Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Real Silicon Valley

jfornear.co

Post reply on HN
Print view View original

101–110 of 154 posts

Re: The Real Silicon Valley

#101

Post by joonix »

sayemm wrote: post #30
fearless wrote: post #8

Earlier quoted context omitted.

Everyone knows startups are not the optimal economically rational way to make money. But to an entrepreneur, living off 6% muni bond interest is profoundly uninteresting, and dare I say soul crushing. Repeat after me: If you think it's only about the money, you're missing the point. And even if it is all about the money, most 25 year olds would jump at a 1% chance to make $10 million over a $100% chance to make $200K…

Maybe the rational way to play the game then is to make that $200K, then stretch your reach and make $1M, and so on... until you've taken care of the money problem. Then that's when you're ready to start taking shots at the big opportunities, without being motivated by money or being held back by it.

The problem is by the time you've saved up $200k, most people are committed to a certain lifestyle based on their annual income. They're generally in their 30s or older, married, couple of cars, kids in school, mortgage, used to spending $X/yr on a vacation, etc etc. And, they've worked so hard to save up that $200k that it's unlikely they burn it to fund living expenses while they work on a startup.

Most entrepreneurs (generally, not just tech) are in fact in their 40s-50s. Well established professionals with good relationships and skills. Thing is they are usually doing it with Other People's Money, not their nest egg.

Re: The Real Silicon Valley

#102

Post by sayemm »

joonix wrote: post #101
sayemm wrote: post #30

Earlier quoted context omitted.

Maybe the rational way to play the game then is to make that $200K, then stretch your reach and make $1M, and so on... until you've taken care of the money problem. Then that's when you're ready to start taking shots at the big opportunities, without being motivated by money or being held back by it.

The problem is by the time you've saved up $200k, most people are committed to a certain lifestyle based on their annual income. They're generally in their 30s or older, married, couple of cars, kids in school, mortgage, used to spending $X/yr on a vacation, etc etc. And, they've worked so hard to save up that $200k that it's unlikely they burn it to fund living expenses while they work on a startup. Most entrepreneu…

I don't think we're talking about "saving up $200K", at least I wasn't at all. Instead build and grow a profitable business to achieve that, not as ambitious as a "startup" but also nowhere near as risky. You're still an entrepreneur either way, just learning to crawl before you walk, so to speak.

Re: The Real Silicon Valley

#103

Post by agorabinary »

SeoxyS wrote: post #74

If you're buying into the Silicon Valley hype, and then get disappointed, you're doing it wrong. Silicon Valley is not a place that's amazing a first, and then awful once you fail. It's simply a place that happens to have the highest concentration and best resources for building tech companies. Ultimately, though, surviving Silicon Valley comes down to one simple rule: don't build stupid shit. Work on a business , ge…

I could not agree more. I wonder how much of the SV environment is created from the trickle down investments of legitimately good ideas --- that is, a Facebook spawning thousands of millionaires, some of which happen to invest in their brother's friend's silly idea not out of any rational analysis, but from just being young and stupid and lucky enough to grab up a few early FB shares.

Furthermore, consider the difference in building a startup and building a typical brick and mortar business. Think of how simple the thought was to create a social network where users choose friends to create a distinct social circle. Or Drew Houston allegedly conceiving of Dropbox by repeatedly forgetting his USB drive in college. Very many SV startups build themselves off of some eureka moment that, being based on the internet, requires minimal investment, effort, connections, and reputation to establish early stage. Then, as long as it is a good idea, investment and employees flood in. Compare this to the enormous barriers of entry extant in a traditional brick and mortar with the bank loans and industry connections and disparate business resources, and combined with a barely-out-of-college aged potential CEO with or without good ideas. You get two entirely different standards of discrimination. It almost seems sometimes like SV considers bad ideas as a normal state of affairs, as a "learning experience" to future brilliance. Fail to succeed? Most successful startup founders hit it right on their debut--- why? Because they have a mentality of, "Should I do this?", and not merely, "Can I do this?".

I'm not saying low barriers to entry are necessarily a bad thing. It just seems like either there are one, a lot of fools with grand visions or two, ulterior-minded entrepreneurs looking to pad their resume or impress their friends with some social networking rip-off that only cost them $10k to build. Bustling, metropolitan environments often offer that billion dollar jackpot or Hollywood walk of fame, but require in turn a more demanding degree of discrimination to tell that shiny metal from mere fool's gold.

Re: The Real Silicon Valley

#104

Post by larrys »

cabinguy wrote: post #60

Bah Humbug (please excuse me, it's just a seasonal expression). While I can feel your pain, this story has nothing to do with SV - it's the story of an entrepreneur. The same story exists in every state in the U.S. and every major city (and most small ones) in the world. Entrepreneurship is very hard. I'm 41 y/o and bootstrapped my first internet company at 24. I owned a nice home, a beautiful vacation (lake) home, a…

I like your points in general and agree but with regard to this statement:

"it's the story of an entrepreneur."

I think there is a big difference. The life of an entrepreneur doesn't have anywhere near the echo chamber that is on the web especially with regards to tech and silicon valley (and as the OP says "Initially it was everything you read on Hacker News"). Yesterday in fact on HN there were all sorts of high fives over a list of "30 under 30" of dubious origins (no mention of the "expert" judges that picked them). PG was right up there with the congrats as well on that.

