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Peak California (medium.com)
384 points by cobbzilla 42 days ago | hide | past | web | favorite | 362 comments



I don't know when Peak California will come, but I'm fairly certain it will happen at some point, and this opinion article actually does a great job at summarizing my opinion as to why in its very last sentence:

"Californians will end up like the landed gentry in interwar England. Lovely houses, illustrious history, and no conceivable way to pay their bills."

Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1]. If they're willing to move from their home to California for work, it's safe to assume they're willing to move from their home to almost anywhere else for work. It's not due to cheap housing or even available housing. It's not due to the great commute into work. It's not due to the low cost of living. The only argument I hear is that tech companies move to SF/LA because lots of tech workers are there, and lots of tech workers are there because lots of tech companies are there.

So if there's nothing holding technology to SF/LA, when does it become a competitive advantage to have your offices anywhere but California? At some point it will. And it will be long overdue.

[1] https://www.mercurynews.com/2018/01/17/h-1b-foreign-citizens...


It’s really quite simple; Silicon Valley is maybe the one place in which I have ever found nearly everyone I meet has a “pay it forward” attitude. It is infectious, and it means that as a “no name” startup founder, you have nearly infinite access to advice and capital, as long as you are convincing enough and tell a good story. There is no immediate expectation of return. I spent most of my life living in NYC, and I originally started Tinfoil in Boston (and went to school at MIT). Both cities are “startup hubs,” but the same attitude doesn’t exist. Boston was particularly bad about “what’s in it for me?” being the common theme of any conversation.

The upshot is that now I volunteer my time often, and for free, to help others who are just starting out. I cannot predict who will be the next Google, but I enjoy helping smart founders, and I enjoy giving back in the same way I was given to.

A few relevant essays: http://www.paulgraham.com/siliconvalley.html http://www.paulgraham.com/ronco.html


This categorically doesn't fit my experience here in Boston. The overwhelming majority of the people I know professionally are eager to help however they can.

I would caveat that with the note that there is rather less appreciation of bullshitters, so startups with a lot of wank to them might have a harder time being taken seriously. But if you're serious, and you're nice, people will absolutely fall all over themselves to do you a solid.


I should add that the valley doesn’t have much of an appetite for bullshitters either, despite what the media would have you believe. Mistakes happen, because there’s a lot more money here, but by and large bullshitters do not get helped or funded.


Theranos, Juicero, Ubeam, Y combinator flying motorbike, Airware, Jawbone, pretty much any "AI" or even machine learning company that isn't overtly a consulting firm, pretty much any autonomous vehicle startup that isn't a mapping company.... Most of the companies which have "succeeded" in the post-2008 landscape have been pretty feeble; it's not like Uber or AirBnB are tech companies. They're phone apps that enable people to defy taxi and hotel laws.

FWIIW I've known Byrne for years, and was shocked when he moved to the Bay Area.


Like I said, mistakes happen. Investors in the valley are willing to take larger risks, and by virtue of there being more money, there will be more mistakes. There are mistakes in Boston too. I don’t know the statistics, but I would bet it’s proportional, though perhaps not because the risk appetite is lower.


Twilio, Stripe, Pure Storage, Nutanix, Slack, Dropbox, Box, SpaceX...

Some of these companies could never have started in Boston, because finding capital would have been impossible. It isn’t always technological advantage that wins, but UX or biz model, or any number of other things related to execution.


I think that would depend a lot on how you define "bullshitters".

Outright knowing scams? I'd agree with you.

Startups with no plausible business model, a bunch of buzzwords and hopes and dreams and no clear elucidation of why anyone would become their customer? Seemingly endless fields of those in the valley.


> but by and large bullshitters do not get helped or funded

Theranos


> Mistakes happen


YC's latest batch has a "drop-in replacement" for WordPress that is actually a rewrite-your-app headless CMS with little differentiation from every other headless CMS and a "don't worry, you don't need to know how to code to automate crypto trading, we definitely aren't watching for which models work!"

Bullshit abounds. And YC is supposed to be the smart-and-decent money.

TBH, one of the really nice things about living around here is that if I take a meeting with a funded company they almost certainly hit at least some bar of seriousness. All successful companies? Definitely not, but there is a lot less chaff for me to filter through.


You seem to be equating “high risk” with bullshit. That’s not the case - the appetite for risk is higher here, that’s true. But it’s not like companies can just stand up and have money thrown at them; due diligence is real, though mistakes do happen.


Wait... you’re saying that someone’s a scammer just because they are working on a CMS?


No. I'm saying they're bullshitters (and ones with dishonest marketing, to boot--go look at the CosmicJS Show HN and tell me that it doesn't make the part of you that cares about honesty start itching).

You don't have to be running a scam to be a bullshitter. But you do have to have an undeserved and unwarranted sort of presentation, and you likely don't have much cattle to go with that hat.


As a business? Yeah, probably. Who’s gonna pay for that when there’s good free ones.


Why would anyone pay for Dropbox when they could just use rsync? It’s free!


In my experience, the only bullshitters who are successful have knowledge in key domains anyways. Running a company is hard, and you have engineers who think it's just math.

Clinkle is a perfect example of this.


Elon Musk is the best counterargument to your claim.


Fair. I suppose my sample set is those who have moved away from there to the valley, so it’s self-selecting, but it was my experience as well.


> Boston was particularly bad about “what’s in it for me?” being the common theme of any conversation.

I'm really surprised to hear that said of the city where RMS wrote GNU while living in his car. Not my experience there at all.


There are pockets. At MIT, as a student, it was definitely very pay-it-forward. But try starting a company in Boston and getting investment, or introductions, or do any sort of networking. It's literally impossible unless you have some way of scratching their back. I have heard this time and time again from founders that moved from Boston to the valley, and I have experienced it firsthand with my company.


Again I think you're overplaying this. Most of my network has never worked with me and likely would never work for me. But I don't have a particularly hard time getting in touch with anybody I'd like to.

(And if anyone who's reading this would like to chat--well, email's in my profile. Don't be shy.)


The difference between GPL and BSD-like, to me , is that GPL says "what's in it for me?" Whereas BSD-like is "here you go take this for free, I may or may not got anything back for giving you my contribution."


More like "What's in it for the (end) USER?" What better way is there for a developer to pay it forward than to pass on all the rights they got (freedom to modify and inspect the software) to the end-user?


I don't ask anything from you for me in order to use my gpl software, I ask that you give the same rights and privileges you had to your users.

You don't even need to give me your contributions, just your users.


> nearly everyone I meet has a “pay it forward” attitude

basically the opposite of what I've experienced in 15 years in tech in the UK, sadly.


As a UK company founder, that spent a year in SF I wholeheartedly agree. London is getting a little better though but it's more of a cultural shift and will take time.


I have found a similar ethic in Boulder, wonder if it arose separately or came from the valley?


I have heard great things about Boulder, but I've never been. This may very well be true.


Maybe the sunny weather encourages optimism? And orange trees fruiting in the streets.

Always thought Douglas Adams' "horrifyingly sunny" Ursa Minor Beta was based on California.


> Why do tech companies flock to California (LA/SF)?

1. California has laws surrounding non-compete, making it easier to poach from the Fairchild Semis, Hewlitt Packards, Intels, Sun Microsystems and Googles of the era.

2. It's easier to recruit out of Michigan than into it. California wisely keeps its snow in one place: Tahoe.

3. Diversity. As you point out, there's a ton of H1-B workers, and SF and LA have sizeable preexisting communities. It's just easier to be an immigrant or hyphenated-American in world class metro areas that can support a variety of ethnic and cultural clustering.

4. Public transit. Depressingly, the bay area still has better public transit than most other cities. Yes, the big companies still run coaches in the bay area, but that works in part because of density you won't see in cheaper, lower cost metros. And if you're recruiting internationally, the ability to commute to work without a drivers license or car kinda matters.

5. Access to money. There's a decent number of banks in SF's Financial district -- Wells Fargo and Charles Schwab are headquartered here. VISA is nearby in Foster City, and there's a number of VCs on Sand Hill Road you won't find in other cities.


3. Neither SF nor LA are particularly more diverse than many other major metro cities. SF has a lot of Asians (SF is 53% white and 35% Asian) and LA has a lot of Hispanics...but Atlanta has a lot of Black Americans (53%) and Dallas and Houston have large populations of Blacks, Hispanics, and Whites. Miami is over 70% Hispanic. NYC may be more diverse than any of them.


The GP said

> _It's just easier to be an immigrant or hyphenated-American in world class metro areas that can support a variety of ethnic and cultural clustering._

The fact that there aren't as many african-americans in the bay area (outside of a handful of locales), doesn't make the GP's point invalid.

I'm an immigrant in SF, and there are few places in the US where I would feel remotely as comfortable. Even being "white" (latin american of southern european ascent) I have a noticeable accent. That accent has triggered abuse by an elderly woman right after the past presidential elections in an ice cream shop in Hayes Valley, SF. And that is without going into the countless cases of "involuntary micro-agressions" ("oh, we don't mean you guys", "you're one of the good ones", etc.).

Outside of the bay area the landscape very quickly changes to white picket fences with two large pick up trucks and white crosses in the lawn, towns with multiple churches of different christian denominations. All of this within an hour of driving from SF. I wouldn't feel at home, and likely not be accepted as part of the community in places like this.

Because there are so many immigrants in the bay area, that gives exposure to the native-born citizenry making them less likely to treat immigrants like the feared "other", as well as immigrants treating other immigrants of different origin decently, for the most part. I think these points are what the GP was referring to. The problem of lack of systematic racism and unequal opportunities for african-americans are still a big problem in the US as a whole, and in the bay area as well, but that doesn't immediately affects the entirety of the immigrant population.


OP was talking about major metro areas and the cities I mentioned are major metros with all the pros and cons that implies.

At any rate, you should really try exploring and getting outside of the Silicon Valley bubble if you think the rest of the U.S. is just a bunch of racists ready to shout offensive things to you.

Even in rural areas in Texas and Florida, big portions of the population are Hispanic. It's not unusual at all. In many Texas honky tonks, you'll find quite a few Hispanics. Some of the top rodeo stars are Mexican and Brazilian. In fact, most of Southwestern culture, from cuisine to music to dance to fashion, is a blend of cultural elements from Mexican, German, Czech, and Pole immigrants.


So far, the place I've been shouted/told offensive things by have been in the bay area for the most part, but it might also be because I'm "white".

I realize now that when I said "outside of the bay area" I didn't make it clear that I was talking about California in particular. People from outside the US, and even some inside the US too, have this image of California that is a pastiche of cliches, where the Golden Gate bridge is next to Venice Beach and the Central Valley doesn't exist. I've travelled throughout many rural areas in the US and have been treated in a lovely way. I remember a recent trip where my wife and I stopped for a quick snack in a rural bar, where we struck a conversation with the people working there were lovely. At the same time, on the walls there were plenty of "american patriot" paraphernalia in the vein of "we say merry christmas here, and if that offends you fuck you". That makes it harder to feel welcomed.


> At the same time, on the walls there were plenty of "american patriot" paraphernalia in the vein of "we say merry christmas here, and if that offends you fuck you". That makes it harder to feel welcomed.

Why should that make you feel unwelcome?

