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Why entrepreneurs are leaving the Bay Area for their next startup

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Re: Why entrepreneurs are leaving the Bay Area for their next startup

#41

Post by robbrit »

malvosenior wrote: post #22
butstillbad99 wrote: post #18

Earlier quoted context omitted.

You seem to assume SF salaries will be offered in places that are also super cheap? Do you expect founders and investors to ignore the cost of living reality in Nowheresville just cause?

Why on earth would the value someone added to a company have anything to do with the cost of living where they live? Either you support remote or you don't but I would not expect different remote salaries based on where that remote employee lives. I know some companies do this, but I can't imagine it's a practice that will continue once remote work becomes the norm as it makes little sense.

Value-added actually does depend on where you are: in-person interactions are significantly more valuable than remote ones. Network effects from who you know (which generally depends on where you are) matter. Interactions with creative people work as sounding boards for ideas.

This is precisely why technology companies cluster in hubs - not just SV but Austin, Denver/Boulder, Seattle, etc. and aren't more or less evenly distributed.

That aside, salary is determined by supply and demand, not solely by value-added. Value-added is a factor in labour demand, but it can be totally swamped by other factors.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#42

Post by moate »

dumbfoundded wrote: post #34

As someone in the hemp business, I have a relatively unique reason. There's no hemp (CBD, non-psychoactive) program in Oregon. You can do cannabis in California but not CBD. I moved everything to Oregon. It's funny that the cannabis industry in California is actually trying to slow down any regulation allowing THC-free, hemp derived products.

Did the "recent" changes to the farm bill affect this in either the short or long term? Just curious.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#43

Post by butstillbad99 »

malvosenior wrote: post #38
butstillbad99 wrote: post #32

Earlier quoted context omitted.

To you an employee it makes no sense. To an investor it does. Human history is filled with stories of seeking cheaper labor. Have you not been following the anxiety over offshoring? Why did all that manufacturing go to China? Cities in America used to be the centers of manufacturing and then it moved to rural areas. If you research it you might find like I did that cost of living was cheaper in rural areas. And a lot…

Manufacturing and software development are very different though. Any able bodied person can work in a factory. If we're being generous I'd say at most 10% of the population is even capable of writing software. The demand for these people is only going to increase. As we have seen with rising developer salaries, the scarcity of the skill allows some leverage to the employee that other fields lack. Software developmen…

Don’t get me wrong; I would expect salaries for remote programmers in rural areas to be higher than typical for the area.

But the future is not going to be something like hundreds of thousands a year in a town where average of cost of living is like $30-$40k.

It’s quite possible I am being too cynical. But people spend all day carefully measuring what we should make to insure the balance isn’t too tilted in our favor. I doubt they’re going to miss what seems like an obvious reality to me.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#45

Post by potatofarmer45 »

blizkreeg wrote: post #28
potatofarmer45 wrote: post #19

SV isn't the best fit for a lot of startups. It really shouldn't be the default location for all startups especially since there are different options that offer different things (NYC, Denver/Boulder, Austin etc). The Bay Area has 3 things that set it apart from anywhere else and startups that really need this have no other real choice: Investors who are willing to invest super early Lots of top tier engineers An ext…

what is your startup working on?

We have an enterprise product built around our own NLP

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#46

Post by basseq »

What a terrible, clickbait headline.

In short (first sentence), tech start-ups are setting up shop in non-SV locations where they can find cheaper rent and more affordable talent. This is a good thing because it means a) physical proximity to funding sources is less important, b) more funding sources are available, c) good talent is everywhere, and d) the trend of tech becoming part of the general economy (dare I say democratized?) continues.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#47

Post by jdhn »

gesman wrote: post #40

California better stop punishing entrepreneurs with it's heavy tax stick before experiencing disaster in it's tax revenues. Exodus seems to be accelerating.

I've heard the argument that despite the heavy tax burden, it's just treated as another cost of doing business due to all the benefits of being in the Bay Area (depth of talent pool, fantastic network support, oodles and oodles of VC money, etc).

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#49

Post by true_tuna »

pascalxus wrote: post #23
butstillbad99 wrote: post #18

Earlier quoted context omitted.

You seem to assume SF salaries will be offered in places that are also super cheap? Do you expect founders and investors to ignore the cost of living reality in Nowheresville just cause?

Sure, if you're young and single and saving aggressively, you can still come out ahead in SF. But Even at half or 1/3 the salary, you'd still come out ahead in many areas across the country, if you have a family of 4. In SF, it's not just the extreme housing costs, but also the 3K-4K/month day care costs (if you can get it), and all the other COL.

How can you save when you’re paying $4k a month in rent?

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#50

Post by x0x0 »

potatofarmer45 wrote: post #19

SV isn't the best fit for a lot of startups. It really shouldn't be the default location for all startups especially since there are different options that offer different things (NYC, Denver/Boulder, Austin etc). The Bay Area has 3 things that set it apart from anywhere else and startups that really need this have no other real choice: Investors who are willing to invest super early Lots of top tier engineers An ext…

it's not just the top tier engineers. It's engineers who are confident enough to take flyers on startups. It also helps they're very confident that if the startup explodes they'll be able to get another job; that requires a density of opportunities and employers who don't mind a previous job that blew up or a short stint or two.
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