[matt_wulfeck]

Honestly, at this point it's too late to start "preparing" for a pop. I'm dubious the city can come up with 6 years of money to ride out any kind of economic turmoil without great pain.

Individuals can simply move to a better and cheaper location. There's many more mature and cheaper tech hubs now than there were in 2007. The city is stuck with itself and its tax liabilities. And in a place where you can't cut down a tree without posting 90 days notice, good luck rolling back some of that spending.

[ashwinaj]

I was in one of the so called "low cost tech hubs" of Dallas/Austin in 2008 during the recession. Anecdotal, but people in tech were doing a lot worse than in SV due to lack of jobs. If you were a reasonably good engineer in SV, you kept your job or at worse got a job at a lower salary in SV, while in Dallas/Austin people were losing jobs outright and unemployed for months since there weren't enough companies around.

This may have changed 8 years on, but I'm skeptical from what I hear from friends and acquaintances in Texas. From an R&D operational point of view, you cannot just up and move all major operations from SV to <insert any tech hub> on a whim. It may work for a 10 person startup, not for a company with thousands or even hundreds of employees.

[todd8]

My anecdotal observation about the size of companies moving to Texas is different. My neighbor just moved his company of three hundred employees to Austin. Another neighbor's company, Dimensional Fund Advisors relocated to Austin, about 1000 employees. On my small street (10 families), half work for or run companies that moved operations to Austin. Toyota just moved to a suburb of Dallas, 4000 employees. The operational cost savings are substantial.

[legodt]

The specific suburb Toyota moved to, Plano (75093), is notable because it is the home of many large companies, tech included. Companies like PepsiCo/Frito-Lay, Gearbox, and UGS are headquartered there alongside large offices for companies such as HP and various financial institutions. Plano is an upper-middle to upper class suburb of Dallas where housing for families is far more accessible than inside of Dallas itself. Whether this suburb-based expansion model can apply to other tech hubs in different states is debatable, but the pattern is still worth noting.

[amyjess]

By the way, the proper term for something like Plano is an "edge city" [0]. It's a suburb that's managed to grow enough of its own industry that residents can both live and work here without having to commute to the city.

Personally, I love it. I have a very cheap cost of living (paying $1 per sq. ft. means you're being gouged here), a spacious home in an area with no noise, and a short commute all at the same time. Also, since we have so much tech industry here bringing a lot of H1-B workers and other diverse employees (plus a major tech university that hosts a large number of international students), there's been a huge boom in good ethnic food here. Dallas is kinda the opposite of most other cities: where other cities have white flight suburbs and a diverse urban core, Dallas has huge concentrations of Chinese, Indian, and Vietnamese people (among many, many other ethnicities) in the suburbs, while the city is full of white hipsters who think living in a tiny loft is cool. As such, you find the best food in the suburbs.

[0] https://en.wikipedia.org/wiki/Edge_city

[whamlastxmas]

Plano is not what I would describe as upper class. There are definitely areas surrounding Plano that are, but they are very small pockets.

[ashwinaj]

Yup, but these aren't "tech" companies. These are traditional manufacturing, finance, insurance (I've heard about State Farm moving to Richardson, TX) etc.

Apart from AMD (when it was on the brink) moving it's HQ to Austin from Sunnyvale, I can't think of any other "tech" company moving major operations from SV to elsewhere.

[the_watcher]

According to the SF Chronicle[1], over 2 dozen tech companies moved from the Bay Area to Austin since 2014.

http://www.sfchronicle.com/business/article/Tech-pipeline-to...

[kbenson]

Does it provide names? I'm curious, but that article is behind a paywall.

[the_watcher]

It provides 2 names, both of which I hadn't heard of, but they were B2B data providers, which is a space that I regularly find companies I have never heard of before.

[netheril96]

Shouldn't it be easier to move tech companies than manufacturing companies?

[HillRat]

Technically, it's trivial to manufacture carpet anywhere you want -- but 85% of all US-made carpets are manufactured in Dalton, Georgia. Likewise, theoretically it's easy to develop software from anywhere (or many anywheres), but in practice you will benefit from the secondary effects of locating in a major tech hub -- or even a minor one. Some of this has to do with ease of recruitment of qualified candidates, but also the network effects of having a large number of tech companies and groups interacting with each other, leading to an overall improvement in capabilities and quality. Finally, funding is a key controller; in the Bay Area, funding can be as simple as opportunistically pitching a GP during a shared UberPool, but in regions without mature VC and angel economies, you'll have to fight harder, and pay more, for those investments.

[elif]

lol do VCs really take pool?

[ashwinaj]

On paper, yes. But this argument has been around for quite a while and we haven't seen any major companies moving operations (ever after the recession). The company I worked for in Austin was a remote location and HQ was in SV. Hardly any engineering employees wanted to move to Austin, despite the fact that they were offered very generous packages. Most employees in Austin were tech support, sales, HR etc. essentially back office.

