Maybe a big city elsewhere in the country will ever go "all-in" like Atlanta did and try to become the "Silicon Valley of the [South, Midwest, Rocky Mountains, etc.]"? I guess a place like Austin, TX could arguable lay claim to this title already, but their tech industry seems to be "home grown" because of the history of computing at UT and with Texas Instruments, NASA, Dell, etc. historically having strong roots in Texas.
But I wonder if a city could ever follow the model of Atlanta and try to build a "new Silicon Valley" from scratch with aggressive policies that lure companies/employees from existing tech hubs?
I've worked in the film business a bit. I'd say it's more like colonization than relocation. Atlanta is a place for filming at low costs, most of pre/post production and the organizational aspects still happens in Los Angeles. Most of the talent is still in LA and flies out to Atlanta for a few weeks. They're saving a buck on shooting, paying a bit for local work (mostly infrastructure stuff) but they aren't really generating value for the city.
The issue with any other city becoming the "SV of the XX" in my opinion comes down to VC and business culture. I think California created something unique when it came to powering ventures and crazy ideas, whereas other parts of the country tend to be more risk averse. Whenever I see new initiatives to draw startups to new cities, the common thread is low amounts of seed money with draconian term sheets from people with very little experience and no network effects to speak of.
This is much more similar to how things work with SF/SV in the context of startups.
(because of the things I described above about how california privileges long term residents, I actually don't pay much more here than I would in any other place of similar density, and net earnings, I'm way better off financially here than anywhere else because I have that granfathered housing deal. (of course, my housing here is a lot less flexible.) Nobody else in the world will pay what silicon valley will pay when you have my skills and no degree. But in theory I would pay a premium to live here.)
Before I die, I want to try living in New York, partly 'cause I really enjoy the car-free lifestyle, but also 'cause I think that it's good to sometimes go to a place where you don't fit in as well, where you interact with people who have dramatically different worldviews about what constitutes an interesting problem. But for me, someone who fit in really badly where he grew up? Finding a place where I fit in was supremely important, even if I don't think it's great to spend the entire rest of my life in that place. Just having that experience of fitting in is transformative, I think.
My guess is that actor/entertainer types have similar feelings about LA; I mean, I think there's a lot of stories about that; about young theatre types running off to LA to find themselves (which I assumed meant "find people who value you") I mean, people talk about shared values; and it's not about voting the same way, mostly, or anything like that, at least for me, as it is about finding the same sorts of problems interesting. I mean, acting and entertaining is a deep sort of thing. I certainly don't understand much of it, but I can at least see that there's a lot there to understand, and if that's your bag, it seems like going and living near other people who also find that sort of thing could be important.
Agree with this. At my company, top brass is basically a cabal of baby boomer LGBT+ scientists who moved here in the 1990s/early 2000s to escape living in the closet in small minded bible belt towns. I'm not LGBT but it's pretty inspiring every day to work alongside them.
When I first started I happened to sit near our top QA exec and over the years as I got to know him he was telling me how in the 1980s his team at MD Anderson used to smuggle blood across the border from Mexico in briefcases before the FDA finally bowed to building pressure and got around to mandating screening for antibodies and accepting INDs.
Oh- one other great tip- pick a hobby you like and join some clubs. SF running, Dolphin Swim club, crossfit and triathlon clubs are networking (and, to be frank, dating) hotspots. GL!
Back in the day, the Hacker Dojo was really great for meeting people. I personally think it's not nearly as good as it was (social stuff, I think, isn't going to be as good during boom times. a lot of the interesting people are just too busy and/or schmoozing less randomly, and we're in a boom time, so the hacker dojo looks like a regular co-working space rather than the coolness it was in the late aughts.) - I mean, I think it's still pretty neat, and still a good place to meet people, just not as good as it was.
A lot of it takes time; I mean, I've been here, more or less, since the late '90s. And a lot of it is just asking. After you leave a job, pick one of your work friends, send them an email and see if they wanna get drinks or something. Like, my experience is that it's okay to be a little weird. just make sure you go away when people tell you to go away. I mean, I know one guy who was my roommate and business partner like fifteen years ago, who is a super introvert. Maybe once a month I send him a text and see if he wants to get pizza. Maybe twice a year he responds in the affirmative.
doing projects with people is... super expensive, but in my life, doing a project/business with someone has been a little like how combat is in the stories, like you have gone through heck with that person and so you will forever have a connection.
[1]https://www.meetup.com/Agile-Articulators-Toastmasters-Club/
It's totally possible. I think the problem right now is that for profitable tech companies, right now engineers are still super cheap (like most of big tech makes rather more than 500K per employee, and pays less than $250K.) - from that perspective, it doesn't really make sense to try to save money on employees... the opposite, really. If they have to pay another $100K/head 'cause the cost of living is so high, that's a smaller bite than anything that might disturb the massive profit. (this is also the root of the argument that we should unionize, even though we make silly money compared to most other workers. Facebook captures a lot more of the surplus value created by labor, say, than Walmart does, even if by any other reasonable standard, we are treated so much better than a walmart floor associate. I mean, I'm not arguing for or against unionization, I'm just saying that's why some people want to unionize even though we already are better off than nearly any other class of worker.)
The other thing to think about is Detroit. Detroit was totally one of these cluster cities; it was the place to be if you were working with cars in a period when there was a lot of innovation to be had in cars. And then the industry changed (or rather, innovation slowed a lot... like, there just wasn't that much more you could do with cars; just small incremental improvements) - automobile manufacturing scattered to the wind and Detroit is kind of a husk.