I'm also an immigrant, and have spent a decent amount of time in rural America, and my point of view is that it's wrong to hold Americans to a different standard than you would people from whatever country you're from. My family is from Bangladesh. If there were people going around trying to remove "Eid Mubarak" from the public discourse, there would be a total shit storm. 90% of Americans celebrate Christmas--tolerance for immigrants does not mean that people don't get to publicly celebrate their own culture, their religious traditions, etc.


> _it's wrong to hold Americans to a different standard than you would people from whatever country you're from_

You have a point. The culture I grew up in has its own share of terrible things that _I didn't even notice_ until I traveled and lived in other countries. Which is why I critique much of my own culture as much as I'll critique parts of american culture.

Having lived in other countries I not only wouldn't be able to go back (because I find some pervasive things of the culture repulsive and unlikely to change any time soon), but it has also made it easier to notice the cliched patterns of hatred towards the "other", the same things that are said of mexicans in the US are said of the polish in the UK, people from some arab countries in France, the turks in The Netherlands (although they are far more "polite" about it), etc.

> _ If there were people going around trying to remove "Eid Mubarak" from the public discourse, there would be a total shit storm. 90% of Americans celebrate Christmas--tolerance for immigrants does not mean that people don't get to publicly celebrate their own culture, their religious traditions, etc._

Sure, there are plenty of sensitive subjects that can put you in the bad side of a culture, but the "Merry Christmas" crowd is the same as "Guns, God & Country" crowd which is in many occasions the "racism doesn't exist" crowd. I used that sign as an example because it's the one I remembered the most vividly, but it wasn't the _only_ sign.


> Having lived in other countries I not only wouldn't be able to go back (because I find some pervasive things of the culture repulsive and unlikely to change any time soon), but it has also made it easier to notice the cliched patterns of hatred towards the "other", the same things that are said of mexicans in the US are said of the polish in the UK, people from some arab countries in France, the turks in The Netherlands (although they are far more "polite" about it), etc.

That's an odd set of examples. The countries you named are just about the least racist places on the planet. I'm sure you can hear some racist things about Bangladeshis/Pakistanis in the U.K., but nothing compared to what you'd hear about various groups in Bangladesh or Pakistan! (I’ve lived in the US 30 years, and almost all the racism I’ve ever witnessed was when other Asian people would be like “oh it’s just us Asians here, let me tell you how I really feel about [people].”)

> Sure, there are plenty of sensitive subjects that can put you in the bad side of a culture, but the "Merry Christmas" crowd is the same as "Guns, God & Country" crowd which is in many occasions the "racism doesn't exist" crowd. I used that sign as an example because it's the one I remembered the most vividly, but it wasn't the _only_ sign.

Even the "guns, god & country" crowd in the U.S. is far more welcoming and tolerant than most people in the rest of the world. In the U.S., we fight over whether English should be the official language. In France, few people question French as the official language. (And can you even imagine suggesting in France that kids should learn Arabic in schools to accommodate immigrants? But that's very common in the U.S. with Spanish.) And the French are incredibly tolerant compared to Bangladeshis. Even among the "gods, guns & country" crowd I'm more welcomed (as a brown guy with a beard) than a white American would ever be welcomed into Bangladeshi society.


Agree, despite what many people say (and the fact that it could always be better), the US and the west are some of the most welcoming and friendly places in the world


>I’ve lived in the US 30 years, and almost all the racism I’ve ever witnessed was when other Asian people would be like “oh it’s just us Asians here, let me tell you how I really feel about [people].”

Your personal experience just doesn't square up with mine.

I lived in the US for 15 years and definitely got racist comments hurled at me. More so than my time in India and Sri Lanka.

Having said that, I do agree that in general, American's are fairly welcoming and tolerant. But people in South Asia are as well!

> than a white American would ever be welcomed into Bangladeshi society.

Never been there, but I do know that white Americans would be well received in many of the South Asian cities I've lived in/visited. They may not be treated the same way a local would but they would be accommodated and welcomed.


> but it has also made it easier to notice the cliched patterns of hatred towards the "other"

Perhaps it isn't "hatred towards the other" but rather love for their own citizens who share a similar cultural background, upbringing, and values...especially when "the other" comes off as ungrateful and in some cases even complains that the host country isn't doing more to make them feel more at home in a place that isn't their home...

> Sure, there are plenty of sensitive subjects that can put you in the bad side of a culture, but the "Merry Christmas" crowd is the same as "Guns, God & Country" crowd which is in many occasions the "racism doesn't exist" crowd

This is a very biased view.


> Perhaps it isn't "hatred towards the other" but rather love for their own citizens who share a similar cultural background, upbringing, and values.

I make a distinction between patriotism and nationalism, which gets conflated quite often. Criticizing something is something only done when wanting the target of criticism to be better.

> especially when "the other" comes off as ungrateful and in some cases even complains that the host country isn't doing more to make them feel more at home in a place that isn't their home...

What is the appropriate level of gratefulness to be accepted? What's the threshold to be considered part of the "host" society? When can I consider the place I chosen to live in and have my friends in "home"?

> This is a very biased view.

As stated, it is biased, stereotypical and cliched. There is a group of people that inhabit the center of that Venn diagram, the size of which I do not know.


I think the social fabric of the US is more complex than you're making it out to be. I'm an atheist with liberal Californian views on most social issues, but I also happen to be pro gun rights and grew up celebrating Christmas. It really pisses me off when overly PC weasels complain about how wishing people a Merry Christmas is non inclusive, so I think that sign is great. Point is most people don't fit the stereotypes that well once you dig a little bit and it's best not to assume malice in the absence of very strong evidence.


While I worked retail during college (in a very diverse urban area), I said Merry Christmas to hundreds (probably thousands) of customers.

During that time, I never once encountered a person who was angry or even remotely offended that I wished them Merry Christmas.

I have however encountered numerous people who were very upset that someone once wished them happy holidays.


I think it’s important to put the “war on Christmas” in context. We are at the tail end of a long period of removing religion from the public sphere, something that has happened more aggressively in the US than in the rest of the world. (Many European countries, after all, still have state-supported churches!) One segment of society has decided that freedom of religion and an inclusive society means freedom from religion, and has been very successful pushing that view in courts. Thus, removal of nativity scenes from public grounds, restrictions on school sponsorship of religious activities, restrictions of state funding of religious-affiliated groups, etc. So when people are mad about “happy holidays” they’re reacting to all of that.

And “happy holidays” is a passive aggressive thing to say. 90% of Americans celebrate Christmas. When people say happy holidays, they mean merry Christmas. “Happy holidays” is a form of erasure—a refusal to acknowledge Christianity without also acknowledging other religions in the same breath.


> When people say happy holidays, they mean merry Christmas. “Happy holidays” is a form of erasure—a refusal to acknowledge Christianity without also acknowledging other religions in the same breath.

This is a bit much. I say “happy holidays” out of respect for the fact that a lot of people I know aren’t Christian, but still enjoy that time of year for whatever reason they choose, be it other religious reasons, nostalgia for family traditions they don’t believe in religiously, or just plain consumerism being fun.


>We are at the tail end of a long period of removing religion from the public sphere, something that has happened more aggressively in the US than in the rest of the world. (Many European countries, after all, still have state-supported churches!)

That's technically true, but it's misleading. Religion is much more important in public life in the US than in most of Europe. For example, this kind of thing wouldn't happen in most European countries: https://thecaucus.blogs.nytimes.com/2008/08/16/tonights-obam...

I say this as someone who doesn't believe that what most people describe as separation of church and state is required by the constitution btw.

>And “happy holidays” is a passive aggressive thing to say. 90% of Americans celebrate Christmas. When people say happy holidays, they mean merry Christmas. “Happy holidays” is a form of erasure—a refusal to acknowledge Christianity without also acknowledging other religions in the same breath.

Happy Holidays has existed since at least the middle of the 19th century, and has been popular since the 30s--long before people cared about recognizing other religions. Trump even said it publicly fairly often over the years.

The family members I know who have a problem with the "War on Christmas" literally think that globalists are trying to force people to stop celebrating Christmas because that's what their media tells them.


Huh? Bing Crosby sang "Happy Holidays". It's a perfectly, entirely banal thing to say. I'm mystified by the emotional valence conservatives have given it --- and by the notional (and I think fictitious) concern that conservatives have that "Merry Christmas" is unsafe to say, as if every random shop you walked into in Chicago in December wouldn't greet you that way.


One thing I have thinking about recently is that there is a class of hostile behaviors which only seem to manifest online.

This is the stuff that people usually don't have the balls to say in the real world -- only when they're shielded by a computer screen.

For instance last night a friend of mine posted a photo on Facebook of the two of us being out for a drink.

A woman who I have worked with in the past immediately messaged me on Facebook and told me I looked fat in the photo. (I didn't, and I'm not.)

Wtf? I'm sure she never would have had the guts to say that in person.

I think a lot of the worst preachy PC behavior policing, like telling people it's insensitive to wish people a Merry Christmas, happens mostly online or in echo chambers. The majority of people live out their lives being reasonably restrained and trying to get along with other people, then on the Internet they turn into a dick.


Which is one reason why it can seem hostile to some people when the reaction to online anti-Christmas dickery makes it's way onto the walls of a real life restaurant.

They've never experienced said online dickery themselves, so they don't understand the context. If they happen to be the kind of person who says happy holidays, it can feel like an attack on them instead of a response to someone else.

Similarly if you walk into a restaurant and the owner has posters on the wall that all say things like "You'll never make me eat meat.", it might come across as a little hostile to you as a carnivore. Despite the fact that it's a reaction against some online troll, not you.

Also I'm absolutely certain that the reaction against the "War on Christmas" is 10,000 times larger than the actual "War on Christmas."

I had a relative tell me how nice it was to finally be able to say Merry Christmas again the Christmas after Trump was elected. Seriously? Who was stopping you? Obama said it every single year in an official White House Christmas greeting video.


> I think a lot of the worst preachy PC behavior policing, like telling people it's insensitive to wish people a Merry Christmas, happens mostly online or in echo chambers.

For what is worth, the only places I've seen this entire "merry christmas" thing being a problem has been as a backlash against corporations trying to look more inclusive by saying happy holidays in a period where there are multiple holidays being celebrated by multiple religions, but might just be my own filter bubble.


A lot of the war of Christmas is actually fake news made up by very socially conservative bad actors or newspapers trying to sell papers - the Daily Mail is one UK example

Ironically some of the Ultra hard-line puritan sects that colonised America where violently against Christmas


> I have however encountered numerous people who were very upset that someone once wished them happy holidays.

Sadly, we can't run the experiment where you start wishing people Happy Hannukah and measure how that goes.


You gotta understand that "American paraphernalia" and patriotism are part of THEIR culture. And it's important to them. It's part of their identity as much as cultural elements of your hometown are part of yours.


Ceteris paribus, less open cultures will be less able to create entrepreneurial environments, especially cosmopolitan ones.

Patriotism and cosmopolitanism can be good friends. Nationalism and cosmopolitanism, not so much.

The "American paraphernalia" as described seems to have a high level of nationalism versus patriotism, which is very uncomfortable for outsiders.

My current definitions of patriotism and nationalism:

Patriotism -- love of country that most benevolent outsiders could approve of and admire.

