The Spillover Effect

The New York Times has a piece today about how bay area tech companies are giving the Phoenix Arizona economy a boost.

I think this is a trend we are just seeing the start of.

A big theme of board meetings I’ve been in over the past year is the crazy high cost of talent in the big tech centers (SF, NYC, LA, Boston, Seattle) and the need to grow headcount inΒ lower cost locations.

This could mean outside of the US in places like Eastern Europe, Asia, India, but for the most part the discussions I have been in have centered on cities in the US where there is a good well educated work force, an increasing number of technically skilled workers, and a much lower cost of living. That could be Phoenix, or it could be Indianapolis, Pittsburgh, Atlanta, and a host of other really good places to live in the US.

Just like we are seeing tech seep into the strategic plans of big Fortune 1000 companies, we are seeing tech seep into the economic development plans of cities around the US (and around the world). Tech is where the growth opportunities are right now.

A good example of how this works is Google’s decision to build a big office in NYC in the early part of the last decade and build (and buy) engineering teams in that office. Google is now a major employer in NYC and the massive organization they have built has now spilled over into the broader tech sector in NYC. My partner Albert calls Google’s NYC office “the gift that Google gave NYC.”

We will see that story play out across many cities in the US (and outside of the US) in the next five to ten years. It is simply too expensive for most companies to house all of their employees in the bay area or NYC. And so they will stop doing that and go elsewhere for talent. That’s a very healthy and positive dynamic for everyone, including the big tech centers that are increasingly getting too expensive to live in for many tech employees.

#management#Web/Tech

Comments (Archived):

  1. JimHirshfield

    This fits well with Jobbatical’s mission.

  2. William Mougayar

    Yup, and you can add Canada (especially Toronto-Waterloo) on the list of more economical ecosystems to find talent from. Internationally, Belarus is a best kept secret too for talent quality.

    1. Jordan Thaeler

      Poland, Romania, Russia – I’ve seen high caliber talent from these areas many times. For some reason China and India continue to disappoint.

    2. awaldstein

      Hardly third world but just did a project with a dedicated ecommerce team out of Manchester. Quality at significantly below NA market costing. Very satisfied.

      1. William Mougayar

        Yes. As implied in this post, almost anywhere outside of NYC, Seattle, LA, Boston, Silicon Valley is going to be cheaper.

        1. awaldstein

          Interesting that this shop is a Shopify expert in the UK and building a core business on that. Seems like over the last year they have thrown a lot of resources at this community. A smart move.

    3. kenberger

      Shhh!

      1. William Mougayar

        Oh no… Sorry

    4. JLM

      .Funny thing and a small point but Belarus is one of the only places (Ukraine being another) where the intrusion of a shooting war may have an impact on the business environment.Prediction — before the snow falls in the Ukraine, they will be in a big time war with Russia.JLMwww.themusingsofthebigredca…

      1. sigmaalgebra

        “Big time” in all of Ukraine or just a dust up again in east Ukraine which mostly wants to be part of Russia and away from the corruption of the rest of Ukraine anyway?Some of the girls in Ukraine, with their braided hair and colorful clothes, are really pretty. There’s been a lot of really good stuff from Ukraine. I hate to see something so good crushed. Still, if Ukraine can’t get their act together, maybe they’d just be better off back with Russia.I know; I know; Russia wants to knock over dominoes and rebuild the old Russian empire of Ivan the Terrible, Peter the Great, the Romanovs,Lenin, Stalin, or whatever and keep growing until they have Spain, Iceland, Greenland, and are about to take the US. I’ve heard that one before and am reluctant to hear it again.I have to suspect that Ukraine can keep out Russia if Ukraine really wants to keep out Russia.

        1. JLM

          .If the Obama administration was on its game, it would have provided lethal aid including tanks, tank destroyers, artillery, ammunition, and training.The Ukrainians are damn good soldiers. Always have been.The Russians are way overrated. It is a conscript army. They are not well blooded in ground warfare right now. Pretty good in the air but untested on the ground.Putin has stood up 5-10 divisions in the last 4 years and they may or may not be any good. We shall see. These are the units which have been posted up along the Ukraine border.This will not be a skirmish because you cannot disengage with no logical phase lines or geographical barriers to line up behind.Once the Russian armor crosses the frontier, they will slash deep and deadly trying to take Kiev. This is WWII style fighting.Airpower, artillery, tanks — these can be the big equalizers.We sent them bandages.JLMwww.themusingsofthebigredca…

          1. sigmaalgebra

            You mentioned Obama. ‘Nuff said until Trump’s inauguration.

