How to Survive in SF as a Broke Startup • Hacker News Board

Re: How to Survive in SF as a Broke Startup

#111

Post by downandout » Thu, Nov 06, 2014, 6:08 PM UTC

gamblor956 wrote: post #109

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…

Nevada hasn't turned out so well for the many startups who have moved there.

Bad companies and/or ideas will fail anywhere, and they will fail faster in high burn rate areas like the Valley. Good (internet) companies will succeed anywhere. When was the last time you refused to install an app based upon where the company behind it was based?

Tax decisions should never drive business decisions until the amount of tax actually becomes a material financial statement item.

Nonsense. You should plan for failure, but you should also plan for success.

Without Silicon Valley, nobody would remember or care about Zuckerberg today.

Also nonsense. Facebook was a great, viral product. No one cared, cares, and in the beginning, even knew, where it was based (and it didn't start in the Valley either).

Re: How to Survive in SF as a Broke Startup

#112

Post by gamblor956 » Thu, Nov 06, 2014, 6:14 PM UTC

at-fates-hands wrote: post #80

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…

This. Great advice. I often wonder why people never associate "start-ups" with "small business". There are plenty of states who talk about having very favorable tax structures for small businesses, none of which include California. Reno is a great example of being able to leverage favorable tax structures and still being close to "the action" so to speak. This is such an obvious win-win on so many levels, I'm not sur…

Compare the success of Nevada's businesses with those of California's. Can you think of any major Nevada success stories outside of the casinos or Zappos? (Even Zappos found success as a Cali company before it moved to Nevada.)

As it turns out, having one of the "best business climates" is usually not correlated with actual business success. States with "favorable" business climates have such climates precisely because businesses would not otherwise succeed in those states. This puts such businesses at a disadvantage when they try to expand to non-favorable states: without the tax subsidies, they simply aren't efficient enough to succeed in a cutthroat, capitalist environment.

Tax Foundation's "best business climates" ranking is based purely on tax rates. It doesn't even take into account tax incentives! If they're going to rank states based on tax policies, they should be ranking based on effective tax rates, not hypothetical maximum marginal tax rates. The other major flaw with the rankings is that they don't take into account the other factors that matter far more to a small business: such as market opportunities, customer availability, employee quality, and support services, none of which you will find in any meaningful qualities in any of the states ranked in the top 10 of the Tax Foundation rankings.

Re: How to Survive in SF as a Broke Startup

#113

Post by [deleted] » Thu, Nov 06, 2014, 6:20 PM UTC

Kalium wrote: post #110

timr wrote: post #108

Earlier quoted context omitted.

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.

[deleted]

Re: How to Survive in SF as a Broke Startup

#114

Post by zingar » Thu, Nov 06, 2014, 6:32 PM UTC

beachstartup wrote: post #105

zingar wrote: post #31

Earlier quoted context omitted.

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 ot…

No, I didn't know anything of the sort. I only noticed "Asian-Americans" and "Americans" in the same sentence once you pointed it out. I understand the offense that this could cause but to be honest I'd find it odd if he was using "less snobbish" as a negative term. If anything I thought he was being negative towards the "Americans".

Also I sense we both believe that discrimination is wrong, you've taken this fairly strongly. But we approach this matter differently.

Your point about how I would react being described as anything other than South African is dead on. But the truth is that apartheid and colonialism has meant that not all South Africans were born with the same opportunities. So nationality may exist in some abstract sense apart form race but it is not a great equaliser. A whole lot of what I know about the US leads me to believe that this is something our countries have in common.

This is not a verbal trick: I firmly believe that the only way to deal with discrimination is to recognise it even where nobody is using the words. If anything the "trick" is pretending that a stamp on a form wipes out the tremendous advantages or disadvantages of skin colour.

Re: How to Survive in SF as a Broke Startup

#115

Post by [deleted] » Thu, Nov 06, 2014, 6:48 PM UTC

smt88 wrote: post #25

timr wrote: post #12

Earlier quoted context omitted.

