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How to Survive in SF as a Broke Startup

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Re: How to Survive in SF as a Broke Startup

#101

Post by junto »

lsc wrote: post #94
junto wrote: post #91

Earlier quoted context omitted.

I understand this too. I prefer to rent a desk in a co-working space rather than work from home. Hence I'm still remote, but I don't work in "THE office" nor "at home".

How has the co-working space worked for you as far as social pressure goes? Being the only person from my company in a co-working space hasn't worked well for me, but I've mostly only used the hacker dojo, which is perhaps a little bit too social for what I need? As far as I can tell, I need people that are working on the same project as I am. I need that feeling that I'm betraying or failing those people if I'm not…

I speak to people in "the office" via Skype regularly throughout the day.

I have a daily 10 minute team stand-up via conference call (our team has a good microphone in the main office).

My code check-ins are there for everyone to see. If there was a lack of them, it would be pretty obvious that I was not pulling my weight.

The people in my co-working space are heads down busy. I go for lunch with some of them, but other than that, there isn't that much chit-chat whilst we sit at our desks and work.

That's not to say that I'm never distracted or procrastinating. However, the cause of my procrastination is the same regardless of environment. Whether it is my old corporate cube environment (surrounded by by co-workers), my co-working space (surrounded by random people working), and my home office (surrounded by my cat) the root cause is that the work is uninteresting and uninspiring. A change of project is the best way to change that. A new feature rather than support another. A walk around the block and some fresh air a short term fix.

Re: How to Survive in SF as a Broke Startup

#102

Post by lsc »

at-fates-hands wrote: post #97
lsc wrote: post #90

Earlier quoted context omitted.

The thing is, the tax rates only matter if you are successful. Well, mostly. You mostly only pay taxes on profit. (there are exceptions, like payroll taxes, but those are mostly federal.) I'd be happy to promise to pay a billion dollars if my company ever has more than two billion dollars on hand, if paying that billion makes it even slightly more likely that my company will become that successful in the future. Face…

>>> Face facts, as a friend used to say, your company will probably fail before it makes enough money to pay significant taxes. I have a freelance business I'm working on getting off the ground. I have to pay quarterly taxes on the revenue I bring in. I just wrote a check for close to $900 on around $2500 of revenue I had taken in for two clients. To me, that's a significant amount of money coming out of my pocket fo…

S-corp or llc? that sounds a lot like your income tax or equivalent (you pay something very much like income tax on profits for pass-through entities) - which is to say, if you were farming out this work to someone else, most of that tax bill would follow the money you are paying someone else to do the work.

At that much, I'd guess you are paying income tax at a rate that would indicate that you have significant other income.

Income tax/fica are the hardest to get around (and most regressive) tax you have to face, but if you wanna stay in America, there's not a lot you can do. (you can shave off something around ten percent if you want to leave California and move somewhere without a state income tax... but there's no getting around federal income and FICA tax.)

Re: How to Survive in SF as a Broke Startup

#103

Post by downandout »

lsc wrote: post #90
downandout wrote: post #56

If you really want to be rational about your company (no personal or business income tax), live cheaply relative to San Francisco, and yet be close to it, start your company in Reno, NV. Rents are 1/2 to 1/3rd of what they are in SF. There is a relatively large and growing tech scene (Gigafactory is being built in Reno, there are several drone startups, SNC does space/military stuff, IGT and Bally Technologies are al…

The thing is, the tax rates only matter if you are successful. Well, mostly. You mostly only pay taxes on profit. (there are exceptions, like payroll taxes, but those are mostly federal.) I'd be happy to promise to pay a billion dollars if my company ever has more than two billion dollars on hand, if paying that billion makes it even slightly more likely that my company will become that successful in the future. Face…

Face facts, as a friend used to say, your company will probably fail before it makes enough money to pay significant taxes.