Nationalism -- love of country (or tribe, "nation") that most benevolent outsiders would disapprove of and could not admire.

They need improvement, but the examples we're discussing seem to uphold these definitions.

They also fit with Macron's claim that nationalism is a betrayal of patriotism. For example, using the flag to divide instead of unite. Or using love of country to pick fights, start wars and bring destruction upon all involved.

"We say Christmas here and if you don't like it, fuck you" is clearly not a patriotic statement. It debases itself, its speakers and its object. It picks a fight and intends to create division, but it has damaged itself from the start by morally degrading itself. That's nationalism, tribalism, chauvinism. It betrays patriotism because it debases the spirit of the country which it claims to love.

A widespread "pay it forward" attitude will be exceedingly difficult in such a society, it seems.


>That makes it harder to feel welcomed.

Bending over backwards to make big displays that everyone should "feel welcomed" is just the culture of the city you're used to. And lets be honest, it's all for show. That doesn't slow down any of the social interactions which make it obvious when someone is unwelcome.


Yes and no. There is a stark difference between Texas and California (I've lived in both states).

Here's a recent story shared by a friend who moved from CA to TX: He took his son (who are Indians) and another bunch of kids, two were Indians and the rest white to a water park in Austin. One of the Indian kids cut the line and moved to the front of the line where my friend was. He asked him why did he do that and he should not cut the line; the Indian kid responded "We are Indians and we need to stick together". This is in the so called liberal oasis of Austin.

I doubt if this frequent in the Bay area; sure you can point to PC culture and all that but this story is a sobering reminder of how segregated Texas espcially when you have kids acting like this.


No offense, but the perception of the US outside of the "diversity bastions" like SF, NYC, LA, etc. has jumped the shark. People now assume that racism and hatred is rampant outside these areas, and it isn't remotely the case. Its actually quite sad and offensive (to say nothing of ironic) that such a large swath of people are at this point all but presumed to be racist until proven otherwise.

To be fair to you, the perception seems to be widespread among residents of the aforementioned mega-cities, as well as non-Americans, and is fueled by the popular media. But I would encourage you to view the idea that these parts of America are backwards and largely bigoted with the same amount of skepticism you would to anyone making sweeping claims about the supposed deficiencies of a group of "others".


I never claimed that a large swath of people are racist and live in backwater, but I seem to have implied it by using a few apparently cliched critiques that carry connotations beyond what I intended. The thesis of my original comment is "foreigners are more likely to feel at home where other foreigners live" in the US, and posited some of the possible reasons. SF and other cities where the immigrant community is very visible aren't prejudice free, but you're less likely to be prejudiced against for being foreign, and even then it does happen. Also, there doesn't need to be a majority or even a plurality of people with racist views in an area for people that are the target of those prejudiced views to feel unwelcome. I was divorcing this from the larger discussion that the US has around diversity.


You're comparing SF to rural America. They're of course quite different.

But OP is asking about other major cities like Atlanta, Boston, Chicago etc. If you think those are anti immigrant racist homophobic etc hellholes, you might be stereotyping quite a bit yourself :)


Nowhere in my comment am I implying that Atlanta, Boston or Chicago or any other big metro areas are racist homophobic hellholes. I'm trying to lay the argument for why a place with a big immigrant population might be easier for other immigrants to feel as they belong. And the vignette about the Ice Cream shop was meant to show that even in blue, blue California, in liberal San Francisco, in trendy Hayes Valley, you can still be made to feel you're somehow "bad" through no fault of your own.

Edit: I realize now that I didn't specify when I said "outside the bay area" I meant California, as in "rural america is very close geographically to metropolitan america".


OK. So we just happen to be talking about different things, and mostly agreeing on the facts then.

Nothing left to argue about then I guess :)


If you think Chicago doesn't have clear and well known racial conflict you've never driven across the city. SF and California is certainly not perfect but it tries to be better.


I don't know if "trying" has anything to do with it. It's much easier to be a harmonious multi-racial society when it's just rich white people and rich asian people.


Most of the conflict in Chicago is intraracial black on black gang violence: https://www.intellectualtakeout.org/blog/chicago-75-murdered...

Spare us the elitism.

SF has tons of problems, including epic homelessness. Other cities are trying to deal with their unique situations under their unique constraints.


Or you haven’t lived in Boston, or Chicago — both cities facing major racial integration problems in the modern day


Not problems that San Francisco isn't also having. People like to prop up SF as an example of inclusiveness, as if it isn't the pinnacle of gentrification. Things may feel inclusive if you are white/asian and working in tech. Ask a black or hispanic person if they feel like SF is a land of opportunity or inclusiveness.

And the rest of California is just as bad. LA somehow has a reputation for inclusiveness despite being home to some of the most serious racial conflicts and explosions of racial violence in the last century.

That California is somehow radically more inclusive than the rest of the country is a myth, but one they are exploiting very well.


Unlike LA?


Compared to Toronto, Canada, they kind of are though.


Interesting perspective. I've often been tempted to work in the US, but one factor that always deterred me was the treatment of African Americans. I've generally had a very good time as a business traveller. I'm half-white and from a privileged background, so it's never been a question of access or belonging -- I've found the tech industry very welcoming. It's more one of personal safety and general disgust at how the US has never really tackled the legacy of slavery. I also find the US bone-deep assumption that "we're the best" extremely irritating -- kind of epitomized by the opening portions of this article only considering US locations.


I understand where you're coming from, but I do not intend to imply that the US or the bay area in particular are not a nice place to live. If anything, I'd find it hard to adapt to most other places, having had some of my prior personal positions jolted by points of view that I hadn't ever considered. Most people are I interact with are lovely and open minded. The scars of institutional racism are very noticeable and are uncomfortable to me, and it makes it hard to comment on some subjects when presenting a perspective that to you might look obvious (due to having seen alternatives) that go counter to the general accepted "narrative". Living in the US has been very rewarding and a good experience overall, to the point where I'd say it's the place I'd like to stay in, but no place is without trade-offs.


FYI, in SF there are also multiple churches of different christian denominations. Most of them will welcome you, doing their best to make you feel at home and accepted as part of the community. It works best if you don't treat them like the feared "other".


I did not intend to needlessly bash on religion in general, but seeing (what felt to me like) a dozen churches in a town of <500 inhabitants was very surprising.


There's more to diversity than skin color. Immigrants from other countries look for people who can speak their own language, eat the same food, worship the same gods etc, and given that the bulk of SF's immigrants (in the tech industry) come from across the Pacific, these communities are much larger in SF (33% Asian) than Atlanta (3%).


"Diversity" in this context is a politically-correct way of saying there is a large community of well-educated Indian immigrants on H1-B Visas living in Silicon Valley and working in the tech industry. Not San Francisco as much, but the South Bay (Santa Clara, Cupertino, San Jose, Sunnyvale, etc.).


Or maybe they meant the large established-long-before-tech Asian communities in Sunset & Chinatown, the Latino/African American communities in Mission-Bayview, the Eastern Europeans in Richmond, or the Italians on Russian hill, the Russians sprinkled around Goddard, or the Vietnamese community in San Jose or .... I could go on and on.

If all you do is focus on tech its really easy to miss the massive immigrant enclaves that have formed in the Bay Area and won't be driven out so easily.


Of course the Bay Area is actually diverse. But I’m skeptical that tech companies actually care about these communities. They care about close proximity to a large population of engineers.


I share your skepticism but take it a step further: can corporations actually care about something other than money? I don't think it even makes sense to anthropomorphize organizations that are governed by profit-before-all shareholders with limited liability and directors with a fiduciary duty to maximize returns.

At the end of the day, the workers the tech companies are competing for do care and that's what matters.


I think it is more about the attitudes than the numbers - there is a neophillia and xenophilia that is pro-diversity.

They don't seem to particularly care about the resulting demographics and occasionally get caught with insensitive assumptions like algorithms that fail to detect dark skinned people due to bad assumptions about how light reflects but they don't like the close-mindedness of xenophobes and homophobes.


Of those cities I've only spent time in the Bay Area and NYC, but NYC feels much more diverse than the Bay Area. The Bay Area has people of every race and ethnicity, but it feels very segregated both geographically and economically. People don't interact across ethnic lines as much (with a few prominent exceptions). In NYC, it doesn't feel like race/ethnicity and socioeconomic status are so tightly correlated.


For economically-secure immigrant groups, that segregation is a feature rather than a bug: https://news.ycombinator.com/item?id=19355273

> There's more to diversity than skin color. Immigrants from other countries look for people who can speak their own language, eat the same food, worship the same gods etc, and given that the bulk of SF's immigrants (in the tech industry) come from across the Pacific, these communities are much larger in SF (33% Asian) than Atlanta (3%).


That's always been my impression of the US. Cultures seem ridiculously segregated - voluntarily. And that applies to hobbies and interests as much as it applies to race and politics.

It's not that people don't mix, it's more that they define their identities by multiple tribal affiliations. And "tribal" doesn't just mean race, it means anything from Mac vs PC vs Linux, to frat houses, to financial traders, to progressive academics, to LARPers, to indie musicians, to YC applicants.

Plus the usual political camps.

There's a patchwork of scenes and monocultures which don't seem to have much to do with each other - which is a different and less permeable dynamic to just being interested in something, or working in some field.


Add language and religion to the list of tribal affiliations and replace racial segregation with ethnic segregation, and you have the way the US sees the rest of the West.

It seems like we're all playing the same game, just with different pieces.


Wrong diversity. All of these places are industry towns. SF is tech, LA movies, Miami tourism and trade, Texas energy and chemicals, NYC Wall St and media.

You wouldn’t start the next big startup in Houston, because who will leave a fat gig at the oil company? NYC is a little different because it’s historically more diverse from a business POV. SF is different because tech spans industries.


regarding #3 -- I kind of despise the Valley in this regard. When you are a tech firm not in the valley, inevitably you get a middle-manager type that comes in and tries to emulate what the latest hip SV firm is doing to boost your street cred. When I look around the offices I have worked at in the South, and up in D.C. in the 00's and early 2010's, we have never had a diversity "problem". There was plenty of diversity, not just male/female diversity, but also multicultural diversity, and diversity of thought and opinion(I've actually worked with some conservatives! They are real!). SV to me pushes their "we have a white male broculture" projections out, so suddenly now it's everyone's problem. Now we have to be explicit with our "diversity" initiatives, despite the fact that we were already much more "diverse" than the SV intellectual and social monoculture you have now.

Anyways, just kind of ranting, but yeah. SV's problems in tech somehow always branch out to be everyone else's problems that are in tech, at least media and high profile twitter accounts and bloggers would have you think that, but it isn't really so.


SV doesn't have a "white male" broculture problem imo. Asians are overrepresented as are Jews, compared to their makeup of the general population, both of which don't identify as white.

twunde 41 days ago [flagged]

SV culturally has a "white male" broculture problem. When people think of tech startups, that is the image they think of.

