Why entrepreneurs are leaving the Bay Area for their next startup • Hacker News Board

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#131

Post by sonnyblarney » Sat, Mar 16, 2019, 2:39 AM UTC

For 'big bet' things it might make a lot of sense. I can see why Uber, AirBnB, and especially OpenAI are going to be there.

But for other, slightly niche businesses, wherein you're competing in a vertical/horizontal that may not be specifically tech, it might make sense to be elsewhere.

Fashion heavy, Mining & Materials, Manufacturing, Fintech, Agriculture etc. I suggest it might be ok to be somewhere else.

As a very crude rule of thumb, if you need 'good engineers' but not 'world class engineers' i.e. the problem space is more or less 'domain' and not 'tech' ... well you can get good engineers in a lot of places, and domain knowledge is not inherently in the Valley.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#132

Post by freddie_mercury » Sat, Mar 16, 2019, 2:44 AM UTC

nostrademons wrote: post #115

sanderjd wrote: post #99

Earlier quoted context omitted.

That does seem to be the crux of the article, but I find it very unsatisfying without data. It's extremely improbable that it is exactly 1 person leaving to 1 person graduating from Stanford or wanting to come. So what is the actual trend? This article doesn't know.

In the absence of housing construction & vacancies, it's probably pretty close to 1 person leaving to 1 person arriving. The limiting factor in the Bay Area is usually housing; if there were really a net outmigration, you'd see vacancies and a drop in rents. If there were a large net inmigration, you'd see new construction (which you do to some extent, but not a lot). There's probably a mild net inflow that's account…

No one is asking whether the overall population of the Bay Area is holding steady. They're asking whether the number of entrepreneurs is holding steady.

You don't need new construction for a Facebook developer-drone to move out of the Bay Area and an entrepreneur from Kansas to move into their apartment.

So there's no reason to assume is is anywhere close to 1 entrepreneur leaving for each 1 arriving. And we're back at the original point: without any numbers who knows what is actually happening?

What's more, even small differences become big when you compound them across the total population and several years. Say the ratio is 1.02 arriving for each entrepreneur leaving. And 1,000 leave every year. After just five years you've got 40 new companies. Many cities would kill to have 40 new companies founded (relative to their baseline formation rate).

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#133

Post by souprock » Sat, Mar 16, 2019, 2:53 AM UTC

analog31 wrote: post #122

babyslothzoo wrote: post #106

TLDR: cost of living But leaving for another west coast city is not going to improve things much, housing and cost of living in Los Angeles, Seattle, Portland, etc are also very high when compared to costs elsewhere in the USA. The midwest and south should be aggressively courting entrepreneurs based on cost of living alone.

We are, but nobody has discovered the silver bullet, if there even is one. Every medium sized city dreams of being the Something Valley.

Eh, go for it?

My place began with a few people out of the local university and an angel investor. There was organic growth and an actual profit. The exit was a company of about 40 people being sold ($36.4 million in 2019 dollars) to a large defense contractor. That's in Melbourne, Florida.

There are several start-ups in the area created by former employees, generally beginning on personal funds.

This also works in Longmont, Colorado. I have a relative who did a couple businesses starting from personal funds. One sold for millions of dollars, and the other is ongoing with decent success.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#134

Post by souprock » Sat, Mar 16, 2019, 3:05 AM UTC

alain94040 wrote: post #70

pascalxus wrote: post #23

Earlier quoted context omitted.

Sure, if you're young and single and saving aggressively, you can still come out ahead in SF. But Even at half or 1/3 the salary, you'd still come out ahead in many areas across the country, if you have a family of 4. In SF, it's not just the extreme housing costs, but also the 3K-4K/month day care costs (if you can get it), and all the other COL.

My numbers disagree: https://thestartupconference.com/2018/09/21/about-that-silic...

This sentence is telling: "Sure, he lives in a great 3,000 sq.ft house that only costs $500/month."

You've discounted the value of that house.

You forgot that the house might be on more than an acre of land, with a stream and some forest.

Your comparison isn't equivalent at all. Add some land, and suddenly you aren't coming out ahead. You can't even pay your bills.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#135

Post by analog31 » Sat, Mar 16, 2019, 3:06 AM UTC

souprock wrote: post #133

analog31 wrote: post #122

Earlier quoted context omitted.

We are, but nobody has discovered the silver bullet, if there even is one. Every medium sized city dreams of being the Something Valley.