You're correct, but that's all the more reason not to move to a crazy expensive city like SF from wherever you are in order to start your (likely to fail) company. What I was saying is that if you feel physical proximity to the Valley is necessary and you are planning to relocate anyway, then Reno is probably the ideal choice. If you are successful, the upside is dramatically higher because there are no state taxes on your success. If you fail, the downside isn't as bad because your expenses are dramatically lower. You also have a higher chance at success if you aren't burning through your startup capital on monstrous expenses associated with being in the Valley.

Re: How to Survive in SF as a Broke Startup

#104

Post by lsc »

downandout wrote: post #103
lsc wrote: post #90

Earlier quoted context omitted.

The thing is, the tax rates only matter if you are successful. Well, mostly. You mostly only pay taxes on profit. (there are exceptions, like payroll taxes, but those are mostly federal.) I'd be happy to promise to pay a billion dollars if my company ever has more than two billion dollars on hand, if paying that billion makes it even slightly more likely that my company will become that successful in the future. Face…

Face facts, as a friend used to say, your company will probably fail before it makes enough money to pay significant taxes. You're correct, but that's all the more reason not to move to a crazy expensive city like SF from wherever you are in order to start your (likely to fail) company. What I was saying is that if you feel physical proximity to the Valley is necessary and you are planning to relocate anyway, then Re…

A longer runway is, indeed, a very good reason for doing a startup in a low cost of living area, assuming your runway is primarily limited by cost of living expenses, which it often is.

Re: How to Survive in SF as a Broke Startup

#105

Post by beachstartup »

zingar wrote: post #31
robin_reala wrote: post #27

Earlier quoted context omitted.

Are ‘Asian-Americans’ not ‘Americans’ in the first place?

You seem to be saying that race shouldn't matter. But how can we discuss this paragraph (about a neighbourhood that is different where the only reason given for that is race) without exploring what race means in that context? (personally, I don't agree in any context, race matters in pretty much every context in the world because discrimination based on race is present in every context, and to ignore it only allows t…

stop misdirecting, you know damn well he implied that asians aren't really american.

race matters, but not for nationality. nationality means the country that you are a citizen of

you can't run these stupid verbal tricks on HN and expect to get away with them.

for example, i know white people of south african nationality who would take great offense if you considered them to be american, or european in any context other than a simple mistake.

Re: How to Survive in SF as a Broke Startup

#106

Post by beachstartup »

robin_reala wrote: post #27
dijit wrote: post #26

Earlier quoted context omitted.

sometimes people downvote for no reason. the reason you're not getting replies is likely because the US are asleep though. I think it's a valid question- although it's probably more about causation; Asian-Americans are less snobbish when it comes to areas to live, my assumption is that they live in area's that Americans wouldn't want to live anyway.

Are ‘Asian-Americans’ not ‘Americans’ in the first place?

not to a lot of people, no.

it isn't good to say in polite company, but sometimes it slips out because it's kind of hard to disguise an entire racial worldview (i.e., only white people are real americans)

i'm an american and my race is asian, i hear little subtle things like this all the time, everywhere. it's gone down in the past 10 years but it's still there.

Re: How to Survive in SF as a Broke Startup

#107

Post by logfromblammo »

dheera wrote: post #67
junto wrote: post #64

It often strikes me as ironic that the very people who build the connected applications that live in the virtual world of the internet are so obsessed about the physical location requirement of San Francisco (and Silicon Valley), in order to become successful in delivering that virtual offering. That being said I have never worked in or worked for a company in "the valley". I've also been a remote freelancer for 15 y…

The virtual world is great but it doesn't replace the physical world. Location still makes a huge difference to tech startups in terms of getting talent, finding venues and events to pitch your idea, getting investor attention, and all that. No matter how good our video streaming technology these days, it still makes a big, big difference to be with the right people in person. If you were in middle-of-nowhere Nebrask…

If you were in the middle of nowhere, Nebraska, you could move to Omaha or Denver, and you no longer have those problems created by not being in close proximity to a metropolis. You retain the advantages of being in an environment where housing and office space are cheaper, commutes are less onerous, and taxes are more affordable. The talent pools are smaller, but they are also less competitive. The investment pools are smaller, but their funding stretches further. Pitch opportunities will be rarer, obviously, so you would need to go farther afield to find them, and mid-continental businesses are far more conservative with new ventures than coastal companies.

