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Why Silicon Valley Works

blog.samaltman.com

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Re: Why Silicon Valley Works

#241

Post by usaar333 »

x0x0 wrote: post #232
usaar333 wrote: post #222

Earlier quoted context omitted.

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…

A home requires: pmi (possibly, often on jumbos) until 80% ltv; insurance, at $300-$350 per month per million dollars; taxes, at roughly $1k per month per million dollars; earthquake insurance, particularly if you're near a fault line; and maintenance, of which I'd budget $5k/year on a million dollar home. Maybe more for CAs housing stock. So that $6k becomes $4k for a mortgage. Using a house for retirement savings i…

Cost wise, I did ignore insurance costs, but yours needs to factor mortgage interest deduction. You might be getting income taxes reduced by $2k/month.

If you view it as plausible your house value will collapse, you shouldn't buy a house. If so, you'd rent and you'd be looking at much lower housing costs.

With regards to cost of living: some things are much more expensive in Madison; e.g. utilities (no A/C needed in Bay Area; heating rarely needed).

Re: Why Silicon Valley Works

#242

Post by throwaway41597 »

ChuckMcM wrote: post #54
2pasc wrote: post #28

Earlier quoted context omitted.

What you are talking about is a new phenomenon. Silicon Valley in 2008 was different - rents were lower, and $120K with 2 kids and one income was OK. There has been a dramatic increase in rent/real estate prices in the last 6 years that has completely schewed the system and the culture. Silicon Valley has thrived in years when rents were OK, people were not greedy and yet great Companies were built. I remember going…

It isn't a new thing, it was rampant in 1998, some say it was rampant in 1982 as well. Having lived through the dot com crash of the late 90's I have thought a lot about what went into that event. It is easy to be dismissive and "blame the suits" or the "bankers" but the reality is much more nuanced than that. I have come to conclude that it depends on what goal is driving the bulk of the community. During a 'non-boo…

TL;DR: Every time there is a wave of genuine innovation, it attracts wannabes. Some of them are not good makers, but they have the skills to attract a lot of capital. Then there is too much money for too little economic activity and too great expectations of growth, and it ends with a crash.

Re: Why Silicon Valley Works

#243

Post by sitkack »

WalterBright wrote: post #237
Balgair wrote: post #235

Earlier quoted context omitted.

Pop is a mechanic and will likely die under a car (we've come to accept this). His know-how of the S&P is suspicion at best as he has no formal algebra-2 training (due to Vietnam and all). He did not buy the house to generate a return, he bought it because he needed a pot to piss in, a bed to sleep in, and a house to raise a family in. Our home is not worth only money.

My intent is not to judge your pop, but to put the 10 fold increase in the value of the house in perspective. BTW, when I work under my car, I put two sets of jack stands under it, and don't work alone. When I was a kid I jacked up my car and put cement blocks under it to hold it up. Before I slipped under it, the blocks crumbled and the car collapsed onto the ground. Yikes! Glad I was able to learn that lesson the e…

I took dying under a car to mean, never retire, never surrender.

Re: Why Silicon Valley Works

#244

Post by mathattack »

pjlegato wrote: post #123
mathattack wrote: post #71

Earlier quoted context omitted.

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…

Two observations: - Plenty of 4k/month San Francisco apartments get you into terrible public schools. - Inverting your point, at least people in NYC / finance are generally honest and upfront about their desire to make lots of money for its own sake; many in the SF area go around preaching nonstop about how their only motivation is to reshape society with their paradigm-shifting value-adding "wearable social network…

The strange thing is when you recruit into the Wall Street jobs, you are supposed to pretend that the reason is anything but the money.

Re: Why Silicon Valley Works

#245

Post by geebee »

potatolicious wrote: post #103
porter wrote: post #86

Earlier quoted context omitted.

If it's so bad, why aren't people moving out of the valley?

I did. Now I'm in Manhattan where it's cheaper, funnily enough.

