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San Francisco Bubble

blog.larrold.com

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Re: San Francisco Bubble

#211

Post by AndrewUnmuted »

mbesto wrote: post #62

This is why the free market is so great. 1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms. 2. Dumb startups? Good, they will fail, people won't be able to afford to live here and they'll leave. 3. People are spoiled? Uber is cheaper and more convenient in some cases than taking the local transportation. When people stop taking…

Considering how very non-free-market principles led to the regulation and law that made startup speculation such a hot, bubbly market, I am led to strongly question your underlying premise.

You are speaking of a free market that is highly theoretical, because there is no such "free market" in today's economy, no matter where you live. However, free market theory suggests that a situation such as SF is not possible under a free market.

San Francisco has a great deal of political might, which explains a lot of the founding contexts allowing it to survive in the way it does. Add the fact that employees cannot be held to an non-compete agreement, and you have a bunch of engineers stepping over one another to chase the next six month gig as the number of ridiculous startup options balloons to a totally unsustainable size.

Re: San Francisco Bubble

#212

Post by api »

pdq wrote: post #138
api wrote: post #78

Earlier quoted context omitted.

Tangent but: I doubt the rate raise will stick. They'll probably have to cut it again. I see a "planet Japan" scenario in which global central banks are zero-bound for decades, if not "forever". Rapid growth is over. There are no more frontiers and birth rates are stabilizing. From an ecological point of view the stabilization of birth rates is good, but it basically breaks all the economic assumptions of the past 25…

> Tangent but: I doubt the rate raise will stick. They'll probably have to cut it again. I see a "planet Japan" scenario in which global central banks are zero-bound for decades, if not "forever". Rapid growth is over. Agreed nominal interest rates will likely drop down again to zero to restimulate the economy, but I doubt that will stick for the next decade, as inflation should creep back in forcing the Fed's hand.…

"Zero-bound" means "at or near zero." Inflation is easy to kill in today's world: just raise interest rates a little tiny bit for a short period of time and the deflationary downdraft will snuff any little inflationary ticks upward. But they'll be forced to drop rates again quickly or we'll fall back into deflation. The instant they raise rates the debt defaults and asset price collapses will start.

Earth is now Japan. Perhaps Mars is the next America.

Re: San Francisco Bubble

#213

Post by [deleted] »

YuriNiyazov wrote: post #58
thelarry wrote: post #47

Earlier quoted context omitted.

I'm very hypocritical.

Yea no kidding. "AppNexus helps brands connect with consumers, empowering agencies and advertisers with a uniquely powerful approach to programmatic online advertising." Thanks for working on Ad Tech, the very thing that powers this bubble by trading attention as a commodity. Other people work on silly startups, but this shit is akin to HFT.

[deleted]

Re: San Francisco Bubble

#215

Post by ryanSrich »

Apocryphon wrote: post #135
vectorjohn wrote: post #81

Earlier quoted context omitted.

Compared to Portland, $7 a beer is actually pretty expensive. Not as crazy as the mythical $15, but for a local craft beer it should be more like $5-6. But that could all just be taxes. (and we do have $7-12 beers, they're just known to be extra fancy or aged)

I've heard that Portland COL prices are climbing sharply due to people moving in. Is that true?

Vocal minority.

Overall Portland is still relatively cheap. The only thing getting out of control is rent and house purchasing (because of the serious lack of inventory), but the entire nation is seeing this so it's not specific to Portland.

Re: San Francisco Bubble

#216

Post by mantas »

azinman2 wrote: post #206
nawitus wrote: post #197

Earlier quoted context omitted.

>I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow. I agree, but this is mostly true because there's so much low-hanging fruit out there. If you look at the current successful startups like Uber and Airbnb, they're really trivial applications. That doesn't mean they can'…

If they were trivial then they'd have been eaten up by competitor now.

They're technically trivial. But execution ain't.

Re: San Francisco Bubble

#217

Post by JackFr »

nawitus wrote: post #197
josh2600 wrote: post #76

Earlier quoted context omitted.

Part of the fallacy of this is the implication that you need "good" engineers for most startups. I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow. Very few things require genuinely novel pieces of code to work. Yes, lots of value can be captured using code, but you coul…

>I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow. I agree, but this is mostly true because there's so much low-hanging fruit out there. If you look at the current successful startups like Uber and Airbnb, they're really trivial applications. That doesn't mean they can'…

Tens of thousands of man hours have gone into making them seem trivial, and the fact that they seem so to you is a testament to their design.

Re: San Francisco Bubble

#218

Post by pc86 »

ChuckMcM wrote: post #195
mbesto wrote: post #62

This is why the free market is so great. 1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms. 2. Dumb startups? Good, they will fail, people won't be able to afford to live here and they'll leave. 3. People are spoiled? Uber is cheaper and more convenient in some cases than taking the local transportation. When people stop taking…

Ok, as a perennial voice for free markets I agree with your observations, but not your point. Having lived through it I see the damage it is doing to individuals who will take years to recover. Too many engineers today, perhaps like sports players, take a big salary, project it across 30 years and then say "Wow I've got millions headed my way, do I really need to bag my lunch?" I've watched as they became both broke…

I agree with everything you said but I think you're underestimating the importance of fighting lifestyle inflation at all costs. It's incredibly hard to justify a six-figure burn rate under any circumstances, even in San Francisco. If you've got a job making multiples of the median household income in the US, it's incredibly irresponsible to live in a manner that wouldn't support a pretty major pay cut at any point.

Re: San Francisco Bubble

#219

Post by acchow »

dawnbreez wrote: post #157
munificent wrote: post #115

Earlier quoted context omitted.

> This is why the free market is so great. I feel like I should just make this my email/social media signature since I say it so often: A perfect requires these things: - Perfect market information - No participant with market power to set prices - Non intervention by governments - No barriers to entry or exit - Equal access to factors of production - Profit maximization - No externalities The less you have those, th…

The reason free markets are great isn't their speed (though they are often faster than your average politician); it's the self-regulating nature of it. You don't have to tell people to stop buying overly-expensive food, nor do you have to tell the food stores to cut their prices. Over time, they each realize that the higher price isn't working; the customer buys elsewhere (either across the street or aceoss the state…

> Companies don't have to be told to improve, either, not when their competitors are improving and eating market space. At least, that's how it works in theory. A lot of industries have turned into demilitarized zones, both sides opposed but neither making a move. Telecom is the best example of how bad this gets.

And yet even telecoms have invested huge swaths of capital to get us to 3G then LTE.

Re: San Francisco Bubble

#220

Post by IndianAstronaut »

ionforce wrote: post #207
IndianAstronaut wrote: post #174

Earlier quoted context omitted.

>Djikstra said "Beware premature optimization" and that's quite true. This is why a product I was working on almost got killed. The senior engineer working on it wanted perfection before delivery. The project was already one year overdue. He suddenly came in one day and rushed me to finish up something and he wrapped up a couple things and we launched at the end of the week. Found out that the project was going to be…

How does a guy like that become senior? As a senior one should know that there is a pragmatic balance lost in trying to aim for perfection.

He has his strengths. He produces exceptional quality code (albeit a bit on the spaghetti side) and is good at finding problems in code. He is also 63 and has decades of experience.
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