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Why Silicon Valley Works

blog.samaltman.com

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Re: Why Silicon Valley Works

#221

Post by cylinder »

mathattack wrote: post #71
steven2012 wrote: post #17

No. The reason why Silicon Valley works is because of the intense greed that it provokes amongst everyone that comes here. Maybe "greed" is too strong of a word, because people aren't necessarily selfish, maybe "money-focused" is probably more accurate. And because anyone can come here and become a millionaire/billionaire, it draws in an immense number of hard-working people which just generally increase the level of…

Having lived in NYC too, the greed there trumps the greed in Silicon Valley. The greed in NYC is money for it's own sake. The greed in Silicon Valley at least has the pretense of creating good products. The greed in Silicon Valley requires creation of value in addition to capturing it. NYC is all about capturing in. A $4,000/month apartment in Silicon Valley gets you a good school. A $5,000/month apartment in NYC get…

Why are you comparing the suburbs (SV) to the city (NYC)? You know NYC has suburbs with great public schools too?

Re: Why Silicon Valley Works

#222

Post by usaar333 »

x0x0 wrote: post #38
clairity wrote: post #24

Earlier quoted context omitted.

sounds like it's not the place for you. a household making "only" $120k, no matter where you live, puts you in the top 15% by income in the US--hardly the "working poor" (see census data). trying to keep up with the joneses, on the other hand, can warp your sense of relative privilege. top 15% in the US is among the top few percent in the world. keep that in mind, and that'll help assuage the negative feelings that c…

You don't understand what it costs to live here. Keeping up with the Joneses means envy for new and shiny, not wanting a modest house, cars, kids, and retirement savings. And here, that means an income of $250k is tough to do -- one bedrooms in sf are $3500; condos in the peninsula sell for $700k+ and houses cost $1100/ft^2. $240k married filing jointly w/ 2 kids means $5900 hits your bank account twice a month. Esse…

Having always lived in the Bay Area, I find it hard to imagine it is tough to live on a combined income of $250k. That's at least top 10% of household incomes in the Bay Area. No, you won't get any neighborhood there is, but 80+% of places are open to you.

First, $5900/month is a huge amount to spend on housing. Large houses on the peninsula rent for around the $4500 range; you only hit $5900/month for 4 bedrooms in the hottest neighborhoods of SF.

Paying $5900 (after tax deductions, including property taxes) for owning a house implies a $1.3M mortgage, so maybe a $1.5M house(?) which is high-end. Houses that cost over $1000/sq foot are very rare; most are in the $600 range looking at Zillow on mid-peninsula.

Also, note that owning a $1.1M house is a form of retirement savings, so you can adjust accordingly.

And housing costs differences of $800k over 30 years (your Madison link vs. a $1.1M Bay Area house) is about $3300/month. You need to earn maybe $70k (before taxes) more in the Bay Area to have equal non-house income. I find it hard to believe that earning $180k in Madison combined (top 8%) is struggling.

Finally, there's always the Easy Bay: great houses in great neighborhoods for $800k.

Re: Why Silicon Valley Works

#223

Post by noname123 »

nilkn wrote: post #91
steven2012 wrote: post #17

No. The reason why Silicon Valley works is because of the intense greed that it provokes amongst everyone that comes here. Maybe "greed" is too strong of a word, because people aren't necessarily selfish, maybe "money-focused" is probably more accurate. And because anyone can come here and become a millionaire/billionaire, it draws in an immense number of hard-working people which just generally increase the level of…

All this is part of the reason why I've strongly been thinking of going back to school to become a doctor. What follows is mostly a rant, just to be upfront about it. It's a really radical transition, but I really, really dislike the city-centric focus of software engineering. I hate the idea of being a contractor (I just want stable, life-long work), and I can't tell you how tired I am of crippling traffic causing m…

To add to your data point, I recently transitioned as a software dev for a e-commerce company to Bioinformatics research place.

The e-commerce recently IPO'd but I didn't like the culture and lifestyle for all the reasons you've already stated in your post.