On a different note, there are two major reasons why you might consider Asians and Jews overrepresented in SV. Jews have historically had major populations in NY, California, Florida and Massachusetts and Chicago[1]. Similarly, Asians have historically clustered in California, NY, Seattle. Asian populations have historically been much more spread out across the US, but some of the largest populations are in California, NY and Boston[2]. Additionally, Asians and Jews have high proportions of individuals working in STEM fields (doctors, engineers, etc) because if you're being discriminated against, in math/science you are either right or you are wrong whereas if you choose a liberal art field like english, there's much more room for teachers/professors to discriminate intentionally or not.

[1] https://en.wikipedia.org/wiki/List_of_urban_areas_by_Jewish_... [2] https://en.wikipedia.org/wiki/Demographics_of_Asian_American...


I'd be willing to bet there are more undocumented immigrants than are a part of that breakdown. Also "asian" encompasses half the world unless they are using the classification in a different way... that's pretty diverse.


[flagged]


Sounds like you already believe you're in a "besieged fortress of sanity".


I grew up in a quite rural place here in CA and went to an evangelical high school, so I know what I'm missing.


> California wisely keeps its snow in one place: Tahoe

Just wanted to say I love this line. I've always said that in California winter is opt-in, but that's even better :)


> California wisely keeps its snow in one place: Tahoe.

Yes but Michigan is also not known for widespread mudslides, wildfires, and earthquakes.


It’s the network effects you mentioned. The reason to be here is because people are here.

While that doesn’t seem like something that _has_ to be in California, it is already here and that’s not something you can just move.

As for why other cities have a hard time competing, it’s the same thing. If CA is perceived as “where innovation happens” then people will look for jobs here. They won’t even look at e.g. Kansas City or Charlotte or wherever, even if there are open roles there.

It doesn’t have to be this way and probably won’t be in ten or twenty years. Especially after this wave of IPOs, SF will likely be unlivable for most. If companies can continue to raise enough money to pay equivalently higher salaries, then the boom can continue a while longer. Otherwise, the numbers don’t make sense.


Mostly weather and culture, imho. California is much more liberal and foreigner welcoming than other parts of the us. And a large part of the well educated tech force is graduating international students.

Regarding weather .. very hard to find same easy weather elsewhere in the USA. Seattle comes close .. and that’s why it’s also impacted, just to a lesser extent.


I don't agree. From what I've seen:

* most people will move somewhere because of a job, not because of the weather

* most people don't want even want to move to another city in the first place.


This.

It's not a choice. 99% MUST move somewhere or STAY somewhere because of a job. Without a job, most people can't live.


Austin is just as good 9 months out of the year, I hear.

Albuquerque NM, is every bit as good (i'm told) as the bay area, with 8 times cheaper housing. there are many more examples you can find in the US that have nearly as good weather.


Albuquerque has awesome weather,* no significant earthquakes, gorgeous scenery (tons of movies are shot around here), fantastic cultural diversity, a decent university, great food, plenty of housing and land to build on, and low taxes and CoL.

*Albuquerque is a mile high, so its climate is much more like Denver than like Phoenix.

What's not so great are a somewhat dysfunctional and corrupt state government, second-class health care and public schools, and a high-tech community that revolves almost entirely around defense work that requires a security clearance. Many of these would be remedied if Albuquerque somehow got a significant influx of startups.


It is not just 'good weather', the actual climate is way better due to proximity to the pacific ocean.


Well, you heard wrong. Both places are much hotter in the summer than the bay area.


I find Austin uncomfortable in summer because of its humidity. Albuquerque is about the same temperature as Austin but because it's dry it's not uncomfortable.


Austin is not that humid. Compared to say Chicago or NYC.


Or Houston. But it's much wetter than Albuquerque.


You can still take advantage of the network effect and not be located in California. Reno,NV to SF via southwest is under $100 one way and the actual flight is around 90 mins or less.


It’s the network effects you mentioned. The reason to be here is because people are here.

When a scene gets hot, there's always the danger of grouthink. There is far too much groupthink here. Much of it now is even the toxic kind. "Fear is the mind-killer." However, fear is only the start, only the beachhead. Groupthink is the main body, and it's the mechanism whereby the mind-killing starts to result in real world consequences.

When a scene gets hot, and there's real money and power to be had, it also attracts the sociopaths.

https://meaningness.com/geeks-mops-sociopaths


It's all about the exits.

You could never get an exit if you were based in Chicago or St. Louis or Montana, etc.


You might have a hard time getting funding in Chicago. I don't see what Chicago would have to do with your getting an exit. Duo just sold to Cisco for $2.3B, and they're in Ann Arbor.


Who cares about exits? Let's build sustainable businesses that operate profitably without insane VC money.


I know you’re asking earnestly, but the sad truth is the vast majority of startup founders care about the exit. Usually they also fail, unless it isn’t their main motivation, but the answer to your question is: most people who start companies.


Yeah in many cases it is "get something cool first and then leave it for somebody else to come up with a business model". Given the fleeting nature of success it makes sense to sell the first one and get enough to retire or be able to afford to lose.


Between this, and the great-grandparent comment, this is a perspective-changing thread.


Speaking as a Montanian, it’s been done before.

https://en.m.wikipedia.org/wiki/RightNow_Technologies


Based in Colorado. Just wondering if you could expand on this.

Seems like what you are saying is no startups in Montana ever get exits - personally I think that's because startups seeking an exit end of moving to The Bay Area because of all the factors being mentioned here.


It’s the Dalton, GA effect — why do carpet companies set up their manufacturing in Dalton? Because that’s where people make carpets. To put it another way, current industrial capabilities contain historical path dependencies that are hard to replicate artificially. In the case of SV (+ Bay Area), the nexus of speculative capital, incumbent tech firms, a startup ecosystem, and top-tier technologists is basically impossible to develop artificially. While the geography of the area may expand — I’m no local, so it’s beyond me why East Bay hasn’t seen significant expansion — it’s hard to imagine SV being displaced as the center of American tech prowess.


  that’s where people make carpets
But you can make software anywhere -- there are no tools or materials supply chain to worry about... especially with Internet everywhere.


You can make software anywhere, but can you hire twenty people to make software anywhere?


It's a lot easier if your company is fully distributed and remote. Then you can hire anyone, from any location in the world.

It's certainly not for everyone, but more and more successful tech startups seem to be moving to that model, and many new ones are using it from the very beginning.


This requires a lot of discipline and experience managing remote teams. It’s significantly harder in a lot of ways. That doesn’t make it not worthwhile, but I’d argue you’re simply trading one set of problems for another. Whether those new problems are worth more or less is entirely dependent on your individual calculus.


> It's a lot easier if your company is fully distributed and remote.

It's a lot easier to hire, but operate and retain that talents is VERY different.


> If they're willing to move from their home to California for work, it's safe to assume they're willing to move from their home to almost anywhere else for work.

Not sure. I moved to the Bay Area from Germany, and while the primary factor was of course the job that was offered to me, the nice weather and the really quite stunning landscape were a factor. I'm still pretty happy if I'm on a hilly street in SF and see the bay, the Golden Gate Bridge, all that jazz. And SF itself is still quite a pretty city, despite its problems.


My first job out of College University had me relocating around the USA about every 9-12 months for about 4 years. Not constant travel, constant relocation. Living out of luggage got bad and sad real quick; I stayed in much too long. Saying "I'm done with this" once I got to California turned out to be good; now, I've lived in the same location for longer than I have since graduating College University and I honestly can't complain. I still compulsively keep boxes because of the bad habits I picked up from continuous relocation... but at this point is a separate issue.

Yes, California rent ever up and on toward morning. Yes, NIMBYs are ever up and on toward morning. Yes, all of the other "Ever Bad Stuff" the same. I don't know where my new next breaking point is, but when it's there I'll find it and I'll act on it; I'm trying really hard to get started on that now, but factors are making that difficult.

My Point: The simple fact of moving to California is not necessarily vindictive of "everyone who does this is going to move around the globe for giggles as suggested or implied". Maybe I wanted California as a destination. Maybe you wanted California as a way-station. Maybe someone born in California wants to stay here ... or move out ... and/or move back eventually.

I have a doubt regarding "You move to California, You'll move anywhere".


I had the exact same thoughts; I grew up in California, went to school here, and now work here. You can claw the Pacific Ocean from my dead, penniless hands. The vast majority of my network seems to feel similarly, even those that did not grow up here. There is a constant saying that’s get thrown around in my company at least: “I will retire in San Diego”. To us:

Seattle is too dreary, slightly too white. Austin is way too white and you are still in Texas (state politics don’t sound like a feels good) New York is too crowded, but in my network this is the obvious next choice: we are told stories in sf that the homelessness is better, techies are in demand and treated well, dating is better for men. LA is where a lot of my network wants to be but companies aren’t growth oriented, we would be stuck in traffic more of our lives, which is why a lot of us left jobs in the valley. My network is primarily techies 24-32 years old, so I’d imagine “growth oriented” may mean less to us in 5-10 years.

Of course this all anecdotal but still relevant and indicative that a certain portion of people who live in California (even transplants) will not just live any where.


I went to SD and my impression: Expected pros: weather, beach, landscape, ocean, Asian and Mexican influence

Expected cons: prices and homeless, artificial buildings, landscapes and often face/bodies

Unexpected pros:every one was super nice, Julio’s, cool airplanes

Unexpected cons: as a person who has always biked and walked. So cal is made for cars. To get from one part of town to another it seemed like in some cases it was just a hw cutting through a valley. Strip malls everywhere - the price you pay for so many options (consumer wise) seems to be paving over some of the most beautiful land on earth - additionally - the juxtaposition of all the luxury stores, boutique hipster shops w army of homeless is just depressing to look at. Not really California’s fault, but SD kind of just made me get down on humanity


haha these are all valid points from a non-californians perspective. I just laugh because as someone who lives in SF and visits SD regularly the homeless issue pales in comparison. My experience with homelessness in SD is that they will generally leave you alone, that is not the case in SF. I have had rotting milk thrown on me on my way to work before.. not a fun time. Also in terms of pricing, SD pales in comparison. So from a bay area perspective, the homelessness and the price become sorta moot points. And yes, california by and large is made for cars. The only place that I have heard people being able to be carless is SF (berkeley/oakland to a lesser extent), so for californians having a car in SD is not unexpected.


  vindictive
did you mean "indicative"?


Yes but it's too late to change it now.


The Bay Area has some of the nicest weather and access to some of the most beautiful recreation opportunities just about anywhere (even if Silicon Valley itself is mostly meh suburban sprawl). It's hard to believe those don't have some effect. Sure, most people who move there do so for jobs, but--especially as they get a bit older--most people will try pretty hard to have a job somewhere they actually like living.


> If they're willing to move from their home to California for work, it's safe to assume they're willing to move from their home to almost anywhere else for work.

Not at all: for me personally, California was a bit of the final destination. It's the place where you have the best chance of being at the forefront of technology. And where you have the highest chance of finding your next job if the first one doesn't work out.

When I moved away from the East Coast to the Bay Area, it was already clear that it'd be hard finding another job in my field (chip design) if my current company would go under. That company has since gone under and over the past decade, a large part of our circle of friends there now lives here.

Talk about Silicon Alleys or Silicon this or that somewhere else is nothing new. I remember such articles in the nineties.

I do think things will slow down in general because of Moore's Law being close to the end. But that's going to be a problem for everyone, not just Silicon Valley.


