people want to know where their next job will be. The concentration of companies in SV means that the people you hire know that they have options if your company doesn't work out. So, the concentration of talent and companies is self-reinforcing.

at one time, you could walk across the street during lunch and bingo you got a new
job in a matter of a few days or a week.. but thats over ! companies have agreed
not to pouch each others people and many have moved out staff too far to make
it impossible for many to switch jobs easily... besides .. there are too few companies left for much to happen in SV.

Rin says

During the past two decades, one of the key reversals is that the Mamas/Poppas "California Dreaming" has been overturned.

Im a metal guy! VH, Priest, Maiden, GnR etc

agree with your other comments.

Rin says

Aside from those, who'd grown up in the Bay Area (and thus, know of no other place call home), I wonder why others are attracted to SF?

Over 40% of American venture capital is spent in the San Francisco Bay Area. In 2012 we got about as much as all of Europe, China, India, and Irael combined. As bonuses the climate is pleasant and San Francisco a nice enough city.

New England as a whole and New York City take second and third place domestically at around 10% nationally although both have unpleasant climates and I wouldn't want to live someplace as urban as New York.

Beyond that in practical terms nothing happens in the rest of the country. The entire Pacific Northwest and Colorado State each get just 2%.

Rin says

Can't any of those companies be located in Boulder CO, Nashville TN, Atlanta GA, Houston TX, etc, and in effect, perform similar tasks, since the actual customer base is not the Bay Area?

Theoeretically yes, although more people win here as early employees after which sticking around to leverage their personal networks for human and venture capital is the best start for their own ventures.

As a tech worker choosing to live in any of those places comes at an enormous cost to your career since the paucity of companies makes it impractical to find viable combinations of technology, company life cycle, and business plan.

I wouldn't choose to live elsewhere again unless I didn't have to work for money.

APOCALYPSEFUCKisShostikovitch says

Interesting. Last time I was in town, SF Symphony was playing Mahler 9, his final symphony and it was 25% empty on a Friday night. Amazing for a city of this size and stature. Glasgow and Buenos Aires has better attendance.

The night scene isnt what it once was..

Symphony, Dance Clubs, etc etc ....

pretty dead !!!

drew_eckhardt says

Over 40% of American venture capital is spent in the San Francisco Bay Area. In 2012 we got about as much as all of Europe, China, India, and Irael combined. As bonuses the climate is pleasant San Francisco a nice enough city.

which in turn is spent setting up shop and hiring staff in Europe, China and India..and other states (texas or new england).... not going to find itself on the next Crab dinner in SF.

its no longer the 80s or 90s...

SF doesnt get much of this as was the case in the past

bla - bla - bla - bla.....

thomaswong.1986 says

at one time, you could walk across the street during lunch and bingo you got a new job in a matter of a few days or a week.. but thats over !

It's not over.

companies have agreed not to pouch each others people and many have moved out staff too far to make it impossible for many to switch jobs easily... besides .. there are too few companies left for much to happen in SV.

The agreement was ony between a few big companies, it led to a class action lawsuit, and is done. There are plenty of companies left in Silicon Valley although the center is shifting north towards the city where kids want to live these days.

It's a seller's market for competent experienced technical people who do decent jobs promoting their personal brands. Recruiters contact me daily Monday through Friday about engineering positions and not infrequently about technical director positions I might take if I was looking. One day I went out for coffee and accidentally got a job offer that evening.

drew_eckhardt says

The agreement was ony between a few big companies, it led to a class action lawsuit, and is done. There are plenty of companies left in Silicon Valley although the center is shifting north towards the city where kids want to live these days.

Kids ... no not that Social Network shit again... Real tech people have years of experience under their belt... what some KID wants isnt what companies need.

drew_eckhardt says

It's a seller's market for competent experienced technical people who do decent jobs promoting their personal brands.

Personal Brand.. oh come on there is no such think as you can apply some marketin crap on their employment status... there is no room for ME, Myself and I... you need to work with people ! its about WE and US.....

APOCALYPSEFUCKisShostikovitch says

Ceffer says

Of course, it is a big place, and there are pockets of niceness and generosity, but finding them sometimes require a major mining operation, and people are always moving away.

Talking to a buddy whose been through three start up, all in infrastructure software niches no cares about, and he's getting out after the next sell. Can't take it any more and doesn't want his kids to have to live in the nightmare SFBA has become.

Interesting. Last time I was in town, SF Symphony was playing Mahler 9, his final symphony and it was 25% empty on a Friday night. Amazing for a city of this size and stature. Glasgow and Buenos Aires has better attendance.

Have you seen the denizens that haunt Market Street and the Mission district?

No time for fancy-pants, 90 member, multi-stringed concertos when I'VE GOT YAMS TO PLANT AND MINGUNS TO LUBRICATE!!111

drew_eckhardt says

Recruiters contact me daily Monday through Friday about engineering positions and not infrequently about technical director positions I might take if I was looking. One day I went out for coffee and accidentally got a job offer that evening.