    5. Jc_mellinger

      I work for a 350 person tech company – all virtual. With the right hiring process in place rural U.S. and Canada are the best kept secrets. Most of my colleagues don’t live in a city.

      1. William Mougayar

        If managing virtual teams is not an issue, then that’s a good plan!

    6. Nick Hencher

      5 years in working with teams in Belarus and Ukraine (we have offices in both countries) and it’s been fantastic – I even lived in Dnipro for 18 months. Visas and restrictions (Banking clients) for Belarus are a pain…

  3. Mitchell Henderson

    This is great news. Building staff outside of the Bay Area makes sense not only for economic reasons, but also fits perfectly with one of the core, inherent strengths of technical talent in that anyone can write code anywhere. I’ve noticed customers are much more willing now to listen to presentations online now than the early 00’s. Some of the most productive meetings I have now occur online, not in person. It’s not just good economics to locate staff across the country, it’s also leveraging the very strength of the vast array of online tools that enable collaboration across distance.

  4. pointsnfigures

    Yup, Google put a similar office in Chicago’s West Loop. Tech is not a fixed pie-I think it’s important for policy makers to recognize that. It’s about making more pie.

    1. JimHirshfield

      Deep dish pie?

        1. JimHirshfield

          New Haven

  5. Matt Zagaja

    I read an article similar to this a while back that I failed to find (maybe someone else recalls it) but the gist was that many companies are locating their customer service and entry level workers outside SF and those employees found it challenging to integrate into the company culture and to find internal advancement opportunities beyond their customer service jobs. For what it’s worth while it’s great that Amazon has been building warehouses in Connecticut, this has not created any sort of foothold in the higher tech areas like artificial intelligence or drone operations. In many ways it feels like there is a two caste system.

    1. Vivek Kumar

      Haven’t seen the article, but this echos what I have see in the valley. Sometimes there’s multi caste system – architects, researchers, coders, support.

    2. LE

      and those employees found it challenging to integrate into the company culture and to find internal advancement opportunities beyond their customer service jobs.This is also a psychological dynamic as well even if it results in no opportunity there is the mindset that there is opportunity. This is similar to how a big company has often an easier time hiring for a shit job than a small place. There is the perception that you can rise above your low level job as unlikely as that actually is. So if you are folding clothes at the gap you think “yeah I could be district manager that is the upside” and if you are folding clothes at some small owner run boutique you can’t fool yourself in thinking the same thing.

      1. sigmaalgebra

        “The business of America is business”. There are a few professions where can mostly ignore this fact, but otherwise for financial responsibility being an employee is just a temporary step, and it remains necessary to own some or all of a successful business. Sorry ’bout that.

  6. Tom Labus

    It’s Steve Case’s Third Wave

  7. LIAD

    behavioural/psychological aspect too.founders enjoy the ego-stroking of being based in the hubs. employees like kudos/halo effect too.’normalising’ being based elsewhere through posts like this/marquee tech firms proudly stating their based in ‘timbuktu’ will help the ‘spillover’ effect go from sounding like an admission of failure/ cost based decision to a more proactive positive one.

  8. kirklove

    Is this how corporate office parks in the burbs came to be though? And their eventual decay? And will we then see a return of that I wonder? Because remote work for whatever reason hasn’t taken hold like it should have.

    1. Jess Bachman

      Yeah, I wonder about this. All these tech companies.. still schleping meat bags into the same building every day.Plenty of successful innovators doing remote working mostly…. not sure why it hasn’t caught on.

      1. awaldstein

        Yes and no.You can cut it down, You can build groupware. But the healthiest groups have rotations of face to face.

        1. Jess Bachman

          Yes, rotations. Thats what successful remote working companies are doing, bringing people together a few times a year.

          1. awaldstein

            I do a fair bit of remote CMO work and insist on being on site often if the job is sizable. Once a month often.Nothing beats face to face for leadership roles.

          2. Drew Meyers

            Agreed, always prefer consulting contracts where I can get f2f often.As I say when talking about Horizon’s mission — a world experienced face to face is an exponentially better world than experienced through a screen.

        2. Kirsten Lambertsen

          Just know that tech talent is starting to hold remote working as a requirement. Can’t fight a tidal wave.