> When I moved away from the East Coast to the Bay Area, it was already clear that it'd be hard finding another job in my field (chip design)

Yeah, diverse VLSI design is pretty much dead everywhere except California.

Every other place tends to be a monoculture dominated by one company.


This is a great opportunity to remind everyone that the less-known field of Economic Geography [0] exists.

If California's state government mismanages things so badly that the costs imposed by being in California exceed the network benefits things could change very quickly. Until such a day, it is likely that they will enjoy a significant advantage in producing tech stuff. Location benefits are far greater than the pundits realise, some things are nearly impossible in practice if you aren't located in a key hub for your industry.

[0] https://en.wikipedia.org/wiki/Economic_geography


Unenforceable non-compete clauses played a non-minor role in the success of CA as a tech-hub.

Sure take a job in MA or NYC as an engineer, but come back in 2 years when your employer is preventing you from working or building a company.


Honestly, I have yet to see a non-compete at any tech company I've worked for. I think it's not common in the culture today. Tech workers are in high-demand, especially outside of the Bay Area. It might be more common in the financial world of NYC, not sure, but just working in enterprise SaaS software world, haven't seen it.


I have never not seen it. Non-compete and non-solicitation clauses are almost always non-negotiable and standard in employment contracts I have helped friends review, outside of CA. (Specifically TX, NY, WA, MA are the ones I’ve seen)


I have worked for or received offers from seven companies in Texas, New York, and Florida. Only one had such a clause, and that one was a small company that didn't really care about it.


I believe you. I’m just saying it’s not as uncommon as parent made it out to be.


> just working in enterprise SaaS software world

Microsoft, at least used to, aggressively enforce non-competes. I worked on an enterprise product at Microsoft in the 2000s and left to go work at Google, but I could not work on Drive/Docs etc


How was that enforceable? Unless you were working for Google outside of CA?


I was working in WA.


But have you seen aggressive assignment of invention clauses? California is pretty straightforward about "your time, your equipment, your invention".


One more condition normally, I think -- it shouldn't be relevant to your employer's business. That's a biggie, and makes it very dangerous to do any kind of programming in your own time if you work for a big company.


Ah, yep. That's an important one.


Note that:

1.) Massachusetts recently passed a law significantly limiting non-competes

2.) I've never been able to find specific numbers, but my experience in Massachusetts is that they're far from universal. I've only had one in my career and that one was quite narrow. (That was EMC which was one of the local employers who fought hardest against the weakening of non-competes.)

I don't like non-competes and personally think the new law should have been stronger than it was. But, historically people jumped around employers like the Route 128 computer companies all the time.


I'm in Massachusetts and when I got a grunt job at an Amazon FC a few years ago I had to sign a noncompete. I don't know if it's enforceable and doubt it'd be enforced, but technically I think I'm not supposed to take a comparable job elsewhere for a year after I quit, or something like that.


the law bans this kind of thing now (as of October 2018): you simply can't have a noncompete unless the employee is exempt from overtime.

even for an exempt employee, the MA law now requires 50% salary to be paid for the period the employee can't work.

i don't know if existing agreements are enforceable or not though.


In my time in MA, I worked for three separate MIT startups, one top software company and one IP law firm. The law firm was the only one that didn’t require a noncompete. One of those companies was backed by one of the loudest voices in the Boston/Cambridge VC community campaigning against such agreements. The company had me sign an updated non-compete upon closing a funding round at the same time their VC was giving public speeches denouncing noncompete agreements in MA. Until the garden leave requirement covers 100% salary, the updated provisions to MA noncompete law are toothless.


Probably due to the culture of those in HR and Legal they have gown up for generations with these one-sided agreements and just implement them with out thinking.

A few high profile sackings of HR directors or General Counsels might help.


50% garden leave isn’t ideal. A lot of people aren’t in a position to take that pay cut (along with bonuses and RSUs) to hang out for a year. OTOH it makes companies put a fair bit of skin in the game which has considerable value.


Generally the 'exempt' thing needs to be pushed up to CEOs and such only as well.

Someone without the latitude to hire, fire and delegate as necessary should NOT be exempt.


There’s already a very limited set of exemptions, although most startups definitely pay zero attention to these laws. We’re very careful about them, but most aren’t; frankly, it’s very annoying to our non-exempt employees because tracking is a pain in the ass, but them’s the laws :/


People desperately want to escape CA but have no choice because that's where the jobs are. Jobs are there because companies are there. Companies are there because it's not their problem and they don't pay the full cost of their egregious location decisions. It all comes down to supply of jobs vs supply of homes: it's desperately out of balance.

Voters think they can actually stop growth by stopping housing development. It's not the housing that brings people to CA, it's the jobs, especially jobs for immigrants and jobs for people outside of CA (in the US).


That used to be the case but it is changing now because potential employees are saying they aren't as interested in bay area because of the cost of living. I've seen more companies offering remote working arrangements. Work from home in vegas, reno, phoenix or some other small town within 1,000 miles from the bay area and then one day per month, fly into SF to attend the monthly meeting.

That's why companies like wework and regus are becoming so popular these days. I've seen a decent amount of tech companies signing deals with these companies to basically be able to offer remote working as a work benefit.

Of course, if employees don't want to use the remote working benefit then they can still live in the bay area.


California doesn't enforce non-competes so it's very easy to for employees to start a new business with little risk of being sued. Eg: you could work for Google self-driving car division, and leave and start a competing company. It happens all the time.


Probably not the best example. You still can't steal trade secrets and can still have NDAs.


Of course, but the big difference is that Google can't prevent you from making a living using your skills as a technologist at a competitor, even if that competitor is your own startup.


We've already seen Apple's Self-driving division have multiple alleged trade-secret thefts.


CA has some good laws, such as regarding non competes, parental leave, sick leave, environmental laws, legal marijuana, assisted suicide. Nice weather and landscapes also help.


Many other places have similar laws, and even in the places that don't, the tech companies there typically do those things regardless of whether it's a legal requirement.


To my knowledge no other state throws out non-competes like California does.


But do they do those things because they must compete with the Californian companies that are required by law?


> But do they do those things because they must compete with the Californian companies that are required by law?

They do those things because they have to compete with everyone in general. If employees want parental leave and will choose the company that provides parental leave over the company that provides <savings from not providing parental leave> in additional salary, companies will offer parental leave regardless of what California requires. And likewise if employees preferred the additional salary over the parental leave, they would provide that in a place the law allows it, even if that isn't allowed in California. But tech employees frequently prefer the flexibility to the money (because the money is still pretty good regardless).

The exception to this is things like CARB where companies will design a car to meet California's fuel economy requirements, but then that model exists and can be purchased by anyone regardless of whether they live in California. If something has a fixed cost, the law in one place requires it, and that place is important enough to justify paying it to operate there, it gets companies to pay the cost. But that doesn't really apply to variable costs like employee benefits.


Yup. I don't work in CA but it's obvious that CA laws affect us too, for better or worse: CA emission standards, Prop 65 warnings, etc.

And I know my salary and benefits are abnormally good because the HQ is in the bay area. Local companies don't give as much.

I feel like I got the best draw by working for a CA company outside of CA.


It's funny how you call 6 week paid parental leave "good laws" - come to Europe, it's typically 15-26 weeks, up to a year in some countries.


Well, yes, relative to the options that other Americans have. It is sad, but I hope I can improve the situation for my children.


>So if there's nothing holding technology to SF/LA

You just stated the reason why the tech companies are there. Feedback loops are a real thing that happens.

As a result of all the tech companies being there, the tech VCs are there, the recruitment agencies are there, etc, etc. That’s just how this works. To see the original factors you’d need to look at the history of the region, but beyond a certain point these things become self sustaining.

Sure there are forces in the other direction, and some individuals or companies might find them compelling, but specialisation works.


For me personally this is the best place I could find where the environment pushes me to be better always. It’s the difference between launching something and making $8k in a week and people around you saying “Why so little? What went wrong? How can I help?” instead of “That’s not possible you must be lying”

I for one find it easier to change my environment than to fight my environment.


> Why do tech companies flock to California (LA/SF)? I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1].

2 flaws here:

1. The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies.

2. Being close to technical universities is good if it gives you a recruiting edge, even if only some of your employees come from that school.


> The majority of those h1b workers are at like tcs Wipro and Infosys, not conventional sv companies.

Who do you think those companies contract out to?


The question of "clustering" is an old one in economics, and also politics and public discourse. PG addressed it a few times, for example. He also write about how to create new centers, fwiw.

It's not a straightforward question, and I don't think any answer is entirely satisfying. A couple of cents though.

1¢ - Industries like tech are a cultural phenomenon, like a music industry or art industry. You can't just decide that Warsaw will have Seattle's grunge rock scene. It just grew there as a cultural outgrowth. It can't be planted elsewhere with predictable results. The thoughts and little decisions made by people are influenced by their cultural context.

2¢ - For the best (in business terms) tech companies, currently, costs like salaries mean nothing.

Twitter and FB were Twitter and FB with 1% of their current visits and employees. The extremely profitable and businesses enabled them to hire tens of thousands of people and spend tens of billions per year. We're these people necessary to the ad part if the business that employs most of them?

I suspect that they aren't. IE, if it turned out FB could only make $40bn or $8bn pa (currently making $80bn) from their site, they would manage to produce the same fb with few compromises on a much reduced budget. This isn't BMW, where operating costs and economic output (the number of cars) are tightly related to eachother.

If google or FB want to increase profit margins, they can, easily, by a lot. They would if they needed to, but they don't. Capital markets like the idea that they are reinvesting for growth and capital markets don't have any better ideas for where to invest profits anyway.

With no incentive to cut costs, why move somewhere cheaper?


I don't think the almost anywhere assumption holds for several reasons - a bad cultural climate can be a sure turn off (anti-intellecutalism and open bigotry), a "good" one can be a pleasure, and employees prefer to have plenty of alternative employers.

There are multiple reasond - security from layoffs or bad workplaces, job-hopping is the defacto way to raise salary, and it also keeps them having to compete for them some.

A middle of nowhere job sets off "it's a trap" alarm bells consciously or unconsciously as an isolating move.

That said there is a lot of range between "most expensive areas in California" and "cheap one company towns".

I suspect sprawling out to network edges would maximize benefits for costs similar to Palo Alto once being the cheap option.


I suspect we've already passed it but it will only be obvious when in retrospect.


I have one answer for you, the opportunities and the salaries are the greatest. Since all the great teams are in the bay, if you want to join one, you are forced to move to the bay now. It's a cycle.


> I often hear people credit the great technical universities. But that can't be, because most of the actual workers at these companies didn't go to Bay Area or even California universities [1].

Having great technical universities doesn't mean most workers will come from there. Obviously a majority of employees do not come from these schools. But a plurality? I wouldn't be surprised.


The Bay Area is a 'critical mass'.

How it came to be is related to a variety of factors.

But it has incumbency in some things and will be impossible to compete with in some ways.

Better for regions to develop competencies in which they have some kind of advantage. Alberta makes some kind of specialized natural resources extraction tech. Makes sense!


Network effects matter a lot in startup world. You learn a lot about your own business by talking to other co-founders and business leaders. The lead generation is easy and talent is easily available.

