patrick.net

corntrollio says

You're certainly seeing lobbying efforts around Massachusetts non-compete requirements (http://www.massachusettsnoncompetelaw.com/2011/01/articles/noncompete-debate/new-momentum-to-limit-noncompetes-in-massachusetts/), and any state that has too strict a non-compete precedent risks losing employees to somewhere like California anyway.

Silicon Valley’s eclipse of Route 128 helped by lack of non-compete clauses says new study

http://www.siliconbeat.com/2008/08/18/silicon-valleys-eclipse-of-route-128-helped-by-lack-of-non-compete-clauses-says-new-study/

thomas.wong1986 says

Yes, When its extreme and a Lawsuit is brought to the courts, but many get away or are settled out of court when caught.. AMD copies Intel 386, never pays a dime, Google pays Yahoo for infringing on Yahoo Patents.. and lots of other examples you never hear of.

Federal court is federal court. California vs. Massachusetts has little bearing on this except if a case gets to the jury and CA juries vs. MA juries would act materially differently (I doubt they would) in applying the law. The Markman hearing is still done by a judge on the federal bench, and that's a critical part of a patent suit. What does settling out of court have to do with CA vs. MA?

thomas.wong1986 says

I dont see $5B being spent in Santa Clara.. does anyone else see this ?

Silicon Valley is primarily R&D not manufacturing.

The manufacturing facilities generally go to the lowest cost location.
Those jobs are not exactly high skilled labor, it's mostly assembly line type work.
Arizona may beat California but general you dont want an economy based on cheapness because
at some point the entire operation will just be moved to India and you'll end up with another Detroit.

toothfairy says

Silicon Valley is primarily R&D not manufacturing.

The manufacturing facilities generally go to the lowest cost location.
Those jobs are not exactly high skilled labor, it's mostly assembly line type work.

Yes, some of these are factors dependent on the actual manufacturing.

Nonetheless, it's not like there isn't manufacturing in the area.

toothfairy says

Silicon Valley is primarily R&D not manufacturing.
The manufacturing facilities generally go to the lowest cost location.
Those jobs are not exactly high skilled labor, it's mostly assembly line type work.

Was primarily a Mfg and R&D... due to high cost, mfg was moved out.. R&D was spared back in the 90s for the time being. But that time if over now... you cant have high labor R&D costs, in a deflationary industry. Doesnt work around here. Never did! Besides whats the difference. R&D (cost center) work on long term projects and not involved in revenue generation nor operations.

On The Record / Carl Guardino

May 13, 2007

Q: So are those really challenges?

A: Unequivocally, yes. Not only to the CEOs in the boardroom, but to any family you talk to in their living room. What we hear time after time from CEOs as well as frontline employees is how incredibly difficult it is to come here and stay here. That truly does have an impact on a company's bottom line when the cost differential is so much higher here than it is in other regions around the state, nation and globe, or the ability to recruit top talent is also impacted.

You mentioned housing. It probably is the top concern we hear about in Silicon Valley from both CEOs and employees in terms of local issues. Does that have an impact? Let me put a finer point on it.

Hewlett-Packard and Dell are the top two computer-makers in the world. Corporate headquarters for HP are located in Palo Alto and Dell is in Round Rock, Texas. Obviously, they both have people and facilities around the globe.

In those two communities where their corporate headquarters are and where a lot of research and development takes place, the median resale price for a home in Palo Alto is about $1.6 million. In Round Rock, Texas, it's about $180,000, except the home and property are bigger.

We hear from HP all the time that a huge deterrent to the ability to recruit and retain people anywhere near Silicon Valley is the housing issue. We don't hear that from Dell, which is also a member company, about their operations in Round Rock. It does continue to plague us and we will continue to sound the alarm.

RESULT: HP exiting the PC business.. to expensive!

thomas.wong1986 says

RESULT: HP exiting the PC business.. to expensive!

Exiting the business to do things that are higher growth and higher margin. PCs are basically a commodity item now (and have been for while, and there isn't much R&D left with respect to the actual PC (although there might be for the components, which HP doesn't make). I see this as a positive for HP -- they can sell their PC business for cash like IBM, and focus on more sophisticated things, although that's not to say there won't be some pain to start out.

corntrollio says

I see this as a positive for HP -- they can sell their PC business for cash like IBM, and focus on more sophisticated things, although that's not to say there won't be some pain to start out.

How about expensive measuring devices, O-Scope, spectrum analizers, thier original business that started HP back in the day. The business they spun off as Agilent manybe ? Even as a commodity is has to support all its costs including R&D else it will perish.

Frankly IBM is an example of the future of SV. Workforce scattered through our nation and internationally. IBM isnt centered around a central hub. They took a mean sledge hammer to expenses thorough out the 90s.

Its pretty clear and from the top what the real problem is...

"In those two communities where their corporate headquarters are and where a lot of research and development takes place, the median resale price for a home in Palo Alto is about $1.6 million. In Round Rock, Texas, it's about $180,000, except the home and property are bigger.

We hear from HP all the time that a huge deterrent to the ability to recruit and retain people anywhere near Silicon Valley is the housing issue. We don't hear that from Dell, which is also a member company, about their operations in Round Rock. It does continue to plague us and we will continue to sound the alarm."