          1. awaldstein

            Not fighting it at all.Teams can be remote but leadership requires a presence especially in sales and marketing where there is a hub (HQ) and spoke structure.

          2. Anne Libby

            We’ll see how this trend holds as we learn the depth of talent that exists outside of today’s major hubs. (And as it becomes clear as to exactly who has the management chops to run remote operations…)I see this all of this as a harbinger for finding a market top in NYC/SF for developer (and certain other) salaries…

          3. Kirsten Lambertsen

            That’s a really good point about management. Running a successful remote operation takes effort, planning, training, tools and protocols.Also, it can be a challenge for people who thrive in bustling, high-contact work environments. Those people need to be supported with co-working-space-rental budgets and such.

      2. Kirsten Lambertsen

        Amen. Remote wins.

      3. Matt Zagaja

        Lots of Fortune 500 companies have been shifting to remote work. At least that’s what I’ve seen from Aetna, Pitney Bowes, The Hartford, and Xerox. They’ve shed real estate and employees can reserve desks and conference rooms at the main campus they maintain. I’m not convinced that remote work is appropriate for everyone. I think that the winning formula will be a hybrid model. People might start full time then transition to remote. Even when remote they’ll spend a day or two a week in an office with their co-workers.

        1. Kirsten Lambertsen

          As someone who has worked fully remote for a few years now, I can report that it works. It works great. It works better than being together in an office. Not ‘as good’ – better.I’m not saying that regular in-person togetherness is unnecessary. But it doesn’t have to be all that often.

          1. awaldstein

            Yes and it depends on your role and the type of work.Part of a development team, no question.Ecommerce expert for a portal–yup.CMO or GM for a business with a core team in HQ and a remote workers all over–? Much less true.

          2. Kirsten Lambertsen

            I should clarify that I’m advocating for company-wide remoteness here. I can’t speak to the effectiveness of a few remote team members in a mostly HQ’d operation. I may be picturing something different from others here.It would be interesting to get insight from StackOverflow on their fully remote set up, since they have a big sales team. Automattic is fully remote, but sales and marketing are not a big part of the org.

          3. awaldstein

            Good clarification.Sales & marketing & biz Dev is what i do so what I know best.

          4. PhilipSugar

            I respectfully disagree. I think it can work but some of the best conversations are ones that I hear happen spontaneously.Again. Different strokes for different folks. I am not saying my way is right.

          5. Kirsten Lambertsen

            I have spontaneous conversations all the time. Even better, I can have them asynchronously with someone on a different continent, if necessary. I don’t have to wait ’til they’re in the office.Nothing’s perfect, of course. But I’ve worked both ways and have observed directly that more work gets done faster and people are happier in remote companies.

          6. LE

            Also I would imagine it’s way easier to fire people that work remotely. Less impact on the rest of the staff and morale (don’t mean no impact, mean less impact).

          7. awaldstein

            Not at all true. Accountability and deliverables are the lifeblood of remote organizations.Impact is not at all lessened by staff reduction actually.

          8. JLM

            .That is primarily a testament to you. For you, you, apparently, make it work. That is not for everyone.JLMwww.themusingsofthebigredca…

          9. Kirsten Lambertsen

            As much as I’d love to take credit :-)…https://blog.stackoverflow….I realize, of course, it can’t work for all kinds of organizations. But my observation is that it can be superior for many.

          10. Vasudev Ram

            There’s also 37 Signals (makers of BaseCamp, one of the company heads is David Heinemeier Hansson, creator of Ruby on Rails). They are all remote, though they have a head office in Chicago.They wrote this book REMOTE: Office Not Required – some time ago.https://37signals.com/remoteLots of pros and cons of remote work discussed in it. And the pros that a lot of people do not know (or know well) about, are brought out in it, too.And there are many other well-known companies doing it too, partly or fully.Of course, as some on this thread have said, remote work may not work for all roles or for all kinds of companies. And the whole company has to want to make it work and take effective action towards that, consistently, ongoing. [1] Lots of posts about all this on HN – every now and then – and on other forums too. It’s a growing movement.[1] But that holds true of any other significant change in way of working, too. It’s one of the reasons such changes sometimes fail – because they are not planned and implemented well – not necessarily because they were bad ideas per se.

