patrick.net

I joined a private club a while ago. A member of the welcome committee is a smart woman RE developer, really into startups and liked my credentials and ideas. (For me, starting a company is more like an adventure, for fun, and to learn something, and to improve oneself; money is tertiary.) So at our first luncheon, she introduced me to an ex microsoftie, a chubby guy in an ill-fitting, bland sport coat. I forgot his name. He did a small company that packages promotional materials on CDROMS for small companies.

Needless to say, I wasn't impressed. I understand there's a lot involved in running a company and making it work. But, what for? That? Precious years of one's life wasted on that? You've got to be kidding.

I guess the fact I was raised in an environment where there was little mention of money making, career, hard working, earning a living, etc., all those traits related to the striving middle class, made me quite cynical and occasionally distancing.

To each's own.

I'd agree with that. Trust funds in the East, dead dreams in the West, and salt of the earth in the middle.

And there's more high tech and high tech start ups in Ohio than there are in the bay area.

It's not the 1960s any more, it's just not.

the ones who made the most money in the American Gold Rush were the ones who sold the shovels.

That makes for nice folk wisdom, but if you read some of the economic history of the westward expansion you'll be saddened to learn that nearly all the "wealth created" came from ... you guessed, it: real estate. Most of the rest came from transport and agriculture. Very little ever came of pickaxe sales.

VC firms use both other people's money _and_ their own money. I've yet to meet a VC, from associate up to partner, who doesn't have significant skin in their funds. Most of their income to speak of comes from carried interest, which is directly related to returns generated. No need to cry for those "other people" who put up the money, either. Limited partners are generally significantly wealthy individuals and private funds representing significantly wealthy individuals.

That makes for nice folk wisdom, but if you read some of the economic history of the westward expansion you’ll be saddened to learn that nearly all the “wealth created” came from … you guessed, it: real estate.

Plan:

1. Sell shovels to hopeful "gold-rushers" who have bought real estates
2. Buy real estates from foreclosed "gold-rushers" who are now disappointed
3. Get rich
4. Go to (1)

"No bias here"

Well, maybe just a teence. :)

Randy and I have talked about this before and that's why I left it open. When you look though at the way Sam Zell or the Walton family conducts themselves or the Wrigley family and contrast that w/ The Donald?

Last I heard... "most" mid-westerners shun self-promotion. They tend to leave that for "other" folks. WB is well known but I don't know if it's b/c of anything he's consciously done?

Drew? Can't say I know him but that's what what the "OR" stands for!

RE: the gold rush mentality in Silly Valley, the legions of engineers and "entrepreneurs" who come here to become start up fodder have exactly the same mentality as aspiring movie stars or pro athletes (football, basketball and baseball, specifically). They are motivated by a small, select, but highly visible group of mega-stars who are hugely successful, but in the end only a miniscule fraction can reach the top of their respective pyramids. In return for the chance at the top, they give up almost everything. It's yet another great Ponzi scheme.

Good to see the trolls still love me.

Ohio is a terrible place for tech companies. There are many better examples. Michigan for example. Ohio is pretty much terrible for most everything right now, complete with plenty of broken dreams even without the benefit of a tech startup culture.

Original Bankster,

"Trustafarian" made it out West a long time ago. They seem to like to populate ski towns as "ski bums", dressing like dirtbags. At least in the 90's, these dudes usually had dreaded hair, hence the terminology.

Ohio is pretty much terrible for most everything right now, complete with plenty of broken dreams even without the benefit of a tech startup culture.

Does the tech startup culture include sushi? :)

Horatio Alger was the original Chuck Ponzi, perhaps. But then again, the American Ponzi has been going on for a quarter millennium now. At what point does it cease to be a pyramid and start to be an economy?

Ohio is pretty much terrible for most everything right now, complete with plenty of broken dreams even without the benefit of a tech startup culture.

Sounds like not much has changed since the Pretenders' song came out...

>> At what point does it cease to be a pyramid and start to be an economy?