SFace says

Silicon Valley is getting about 40% of all the US VC dollar and CA aggregate more than 50% now.

And in return the VC sites on your Board of Directors, watching every nickle spent. They dont just write checks and forget about it praying for some next big thing. They watch over you every quarter, yeaer over years, comparing the budgeted amount they approved to be spent to actual spending. They approve how much headcount gets expanded and by how much. Its called Goverance.. God forbid you overspend and dont make up in cuts by year end.

And while we do get lots of funding, much of that is still burned off in overseas R&D. I rather have it here, but what can you do!

thomas.wong1986 says

We hear from HP all the time that a huge deterrent to the ability to recruit and retain people anywhere near Silicon Valley is the housing issue.

Sure, but that has very little to do with why HP is getting out of the PC business. Note your original quote that I pulled:

thomas.wong1986 says

RESULT: HP exiting the PC business.. to expensive!

That's not a result of the Bay Area being too expensive. That's a result of the PC business not being a growth industry and better suited as a divestment.

HP could easily run facilities elsewhere like IBM, and it would still not involve their PC business.

SFace says

The VC gets one seat, out of 10? Mostly they are there to be on the inside and establish relationships, not run the show or really have the power to.

Depends on the deal and depends on the company. It would usually be more than 1 when you include all of the investors though -- e.g. there might be an angel investor with a seat, and a Series A investor with 2 seats. Then the Series B investor says, okay I want 2 seats, and the Series A investor gets cut back to 1. Most start-ups don't have 10 directors -- usually fewer. Also, even if the company has, say, 3 reps on the Board, the two founders and the professional CEO, the professional CEO may have been picked/recommended by the VCs. If the technology was spun out of a university, the university might have a seat, or at least have rights requiring consent for certain decisions.

The actual level of oversight by the Board can differ from company to company as well.

thomas.wong1986 says

In those two communities where their corporate headquarters are and where a lot of research and development takes place, the median resale price for a home in Palo Alto is about $1.6 million. In Round Rock, Texas, it's about $180,000, except the home and property are bigger.

I live here in Bay Area and grew up in Texas. This is a great description of my experience of housing. Hard to buy a crappy house here. So, I borrow the house not the money.

LAO says

've read some predictions that we wont reach 2006 bubble prices again in Los Angeles until 2024... Others are less optimistic and see prices heading back to mid-1990s prices and staying there until 2025. Which would mean we would have 30 years of ZERO housing appreciation from 1995-2025.

Zero appreciation adjusted for inflation is the norm. Anything beyond that has spelled "TROUBLE" be it 1990 or 2008. Have we learned anything yet ?

else skip buying a home and horde up on Gold, cause the Shi^ will surely hit the fan...

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
...Ernest Hemingway

Unless, of course, you win the war like we did in 1945.

In most countries you have the corrupt, and the landless. We're getting there.

The Answer lies in Globalization.
My guess is houses will drop 50%.
If we look at autoworker wages:
Detroit was $100 or $75 per hour
It moved to Tennessee and $55/hour
It moved to Mexico at $15/hour
It moved to China at $2/hour (China banned from auto sales in U.S.)
Jeep went bankrupt and emerged with new hires at $15/hour
Chinese auto workers got a raise to $3/hour

The best we can hope for is $15/hr or $30,000/yr which equates to a house or loan of $115,000 with 2 incomes $230,000. (fact check?)

Inflation is an unknown, Romney tariffs on China is an unknown, and if Japan's Yen is devalued to help break the Yuan/Dollar peg, that is unknown.

In a free global market the wages will equalize. Water seeks it own level.

Edit: in a free global market many foreigners can buy real estate in the beautiful Bay Area driving up prices.

robertoaribas says

Even in very poor parts of the world, a reasonable house with land costs FAR MORE than in most US cities.

Look for a drop in prices of 90% in all those poor parts of the world, across the board. Then we'll talk.

In our new system one guy can push a button and grab a trillion dollars worth of mortgages/deeds just because he can. No one can stop him and the carrying costs are just the property taxes. Say hello to the new rentier class. Formerly known as the nobility. I know he's doing it supposedly so my retirement check doesn't bounce. But how long will that fantasy last?

taxee says

In our new system one guy can push a button and grab a trillion dollars worth of mortgages/deeds just because he can.

See Sarbanes Oxley... Segregation of Duties, Internal Control over Financial transaction and IT access... but sometimes it happens.. rare, unauthorized, and will be caught/prosecuted.

robertoaribas says

. Even in very poor parts of the world, a reasonable house with land costs FAR MORE than in most US cities. visit Shanghai, Bangkok, Manila or Mexico city for comparison sake.

Smaller cities do attract industries and business, because they are more competitive.. as Arizona has from Silicon Valley.

Overall, Japan and German didnt skyrocket like many others... they already had their bubble in the 80s and 90s.

thomaswong.1986 says

taxee says

In our new system one guy can push a button and grab a trillion dollars worth of mortgages/deeds just because he can.

See Sarbanes Oxley... Segregation of Duties, Internal Control over Financial transaction and IT access... but sometimes it happens.. rare, unauthorized, and will be caught/prosecuted.

I don't see any indication that the fed will be prosecuted any time soon.

Things seem to be working quite well for them. The fed are fine, the hungry get food stamps. What could possibly go wrong?