Eh, go for it? My place began with a few people out of the local university and an angel investor. There was organic growth and an actual profit. The exit was a company of about 40 people being sold ($36.4 million in 2019 dollars) to a large defense contractor. That's in Melbourne, Florida. There are several start-ups in the area created by former employees, generally beginning on personal funds. This also works in L…

Indeed, there are scattered start-ups everywhere. The university in my town is a major center for biology research, and has resulted in formation of a number of businesses, some of which have grown to respectable size. We have Epic. I have my own side-business, but not even scalable to a level of interest for a VC.

But still nothing at a level to suggest the tide turning away from the big coastal cities.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#136

Post by beager » Sat, Mar 16, 2019, 3:36 AM UTC

The notion that the Bay Area contains all the wisdom about high-growth, VC-backed success, if true, seems to me like a great opportunity for those who have been successful at it in the Bay Area to consult for those who want to replicate it for the rest of the country.

It may well be more lucrative for those people to stay put and startup again, but there’s certainly a tier of people who are craving adventure and would much more enjoy sharing their blueprint for success with Austin, Boulder, Atlanta, SLC, Portland, on and on.

If I were a big VC firm (and sure, this might be a good reason why I’m not), I’d be forward-deploying my analysts and recruiting a class of EIRs from the flyover states. It’s a new flavor of alpha for VC: sourcing dealflow from the entire US.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#137

Post by nathan_f77 » Sat, Mar 16, 2019, 5:08 AM UTC

nkkollaw wrote: post #2

I wonder why entrepreneurs don't come to Poland to build their product. Warsaw or Wroclaw in particular are vibrant, tech-oriented cities where life is about 1/4 of SF. If I had to bet my future on being able to building something with 1M, I would want to get 4 months instead of 1 for the money. Of course, SF might have better investing ecosystem, but once you got the money development should be done in a more approp…

> I wonder why entrepreneurs don't come to Poland to build their product.

The answer is that immigration is very difficult. I couldn't find any freelancer or entrepreneur visas for Poland, so it looks like it would be impossible for me to relocate there and work on my own startup.

I'm making it even more difficult for myself, because I would prefer to build a small sustainable business where I don't take any traditional investment or go through an accelerator. I also want to have a fully remote team, so I have no need for a physical office or local employees.

Thailand seems to be the best option for now, and it's not through any government program. I'm actually employed by an agency called Iglu [1], so I have a business visa and work permit. However, I don't have a boss, and I find all of my own freelancing contracts. My startup also hires Iglu for development services, even though I'm the sole developer, so I am technically working for Iglu while building my own product.

I think it's a really great setup, and it makes everything very easy, stable, and legal. But I would really like to find some similar opportunities in other countries.

[1] https://iglu.net

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#138

Post by crushcrashcrush » Sat, Mar 16, 2019, 6:10 AM UTC

pmoriarty wrote: post #97

opportune wrote: post #60

Earlier quoted context omitted.

I would love to start a business in Miami but the COL seems pretty high. I feel like it's probably the best place in the world to start a latin america-focused tech company (social networking, streaming, fintech, etc.) and it seems like a great place to live. Does anybody happen to know what kind of companies the VC's there are focused on - could see pure tech plays being outside of their core competencies and thus u…

"it seems like a great place to live" Great except for all the hurricanes, sweltering heat and high humidity, and cultural wasteland. Not that SF has much culture compared to world-class cities like NYC, London, Berlin, or Amsterdam, and Silicon Valley is even worse. California also has earthquakes, so maybe it evens out.

More culture in Miami than San Francisco.

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#139

Post by masonic » Sat, Mar 16, 2019, 8:09 AM UTC

opportune wrote: post #59

I'm heavily considering Tallinn for a tech startup - It's easy to get residence status (IIRC basically requires a ~$60k investment in a business you are starting) and extremely easy to start a business. You get access to the EU labor/trade markets in a low COL city which already has a decent sized tech and entrepreneurship presence. The government is actively courting you and in general seems very easy to interact wi…

How far can one get if he speaks English but neither Estonian nor Russian?

Re: Why entrepreneurs are leaving the Bay Area for their next startup

#140

Post by masonic » Sat, Mar 16, 2019, 8:15 AM UTC

i_phish_cats wrote: post #66

justfor1comment wrote: post #62

As an engineer in the Bay Area I would recommend most startups to locate themselves outside the bay. Especially if they operate a low margins business. Rent is expensive and so are the employee salaries over here. I have many Bay Area startup recruiters reach out to me with rather interesting projects. However, a quick look at Glassdoor reveals that the liquid portion of the salaries they offer is so low that I would…

If only there were trailer parks or other cheaper housing options around here. Fuck NIMBY's.

It's the YIMBY developers that are destroying mobile home parks here, including the two closest to me right now (on El Camino near Poplar, and the former Blue Bonnet complex at Fair Oaks and Evelyn).