It's a huge disadvantage unless you're doing something that depends on access to a large number of high-quality (but expensive) engineers and/or rich people. Building a tool for programmers? The valley might be your place. Building a fashion startup? Go where people are fashionable. Building a search engine? There are a lot of search people here. Building a service startup that requires warehouses, inventory and/or l…

> access to a large number of ... rich people That's kind of the heart of it for a lot of people. Say you're a young engineer with a great idea. Now what? You don't have the experience or connections to build your company, so you absolutely need to raise money. That kind of money may exist elsewhere, but only as a fraction of the SF money. "Silicon Alley" talks a big game, but their numbers aren't even close (especia…

[deleted]

Re: How to Survive in SF as a Broke Startup

#116

Post by 7Figures2Commas » Thu, Nov 06, 2014, 6:56 PM UTC

gamblor956 wrote: post #109

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…

> 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.

Tax considerations should never be the sole driver of business decisions but that isn't a good justification for ignoring them. Founders, for instance, should know about 83(b) elections and Qualified Small Business Stock (QSBS). Incidentally, California is one of the few states in which the exclusion of gains from the sale of QSBS is not allowed. I would venture a guess that close to 100% of tech startup founders today have no idea what QSBS is even though it can allow them to eliminate up to 50% of their capital gains tax when they sell their company.

Your comment seems to be based on the flawed assumption that legitimate tax planning involves complicated corporate structures. There's nothing complicated or expensive about choosing to reside in Nevada (because of the lower costs, business-friendly environment, etc.) and structuring your Nevada-based business as a Nevada corporation. That is far less complicated and expensive than, for instance, choosing to reside in California and structuring your California-based business as a Delaware corporation, which is something that a ton of California startups do based on the hopeful assumption that they're going to raise capital from investors who will require Delaware incorporation.

> Nevada hasn't turned out so well for the many startups who have moved there.

California isn't a panacea for startups either. For every Facebook, there are countless ventures that never took off. Startups fail at a very high rate. Wherever they're located.

Re: How to Survive in SF as a Broke Startup

#117

Post by no_future » Thu, Nov 06, 2014, 6:58 PM UTC

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…

Well SV is one of the only places where they have these wheelbarrows full of millions of dollars to throw at tech companies, so I would think that location is pretty important if you're interested in VC funding.

Re: How to Survive in SF as a Broke Startup

#118

Post by aagha » Fri, Nov 07, 2014, 6:21 AM UTC

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…

I wouldn't advocate moving to another state in a location that's 3.5 hours drive and 3 hours by plane (not 45 minutes--airport time on both the front and back end will be an hour).

However, I would recommend checking out the East Bay. Berkeley and Oakland particularly. Cheaper rents, good startup community, 30 minutes to SF by BART.

Re: How to Survive in SF as a Broke Startup

#119

Post by lsc » Fri, Nov 07, 2014, 3:37 PM UTC

junto wrote: post #101

lsc wrote: post #94

Earlier quoted context omitted.

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 ot…

>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.

Yeah, for me? that usually doesn't work. I mean, I switch tasks and goals often, but that doesn't help me focus, usually, at least not long enough to accomplish something. Work is one of those things that is less immediately satisfying than, say, hacker news, games, or a billion other distractions, but work is vastly more satisfying when I accomplish something. For me? it takes a lot of effort and tricks to get myself to focus long enough to finish something, but when I do? it's incredibly rewarding. Maybe I need to break up my tasks into smaller chunks? But a lot of my work is support-type work, where it's already in smallish chunks.

But... yeah. I suppose other people are better able to focus on that further-out reward than I am. Maybe it's just me? Maybe it's that I'm coming down off of a long period of being less than productive?

Either way, I think that personally, I'm way better off showing up.

Re: How to Survive in SF as a Broke Startup

#120

Post by dijit » Sun, Nov 09, 2014, 12:29 AM UTC

beachstartup wrote: post #100

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.

> Asian-Americans are... > my assumption is that they live in area's that Americans wouldn't want to live anyway. yeah, real americans wouldn't want to live there, amirite? trustworthy, dependable, high standards having white americans, not like those filthy asian americans who are only pretending to be citizens. after all we all know where they're really from wink wink nudge nudge i've got news for you, pal. "Americ…

I'm not american, so I was merely speculating.

in the UK we consider white people to be indiginous (even if there are british citizens who are from different descents who are equal to me in every way).

regardless, there is a certain set of areas where white people simply do not live, and they are almost entirely inhabited by Indians or British with indian descent.

(fun fact: on forms they have a "British Indian" check-box)

race doesn't matter, but they're culturally different and I was suggesting that it might explain why they'd be willing to accept lower standards of living for some money saved (which is the case in the UK)

Please stop implying I'm racist because I used the colloquial term "Americans" to mean "white people" who have out-bred and/or killed the native populace.