        2. Vasudev Ram

          Yep. Anecdata: One of my clients (a student of my software courses) works for a big company of the kind you mention (not sure if Fortune 500, but he’s told me it’s one of the largest in the US in its field). He works mainly remotely from home and goes in to the office now and then. It helps him look after his two young kids at home.

      4. Vasudev Ram

        I obviously don’t have large scale data, but I get a feeling remote _is_ catching on, at least some. Maybe it’s just that it isn’t being talked about that much (relatively speaking, compared to non-remote).

        1. Kirsten Lambertsen

          Check out all these remote companieshttps://github.com/lukasz-m…

          1. Vasudev Ram

            Thanks.

          2. Vasudev Ram

            BTW, that seems to have been inspired by another Github project called awesome-python. And I’ve seen others for other topics. Useful use of Github …

    2. LE

      Is this how corporate office parks in the burbs came to be though?Interstate highway system in part, which is as a result of national defense and with the highway act of 1956, the Russians and the cold war.Also resulting in the desire of the workforce to move out of the city to the suburbs and be able to do so and commute by car back to the city if that is where the jobs were.

    3. ShanaC

      Why didn’t remote work take off

      1. kirklove

        In a word… trust.Managers like butts in seats in one room. It’s silly, but human nature.

        1. Drew Meyers

          There’s a lot of challenges w/ remote work. I’m not in the camp that thinks “oh, everyone should work remotely and we’d be better off”… I believe that’s false. Some people can do very well in remote roles, but you really have to have an insanely deep level of self motivation…which from my experience many people simply don’t have.

      2. Drew Meyers

        It has come a long way though, no?

  9. Peter Connor

    Google has a big office in Dublin, as well as about 60 other big tech companies. It’s made it very hard for other companies to acquire talent, as you’re competing against very cash rich companies.But, here is a post about a US company’s move, http://needwant.com/p/im-mo…Fred as a VC do you have any anxiety as to where teams are located?

  10. Richard

    Fred, you weren’t shown much love from the LA times this week on your prognostic skills

    1. Dan T

      This is a great kind of mistake to make . . you’re gonna pass on a lot of winners if you want to avoid betting on losers. I would just feel good for them for winning, despite what appeared to be a stacked deck against them.

    2. LE

      In VC 100 million is not really a “win” to lose sleep over, especially when you read the structure in the full article and see the number of seed investors:http://www.latimes.com/busihttps://www.crunchbase.com/…And even if it was per Dan T comment below you’d need a complete data set of rejected startups (most likely thousands I would imagine..)

      1. Richard

        I hear ya, was surprise to see it in the lead paragraph. Must have come from founders?

    3. fredwilson

      that’s very funny

      1. JLM

        .Haha, you’re like Trump when you mess up — not too damn often — you get earned media by the boat load.It counts as long as they get the spelling of your name right.JLMwww.themusingsofthebigredca…