Indian and Chinese immigrants also play a big role. Stuck on backlog these are cheap employees who are desperate for employment because their H1b is tied to they having a job. These people will work for 60 hours a week for a salary of 20.


The Duke of Westminster owns huge chunks of real estate to this day :-)


Just how much ink needs to be spilled about how California and Bay Area are doomed. I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest. The gap between SF and rest of the country when it comes to venture investment has actually grown as the cost of living has gone up. For example, in 2018, $45bn was invested in Bay Area startups whole only $1.5bn was invested in Austin and even less in Denver, Utah etc. It is not even close. Weirdly, the other fast growing tech regions are similar to California - expensive, dense, and left leaning (NYC, Boston, Seattle).

Maybe this time the prediction will be true, but I am willing to take a large bet against it. And this is because several things, but the primary reason is that California continues to overindex it's policies towards people, while other competing states overindex on business friendliness. But in the knowledge economy, a thirivng talent market is far more relevant to a business than some tax breaks. If you can't execute and be profitable, what's the point of a tax break. California optimizes for people through various mechanisms - non competes, inclusivity, diversity, environment, labor protection, safety net etc. If a place is great for people, it is great for business.


CA and Bay Area will be fine, economically speaking, but at least from my perspective we've already reached a tipping point where it's become so expensive for your average family that it's created this strange, dystopian atmosphere (in SF) where you have obscene wealth next to in-your-face poverty, there are basically no kids because no one can afford to raise families here, streets downtown are lined with human feces and used needles, $1m gets you a small 1-bedroom fixer upper in a bad area, diversity (in profession/race/ages) is extremely limited, and people are generally stretched/anxious due to cost of living.


Obscene wealth next to in your face poverty is nothing new, nor particularly special about SF. I don't deny it's a big problem, but this is pretty much what every major city wrestles with. Nor is this unique to our time period. For example, it's well documented that in Paris through as early as the 1700's through now, that there was an enormous amount of capital concentration right beside extreme poverty and >40% of the population owning net nothing. 'Dystopian' is also a very dramatic language.. Where do you live in SF? If you live in downtown or soma and only spend time there, I can see what you mean. However if you go out to richmond or sunset for example, there are a lot more families and children there.


It's different in SF. The homeless are much more "in your face" than in any other city I've been to by a long shot e.g. in NYC the homeless mostly keep to themselves and aren't very aggressive in my experience. In SF they are very aggressive, many with mental issues, talking to themselves or yelling at others, and appear to be on drugs. I've never visited a city where they are so many homeless who are simply passed out in the middle of the sidewalk on the hard ground with people in suits stepping over them downtown. It's also more "visible" because services that cater to homeless are all located downtown.

I live in Castro, but obviously like many spend a lot of time downtown for work.

Sure, there are families in the outer neighborhoods, but it's different in the sense that those are mostly families that have lived in SF for generations. Good luck trying to raise a family as a newcomer on the reported median household income for SF of ~$78k.


Agreed - there are a lot of aggressive homeless people downtown, and in berkeley as well. Some guy was cussing me out and trying to pick a fight with me the other week when I was just walking along.

Definitely true, SF really is unlivable on a median income and that is a continual frustration I have.


> it's well documented that in Paris through as early as the 1700's through now, that there was an enormous amount of capital concentration right beside extreme poverty

1700s-present France is not what comes to mind when one says the words "stable and prosperous".

What does come to mind is executing a bunch of people then spending 150yr trying to figure out the best way to replace them.


> Obscene wealth next to in your face poverty is nothing new, nor particularly special about SF.

It is common in developing/third world nations. Income inequality is a hallmark of such nations. It would seem that the United States has dropped from a first world (creditor) nation to a third world (debtor) nation. It is a fairly recent phenomenon with very real and easily explainable reasons, which the article states numerous times over.


Any decent-sized US city has its share both wealth and poverty, but most are dominated by postwar development, so the two are separated by miles of freeway rather than feet of sidewalk.

Where inequality seems worse, you are probably seeing a successful progressive effort to prevent segregation, and vice versa. When your neighbors and everyone you encounter in daily life are all in roughly the same economic shape as you, that doesn't mean you're living in an egalitarian society. Quite the opposite.


You have triggered me, so I will rant a bit about the Fallacy of Equality of All Good Things.

Let me explain:

   * Fallacy 1: First/third world = Creditor/Debtor
The financial hubs are always debtor countries, because the periphery wants to accumulate their reserves. So when England was the dominant financial power it always ran a trade deficit as everyone else wanted to acquire pound-denominated assets, which is a roundabout way of saying they wanted to be creditors to the UK. This allowed consumption goods from all over the world to flow into the UK while the rest of the world used the proceeds to acquire pound claims.

When the U.S took over, everyone started accumulating dollar assets, meaning they were creditors to the US. How did they achieve this magical feat? It's pretty easy, they just made their currencies a bit undervalued relative to the currency of the core. Nations can trash their own currencies pretty easily -- there is only a political downside, but if you can convince your countrymen to tighten their belts in exchange for being a creditor nation, then all the better, especially if you really need a reserve with which to buy foreign inputs. In other cases, they were not very democratic to begin with, so it wasn't an issue.

This is also true if you study local financial flows within a country -- a major urban area will be a debtor area and the poorer, smaller region around it will be a creditor to it, which is just another way of saying money flows out of the city and consumption goods flow into it from the land around. If you compare how much a person in a city consumes per day versus how much a person in the periphery consumes, we in the core consume quite a bit more. Restaurants, bars, custom shoes, concerts, museums -- we really live it up! How can money just flow out of a city without a printing press there? Because the periphery re-invests by purchasing assets in the core, recycling the money. So if you live in a farm or small town you will have a retirement account with stock or bonds that are claims on companies in the core -- the money you save is being sent back to the core rather than being invested in some other small town -- thus the periphery is a creditor to the core. This is true for cities as well as nations. This phenomena of net trade inflows to big cities was even true of Ancient Rome and Ancient Athens, but there it was pretty obvious that rather than having the farmers invest their money in Rome stocks, they were just taxed the loot was brought into Rome. The developed urban core is always a consumption sink while the more rural periphery tightens its belt.

This does not mean that the core is third world and the periphery is first world -- it means the opposite!

   * Fallacy 2: strong currency = export power. 
There is a similar fallacy with being an export power and having a "strong" currency. People like to have a "strong" currency -- e.g. who prefers weakness to strength? But people also like to be net exporters, because they want to make more income selling goods to others than they spend buying goods from others. But the stronger your currency, the more expensive your product and you become a net importer. Because assets in the core are somewhat overvalued relative to the periphery that the core is a net importer. You can see this by comparing interest rates in the periphery versus the core.

But you often hear people demanding both a strong currency and being an export power. And sometimes they throw in first world and net creditor to boot. Even though these good things are the opposites of each other. You have to pick and choose -- do you want to export a lot with an artificially weak currency, or import a lot with an artificially strong currency? Do you want to be a financial hub and thus a debtor or a smaller node orbiting the hub and thus a creditor? You can pick and choose what you want, but you can't have it all.

Here endeth my rant on the fallacy of Equality of All Good Things.


> California optimizes for people through various mechanisms

Except for high personal income tax, school funding, cost of living (food costs, utility costs, etc are all heavily affected by public policy), regressive consumption taxes (like the fuel tax), high sales tax, poor public transportation, and so on.

It certainly doesn't feel like California is trying to optimize for people.


It's optimizing for long time Californian land owners, cf. Props 13, 8, 58, 60, 90, 193, 218, 39, 26.

Direct democracy has the Native Sons of the Golden West building thier economic wall around the state ten feet higher every election. I don't see any way out without federal intervention.


> I have probably read a hundred article over the last 15 years predicting the demise of both, but in reality the exact opposite happens as California and Bay Area economy continue to crush the rest.

Maybe I just wasn't paying attention before, but I've read a lot about it lately, especially in the context of New York being the next Silicon Valley. I feel like this was especially true when Amazon was considering it as a location for HQ2, but even now that it's not I keep seeing NYT articles about NYC being #2 in tech (ignoring Seattle, for example) and how it's definitely gonna surpass SV at some point because it's "a so much better place to live", has "so many more creative professionals", etc. This article doesn't say it outright, but it kinda alludes to it making NYC the primary example it compares The Bay against.



Thanks for the article links that underscores my point. Somehow businesses are always fleeing California and we have the worst business climate, while at the same time becoming the fifth largest economy of the world, home to 3 of the 5 most valuable companies in the world, and home to the next set of valuable startups.


It's worth noting that $45bn of funding in the Bay Area probably only goes as far as $15bn would in Austin. Companies are indirectly paying their employees' housing costs after all.

I'd like to see numbers by per-company and per-employee funding, adjusted for purchasing power.


It must be mentioned that SF housing prices - i.e price for median homes - are now nearing levels where regular people may never be able to pay off their mortgage. And these homes are increasing 15% in price, every year.

That is, IMO, very dramatic.


I love seeing all the speculation here on HackerNews about why tech companies flock to California, and especially to the Bay Area. Everyone has their own theory: access to money, the great weather, non-competes not being enforceable, great universities, the “pay it forward” attitude, immigrant diversity and tolerance, "good" public transit (as compared to other parts of the US), network effect (because the best developers, investors, and tech companies are already there), beautiful landscapes and the ocean, concentration of VCs, etc.

It reminds me of a similarly long discussion here on HN about why Americans were generally thin in the 1950s but much fatter today. Again, everyone was pretty sure of their reason, the leading theories being: fast food, food being cheaper, rise of sedentary jobs, less physical activity due to more cars & labor saving devices, wives now working outside and not cooking at home, big reduction in smoking (because it keeps you thin), more sugar in foods, more carbs in our diet, etc.

All of the theories above sound reasonable. The problem is that there is almost no way to do controlled experiments to find the true answer. And the true answer could be quite complex, like it was initially 38% factor A, 22% factor B, and the C,D, & E making up the rest, but over time it's become 5% factor A, 11% factor B, with factor D now dominating at 58%.

I'm resigned to the conclusion that we're not going to know the answer. It's a complex interaction of millions of individual decisions and interrelated changes over a period of decades in a way that's not reproducible.


It is probably first mover effect. Bay Area had silicon valley. Remember silicon? Many things involving semiconductors and electronics grew up in the Bay Area because of Fairchild and the traitorous 8. In fact, you could make the argument that the first generation of electronics businesses involving vacuum tubes were in the area as well (in Oakland). Software companies growing there happened later when the semiconductor money needed something to invest in, and computers were something semiconductor people understood.

Nobody wonders at Wall Street being a center of finance after some 18th century traders met under a buttonwood tree, nobody wonders at Hollywood continuing to be a center of film and TV production, and nobody should wonder at Bay Area being a center of software development.


>It's a complex interaction of millions of individual decisions and interrelated changes over a period of decades in a way that's not reproducible.

Somewhat incidentally this is the major theme of Tolstoy's masterpiece War and Peace


I'm skeptical of any model that throws up its hands and says "this is so for a number of reasons I guess". Multifactor trends are unlikely [1], bad at explanation and prediction, and easy to fit to anything. It's better to admit you don't know than say it's a combination of N things.

Remember, most things are hard to explain until you know the truth. That doesn't mean the truth is super complicated.

