Earlier quoted context omitted.
Citation?
GP is incorrect. California's growth was a record low, but it was still growth. https://www.politico.com/news/2020/05/05/california-populati...
Silicon Valley exodus: Bay Area tech companies leaving for Texas
541–550 of 622 posts
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#542Earlier quoted context omitted.
When you’re growing at even 10% per month the difference between 50Billion and 400 billion in 50 years is a rounding error on a rounding error. Further, diminishing returns means your stuck investing in ever less profitable operations as you grow. These will often lose money, just look at say Microsoft or Google to see how little an extra 100 billion 10 years ago would give them now. Nobody is saying they don’t have…
Corporate entities have to make quarterly payments. Let's assume you're a $10 million company with 10% monthly ROE/growth. Paying an additional 9% in California corporate tax rates will result in the loss of a billion in market cap within five years. Literally a third of the terminal value of the startup. Point taken about diminishing marginal returns. But you can see that even taking that into account, the impact of…
That a 9% income tax in California corporate tax rates are on profit. A profitable startup has unlimited runway so the classic X month of runway company is facing ~0 income taxes.
Further it assumes your capital constrained, which might apply to some fast growing business but if your the magical unicorn of a profitable fast growing growing company then capital is the easiest problem to solve. Worst case you might trade a little extra equity, but again that’s linear dilution often based on growth at the current rate.
PS: If your growing 10% per month it takes 6 years to go from 1 million per year in revenue to 1 billion per year in revenue. It’s very fast, but hardly instantaneous. Keeping that up for 12 years means 1 trillion in revenue per year which is extremely rare. Growth will slow eventually, and when it does there are a huge number of things to optimize.
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#543Earlier quoted context omitted.
HP moving to Texas is the corporate version of my grandparents retiring to Florida.
Sure HP and Oracle are not "sexy" but they do employee massive numbers of tech folks. The impact will be noticed. They hire people who later move to the "sexy" companies a few years into their career.
They are only moving Head Offices - not closing down campuses; most likely, it's a subset of the bean counters and admin stuff who may be asked to move. If you're cynical, you could argue they are only shipping the "HQ" signage from their Bay Area buildings to Texas.
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#544I am curious if anyone agrees with my take: HP Enterprise and Oracle did not move because Texas is "more tech friendly." Instead they moved because HPE and Oracle are no longer primarily tech companies. While they do substantial technical work, most of that will remain in SV. It's sort of the mirror of Apple, which also has a substantial presence in Austin (finance, etc) but is headquartered in SV because it is prima…
I call it the "COVID come to Jesus moment". I remember for the last year or two. The murmurs here, twitter and reddit has been "Why don't these companies understand that their work can all be remote", "why does X company insist on having on-site employees". Meanwhile on the other side of the spectrum you had the higher ups all murmuring "well if we let people work from home, then our company will be doomed". Then COV…
They werent told any lies, they are simply micromanagers who want to see their employees in their seats
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#545Earlier quoted context omitted.
But moving to Texas frees up real estate in the Bay Area for more productive businesses. And given the transient nature of techies, many of those techies would have moved to California will now move to Texas, putting some relief into the housing market and maybe clearing up traffic a bit. I wouldn’t see these two moving as a negative, they’ve long had reputations as bad places to work.
The biggest hit will be on tax revenue, new "sexy" businesses dont tend to make as much money as the zombie companies that seem to print money
California already has plenty of that, and if it ever becomes a problem, that means there is underused capacity that will attract more people (with their income taxes) in again.
Oracle, HPE, and (not moving, but might as well add) IBM have long made their money with legal and financial shenanigans anyways, they are exactly what we should call zombie companies.
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#546Earlier quoted context omitted.
The biggest hit will be on tax revenue, new "sexy" businesses dont tend to make as much money as the zombie companies that seem to print money
California makes money on cap gains taxes as well as corporate income taxes. And likely the personal income taxes won't change. Complaining about dev teams moving to texas is like complaining about goods being manufactured in China. It's a net positive for the whole world, plus competition will improve the Vally and SF just as much as it improves individual companies and products.
Just to note here, the dev teams aren't moving to Texas, management is moving to Texas. The dev teams are more likely to be moving to India where costs are lower (especially if we are talking about Oracle and HPE).
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#547Earlier quoted context omitted.
Have you never been to Chicago? Pretty nice town.
Nice to visit, wouldn't want to live there. Did I mention it's the murder capital of the United States?
It is the country's third largest city. So by volume it may well be the murder capital. But the murder rate places it like 10th, https://en.wikipedia.org/wiki/List_of_United_States_cities_b...
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#548Earlier quoted context omitted.
>Traditionally this stuff has meant race to the bottom in terms of taxes and regulations. That is terrible. But there is no race since Texas hasn't made any changes to accommodate these companies
Well texas has less taxes and regulations, so they are making the opening gambit of the traditional rat race. The question is whether and how California responds.
Ah yes when Texas joined the union in 1845 and declined to pass a state income tax they made the first move in a centuries long battle with California...
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#549Traditionally this stuff has meant race to the bottom in terms of taxes and regulations. That is terrible. But if it instead helps wake up California to actually rezone, densify, remove prop 13, and improve social services, that could be quite good.
> Traditionally this stuff has meant race to the bottom in terms of taxes and regulations. That is terrible. How is that terrible? That's the best thing that could happen.
Yeah F regulations man, I really want to employ children and pollute rivers. How dare they impede my capitalism.
Re: Silicon Valley exodus: Bay Area tech companies leaving for Texas
#550Earlier quoted context omitted.
Universities help I think. Stanford, Berkeley &c. Many great public universities and many great universities!
The east coast has entire Ivy League and yet no Silicon Valley. Also, how do you explain Seattle?
The East Coast had Bell Labs, Digital Equipment Corporation, IBM, etc., all of which were absolute powerhouses at various point.