        1. sigmaalgebra

          Yes, during the primaries, Trump got ballpark $1 billion in earned media free publicity. Right.But apparently that free lunch is mostly over. Why? IMHO, the Hillary campaign went to the usual media sources — ABC, CBS, CNN, MSNBC, NBC, NYT, WaPo, LAT, and a few more — and made each an offer they couldn’t refuse:As you know, starting in September the Hillary campaign will be running ads, wall to wall, spending ballpark $1 billion in each of September and October. Now, we have to play ball together here. We expect TLC coverage for our campaign and attack Trump 24 x 7 for everything including when he stopped beating Ivanka, Tiffany, Melania, Marla, Ivana, and any pet puppy dogs or kitty cats. Then you will get your fair share of the $1 billion a month. And you will be very welcome in the news room of the White House, with lots of deep background, exclusives from high administration sources, etc. That’s the good news, play ball. But here is the bad news: If you give even 10 cents of free media to the Trump campaign, then you will get no Hillary campaign ads and, in addition, discover grand new definitions of pain and suffering until Hillary wins and much, much worse after that. You get my drift? Capache? You’re on the team, as a good team player, right?Or, during the primaries, the Hillary campaign didn’t much care about the Trump earned media — didn’t take Trump very seriously until too late even if then anyway.But, now, in the general election, Hillary wants no more free media for Trump. Hillary is promising to pay her $2 billion for TLC coverage and wants nothing for Trump.And where is Hillary getting the $2 billion? Uh, supposedly Hilllary has had about 300 fund raisers. And just now, in Silicon Valley, Hollywood, and the Hamptons, she’s having several dozen fund raisers but only one rally and no pressers.Apparently Hillary’s plan is to promise favors, get paid, use the money to buy off the media, have the media run her ads and give her TLC, have the media attack and otherwise block Trump, let her campaign staff do their best, e.g., fun and games on election day, and otherwise rest.The media? They want to incite a blood sport cage match and charge the fighters $2 billion each to distribute the video so that voters can select a winner.Of course, if Trump doesn’t pay up $2 billion, the media will be totally in the tank for Hillary. Well, even if Trump pays up the $2 billion, the media will still be totally in the tank for Hillary — Obama v Romney again. Maybe if Trump paid up $4-6 billion the media would be a little more fair to Trump while they accused him of trying to buy the election!Issues? If issues come up, then the Hillary campaign will put out lies. If there are some questions about the lies, then they will put out more lies about the lies. Then they will expect that within a week or 7 days, whichever comes first, the media will drop the issue. Then the Hillary campaign expects that nearly all the voters will forget about the issue.E.g., Hillary claimed that what she did with her e-mail is what General Powell did with his and advised her to do with hers. Since then Powell said that’s false. Then Hillary lied about that. In a few days, the media will drop the issue.Same for Huma’s efforts at journalism blaming the US for 9/11/2001 and blaming women with short skirts for being raped.To fight Trump, the Hillary campaign will pick some issues and just put out lies, then more lies, then a week or 7 days later pick some different issues and put out some more lies.When Hillary gives a rally, she makes promises. Okay, likely they are all lies.If she doesn’t keep her promises, then what? What is the recourse? Sure, we would conclude that she is a liar and quit believing her.But, in that case, why wait for more of her lies to quit believing her? She’s been lying with nearly everything she’s said in public all the way back to Arkansas.So, when she makes a promise, assume it’s a lie. E.g., she’s promised that as POTUS she will restrict donations. Well, she signed a form like that as Secretary of State, violated that, and suffered no consequences. And as POTUS, if she lies, then what? About the only recourse we would have would be impeachment.Hillary lies, freely, with no hesitation, fear, guilt, or shame. And mostly the US citizens have no recourse. She has no credibility or integrity, and the media, in the tank and well paid off, wants us to forget that. So, she keeps lying and getting away with it. Remarkable scam.

          1. JLM

            .The Trump earned media campaign is still in full swing. Big time.Trump owns the space between the ears of his opponent, the MSM, the punditry, the consultants.Kelly Anne Conway — the first woman Presidential campaign manager. Keep your eye on this killer.If DJT is elected, she will be his COS.JLMwww.themusingsofthebigredca…

          2. sigmaalgebra

            > Kelly Anne Conway — the first woman Presidential campaign manager. Keep your eye on this killer.Last night saw the YouTube video clip of her and the Clinton twit, what’s his name, right, George Stephanopoulous. She was right there, on top of each question, saw it fully before little George finished and had her nice response ready before George stopped.What George was doing is so obvious and Kelly has so much experience and is so bright she played with him in an interview like Le Bron would play with him in round ball. It was fun to see.Yes, partly Trump is now in Hillary’s head: He attacks and she responds. Of course her responses are just lies. But, a biggie thing-y is, she has a long history of getting away with lies.She’s a good actress and a really good liar: She can lie and look really sincere.As I wrote, I believe that her plan to win is based on her paying the media $2 billion to run her ads, give her TLC, and attack and block Trump. She will let her staff do whatever. Otherwise she will just lie and rest. Trump can get her to lie; so what. She will lie anyway.Until enough voters realize what an astounding liar she is, she might win.Making silly little Georgie look stupid is one thing. Being a good CoS is different. Newt was mentioned as CoS — he knows how the House works, likely better than Pence does.I can see Kelly as Press Secretary.So, why have a press secretary for head of the campaign? Well, Hillary’s not doing much in the campaign. Instead, really, as Trump mentioned, he is running against the media, the media in the tank for Hillary.So, if the opponent is the media, then, sure, have a press secretary lead the attack.She’s bright and more, Just because she’d make a good press secretary does not mean that that’s all she could do or could not be a CoS. Still, Trump’s standards for staff are really high; CoS will be darned important as Trump gets stuff DONE; and Newt knows the House, the Senate, the White House, the media (e,g,. his brilliant media put down, cut down when he was running), DC, the issues, etc. So, the CoS should be at least as good as Newt. That may rule out Kelly.But, sure, Kelly looks terrific — bright, happy, secure, competent, confident, stable, measured, on target, good, instant insight, great smile, perfect weight, pretty hair, pretty face, four kids, played with Georigie like a cat with a mouse, etc.