As so I, all they are doing is collecting Resumes... they been doing it for decades..
... today offers are 3-6 months away.. forget what ever happened 5-6 years ago...
its a different world.

thomaswong.1986 says

Over 40% of American venture capital is spent in the San Francisco Bay Area. In 2012 we got about as much as all of Europe, China, India, and Irael combined. As bonuses the climate is pleasant San Francisco a nice enough city.

which in turn is spent setting up shop and hiring staff in Europe, China and India..and other states (texas or new england).... not going to find itself on the next Crab dinner in SF.

Although both manual and knowledge assembly work have moved to low-cost places the vast majority of product development for venture funded SF Bay companies happens here.

Off-shoring core product development isn't viable unless you send skilled technical leaders to live over-seas, hire talent, and lead it in the right direction. Most Silicon Valley people aren't going to do that to themselves or friends.

Off-shoring in this situation will become reasonable as foreigners gain institutional learning (for example, I worked with and learned from Digital Systems Research Center and Bell Labs alumni) in America and move back to where their salaries pay for live-in servants but we're not there yet.

thomaswong.1986 says

As so I, all they are doing is collecting Resumes... they been doing it for decades..

... today offers are 3-6 months away.. forget what ever happened 5-6 years ago...

its a different world.

Provided that you're more than an assembly-line worker as of 2010-2011 offers weren't days away on the receiving side. Hiring 2011-2013 it's the same.

drew_eckhardt says

Although both manual and knowledge assembly work have moved to low-cost places the vast majority of product development for venture funded SF Bay companies happens here.

you can check with the local firms and how many R&D jobs were sent to other states just look at their jobs board... it obvious we cant afford to keep everyone here any longer...

drew_eckhardt says

Although both manual and knowledge assembly work have moved to low-cost places the vast majority of product development for venture funded SF Bay companies happens here.

enough people and facilities to have production back in the states... i say redo detroit and get people to have jobs... VC money would server better as it
circulates in the USA and not in Asia....

thomaswong.1986 says

It's a seller's market for competent experienced technical people who do decent jobs promoting their personal brands.

Personal Brand.. oh come on there is no such think as you can apply some marketin crap on their employment status...

There is although most engineers aren't good at it and don't enjoy it where it doesn't happen incidentally to something else like free-software work.

there is no room for ME, Myself and I... you need to work with people ! its about WE and US.....

Looking after your own interests and being a team player are not mutually exclusive. In fact the two are very interlinked. Getting good results for your company increases your value to them and others. Multiplying your team members' success through leadership is great for everybody.

Within one company executives have a fiduciary duty to the share holders to be as profitable as possible which means keeping compensation packages low without causing turn-over which is expensive. Getting a nice package requires bringing your value to the executives' attention which is marketing and negotiating for more which is sales.

Sometimes a company ceases to be right for you and you should apply the same skills to securing a better position.

Both things are completely orthogonal to being a team player and driving shareholder value for your current company.

It's like free-agency in American spectator sports. You play hard for your current contract this season (project) and perhaps to get to the championship down the road (product and liquidity event) but are smart about getting the next one.

As a guy not into such sports (rugby is a lot more exciting than American hand-egg) I'll use a bad example. Tim Tebow did a good job playing for the Denver Broncos, but has since moved on to the Jets and Patriots.

thomaswong.1986 says

your never going to find the right candidate who fits all of the 10 points you are seeking. this has always been true, especially in the hay day what was tought

last year in college already became obsolete.

You find the closest candidate with potential to learn and grow... its up to you

to teach and spread knowledge... yep ! the next step is your ability to train

and become a leader...

I don't disagree with this, but you still need a core of engineers with experience, or else who is going to train the new engineers?

drew_eckhardt says

The agreement was ony between a few big companies, it led to a class action lawsuit, and is done. There are plenty of companies left in Silicon Valley although the center is shifting north towards the city where kids want to live these days.

It's a seller's market for competent experienced technical people who do decent jobs promoting their personal brands.

Agreed. Good engineers have no problem finding another job in SV. Anybody who argues otherwise is incorrect.

drew_eckhardt says

As a tech worker choosing to live in any of those places comes at an enormous cost to your career since the paucity of companies makes it impractical to find viable combinations of technology, company life cycle, and business plan.

I wouldn't choose to live elsewhere again unless I didn't have to work for money.

This is why the concentration of companies in SV is self-reinforcing. People know there are plenty of companies to work for, and that makes them less willing to move elsewhere.

thomaswong.1986 says

Thats the fun and pain of working in tech.. it moves really really fast.. and YOU are

going to sacrifice much to get up to speed... no one ever said its easy M-F 8-5 job!

Trust me, I know it's not an M-F 8-5 job. I don't think I've ever worked those hours, and I certainly don't now.

JFP says

I don't disagree with this, but you still need a core of engineers with experience, or else who is going to train the new engineers?

yep... and as such I do the first round of training.... its my job!
later i do job rotation and the staff cross train them self. '

thomaswong.1986 says

enough people and facilities to have production back in the states... i say redo detroit and get people to have jobs... VC money would server better as it

circulates in the USA and not in Asia....

