[ben_jones]

> It’s going to be ugly for a while.

As a life long Bay Area resident I’ve gotta assume 10 years+ before non tech businesses find some casus belli to operate the ex-warehouse converted to open office buildings throughout SF.

I say non tech because if you’re a burgeoning tech company why on gods green earth would you choose SF? Because you want to poach all the ex-googlers at 300k+ TC expectations? Because you want to compete with Meta for Stanford and Berkeley grads (because they truly are so much better than all the other CS grads in the world)? Because you’re really really trying to nail down that contract with Kaiser Permensorrythreemonthsuntilyourappointmente? Because it’s the only way you can raise $100m on a $5b valuation for your macaroni and cheese only microwave?

SF is a gorgeous amazing city with a rich history and jaw dropping views and weather (bring a jacket) but man even as a major proponent I can’t make a business case outside of checks notes access to League of Legends themed investor meetings.

[wbl]

Because you've got to take care of your sick mother was very famously a reason. But there's an more serious reason: you can hire an incredible depth of experts here you can't anywhere else, who are immersed in informal networks that diffuse innovation.

Why do hedge funds pick Manhattan? Why are all the watchmakers in Jura? Why are biotech firms in Boston and New Jersey? Why are all the US car companies in Detroit? The answer is thick hiring markets and agglomerative efficiencies. Top people don't sell equities in Dallas.

[ben_jones]

> Because you've got to take care of your sick mother was very famously a reason.

With aging parents I empathize a lot with this appreciate you raising it. It’s true the locals will have many reasons to be here and will continue to start businesses and enterprises here.

> you can hire an incredible depth of experts here you can't anywhere else

I’d argue that there are a lot of bad institutional habits in the Bay with regards to software and business management such that the benefit of domain expertise is caught in a nuclear blast of bad “leadership” and dumb capital.

[kolbe]

Covid diffused a massive number of those experts throughout the world.

[vel0city]

You probably could have picked a different city than Dallas, as Dallas actually has a decently large financial sector. It has historically been a pretty big part of the financial industry of the Southwest US buoyed by the Federal Reserve presense and within the last few years has had some massive growth by many big banking and finance groups. Its the second biggest financial area behind NY in the US.

"The industry’s rapid Texas expansion since the onset of the pandemic means the area now has more finance workers than Chicago or Los Angeles, trailing only New York."

https://www.dallasnews.com/business/banking/2024/01/02/wall-...

[TMWNN]

That's interesting; I'd thought Charlotte was the #2 financial center after NYC. Perhaps by the total market cap headquartered there (given Bank of America and other large banks)?

Regardless, the fact that there are multiple such large centers is a good thing.

[nocoiner]

I think it was a reference to Liar’s Poker.

[vel0city]

Thanks for cluing me in to the reference; I did totally miss that one.

Still, the world is a much different place in 2024 than in 1989.

[TMWNN]

"Equities in Dallas" being a Liar's Poker reference that vel0city didn't recognize doesn't affect the validity of the comment, specifically "Its the second biggest financial area behind NY in the US".

[seanmcdirmid]

What other options do you have? All cities have the same issue to lesser degree: Seattle is a bit cheaper than SF but also maybe has a bit less talent, Portland is cheaper still than Seattle with less talent still. Unless you are a FAANG who can convince people to relocate to Durham for a bit lesser pay, it’s going to tough going trying to recruit the right talent in that LCOL even though compensation is less.

You are stuck making trade offs wherever you base your office, the market remains sort of efficient like that. If you have the network to hire the right talent in say Atlanta, go for it. But many will still do better in SF.

[rufus_foreman]

>> What other options do you have?

100 other metro areas in the US and 5 other continents.

[seanmcdirmid]

All with different trade offs to be made.

[photonbeam]

These companies have been importing people from all over the US (and elsewhere) to the bay area. Its not efficient at all

[seanmcdirmid]

Yes, but not just from one singular location they could go instead. It isn’t easy setting up in Shanghai and Bangalore.

[ben_jones]

> What other options do you have?

Many companies are plopping offices right next to university clusters, which is a good solution if you need both talent and cost efficiencies. Consider the research Triangle in North Carolina as one example.

It’s probably shorter to just say SFs appeal is largely to fresh grads who want to party in a city and industry consolidation - both the consolidation of actual tech companies and the financial services that service them, like VCs. SF does not have any monopoly on fresh grads and no longer represents a disproportionate consolidation of the tech industry which is now very spread out.

> You are stuck making trade offs wherever you base your office, the market remains sort of efficient like that.

Absolutely there are tradeoffs. I believe people are struggling to realize the entrepreneurial tradeoffs of SF have changed (as much as I don’t want them to as a local resident), and now disproportionately encourage cynicism - oh wait AI will turn everything around never mind.

[seanmcdirmid]

Ya, you know 25 or so years ago, SF wasn’t the place to do tech, that was more mid and South Bay. Then it was for awhile, and maybe it isn’t going to be much of a place for it again.

I really wish the techs would fully embrace remote work and then just equalize pay already. You can work and live where you want, although you might not get paid enough to live in SF, but it’s your choice and problem.

[ikiris]

They are embracing equal pay, by massive layoff waves.

[fortran77]

Sunnyvale, Mountain View, San Jose, Cupertino, Santa Clara

[jonnycoder]

SF is far from an “amazing” city. From Gdansk to Bangalore to NYC to Amsterdam, and many others, I put SF at the bottom of my list. And I love cooler weather.

[jareklupinski]

> non tech businesses find some casus belli to operate the ex-warehouse converted to open office buildings throughout SF

> SF is a gorgeous amazing city with a rich history and jaw dropping views and weather (bring a jacket)

sounds like you want to convert those warehouses into hotels and start a tourism-focused industry

[karma_pharmer]

because they truly are so much better than all the other CS grads in the world

Well they kinda are. And most of them want to stay in the Bay Area, so you don't end up randomly losing a bunch of your potential "excellent match" candidates because of geographical preference. There are only two other schools in that tier; a lot of MIT grads want to stay on the East Coast.

Carnegie Mellon grads are the recruitment secret superpower though: they all want to get the hell out of yinzburgh as quickly as possible -- anywhere on earth is an improvement. Crazy smart too, especially the ones who do programming languages and compilers.

[Yeul]

I see this in my own country. Amsterdam is expensive why not go to the countryside? Where it that easy.

Restaurants, clubs, drug dealers, ordering your coffee at Starbucks in English not Dutch- all the things you want as a high rising young urban professional is in the city. So if you actually want to attract this talent you cough up the ridiculous amount of money for the privilege of the city.

[CalRobert]

It's nice to be near other immigrants too. It's harder to get to know people with entrenched friend networks, and the Dutch aren't known for being easy to befriend.

[fshbbdssbbgdd]

Many execs believe that people are more productive when you can supervise them in the office. Given that, it would follow that you have to care about being where the talent is.