[1] https://slatestarcodex.com/2015/02/14/how-likely-are-multifa...


Does everyone really love the California climate? It's awful. too hot, forest fires almost every year, drought. Only deserts are worse than that.


I love the San Francisco climate. Minus the fires, which are a recent, suboptimal thing. It's rarely too hot or too cold for me.


California is the United States, writ large. It's not qualitatively different, it's just more so.

Or, from a slightly different standpoint, the rest of the country is California, just 20 years behind schedule.

I have lived in many different places all over the United States, including twice in California, where I have settled with my family, and it's very easy to fall into a "crazy california" narrative - especially when comparing with "sensible" places like Minnesota. But it's not true. Right this very moment in Minneapolis there is a heated, polarized debate about housing affordability and homeless services and zoning that is indistinguishable from the SFBA debate (save for the pricing numbers difference).


Interestingly enough, Minneapolis just upzoned the entire city.

https://www.nytimes.com/2018/12/13/us/minneapolis-single-fam...


I'm not so sure that California is ahead of the rest of the country. The effect of the tech industry on the Bay Area's fortunes is not that unlike the effect of the auto industry on Detroit or even the textile mills on New England. Silicon Valley is just the latest iteration of a cycle that has existed for a long time.


it seems like global competition is the force that ultimately damaged both Detroit's auto industry and New England's textile mills. on the surface at least, it seems reasonable to guess that, somehow, global competition will be the force that ultimately dethrones Silicon Valley.


The "you can't offshore tech" arguments of today are basically the same "you need skilled labor to manufacture this, they can't do that in the 3rd world" arguments of decades past.


They did try to offshore tech but it failed to fully displace for various reasons.

I'm curious were there attempts at remote industrial outsourcing in the past that failed? I know that Ford attempted his own South American rubber plantation that essentially ended up in literal rebellion due to being a control freak, cultural imperialist and poor agricultural planner.

https://en.m.wikipedia.org/wiki/Fordlândia


For SV's demise, I think the pattern to watch for is corporations like Toyota or Honda.

During the decades of their ascendancy, they actually understood the US consumer better than their Detroit counterparts and built cars the US consumer favored. Then they built factories in the US. Yet, they remained truly Japanese companies.


Other cities have the same problems, but are not following the same failed solutions. Another commenter posted about how Minneapolis upzoned the whole city, something unimaginable in the bay. Rent control also has little traction there.


Is the argument really the same, or is the media just presenting it that way out of laziness?


You're right as far as blue cities/states go. But Some other cities (some red ones and some blues that are less liberals) don't stop housing from being built as much. The less rules and regulations and zoning, the more supply is created. Houstan, Dallas for instance are much more affordable.


For all of the talk about California’s immense wealth, most people are unaware that the state also has a higher rate of people in poverty than any other state when you correct for local cost of living and taxes.

https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr...

(See the column of the Census’ supplemental poverty measure.)


I'd love to see some numbers that take the origins of the homeless people into account. Did these people become homeless in California or did they become homeless elsewhere and then migrated to California? The mild weather and liberal attitude make CA a lot more attractive to the homeless than many other states.


For San Francisco, 71% had housing in the city before becoming homeless, 19% were from CA and only 10% from the rest of the USA. http://www.socketsite.com/archives/2016/02/san-franciscos-ho...

The homeless rate here is similar to that in New York, but New York has a right to shelter so far fewer sleep on the streets than in San Francisco. It's less that the mild weather makes CA more attractive, more that it lets CA governments ignore the problem.


I had not heard these statistics before but they are very informative. I live in New York but visit SF often for my job. Every time I visit I am shocked all over again at the extent of the homelessness and poverty right next to obscene levels of wealth from tech.

I always assumed New York just had fewer homeless but these statistics prove that the CA government has instead completely and utterly failed to support this population of people. In general, San Francisco seems like a terrible place to live.


OP was discussing poverty rather than homelessness; having cycled through a number of bay area cities which have a much less favorable economic situation than downtown SF/Oakland/Berkeley/San Jose/MTV/Palo Alto/etc... yes, there are serious problems with poverty in California.

Most commentors here have some kind of conceptual idea about what poverty is like, or see West Oakland town houses sometimes from BART, or have ideas shaped by homelessness in SF and occasional conversations with colleagues and friends - the reality is that there's a whole ton more people out there living on much less, and it's a different world entirely, especially when you see it in person.

In some ways it's probably less dangerous than people would imagine, but it's also shocking and nearly third world.


With great wealth comes great inequality: for the most part, California condenses all the extreme parts of the U.S. economy into one state. Unless California invests more in its public utilities (or anything that allows for an even playing field), economic inequality in a high economic region should be expected.


> With great wealth comes great inequality

What do you class as great wealth? Scandinavian countries seem to do OK.


I would say that statement holds true for most countries. The Nordic model [1] is an exception, and why I said California should invest more in its public welfare.

[1] https://en.wikipedia.org/wiki/Nordic_model


Counterpoints

> It’s no longer the best place in the world to start a startup.

The place with most active investors with the largest investments? The place with the biggest pool of programmers and pms and designers? The place with the best legal system to foster entrepreneurship?

Where else in the world would you get all of this? (Not even including beaches, attractive people, weather, food, top hospitals and universities, diversity, optimism, etc)

And to the author. San Francisco != all of tech in California

> The gains from the existing tech industry increasingly accrue to a) passive investors, and b) lucky landlords.

Sure, but compare that to any other industries. Tech industry is still very very mericratic. (Low startup capital, barrier to entry) Besides, every company is a tech company now

> The state government is a levered bet on tech compensation.

Why would you not want to bet on the best industry going forward? The one that eats all the other industries?


>>> The place with the biggest pool of programmers and pms and designers?

right but if you want a halfway decent one you have to compete with FANG and pay 300k a year.


There is no shortage of people in Silicon Valley willing to work at startups, and that's why there are so many startups.

Among those people are successful FAANG employees who already made a bunch of money and feel safe trying something new, because if it doesn't work out they are not going to go broke and will probably end up back working at a FAANG.


> The place with the biggest pool of programmers and pms and designers?

Why do we have regular discussions on how hard hiring in SV is, then?


It's hard to hire in SV because it's the most competitive talent landscape for technology in the world.

I work in recruiting (software salespeople), and this is by far the best market in the world for hiring in that niche. The talent you get here is significantly better than anywhere else. I make the analogy that it's like hiring for finance in London or New York. Outside of a global city, working at Goldman Sachs is impressive. However when you're hiring in NYC you can get much more granular - getting someone who's worked in the right team, on the right sort of deals etc.

There are plenty of actors in the world, but Hollywood is where entertainment deals are done. We'd laugh at someone trying to hire the worlds best Oil & Gas team in San Francisco. These are the big leagues.


I enjoy Silicon Valley obituaries. I've read them every time some bubble bursts, whether it was the video game bubble, the integrated circuit bubble, the dot-com bubble, or the social media bubble.

What the authors usually miss is that the things they call out as killing the Bay Area (home prices, job shifting, taxation, Etc.) have been true for at least the last 60 years. What they miss are the things that power the engine.

Those things are an at will work force, with legislative protection against non-competes, combined with wealth sharing/creation that is unlike any other place in the world.

There are more IPOs coming out this year, Lyft, Uber, and others. And already the real estate folks have said "prepare for the shock of higher prices." That is because there will likely be thousands of millionaires minted over the course of the year. And while that wealth will be distributed unevenly, some will be lucky, and others will not, once again there will be a refreshing of the 'who got rich with some big event' sorts of stories and people will "know" someone who got rich. I got to experience that when Sun went public, lots of people I knew as co-workers were now much much wealthier than I was, they were buying houses in Palo Alto and Saratoga and I thinking about private school for their kids. Sometimes, or or the other of a married pair dropped out of the workforce. And with that wealth people left the companies where they made their money and went to other companies to grow them. Some of them got to experience that IPO burst, two, three, and even four times.

You get groups of people who "self fund" their adventure/idea and work for free on some new topic. That is hard to do if you don't already have independently wealthy engineers to start with.

Think for a moment if your city was full of people in their 30's and 40's whose lifestyle and needs was fully funded by their existing wealth. Do they sit around and sip drinks on the porch? Not here they don't. They get together and start building stuff. Sometimes small things, sometimes big things. And when they do, there is no shortage of capital companies that are willing to augment their efforts in exchange for a piece of the pie. And some times that explodes again into another pile of wealth.

It is certainly a pretty unique place to hang out. And I expect that is part of why it is so hard to "replicate."


Well said. Reminds me of something I heard in some interview about what makes the valley special that really stuck with me. It goes something along the lines of:

"There's no other place quite like the valley for starting and scaling a company from the ground up. No other place in the world can even come close to the valley in terms of the sheer number and concentration of engineers, leaders, and investors who have experienced the scaling of a company from the ground up first hand. And those are the people you want by your side when starting your own company, because they can apply their learnings to help your company grow at an accelerated pace and avoid the pitfalls they encountered along the way."


It's the language of the city and the region. Walk through downtown San Francisco and you hear people talking about funding, about IPOs, about engineering, about CAC and LTV. For better and for worse, everyone is in tech here.


Something touched on with the piece, but not quite hammered nearly as much as it should have been: switching costs, which have dramatically changed in the past 10-15 years.

The initial round of California VC money came from hardware startups cashing out. Hardware is tied to the physical realm, and thus locality is important - if you need to buy leftover equipment or supplies, it's way easier to get them if you're in the neighborhood as your vendor.

The next round of software startups in the 90s through early 00's had a similar switching cost with VC funding. Though we obviously had telephones and email, we had not fully transitioned into the "remote work" mindset that allows teams to collaborate regardless of distance. It was challenging for VCs to work effectively with their founders, and for founders to work effectively with their teams - which forced teams to co-locate with founders, and founders to co-locate with VCs.

You don't need the world's best software engineers to launch a startup - you can launch something with sufficient complexity to start making money in Denver, or Austin, or Chicago, or anywhere else with a reasonable supply of engineers. And now, VCs are far more tolerant of remote founders given how easy it is to stay in communication. If all that is true, why make things more economically challenging than they need to be by trying to fight the economic headwinds of California?


Oh boy, here we go again, another article proclaiming that California is too expensive and you're better off starting your company elsewhere. California has been expensive for a very very long time, decades. Yet, every year, someone gets hopeful that this is it, this is some sign, tech is finally moving on from California. When I moved to California in 2007, startups in Austin were the next big thing. SXSW celebrated a huge number of Austin startups, and then once they grew to a larger size, they all migrated here to California and the scene seemed to evaporate overnight.

The problem these types of articles fail to grasp is that even with paying a tech worker over $200 to 500k a year, that is still an amazing return on investment. Not even considering just the FAANG companies, but all the other ones like LinkedIn and Square, Twitter and DropBox, they're raking in billions a year in revenue. They make so much raw cash, they have stock buybacks and investment arms of their companies that just invest in other things.

There are other tech cities, of course, Seattle being another hub. You don't have to pay as much for your employees and the cost of living is adjusted for that expectation. LA and NYC have a pretty decent cluster of workers as well. The problem is, you can find generalists, but once you start to need specialized engineers or roles, it gets exponentially harder and you end up creating remote offices in the Bay Area to capture that.

