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Ask HN: Just how bad is the Valley economy
15 points by willheim on Oct 25, 2010 | hide | past | web | favorite | 18 comments
So last night (Sunday October 24th) I was watching 60 minutes and they had a 20 minute segment on how the SV/San Jose area was in complete and utter economic meltdown. They were talking about the 99ers (99 weeks unemployed) and interviewed all these PhDs and other qualified older people who had lost their jobs, couldn't find another, and had burned through savings.

I've looked at moving there but wonder now just how bad the local economy is. Here on HN it's all rosy (bootstrapped but rosy) with VC cash being talked about every day.

What's the real story? Seems people can buy homes in San Jose for far less than renting in SF.

I used to work at a fab in Fremont. It was one of several Silicon Valley fabs that are now no longer operating in the Valley. Its owner at the time, Agilent, cut eight to nine thousand jobs in the early 2000s:


Last year Agilent, which is still a big area employer, cut another 2700 people:


It is worth remembering that Silicon Valley's first name is "silicon" for a reason. The area made its name with hardware and fabs. The folks in the area who are fifty and sixty years old are proportionally more likely to have extensive experience in hardware and fabs than in web development, and many of the fabs are closing down. Moreover, because it took a lot of people to run a fab -- more in the past than today -- there are a lot of those people.

Yes, life here on HN is great, but that's because of the tiny sample size. For example, what is the total number of people who have been employed at any YC startup over the last decade? I bet it doesn't add up to eight thousand people.

So it depends on your skills. If you want a job running a lithography tool on a production line your job prospects are different than if you want a job writing Ruby apps for a YC startup.

From Mountain View to San Francisco, there are dozens of startups that have gotten funded in the last 9 months. I'd be willing to be there will be another 3-4 dozen that get funded by the end of the year.

The vast majority of those startups are Web/Mobile/Social/Gaming startups. Take 100 startups with $500k in the bank looking for one two three (web/mobile/flash) developers and you have a rough idea of what the hiring market is like in SF. Add Facebook, Linked In, Twitter, Yelp and Google starting to compete more heavily for engineers, and you'll start to see why recruitment is going to get a lot tougher in the next year or two for startups.

From Mountain View South to San Jose and in the East Bay, the startups have traditionally been more hardware/silicon oriented. Those industries have been consolidating a lot, and those companies have been laying off people. It's people that come from those industries that have gotten laid off.

The 60 minutes episode talked about the San Jose area, and if you read the article [1], it primarily talks about older workers who were in PR, office managers, personnel, etc...

All that to say, is that after we get funded, we're going to be staying in San Jose. Office space is cheaper, housing is cheaper. It's a lot easier to get around by car. There's parking for less than $20/3 hours. And, there's a lot of experienced talent that's looking for work.

ref: [1] http://www.cbsnews.com/stories/2010/10/21/60minutes/main6978...

Also, how many silicon startups have there been as of late?

In general terms, it's my impression that the days of the US VC funded, high capital requirement hardware startup are over with the closing of the IPO window.

Lots of HN style consumer internet companies can hope to get bought by Google, Facebook, Twitter, whatever, or just thrive on organic growth since their up front capital costs are relatively modest.

As I keep asking, who's going to be able to create the next thing like FPGAs? (As least in the US.)

What? The biggest problem startups we've funded have is hiring.

I saw the "60 Minutes" segment. The people who are looking for jobs are the same kind of folks who are out of work across the country. Think mid-career middle managers who don't have technical skills: accounting managers, sales directors and VPs of this and that.

As companies consolidated operations, downsized and offshored, many of these folks thought they'd retire at the company they were at only to have a rude wake-up call two years back.

It isn't just in silicon valley, I know a former VP of software who now is a real estate agent (specializing in short sales) and a sales trainer who's been out of work (forever it seems) and others who've been bounced around. I think the "60 Minutes" crew concentrated on SV because the tech sector was supposed to "save" us and California has one of the highest unemployment rates in the US.

The truth is that a lot of these people thought they'd retire from the job they held before the recession. It's thinking I thought had died a generation before, but there were thousands who've gotten caught off guard with stale skills.