Manhattan is expensive, but I think you benefit a bit more from the efficiencies of extreme urban living. With the exception of a few neighborhoods, it's much harder to get by in SF without a car. In fact, SF is sort of in the worst of both worlds - dense enough that it's quite difficult to own a car, not so dense that it's easy to get by without one.

Re: Why Silicon Valley Works

#246

Post by geebee »

pjlegato wrote: post #123
mathattack wrote: post #71

Earlier quoted context omitted.

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…

Two observations: - Plenty of 4k/month San Francisco apartments get you into terrible public schools. - Inverting your point, at least people in NYC / finance are generally honest and upfront about their desire to make lots of money for its own sake; many in the SF area go around preaching nonstop about how their only motivation is to reshape society with their paradigm-shifting value-adding "wearable social network…

Well, SF runs a lottery system, so your rent was largely irrelevant until recently (the system is changing to give some preference to people who reside in a school district).

That said, you really should investigate SF public schools a bit more. There are a large number of very high performing public schools, as well as some terrible ones. That's actually no different from the 'burbs, it's that if you live in the Gunn district in Palo Alto, you get to go to Gunn. If you live in a particular school district in SF, you aren't guaranteed a slot in that school.

Re: Why Silicon Valley Works

#247

Post by geebee »

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…

What do you think of this bit?

In "Why not to start a startup"

http://paulgraham.com/notnot.html

"9. Family to support"

"This one is real. I wouldn't advise anyone with a family to start a startup. I'm not saying it's a bad idea, just that I don't want to take responsibility for advising it. I'm willing to take responsibility for telling 22 year olds to start startups. So what if they fail? They'll learn a lot, and that job at Microsoft will still be waiting for them if they need it. But I'm not prepared to cross moms."

Can you see how a statement like this might make people with kids more reluctant to apply to YC?

Re: Why Silicon Valley Works

#248

Post by WalterBright »

sitkack wrote: post #243
WalterBright wrote: post #237

Earlier quoted context omitted.

My intent is not to judge your pop, but to put the 10 fold increase in the value of the house in perspective. BTW, when I work under my car, I put two sets of jack stands under it, and don't work alone. When I was a kid I jacked up my car and put cement blocks under it to hold it up. Before I slipped under it, the blocks crumbled and the car collapsed onto the ground. Yikes! Glad I was able to learn that lesson the e…

I took dying under a car to mean, never retire, never surrender.

I know :-)

Re: Why Silicon Valley Works

#249

Post by Balgair »

sitkack wrote: post #243
WalterBright wrote: post #237

Earlier quoted context omitted.

My intent is not to judge your pop, but to put the 10 fold increase in the value of the house in perspective. BTW, when I work under my car, I put two sets of jack stands under it, and don't work alone. When I was a kid I jacked up my car and put cement blocks under it to hold it up. Before I slipped under it, the blocks crumbled and the car collapsed onto the ground. Yikes! Glad I was able to learn that lesson the e…

I took dying under a car to mean, never retire, never surrender.

No, I meant it quite literally. He uses jacks and has seen many friends die for lack of them. It's not an accident that will kill him, just old age or a heart attack of a sort. We are pretty sure that Mom will walk out to the garage one day and find him dead under a car with what he really loves to do.

Re: Why Silicon Valley Works

#250

Post by mathattack »

geebee wrote: post #246
pjlegato wrote: post #123

Earlier quoted context omitted.

Two observations: - Plenty of 4k/month San Francisco apartments get you into terrible public schools. - Inverting your point, at least people in NYC / finance are generally honest and upfront about their desire to make lots of money for its own sake; many in the SF area go around preaching nonstop about how their only motivation is to reshape society with their paradigm-shifting value-adding "wearable social network…

Well, SF runs a lottery system, so your rent was largely irrelevant until recently (the system is changing to give some preference to people who reside in a school district). That said, you really should investigate SF public schools a bit more. There are a large number of very high performing public schools, as well as some terrible ones. That's actually no different from the 'burbs, it's that if you live in the Gun…

Having a large chance to have your kid land in a poor quality school is reason enough not to live someplace. (Unless you can afford private)
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