The only real advantage to SV is that it has more money sloshing around, desperately trying to spill out onto the next profit opportunity. By comparison, everywhere else has already tightened their belts by at least two holes, and will look on your blue-sky babbling with extreme suspicion.

But if you don't need outside investment, and you don't need to be physically close to customers, any metropolis in the U.S. (and quite a few in Canada) will do. Some are better than others, obviously, but none will be so bad that they will cause your business to fail--not even the declining Rust Belt cities, like Detroit.

Re: How to Survive in SF as a Broke Startup

#108

Post by timr »

Kalium wrote: post #96
Retric wrote: post #87

Earlier quoted context omitted.

Plenty of companies have 1,000+ developers and zero presence in the valley. It's ridiculously overpriced and only really useful for fundraising. Which is why most successful companies mostly grow outside of the valley.

Yes, there are lots of companies outside the Bay. Yes, lots of them have lots of people. And yet there's a disproportionate number of companies in the Bay. So perhaps it should be seriously considered that there are rational reasons for that. Ease of access to talent is one I hear a lot from founders and hiring managers.

Have you ever recruited anyone here? The unemployment rate for good engineers is negative here: you're not just competing with their current job, but with the two other startups who are wooing them, and the one they're thinking about starting.

If you're building something that doesn't require elite technical skill (like most startups), locating in silicon valley is a net negative for recruiting. You're going to have a very difficult time convincing someone to leave Google to work on your social secret photo food delivery app for dogs.

Re: How to Survive in SF as a Broke Startup

#109

Post by gamblor956 »

downandout wrote: post #56

If you really want to be rational about your company (no personal or business income tax), live cheaply relative to San Francisco, and yet be close to it, start your company in Reno, NV. Rents are 1/2 to 1/3rd of what they are in SF. There is a relatively large and growing tech scene (Gigafactory is being built in Reno, there are several drone startups, SNC does space/military stuff, IGT and Bally Technologies are al…

That's horrible advice. Tax decisions should never drive business decisions until the amount of tax actually becomes a material financial statement item. If you let tax effects drive your business decisions as a startup, you end up with a structure more complicated than the most efficient option, and most of the future tax "savings" disappear to lost opportunities or maintenance of your "optimized" structure.

(not to mention the negative effects of CA's business income tax, higher payroll taxes, office rents, living expenses for employees, etc. on your valuation).

Nevada hasn't turned out so well for the many startups who have moved there. Check out re/code's entire series of the Downtown Vegas experiment. It turns out that money isn't everything, or even the most important thing. If your business couldn't succeed in California, moving to Nevada won't make a difference.

Mark Zuckerberg alone has paid a multi-billion dollar penalty for the mere privilege of living in California.

Zuckerberg chose to pay a lot of taxes for the privilege of living in California, the state which made it possible for him to earn many billions of dollars. Without Silicon Valley, nobody would remember or care about Zuckerberg today. (Even Zappos, Nevada's only success story to date, found its initial success in California.) Zuckerberg did the right thing: he paid it forward so that California could continue to be the place where people go to make it big.

Re: How to Survive in SF as a Broke Startup

#110

Post by Kalium »

timr wrote: post #108
Kalium wrote: post #96

Earlier quoted context omitted.

Yes, there are lots of companies outside the Bay. Yes, lots of them have lots of people. And yet there's a disproportionate number of companies in the Bay. So perhaps it should be seriously considered that there are rational reasons for that. Ease of access to talent is one I hear a lot from founders and hiring managers.

Have you ever recruited anyone here? The unemployment rate for good engineers is negative here: you're not just competing with their current job, but with the two other startups who are wooing them, and the one they're thinking about starting. If you're building something that doesn't require elite technical skill (like most startups), locating in silicon valley is a net negative for recruiting. You're going to have…

I have. I've also recruited elsewhere. The unemployment rate you cite makes engineers much more comfortable with uncertain companies, which is a tremendous stumbling block when trying to hire outside the Valley. It dramatically reduces the risk of joining a startup.
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