patrick.net

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.