Everybody has fiduciary duty to their investors.

Sometimes that's best served by quickly recruiting a team which is excellent and will interact well with executives working out of the founders' headquarters. The economics there (chance of success, total money spent getting to a win) dictate locality.

Sometimes it's served best by finding the lowest labor cost.

Detroit doesn't fit either category. It's not local and you can't hire software engineers there for 500,000 Rupees a year which is $8066 at current exchange rates and much better than the $15,080 US minimum wage (given 40 hour weeks with no vacation) to say nothing of the $60K average among entry level software engineers (via salary.com) and $90K average across software engineers of all experience levels.

JFP says

drew_eckhardt says

The agreement was ony between a few big companies, it led to a class action lawsuit, and is done. There are plenty of companies left in Silicon Valley although the center is shifting north towards the city where kids want to live these days.

It's a seller's market for competent experienced technical people who do decent jobs promoting their personal brands.

Agreed. Good engineers have no problem finding another job in SV. Anybody who argues otherwise is incorrect.

sacred cows... you can axe everyone else but not the R&D people...

so let the blood bath begin...

Customer Support,
Sales Admin,
Marketing,
Professional Services,
Accounting,
IT, HR
and who else is left...

Ugh! is that enough sacrifice already,
just dont let any engineer lose their job!

drew_eckhardt says

Detroit doesn't fit either category. It's not local and you can't hire software engineers there for 500,000 Rupees a year which is $8066 at current exchange rates and much better than the $15,080 US minimum wage (40 hour weeks with no vacation) to say nothing of the $60K average among entry level software engineers (via salary.com) and $90K average across engineers of all experience levels.

from the CEO perspective only the Sales process matters,,, nothing else...

R&D work on long term projects so they are not important on daily or monthly basis where they are at ...Sales people are already in the field generating orders. Mfg can be anywhere as well.... since they only fill the warehouses and provide drop ships to customers.

at the end of the day/month/quarter its always about Revenues and Expenses and the CEOs daily question... "where are we at now" during the exec staff meetings.

visibility only comes from a handful of Sales admin and Accounting folks at HQ.

I wish we could have opened up North Bay and further South of San Jose

to increase facilities and jobs ... but state of CA doesnt want real Tech jobs

and Mfg...We (CA) have not been so open to keeping jobs in the state...

we demonized too many entrepreneurs and business people in recent decades.

I think for the time being, there's a certain preexisting momentum, from having Oracle, eBay, & Google in S.V. And thus, if the leaders sort of *stick around*, then others will follow suit, in terms of financing start-ups and looking for bigger M&As, down the road.

Still, from the perspective of the actual work, it seems to be a bit of a high cost region, for development when historically, ever increasing R&D costs have always been the first thing which CFOs look to trim.

Realize, DuPont grew around Wilmington DE (ala very affordable), not NYC nor Boston, and of all the old R&D industries, it had the highest number of patents in chemical processing. This had worked until they decided to offshore R&D in the 90s/00s and now, that DE company is a part of the rust belt. Likewise, as Proctor & Gamble acquired northeast companies, like Vicks in New Haven or Gillette in Boston, it looked to trim headcount and move the work to the Ohio Valley.

thomaswong.1986 says

sacred cows... you can axe everyone else but not the R&D people...

so let the blood bath begin...

Customer Support,

Sales Admin,

Marketing,

Professional Services,

Accounting,

IT, HR

Startups are team sports.

Profits are what result when you multiply business proposition * implementation * marketing * sales * support and subtract what you spent getting there.

A value too close to zero for any factor makes for negative and otherwise uninteresting outputs.

You can't profit from a product the target market won't buy because it doesn't solve a problem or that problem is adequately addressed by established market alternatives.

You can't profit if the customers don't buy the product or return it due to low quality from bad implementation.

You can't sell efficiently without high quality leads generated by marketing.

You don't make money when sales doesn't close those leads.

Customers don't come back and look elsewhere when their support experience is inadequate or they get the impression that's the case when they're shopping.

Physical proximity of all elements improves communication and makes things better.

Some elements (HR, accounting, etc.) don't feed directly into the equation for success but aren't significant cost centers and moving them elsewhere reduces your odds because that decreases the cycles other people have to spend on the product.

If you get to the big company stage where you survive by not sucking too much more than the competition (as opposed to beating their market alternative by 2-10X where the high end is your target and 2-3X work sometimes) you can afford to maintain the status quo by outsourcing although you should do better by finding new distruptable markets you tackle like a startup. For instance Google's self-driving cars, Uber, and robotics projects could completely revolutionize transportation and suck up a substantial fraction of urban travel costs where the average American spends $8200/year on their car.

Making the status quo inexpensive also has its limits with profits dropping as you get to the last stage of the technology adoption life cycle. Microsoft is not winning given market alternatives of smart phones (as of Q3 2013 Android Linux had 80% of that market, iPhone 12, and Windows Phone 3.6) and tablets (66.7% Android and 29.7% iPad by units, 46.2 and 45.6% by revenue).

Smart executives know this and act accordingly.