If you can convince your influential engineering employees to move, that can work. But if they don't want to move, your hands are tied.

[sbardle]

Especially with the rise of remote working and services like Slack.

[TeMPOraL]

The "rise of remote working" was supposed to happen 20 years ago. We should all be working from home for a good decade now. Instead, management invented excuses like "importance of teamwork", "serendipity happening at the water cooler", etc. Another messaging app won't change that by itself.

[rconti]

Obviously also anecdotal, but I live in the Valley and I don't know a single person in tech who lost their job during the recession.

Everybody just put their heads down and kept working. Nobody was recruiting, nobody was switching jobs, nobody was quitting. I know OF people who lost jobs in related fields; sales, marketing, etc, but not in technical fields.

Obviously people did lose tech jobs, I'm just saying it wasn't like a techpocalypse.

[amyjess]

I've lived my entire life in Dallas, and I can confirm as well.

I was unemployed from February 2010 to March 2012 because of the recession. What I'd observed was that if you had skills that were in high demand in enterprise environments, like Java with J2EE/Spring/Hibernate or the .NET stack, then you'd land on your feet, but if you specialized in something less common, then you were out of luck. My experience was all specialized in Linux platform and Python development, and I only had a little over 2.5 years (since I graduated college in 2007, right before the recession hit), which meant I was in the worst case scenario.

It was tough. I applied for job after job after job, was rejected constantly, had a few interviews that never panned out. It took a terrible toll on my mental health. Eventually, I found a very young startup that needed a Linux platform person and couldn't afford someone with a lot of experience, which was what saved me from homelessness. I spent a few years there, picked up a lot more experience with Linux platform work and Python, got some Java under my belt as well, and eventually moved on to greener pastures (because they were still a skeleton-crew startup that couldn't afford to pay much when I left in late 2014).

Still, there's a lot of shortsightedness here. I'm just coming out of another, much shorter (2.5 months), unemployment spell, and I learned that I shouldn't even bother applying to Java positions anymore. My Java experience is all core Java, with no J2EE/Spring/Hibernate/other web frameworks. I spent quite a bit of time doing Java for both the above mentioned startup and the company I went to after there (hell, I was the one who put together materials educating my entire company on Java 8), but almost nobody counts it as valid experience because it doesn't involve a big web framework.

It's aggravating, really. For most companies here, it's "big enterprisey web frameworks or bust", and if you didn't get into that straight out of college, you're screwed because no employer's going to bother training you later on, because now you're considered locked into some other development track. I _want_ to broaden my experience so a few years from now, I can tell employers I've got some of everything under my belt, but here, once you're considered locked into something, that's it.

[the_watcher]

> Honestly, at this point it's too late to start "preparing" for a pop. I'm dubious the city can come up with 6 years of money to ride out any kind of economic turmoil without great pain.

So cities and states should just give up? Just because they won't be able to protect against everything doesn't mean they shouldn't be working on sound budgeting plans to offset whatever amount of pain that they have. You're right that the regulatory structure of the city makes it very difficult to make the kind of infrastructure investments truly necessary to address the issues of the city, but building up cash reserves is simply sound planning.

[matt_wulfeck]

how about a follow up: be prepared individually to ride out economic pain. Don't be afraid to move. If you have a successful business then beware the city is going to have a keen eye on you as a potential source of income that it will badly need.

I predict the city will try and suck any profitable enterprises dry before they cut back on social spending, despite what the messaging suggests.

[the_watcher]

Sure, but that isn't mutually exclusive with the city doing its best to put together a financial emergency fund.

[DrScump]

Has that ever happened in SF?

[the_watcher]

Does that make it mutually exclusive? Does the fact that it has never happened in SF mean that the city should just punt on even attempting any fiscal responsibility?

[DrScump]

My point being that in the two generations of one-party rule in SF, there has never been any semblance of fiscal responsibility. I wouldn't rely on that happening now.

[dragonwriter]

> Individuals can simply move to a better and cheaper location.

[...]

> And in a place where you can't cut down a tree without posting 90 days notice, good luck rolling back some of that spending.

A change of the individuals in the city of the type you suggest would, quite likely, solve the later problem you point to. So the problem seems to be self-limiting.

[rm_-rf_slash]

They could always scrape some gold off the top of City Hall.

[jobu]

> Honestly, at this point it's too late to start "preparing" for a pop.

That's probably true, and if they do find a way to start squirreling away large amounts of money it could bring about the pop sooner and possiblle make it worse. A large contraction in government spending when things are already shaky can instigate more problems in the economy.

[vox_mollis]

Former US Comptroller General David Walker has been beating this drum for decades (in the context of US fiscal concerns), to no avail.