I'm not going to defend that it's not exhausting living here. It's hyper-competitive and the politics of "live and let live" create pockets of very seedy places in all the strange areas. Yet, some of the brightest people in the world live here doing some of the most amazing things in the world. It's super easy to find a meetup where, for example, the guest speaker invented Rust, for free, with pizza, on a random Tuesday! Other places around the world have to create these specialized conferences to make it worth their effort.


> that is still an amazing return on investment.

bingo. to first order it's a winner take all game. it doesn't matter how much cash the VCs need to pay to start one of these contraptions. what matters is that the contraption succeeds.

if the chance of success is 0.01% in SV, but it's 0.0000001% in Austin, it doesn't matter at all if the costs are 10 times as much in SV. VCs are not starting companies to save cash. they're starting companies to dominate an industry. so they buy the biggest guns and it doesn't matter how much they cost.


San Francisco is just...dystopian at this point. In-your-face poverty mingling with obscene wealth, human feces and used needles everywhere downtown/SoMa, decrepit 1 bedroom homes that sell for $1m, very few families/kids, and to make things worse stores that would be open til 10pm in any other city don't seem to stay open past 5-6 (at least in the Castro).

Edit: I thought it was weird for me as a single youngish male to "care" that there are kids and families in a city, but you're reminded when you go to basically any other city how much "realer" a city feels when you actually see families (moms, dads, kids, grandparents) walking around and enjoying each other's company and life in general.


It always makes me chuckle to see a work of fiction set in modern San Francisco that treats it like a normal city where normal people live. The NBC show “About a Boy” is a perfect example [0]. It’s hilarious to see just how out of touch most Americans are with what this city has become. San Francisco may have been an actual city in the past, but it’s just a filthy office park at this point.

[0] https://m.youtube.com/watch?v=PytVvfY3jiU


A lot of SF feels the same as when I lived there in the 90's. I'm mostly familiar with the inner richmond and sunset areas. Most of the same restaurants and stores are still there.


I think its a good article, but I'm confused about the author's implication that the state government is consciously choosing to depend on income and capital gains tax revenues. California does depend on those taxes, but not by choice: Prop 13 made it basically impossible for property tax revenues to grow at the same rate as the economy.

I also agree with the other comments here that this author seems to think SF == Bay Area. Much of his comments about hippies and landlords conspiring make no sense in the rest of the bay, where it is actually relatively wealthy homeowners conspiring to prevent growth in order to ride the surge in home prices.


A couple years after Prop 13 was enacted in 1978, the California legislature approved of Mello-Roos Community Facilities District taxes in 1982. They exist on top of regular property taxes (they do not replace them). While I agree with your narrative that it's hard for California to raise property taxes (beyond two percent per year), CFD's help bring in new property tax revenue to ease the gap.


I've seen this article over and over through the years. I moved to Palo Alto in 1984 when all the houses were under water and people told me that I'd missed the boom. California has plenty of issues, but always muddles through them.

California's economy is more diversified and resilient than that of, say, Detroit. There's much more to the state than startups. Sure, eventually it will be superseded in some way or another, but I doubt it will happen in my lifetime.


I've had a few casual conversations about the collapse of California recently. In my opinion, zoning laws will be the death of San Francisco. The greed of the NIMBY's will eventually drive prices too high for anyone that didn't buy 20 years prior (i'm amazed it hasn't happened already). I've been entertaining the idea of a state putting extreme limits on zoning laws. I'm not an economic expert so i'm not sure what it would look like, but I can't help but compare to Tokyo with their ballooning population and stable cost of living.


Japan has fantastic zoning laws. Here's[0] a great blog post about it.

[0]http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html


If rent goes up too high, and businesses cannot afford to raise wages to keep up, units will go unfilled, and they'll pivot downwards again.


California is fucked because normal people can’t afford to live here anymore. At least not in the Bay Area, LA, and San Diego. In San Francisco a favorite pastime is to blame tech workers for “driving up rents” anyone who has taken economics knows prices don’t work that way. Prices go up when demand exceeds supply. We also are quite aware of WHY demand exceeds supply. 1) People keep coming here because we keep hiring, and 2) people who already live here block new housing construction. The objection we see in every community meeting is “we don’t want to change the character of our city”. I assure you, driving out your teachers, bus drivers, baristas and librarians is changing your city even worse. It leads to congestion, increased homelessness, loss of diversity. For every ten jobs we create we build two new houses. It’s not the people with new jobs that suffer.

Here’s the solution. A new state law saying if a city adds a job it also has to permit the construction of a unit of housing. Done.

I assure you if the City of Mountain View has to follow that rule, the muddy lot next to Google campus (currently zoned for hotel) would have a ten story apartment building in it next year. Why hasn’t it happened yet? Not allowed. Well who doesn’t allow it? The city. Why won’t the city allow it? Residents don’t want new housing. Why don’t residents want new housing? A mistaken belief that blocking new housing will preserve their city. Blocking new housing will in fact destroy our communities. We can get out of this mess, but we have to build our way out.


> Why don’t residents want new housing? A mistaken belief that blocking new housing will preserve their city.

It isn't a mistaken belief. If you got in early and own property in a place like SF then rising prices are going to be adding money to your retirement account.

Any real solution (build, build, build!) to the housing market in a place like SF would destroy a lot of value for a lot of people. Most of those people are middle-class, and the money they've stuffed in their bricks is their single biggest investment.

Of course if it all comes crashing down they'll also lose, but right now that's looking a whole lot less likely than them being able to keep riding housing bubble gravy train.


Why would it destroy value? If the area around my home develops into a booming area, some developer will want to buy my home and build something bigger on it. These low-rise buildings must be bought and replaced for the "build, build, build" to happen. The only way this could backfire for some is if the building boom starts and then the economy collapses and the boom never returns. Now you have an old house surrounded by high rises and rent is low because of the surplus that was built. That seems very unlikely though. To me the bigger threat seems to be that some other place with fewer NIMBYs will outgrow SV because of the artificial limit imposed by the NIMBYs.


Sure, some property owners will luck out in the way you're describing. Their lot will be bought out to develop a high-rise.

But it's just as likely that the lot next to them will be bought for development, and theirs will be passed over for the foreseeable future, or that the only reason anyone lives in their suburb is because of unreasonable prices where people actually want to live.

Now their property value will plateau or fall as demand for housing falls due to new development happening elsewhere.

In the long term it's likely that everyone involved will win, but many property owners just have a 10-20 year horizon before they'd like to sell, and might correctly foresee that a deregulated zoning policy might lead to a growth slump in that time frame if the supply doesn't continue to be artificially restricted.


And that is why incentivizing real estate as an investment vehicle exacerbates the housing crisis. Misaligned incentives at the local level means that heavy-handed state measures (SB 827, OP's proposal, etc.) is likely the only way out of this mess.


There's plenty of potential ways out of the mess, but pretending that the status quo is uniformly bad and just needs to be fixed isn't going to help.

The entire reason for why there's a problem is because the current state of affairs is awesome for some people (existing property owners) and bad for pretty much everyone else.

Saying it needs to be a state law is just setting up a different variant of the same intractable problem.

Who's going to care to lobby more when such a law is proposed state-wide in California? A bunch of property owners in SF/LA sitting on a million $ in assets, or potential future California residents who don't even live there because property prices are insane now?


To complete the thought, if government did allow a massive increase in housing supply and all those voters “lose” that money, the associated politicians will be gone in a heartbeat. So while the NIMBYs start this, they’re enabled by politicians in fear of their phony-baloney jobs.


It will take state level intervention. The voting population of the city of San Francisco itself has enormously outsized influence on the regional economy due to their ability to control development within the borders of the city. But they constitute nowhere near the majority of the population of the Bay Area. At some point (ideally) their state level politicians will just get steamrolled by the representatives of the rest of the state's population, and most of their power to control local development will be stripped away.


Presumably the opposition to that won't just be Bay Area NIMBYs, but anyone living in California with an interest in the state not dictating zoning policy to local municipalities.


Basically true, but I'm happy enough to let the market solve this one. California will change or it will fail.

The one thing that should perhaps be legislated is some up-front disclosure in employment offers of typical costs of living in the BA. Many prospective employees from elsewhere will not quickly realize that (absurd as it seems) you can't raise a family there on $200K/y.


Pity, since California is such a nice place weather wise. And there is the crux of the problem: people put up with this madness because there is some other non-market reason that isn't very portable (e.g. Austin has very hot summers).


An alternative/additional solution to "just built more, denser housing" is making remote work much more widely adopted. A lot of roles in software, research, etc. are very well suited for remote work. Bay Area companies should: (1) make remote work more widespread and (2) build more offices outside of Bay Area.


Yep - I agree with the increased dense housing is needed (although I would also argue that with this construction infrastructure / public transit comes for the ride or it is a failure too), but it seems that one of the stop gaps is to promote /incentive remote at companies...


> Why don’t residents want new housing?

Also people who own houses want the cost of houses to be high.


As a homeowner, I don't want home prices to be high.

High home prices mean I can't move my family without incurring a substantial jump in property taxes (even if it's to downsize once the kids move out).

I'd also like my kids to have the option to live here without too much financial difficulty.


You have the right perspective on this IMO. Thinking about owning a home as an investment is foolhardy: very few people are going to get rich off an increase in their home's value, and only a few are even going to significantly increase their retirement funds after downsizing.

Houses are places to live, not investments. It's in all of our interests if they're as affordable as possible everywhere instead of pushing the equivalence of an arms race.


The irony being, of course, that California is one of the few places where your home value could rise 5-10X and your property taxes appreciate at less than inflation.

Prop 13 creates many artificial barriers to selling property and other market distortions, and folks not downsizing when they'd like to is one of the crazier ones.


The most dense cities in the world: Hong Kong, Singapore, Tokyo even New York City should be the go to locations for tech, but they're not.

The Bay Area has two things going for it that will make it hard to replace.

1. Non-competes are unenforceable. This means that the most talented engineers like working here because they can job hop with ease where in other locales they are locked into jobs working for lousy bosses.

2. Many of the most talented venture capitalists and seed investors like living here. They like it because it's pretty, you can escape the city in no time and be in nature and it's low density. I doubt the kind of people who live in Atherton or Woodside would pick up and move so easily to L.A or Manhattan. The Bay Area with its geographical boundaries provides a pretty good integration of ultra-rich neighborhoods with the middle class workers that make up the bulk of tech's working class.


> The most dense cities in the world: Hong Kong, Singapore, even New York City should be the go to locations for tech, but they're not.

Those places have COL problems as bad or worse than the Bay Area. At least Singapore (and to a lesser extent HK) deals with it via lots of public subsidized housing.


The comment you replied to must have been edited since you replied to it.

Tokyo rents basically haven’t moved in the last 30 years and the population has added 1.5m people. If you want to work in NYC there are many, many affordable options within 1 hours commute.


Commuting 1 hour, especially in public transit in the NYC area, is a terrible way to live.


The current democratic structure clearly doesn't work here. Western democracies are starting to look more and more inefficient these days. They're overwhelmed with complexity and are stuck on short-term egoism.


The cities are quite happy to not add jobs either. The “bluff” will be called.


Baristas?


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