Will that happen to the software industry? will innovations start being small and predictable? will the P/E of Facebook drop to match the P/E of Ford? I mean, silicon valley has already been through one of these changes; silicon valley is called silicon valley 'cause they used to make the silicon here, and they've really successfully switched to writing software.
I mean, I'm personally long silicon valley (and while I think it's overvalued now, I think it's a good long term bet) - I think it will turn out more like New York than like Detroit, but... who knows?
You might be surprised by how many "Silicon X" places there are. Most of them are trying to lure companies. Only a few - like Atlanta - seem to understand that they need educational and financial infrastructure first.
Primary and secondary schools may well be training indicators.
But, I mean, could you greenfield start a world class university in a place where people see reading in public as something to be ridiculed? would that be easier than bootstrapping a major tech company in some low cost of living area?
I love your story, I thank you for sharing it and your candor because this sounds exactly like something I would do and feel sheepish about afterwards. They way you describe this happening I can feel in my soul reenacting the exact same scenario. Well done!
Then I go visit the "other side", and man do I miss conversations around the newest framework, or latest VC investment bust. It's very much a love hate relationship; which I have no plans on leaving.
Wouldn't this mean that landlords are effectively leaving money on the table? If it's not rent controlled, couldn't they just jack up the rent whenever they felt like it?
Yes.
>If it's not rent controlled, couldn't they just jack up the rent whenever they felt like it?
I was talking with a guy who I work with who is a landlord on the side, and he seemed to have this real labor-theory-of-value sense of fairness, like he says he jacks up rent every time his taxes or insurance or what have you goes up, but it sounds like he's like 5 years behind market (which is a huge amount)
And this is super common in California, small-time landlords, if the tenant is not causing issues, tend to raise rents rather less than market.
I think some of it is that the vast majority of your ROI, in California, comes from property appreciation, (while in many other markets, as far as I can tell, you usually get a lot more cashflow; all the places I looked at in cleveland or in new mexico would be positive cashflow out the gate; all the places I've looked at buying in California only become positive cashflow once rents go up rather a lot) - so I guess maybe some landlords feel that if they don't jack up rents too much on easy tenants, they won't have to do as much work, and as most of their income is actually appreciation on the property which happens either way, they don't see giving up some of the rent as that big of a deal?
I can tell you that if you rent from a professional property management company, your rents will go up way faster, but they are also way more responsive when it comes to fixing things, and there is a strong feeling that if the rents haven't gone up on you in a while, you want to deal with any problems yourself; you don't want to call the landlord, which is evidence in favor of the "landlords avoiding work" theory.
The thing that this theory doesn't explain is that a lot of these landlords seem to be below market by a lot more than what a property management firm would charge. (I think. around here property management companies charge more than usual and usually have really big fees for replacing a moved-out tenant)
A landlord is renting out a long lived expensive asset. Small time landlords I've talked to all mention that you make money on tenants that pay their rent and don't cause issues. Bad tenants easily cost you more than it would to just leave the unit empty. A tenet can easily do $100k worth of damage in less than a year.
A whole lot of the housing stock in silicon valley (and it seems most of what is owned by this type of landlord) is essentially teardowns; stuff built more than 50 years ago to working-class standards. the structure itself represents the right to 'remodel' into something someone willing to pay a million bucks for a house might actually want to live in; and by 'remodel' I mean to leave the 'minimum legal structure' standing (I think paul graham made some joke about it on twitter some time ago, with a photo of a remodel that had one interior wall standing and the rest demolished. The joke was thought to be problematic, if I remember, for some reason I don't remember.)
I mean, sure, if the landlord wants to keep renting out a shack built in the '60s, the wrong tenant can make that quite expensive, but it would be difficult for the tenant to devalue the market value of the asset by 100K.
I suppose that might be another part of it; there certainly is some demand for these older units at market rates, but certainly for people willing to pay full freight, the nicer units go first.
the long term root is that there is a huge productivity advantage to clusters of workers. (or, at least many people believe so) Around here, if you strike up a random conversation in public, it's very likely you will do so with someone who does something relevant to what you do, and this is good for getting new ideas and really good for getting new contacts. Right now? there's a huge concentration of programming know-how in silicon valley and san francisco, and building that sort of cluster somewhere else would be really difficult. (I think Los Angeles has a similar situation, only with the movie industry.)
I literally found someone to buy my company at a (non-industry) party. (I mean, I did a bad job of it, I was drinking too much and complaining loudly about how much it sucks to run a company and how I had fucked up like three really good chances to sell the thing and generally being a downer, which is rude, I think, at a party, but also not how you maximize the value of the company you sell. Still, I got an impactful amount of money, and more importantly, I got someone else to run the damn thing so I could go get a job that paid without dumping my existing customers.) I've solved technical problems in similar sorts of ways; it's completely normal to go hang out with friends and actually solve problems over drinks or pizza or whatever. (which yes, is a culture some people hate, and I totally understand that, but some of us like it, and like it or not, it's certainly effective.)
Another bigger microeconomic factor that people who don't live here don't understand is that California laws and cultural norms are set up to privilege people who have been here longer. If you bought a place here in '08? Silicon valley isn't very expensive at all; our property taxes are largely fixed based on what we paid for the place when we bought it. This is kinda true (but to a much lessor extent) for rents; I know a lot of people paying under 2/3rds what they'd pay in rent if they moved in today, even without rent control. with rent control, paying under 1/3rd what they'd pay if they moved in today is not uncommon. This means that the sticker shock you get from the outside looking in isn't actually what most of the people who have lived here long term are paying.