When it starts doing something useful -- so far the schme has been to earn money without doing an honest day of work. For example bankers charge interest on money which they do not own.

>> nah, most people think you’re a pompous ass.

I agree -- Silly Con Valley s full of such people ....

so far the schme has been to earn money without doing an honest day of work. For example bankers charge interest on money which they do not own.

What is wrong with that?

Well, taking money you didn't earn by work used to be considered a bad thing. I think it was called usury or just plain crime.

I could walk into the door of a hi-tech place in Ohio and be fairly considered for a job. There are quite a few hi-tech places out there too. The BA is extremely grim for hi-tech unless you're a Chindian.

Not saying the BA isn't good for some other things, street musicians can make out well there, come up with some gimmick to sell at flea markets and you'll do well out there, stuff that requires simply a lot of people around who would respond to a little cute knick knack, getting their picture drawn or even their face painted, stuff like that. You gotta be GOOD and preferably keeping every dollar out of the hands of The Man as possible, but the BA is a good place for stuff like that.

The BA is extremely grim for hi-tech unless you’re a Chindian.

News to me. Please explain.

Well perma renter has a negative attitude about start ups. I would say its nice to have the option to work at one. Why not move to france where most kids out of school supposedly want to get a government job?

I worked at a startup once and one of the founders gave me great advice, he said at my age I should work at a start up about 6 months, if at that time it looks like it might take off- stay, if not move to next start up. (its funny a month later I quite his start up- it was shit -some 'real estate portal' bs hehe i decided they were dead when the closed the office, asked us to 'work for stock options' and moved the servers to a guys garage.....)

If you did this you could hit 10 starts ups in 5 five years and might be able to cash in at one of them. Remember, you can ALWAYS get regular job. I got tired of the start ups and have been a self employed consultant. This is an awsome way to make top dollar for minimum hours expended (billing hourly rules!) but you have to be experienced (which you can get at start ups). Being in tech is still an awsome career IMO - so many options include the old 'gubbermint job'. And half the coders I meet do not even have a college degree. Where else can average people make 100k (half of them with no college degree)? and thats not the 'rare case' pulling 100k thats average, lowest tech salary in CA is probaby 60k - anything less is no experience/h1b.

The concept of usuary begins with the bible. God states in one of his laws that no one shall charge his people interest. This proved to be impractical so a reasonable amount of interest to cover opportunity costs and losses was deemed to not be usuary.

Anyway, the concept of banking and lending is morally sound. Without interest no one would lend and there could not be commerce. Even an equity partner demands a share with no upside limit, therefore a loan at a contracted rate is more attractive. Nothing is free and a borrower benefits by having money now verses not having it at all. A bank isn't given the money to lend either. A bank pays individual depositers interest and then lends that money out. The economy is based on the multiplier effect of banks lending money, that money then goes into another bank where it is loaned out, and over and over. It's actually a very interesting system, and is the foundation of a capitalist society.

Make that depositor, instead of depositer.

The BA is extremely grim for hi-tech unless you’re a Chindian.

The BA is extremely boring.

A bank isn’t given the money to lend either. A bank pays individual depositers interest and then lends that money out.

Malcolm, that is what the banks sneeringly refer to as "retail money." It is not the main source of the money they loan.

In an attempt to try and get us back (or slightly back) on focus -- I was talking to someone who was in town for the HQ biotech gathering a couple of weeks ago. He said the downturn is bringing more money into his VC firm. Pensions/retirement funds usually have two different pools dedicated to venture capital and private equity firms (that were relying on cheap money to do the buyouts that were all the rage the past couple of years). As the credit crunch hit, the money dedicated to funding private equity firms is now going into the VC pool as the buyout opportunities fade away. Anecdotely, I know someone laid off from a biotech firm that got another job rather quickly. I don't think that biotech will save the Bay Area, but we do tend to be a bit internet/tech centric on this board. Remember, as someone once said, tech innovation (networking/computers) is not an end in itself, but all about creating the infrastructure for the biotech revolution.