Funny enough I also applied for a software position for a hospital but I didn't take it as I consulted many of my friends who are in residency and EMR software field where they said that hospitals are onerous with regulations. So coding can be frustrating experience and turn-arounds are slow with specialists/business analysts ensuring compliance with patient privacy and clinical data accuracy.

If you're looking for a place where there's a lot of smart people who are not motivated for money, there are many software opportunities in NGOs, life sciences research where lifestyle is much more relaxed, pays actually pretty well (because people won't accept the fake carrot of big equity payout) and you get more job satisfaction IMHO. Best of luck to you.

Re: Why Silicon Valley Works

#224

Post by cellis »

ig1 wrote: post #191
cellis wrote: post #163

Earlier quoted context omitted.

I wouldn't say "vastly", at least not now. It is probably easier if you come from a "target" background ( went to a prestigious school, graduated MBA, worked 100-120 hr weeks as an analyst... ). But for the average joe off the street? Tech is "vastly" easier to become a millionaire. That is to say, you have zero chance of becoming a millionaire in finance without the required background, but as someone with, say, an…

You're vastly overestimating how easy it is to raise a series A - the majority of YC companies don't make it to series A. The chances of an inexperienced non-tech founder raising a series A are small; there are hundreds if not thousands of such founders who try and fail for everyone who succeeds. Investment banking is also far from homogenous, the requirements for being in sales at a mid-tier commodity fund in Chicag…

There is no need to reiterate how difficult it is to build a successful startup. My point was that even after controlling for this difficulty, for the average developer it's going to be "easier" to make $1mm by starting their own startup. The vast majority of finance professionals with target backgrounds won't break 200k in income per year. There are outliers in every profession and sure there are some hotshot salespeople and quants that make 1mm+/yr, but: when I look closely, and from talking with friends who work at namebrand banks and PE groups, it seems they're no more prevalent in finance than successful startup founders are in tech (i'd still like to see hard data on this because there are so many ways to compensate people and most have no incentive to report this, in both industries).

Now on to compensation: comparing apples to oranges, a Goldman Sachs VP's total compensation is about 240k, or roughly what a senior software engineer at Google makes. If I were a brilliant developer, I would rather work at Google and make the same amount than going through the meat grinder than is your IB to become a GS VP.

Re: Why Silicon Valley Works

#225

Post by cylinder »

whiddershins wrote: post #134

I love the way people in the Startup community talk about how New York is oriented around finance. It is totally true, from the perspective of a certain group of people. New York also has a history and cultural identity that puts monetary success and business above other concerns that can arguably be traced back to its founding by Dutch traders as New Amsterdam. That said, New York is only oriented culturally around…

Well put. I live here and can go months before meeting someone who works in finance. There are lots of big corporations here as well as lots of artistic/creative jobs.

Re: Why Silicon Valley Works

#226

Post by cylinder »

potatoyogurt wrote: post #186
Dewie wrote: post #68

Earlier quoted context omitted.

I think that the point is that it is the new status-symbol. In my experience (not Silicon Valley), status symbols in the form of material possessions have taken a back seat to status symbols in the form of fitness and "experiential materialism" (frequent travelling, exotic and varied experiences).

Totally. I'm so sick of hearing people talk about the twenty countries they went to last spring. If you like traveling, that's totally fine, but with a lot of people, it just feels like they're checking boxes to try to seem more interesting.

Worst part is when people say "We did Country X..."

Re: Why Silicon Valley Works

#227

Post by nostrademons »

usaar333 wrote: post #222
x0x0 wrote: post #38

Earlier quoted context omitted.

