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Why Silicon Valley Works

blog.samaltman.com

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Re: Why Silicon Valley Works

#151

Post by owenmarshall »

Emphaticdotco wrote: post #150
nilkn wrote: post #91

Earlier quoted context omitted.

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…

Traffic is atrocious. The driverless, grid-connected cars can't get here soon enough.

I don't think the cars are the problem, as much as the tech bubble driving real estate prices through the stratosphere. That's not going to be fixed by... more technology.

In other words, this may be the HNest comment I've ever seen.

Re: Why Silicon Valley Works

#152

Post by Emphaticdotco »

basher wrote: post #44
zoba wrote: post #31

Another reason I think the valley works so well is the audience its news outlets have. If you have a great product but can't get news coverage on it, its going to be hard to get growth without a large marketing budget. However, if you're friends with a friend of a Techcrunch write, its much easier to get covered and start to get a core group of users who love your product - and are tech savvy enough to understand tha…

Is asking tech journalists you've just met to write about your startup considered annoying?

All depends on the "how". If you make the effort to show that you understand their coverage niche, and make sure that you actually fit into it, and also have (or can package) your story as something newsworthy then go for it.

Re: Why Silicon Valley Works

#153

Post by ihnorton »

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…

Before you do that: become very familiar with the concept and consequences of RVUs (and, ideally, ask an active GP).

Re: Why Silicon Valley Works

#154

Post by graycat »

twic wrote: post #131
graycat wrote: post #73

From http://www.avc.com/a_vc/2013/02/venture-capital-returns.html... at least on average, there is some serious question if Silicon Valley "works" at all well. For > One of the biggest misconceptions about us is that you need to have pre-existing connections to get value from the network. Remarkably, you don’t. Well, as I recall, Sam, from one of your lectures in your current course at Stanford, both Marc Andreesseen…

I'd be interested to see a comparison of something like "dollars of revenue at ten years of age per dollar of initial investment" between Silicon Valley startups and newly formed companies of other kinds. That seems like a reasonable measure of the actual worth of a company to me, and so a decent test of whether Silicon Valley works or not. Looking at valuations or even market caps is much less useful, because that t…

You have a point, but in this context necessarily works has to mean making money for the limited partners (LPs) and, there, more money than the alternatives, e.g., an index fund of the NYSE. Well, follow the link I gave to AVC.com and Fred Wilson's table of data there and have to conclude that on average information technology venture capital, and, thus, nearly necessarily also Silicon Valley, doesn't work very well.

I did mention NSF, etc.: There, Ike wanted pictures. The U-2 was not getting it done. So, one day Lockheed's Kelly Johnson walked in with a pile of papers and proposed a new plane, fly at 80,000+ feet, at Mach 3+, for 2000+ miles without refueling, and essentially impossible to shoot down. The project was approved; the plane flew as planned; and we got the pictures.

So, Kelly had a very ambitious start-up, and delivered as planned, with the project approved from work essentially just on paper.

Such work can be done. Other cases include the F-117, GPS, passive sonar, Keyhole (essentially a Hubble but before Hubble and aimed at earth instead of space).

It really is possible to do accurate evaluations of ambitious projects just on paper and, then, go forward with a quite high batting average. And this fact does partly respond to your point.

Well, NSF, NIH, DARPA, CIA, DoE, etc. can work this way, but Silicon Valley just flatly refuses to. Instead, they want another SnapChat with traction and f'get about anything more, and that means that they can't do the really valuable projects. And that's why, on average, they don't make the big bucks.

Re: Why Silicon Valley Works

#156

Post by javiramos »

TheOtherHobbes wrote: post #120
nilkn wrote: post #91

Earlier quoted context omitted.

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…

Uh - remote? I've spent most of my professional life working from home. With some extra effort, you can earn an SV salary but live in an area that has a very un-SV cost of living. Traffic isn't an issue either. You can network remotely. You can build companies remotely. You can even find investors remotely. A few people are doing this already. More and more will in future. (Are we really supposed to believe it's alwa…

Maybe not as stable as being a doctor but these guys from Wufoo built a company working entirely remotely: http://startupclass.samaltman.com/courses/lec07/

Pretty cool.