I am not so -ve on startups although I wrote that most fail to make any money for foot soldiers. Not every food soldier is hoping to make millions and millions. Even with a moderate success a foot soldier can pocket 3-4 years of annual pay - and that to me is a reasonable reward for the risk of working 80 hours.

But after the dot com bust, even that has become difficult. Hence I am staying away from startups.

Banks have free pass tp print money and charge interest on printed money .... go ask FEDERAL RESERVE .....

I could walk into the door of a hi-tech place in Ohio and be fairly considered for a job.

I think that everyone who wants to move to Ohio, should, without further hesitation. I know a number of people in the southern part of the state who'd be happy to trade places with you right now...

NorCal makes the tech innovations which allow SoCal to make use of them with high quality internet porn(oh and tv/movies/music too).

Flyover has limited access to porn so they utilize internet technology (innovated in norcal) to access porn that comes from SoCal(los angeles).

Smart Techies flock to Norcal to work on internet tech, attractive people flock to LA to work in movies/porn.

So with CA a magnet for smart and attractive people what could be better? its a great situation - every state is dying to attract these people/companies/jobs.

I think that everyone who wants to move to Ohio, should, without further hesitation.

I think that everyone who wants to move to Ohio, should, without further hesitation.

Be aware:

Ohio has state and local income tax
Ohio has horrible winters
Ohio is inundated with ugly people (the attractive must have left for socal)

Headset, it is a lot more complicated than that, but my understanding is that banks can't just tap the treasury through the reserve system. They buy and sell securities brokered by the federal reserve banks which increase or decrease money supply. My description was simplistic, but is the basic model for the banking system barring the regualtory infusions of cash for monetary policy.

Correction, I was addressing Permarenter not Headset, excuse me.

Running a biz in Ohio requires you pay many levels of taxes. Income is taxed, in the worst cases, at the Fed, State, County, City and School District level. Yes, 5 income taxes, each with their own bureaucracy. Then there's the normal litany of workers comp, unemployment insurance, and usually a couple of special state tax initiatives. The employer has to manage all these withholdings, deal with all these agencies, and suffer from employees which generally lack a strong "employment at will" mentality.

If you really want to start a high tech biz in the salt-of-the-earth Midwest, I'd recommend Chicagoland.

DQ numbers are out for SoCal. More pain - bring it on!

:-) And Intel numbers for Q4 are out and cause a huge disappointment. Stock down more than 14% after hours. The crash of 2008 - bring it on !

http://finance.yahoo.com/q?s=intc

Can we come up with some nice names for this January ? How about

1. The January Jolt
2. The Year We Woke Up
3. Boom to Doom in a month

What say you ?

Austin is popular too for start ups. But if you need to smooze with VC/investor to start or end(sell) your company and or product you will be flying to San Jose every week.

So I suppose the management in bay area with worker bees in india model is ideal for many companies but 100% india based workers is difficult to manage .... it aint ez.

My ideal start up is with me as only employee and creating a wildly popular software product and or site. For example - I beleive the bit-torrent base code is done by one guy. Other programs (like azureus) use this code to manage the torrents. Also I imagine lots of shareware software companies are now or at least started this way. dont get funding unless you need it and you avoid the 100 hour work weeks.

physical media for music/movies/tv/books will soon be the minority way to enjoy it - that means tons of software jobs, companies, and projects will be around for a long, long time. Then when this technology matures the buyouts start and there are tons of jobs merging code and systems - just like always.

RE: Ohio

I doubt I can live east of the continental divide. :(

I'm so glad I dumped all my INTC back a month or so ago at 27.24....

Hello Kitty,

"attractive people flock to SoCal to work in movies/_ _ _ _"

LOL! Yes we certainly seem to be putting all that great technology to wonderful use!

Seriously though, I thought SP said most of the VC money/start-ups are geared to endless... "e-mail search engines". I know we have a glut of them here in PDX.

A movie studio is being built here in San Marcos. Lord knows this city needs more attractive people.

Is the yen carry trade unwinding picking up speed ? Nikkei is down more than 300 points or about 2.5% at the open.