The type of employees YC companies look to hire are probably never in need of jobs (thus they will have problems hiring, in any market). To solve the problem mentioned on the news segment, we need companies that (for lack of better words) are aiming lower.

"aiming lower" is a bit degrading. YC companies are a market segment that wouldn't hire these folks because of their skill disciplines. They are smart people without a market.

How well do these startups pay (as a point of reference, RethinkDB offered an absurdly low salary for what amounted to a top-5% developer)?

I think the original article might have been talking about the real world.

OTOH, the media is very good about discovering poster cases to earn our sympathy. One common theme I've noticed in all these cases is that the person in question took their job for granted in the face of the changing technical landscape, didn't upgrade their skills and finds themselves in a tough situation.

Another problem in the tech industry is ageism: the media doesn't talk about unemployed 30-something and 20-somethings. Haven't seen this piece, maybe it did.

There's an opening if ever there was one:

What are the skill sets that YC companies are requiring? Are these people not to be found? In Vancouver it seems a lot tougher to find new members (unless very, very well funded so as to be able to compete with the very secured and well employed). What is the biggest challenge for your companies in hiring?

I don't think you will find all three present anywhere in the world: smart people, tech and unemployment

pg, I see that there is a page for jobs at YCombinator companies, but it is very empty with just one job at BackType listed:


Are there more positions you are hiring for that are not listed there?

There are a lot more. I need to fix the software that drives that page. For various stupid reasons it only shows jobs posted in the last couple days.

If you need someone to fix it for you I can certainly use the work.

Sometimes it irritates me to see so many people apparently complaining about the shortage of competent / qualified programmers these days. I'm more than 50 years old with nearly two decades of professional experience as a programmer. I ran my own outsource programmer training center in Asia for several years and we ran more than 200 trainees through the system before we closed.

I also have an additional range of business experience that might come in handy to a future employer, especially in a company run by people much younger and less experienced than me.

And I'm not afraid to put in 12 hours days for weeks on end when it's important to the company.

But I never see any job listings for people who can bring what I want to bring to the table. Instead I typically see complaints about startups not being able to find qualified engineers. Yet I've been back in the USA for more than a year already, and so far I haven't been able to get a single startup to consider hiring me.

Is it my age that puts them off? Or should I be looking for work with companies other than startups? Or am I looking at the wrong startups?

Or should I just do my own startup and stop trying to help with someone else's?

I'm not criticizing, but just giving my two cents here to give perspective.

The problem with being 50 years old is not being 50 years old, but coming across as acting 50 years old.

Startups don't need someone who can manage an outsource program to train 200 employees. They need someone who can ship. Someone who is implementing features and building product value.

Culturally startups today want to stay small because that's a competitive advantage that allows pivoting until you either have a home run business model or can be acquired by a larger competitor.

I don't know you or your situation, but instead of calling attention to what you did in the training center in Asia, tell the community about what you've built. What's in your GitHub profile?

As far as training is concerned it's better to train a half dozen brilliant rock solid (as opposed to rock star) programmers that can ship.

I think it's absolutely awesome that you are programming to this day and willing to put in the 12 hours, but I think it's better to see that zeal for training to use trying to creating a hardcore team of "special forces" developers instead of a whole platoon of "grunts" or "marines".

The people who want what you have offered to bring to the table are enterprises. If you want to go after startups, you need to start focusing on startup scale projects. If you are talking about more than 6-8 devs on a team, it's already too large.

On top of that, it's important to be building teams with balance, just like a small special forces team in the Navy Seals or Army Rangers. You need to be able to train and lead people that complement each other and can build a whole product, front-end, back-end and everything in between.

Again, I'm not judging you here. Just putting in perspective that what you are offering in your reply is not what I see the HN community asking for.

I saw the piece as well.. pretty depressing. A start-up migth not have the money to hire an old qualified PhD... I am not if an old qualified PhD will be interested either.. Almost feels like we have 2 worlds in the valley

I don't know about that. One of the most depressing bits was an engineer who just took a job at Target for $9.50/hr.

There were also plenty of office managers and others whom I would assume could bring forth plenty of skills that a start-up (funded) could employ. Particularly in sales, one would think.

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