You don't understand what it costs to live here. Keeping up with the Joneses means envy for new and shiny, not wanting a modest house, cars, kids, and retirement savings. And here, that means an income of $250k is tough to do -- one bedrooms in sf are $3500; condos in the peninsula sell for $700k+ and houses cost $1100/ft^2. $240k married filing jointly w/ 2 kids means $5900 hits your bank account twice a month. Esse…

Having always lived in the Bay Area, I find it hard to imagine it is tough to live on a combined income of $250k. That's at least top 10% of household incomes in the Bay Area. No, you won't get any neighborhood there is, but 80+% of places are open to you. First, $5900/month is a huge amount to spend on housing. Large houses on the peninsula rent for around the $4500 range; you only hit $5900/month for 4 bedrooms in…

Not entirely sure that owning a $1.1M home (now) is a form of retirement savings; I wouldn't be surprised if, by the time I retire in 40 years or so, Silicon Valley looks like Detroit. A bunch of parallels are there: single-industry region, large amounts of shoddily-built tract housing, and a mobile, transient worker population chasing the latest hot industry.

Re: Why Silicon Valley Works

#228

Post by jknightco »

whiddershins wrote: post #134

I love the way people in the Startup community talk about how New York is oriented around finance. It is totally true, from the perspective of a certain group of people. New York also has a history and cultural identity that puts monetary success and business above other concerns that can arguably be traced back to its founding by Dutch traders as New Amsterdam. That said, New York is only oriented culturally around…

Thank you for this. I absolutely can't stand the comparison between the two environments. According to NYC's labor statistics [1], Finance as a whole (including all of commercial and investment banking, insurance, and real estate) makes up about 12.5% of the city's private sector jobs, and employs about as many people as the NYC local government does. For comparison, the Education and Health Services sector employs almost twice as many people (~24%), and Leisure and Hospitality about the same (11.4%).

Its much harder to find good statistics on the Bay Area because its comprised of so many different municipalities, but I would bet the Tech industry employs way more than 12.5% of private sector employees there. There's also no real "runner-up" in the region; Finance is one of the industries here, Tech is the industry in the Bay Area.

[1] http://labor.ny.gov/stats/nyc/index.shtm

Re: Why Silicon Valley Works

#229

Post by clairity »

jforman wrote: post #50
clairity wrote: post #24

Earlier quoted context omitted.

sounds like it's not the place for you. a household making "only" $120k, no matter where you live, puts you in the top 15% by income in the US--hardly the "working poor" (see census data). trying to keep up with the joneses, on the other hand, can warp your sense of relative privilege. top 15% in the US is among the top few percent in the world. keep that in mind, and that'll help assuage the negative feelings that c…

"No matter where you live" ? The 80th percentile for household income in 2012 was $160,000. This does really crazy things to a relatively static housing supply: http://www.sfgate.com/bayarea/article/In-growth-of-wealth-ga... This isn't just about "keeping up with the Joneses." Most families want a) a decent home, and b) a good education for their children. I had to pay an obscene amount for a) in SF, and I was holdin…

that $160k figure is for residents of san francisco, not the nation as a whole, which is what i was quoting, and is the whole point of what i posted. you're comparing yourself to your neighbors, not the nearly 7 billion other people on the planet or the 270 million americans who are less well-off than you. relatively ordinary is relatively amazing for the rest of the world. it's about perspective.

Re: Why Silicon Valley Works

#230

Post by aagha »

garry wrote: post #177
axavuj05 wrote: post #126

Throw-away account for obvious reasons: > "Silicon Valley works because there is such a high density of people working on start-ups and they are inclined to help each other" Bull shit. With all due respect to Sam--who no doubt knows what he's doing and saying and has become very successful--he is undoubtedly living in a bubble of his own. While I've found people generally open to the idea of chatting over a coffee, I…

> Complete and utter bull. Maybe in Sam's world, sure! White? 20-something? No-kids? Harvard/Stanford? B2C? Let’s chat! > Early-40's/Late-30's? Not-white? Married w/ kids? Not-Harvard/Stanford? B2B? Nope. (Don't bother to apply to YC either). YC does not discriminate in this way. We fund lots of people working on B2B and enterprise ideas, who are married with kids, who are in their 30's, 40's and yes older too. This…

That's interesting, and good to hear.

Would YC be open to sharing anonymized data on the sitribution of YC-ers (at time of entry) by age, married (binary), # of kids and race?

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