Back in the day, we had articles in Inc. Magazine (the 80's) and some people read "Entrepreneur" and there was an article here and there in the local newspaper and it was probably more about someone who worked hard then got lucky. I was actually featured in one of those articles and of course it was 7 day a week work as well as luck. But it was definitely not "hit out of the ball park" like you read about today. (I was able to buy a Mercedes at 25 iirc and that was back when they were not as ubiquitous). So there were much less dreamers and more realistic people that entered entrepreneurship then you have now.

Re: The Real Silicon Valley

#105

Post by paulsowden »

pmorici wrote: post #75
jcdavis wrote: post #50

Earlier quoted context omitted.

This is way overly pessimistic. At 100k total taxes (Federal+CA+SS+Medicare) are in the 30% range. That leaves 30k to spend (not too hard for a single 25 year old assuming you don't have lots of student loans, even in SF) and 40k to save. And this ignores tax-advantaged savings

Are there any tax-advantaged savings options besides IRA and similar retirement savings that you essentially can't access until you are 60+?

There's also HSA (although still taxed in California you'll still avoid federal taxes) which is tax deferred and if used for qualified medical expenses you'll never pay federal tax. After age 60 it can be drawn down on similar to an IRA. (Has the caveat that it to maintain an HSA you need to be on a HDHP, which for a healthy 20 something is probably a reasonable choice).

Re: The Real Silicon Valley

#106

Post by jcdavis »

acchow wrote: post #68
jcdavis wrote: post #50

Earlier quoted context omitted.

This is way overly pessimistic. At 100k total taxes (Federal+CA+SS+Medicare) are in the 30% range. That leaves 30k to spend (not too hard for a single 25 year old assuming you don't have lots of student loans, even in SF) and 40k to save. And this ignores tax-advantaged savings

At 100k, take-home pay is $65,278. Closer to 35% "total taxes"

Where are you getting those numbers? Not saying you're wrong, just curious. A quick look online shows ~18k federal, ~6k CA, and ~6K SS + medicare, which is 30%ish

Re: The Real Silicon Valley

#107

Post by bsims »

pmorici wrote: post #75
jcdavis wrote: post #50

Earlier quoted context omitted.

This is way overly pessimistic. At 100k total taxes (Federal+CA+SS+Medicare) are in the 30% range. That leaves 30k to spend (not too hard for a single 25 year old assuming you don't have lots of student loans, even in SF) and 40k to save. And this ignores tax-advantaged savings

Are there any tax-advantaged savings options besides IRA and similar retirement savings that you essentially can't access until you are 60+?

If you do any freelance work or own your own business you could do an Independent 401k which lets you stuff more money away than a normal 401k. Good idea for some of the freelancers on HN.

http://www.investopedia.com/terms/i/independent_401k.asp

Re: The Real Silicon Valley

#108

Post by bsims »

smartician wrote: post #59
bsims wrote: post #19

Earlier quoted context omitted.

It is hard to tell if this is a serious or sarcastic response. If you think Muni Bonds will stay at 6% for a lifetime, you're misinformed. 1) Government owned consumer debt is up nearly 5x in 5 years 2) Lately Muni Bonds have been swinging more than stocks themselves 3) Take Pimco Municipal Income Fund (NYSE: PMF) as an example. It's price has appreciated 7% over 10 years, TOTAL. Even with dividends you're looking at…

Given that the last ten years include the greatest financial crisis since the Great Depression, a net gain of 7% is pretty good. Plus, the annual distributions were consistently over 6%, so you're looking at a total return of almost 7% per year. That's actually pretty good.

You are correct. I didn't realize PMF was such a consistent dividend that far back. On top of the 6% average, it is also tax free since it is Municipal so true return could get up to 8ish which is pretty incredible considering the last 10 years.

Re: The Real Silicon Valley

#109

Post by beambot »

jseliger wrote: post #77
cabinguy wrote: post #60

Bah Humbug (please excuse me, it's just a seasonal expression). While I can feel your pain, this story has nothing to do with SV - it's the story of an entrepreneur. The same story exists in every state in the U.S. and every major city (and most small ones) in the world. Entrepreneurship is very hard. I'm 41 y/o and bootstrapped my first internet company at 24. I owned a nice home, a beautiful vacation (lake) home, a…

>I owned a nice home, a beautiful vacation (lake) home, a big office building, 2 Mercedes Benz (wife's SUV, my car) [. . .] It all went away (except for my primary home) by the time I was 35. One lesson here might be to not buy the fancy, expensive stuff and the lifestyle that goes with it. I bet things would've been a lot smoother with fewer gee-gaws and more cash in the bank.

Indeed. To put it another way: when your income variance is high, averaging (smoothing out expenses) seems pretty important -- at least, it would be to me. Calling a cavalier lifestyle intrinsic to entrepreneurs (in general) seems misplaced. It sounds more OP's individual choice.

Re: The Real Silicon Valley

#110

Post by nhebb »

cabinguy wrote: post #60

Bah Humbug (please excuse me, it's just a seasonal expression). While I can feel your pain, this story has nothing to do with SV - it's the story of an entrepreneur. The same story exists in every state in the U.S. and every major city (and most small ones) in the world. Entrepreneurship is very hard. I'm 41 y/o and bootstrapped my first internet company at 24. I owned a nice home, a beautiful vacation (lake) home, a…

Your comments are an inspiration, but I think they are tangential to the blog post. The way I read it, I think the OP is addressing the Bravo TV show http://www.bravotv.com/start-ups-silicon-valley. I was able to make it through about 5 minutes of the show. It's all hipster fluff and pretty faces.
Post reply on HN