Re: Why Silicon Valley Works

#157

Post by javiramos »

cpwright wrote: post #94
wooyi wrote: post #89

Earlier quoted context omitted.

The article talks about long term compensation for entrepreneurs. You're in it for the big payout, to change the world, to build something better. He's not talking about SV working for your everyday salary men/women who wants cheap housing and high quality of living or work life balance.

You can't build a large company with only the founders, or first couple dozen employees, to grow beyond a certain point, you are going to need those "salary men/women."

Check out these guys from Wufoo... Definitely an outlier, but flips your "You can't..." statement...

http://startupclass.samaltman.com/courses/lec07/

Re: Why Silicon Valley Works

#158

Post by rconti »

malbiniak wrote: post #140
porter wrote: post #86

Earlier quoted context omitted.

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

Hello from Portland. Anecdotally, it seems like they are moving out of there and moving in here. (Disclaimer: there's an alarming number of people here that are opposed to that. I'm not one of them.) Thing to consider, though. There still isn't nearly the concentration of VCs (and thus networks) here as there are there. Depending on where you're at with your project/startup/company, that's got to be a sizable conside…

Anecdotally, the Northwest has been complaining about people from CA moving up and "ruining the place" for decades. (see: "Californians driving up our housing costs", "Californians don't know how to drive", etc. I grew up in the Seattle suburbs, and it was a common refrain in the 80s and 90s, and I'm sure it goes back at least to the 1962 World's Fair, if not the early days of Boeing.

Also anecdotally, I moved to the Bay Area, my parents moved (back) to SoCal after 40 years in the Northwest grey. Plus, I have 4 dot-com era friends who have moved from the Seattle tech boom to the Bay Area tech boom, all in their late 20s/early 30s (so not just-out-of-college types), and I know a few others who are considering the same. And I don't know a soul from here who moved north, except for people who came down here for college and then returned home.

I guess it's like they say, "the plural of anecdote is not 'data'".

Re: Why Silicon Valley Works

#159

Post by rdl »

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…

I live a 20 minute drive (after 10am or 7pm) from ~all the startups in SF (in SOMA or Midmarket). My rent would be ~$1800-2500/mo for a 1BR. (GF owns the condo, so no rent now). While Oakland is moderately "real", I've never "had to use the AK" -- it's realistically about as safe where I live as in SF (I live near a Whole Foods, after all). I do spend about $660/mo on commute ($260 parking, $100 bridge toll, $300 or so on gas and vehicle operating expenses). I could do a 50 minute BART ride for $0/mo total if I wanted, and it'd be 30 minutes if I lived a little closer to BART and worked at Twitter or Lookout instead of by Caltrain.

There are probably >10k jobs in that commute footprint I could have within a week at $150k base plus $100-300k/yr in equity. If I were a competent 5-10y experience frontend developer, maybe 50k jobs in the same range. That's without even touching Silicon Valley itself, or remote-but-through-SF-connections.

This is the advantage of SV as an employee. You can work for a startup knowing that you'd literally have a new job before the day is out if your company imploded in the morning.

Re: Why Silicon Valley Works

#160

Post by _delirium »

nerfhammer wrote: post #23
joshhart wrote: post #6

My biggest concern with Silicon Valley is that it will become so expensive that many potential startups are prevented from coming here. Sam also stated that housing costs were the biggest weakness. I wonder what YC could do about this problem for it's companies. I think it would be interesting for YC to build a few high-rise live-work spaces for smaller YC companies to foster and grow the tightly-knit community. Mayb…

> build a few high-rise The dominant political view in the area is that building high-rise anything anywhere is something that should be stopped at all costs

True in much of Silicon Valley (especially places like Palo Alto, which want to retain a suburban layout), but there's some moderate densification going on in San Jose. It lulled for a bit during the financial crisis because a bunch of projects' financing fell through—some apartments under construction had work stopped for ~2 years. But construction seems to be back in swing again now.
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