        2. Lawrence Brass

          Privileges of stardom. Anyway, Fred can be trusted. Donald’s word isn’t worth a pence.

          1. JLM

            .Lawrence, Lawrence — why do you want to provoke me? I’ve been so well-behaved for so long now. And, you know what a hair trigger I have. It is a flaw, admittedly.DJT is rounding into Presidential shape and is more likely to be President today than any other time in his crusade.Remember this name — Kelly Ann Conway. First woman Presidential campaign manager in US history. Huge fan, am I.Behave yourself, Lawrence, and I will return the favor.JLMwww.themusingsofthebigredca…

          2. Lawrence Brass

            Ah, the power of restraint.Sorry Jeff I couldn’t resist the temptation, watching the news and the new Trump-Pence signs. Him backing up the way he did recently was quite impressive. Didn’t believe he could actually do that.I will behave. πŸ˜‰

          3. LE

            Kelly Ann actually came from South Jersey. She has a good mouth on her.NYT has been really ratcheting up the hatchet job on Trump. Did you know he actually had to borrow money to build buildings!!! I didn’t know that!! I thought he just paid cash for everything. Did you know that he borrowed from the Bank of China!! I didn’t know that. I thought he would have pay more in interest to a bank in this country so he didn’t have to deal with China because he hates them so much!!In other news I am shocked that gambling is going on in the world of startup investing also.

          4. sigmaalgebra

            JLM, you are being so tough on Lawrence.Likely he means well, just wants Captain America, Superman, Batman, and the best of John Wayne, sees that Trump is a little short of that, wants something better, so wants to vote against Trump and, thus, because he doesn’t fully believe everything Trump has said, wants to vote for someone he believes is more honest, that is, Hillary, that is, a pathological liar with a history back to Arkansas of nearly every public statement a lie, lots of really serious lies including perjury before Congress, lies about Benghazi, lies about her e-mail, lies about the US money for Haiti, and now lies about what Powell told her and about Huma. Thing is, Hillary is a really good actress and a world class liar, can lie about anything and look really sincere.

  11. Aaron Klein

    We didn’t start in a high-cost market out here in California, but our second office sprouted up in Midtown Atlanta, and it’s been an incredible way to add great talent to the company. Great talent pools, decent costs, and really loyal employees.

    1. Sahil Patel

      @aaronklein:disqus I started my software company in ATL (I lived in midtown for a long time) and I have found a great talent pool. Thanks to GA Tech (and in second place, Emory), more students are graduating and thankfully skipping the traditional big co and instead joining early stage companies. And many in their late 20 / early 30s move here for said big co (McKinsey, Home Depot, etc.), take a look around and decide to get in the (start-up) game. I feel a bit like Rodney Dangerfield saying it, but Atlanta doesn’t get the respect it should for fostering new companies.

      1. Aaron Klein

        Agreed!

  12. Kurt Stangl

    Great post. The other angle that’s coming into play with your “next 5-10 years” prediction is India. After spending time with in-country with my team, I got a clear picture. In the next 5-10 years, the digital natives that are coming of age in India will happen in numbers of 10’s of millions of highly skilled technologists. Everyone from Apple and Amazon to Salesforce and Uber are grooming great teams over there and my heart swells to see the biggest democracy in the world embrace technology so fully. BIG changes coming in the next 5-10 years.

  13. Zach Milam

    I’ve never lived in NY or SF, but I can imagine the atmosphere in those cities inspires people to do awesome things in powerful (and often subtle) ways. Ambition is contagious and is mostly spread via close contact. So I wonder if companies can take that atmosphere with them to smaller cities, or if they’ll be pulled down to the mean.I hope they can–I’d love to see tech companies more dispersed. Moving out of NY and SF would remove some high barriers to entry and increase accessibility, and I think that would be great.

    1. LE

      Ambition is contagious and is mostly spread via close contactThis is also what people often ignore with respect to attending a top college or high school. It’s not all about who is in front teaching, but the collective student body.

  14. Collin

    Our Google Partner team is located in Phoenix, so I know Google is already doing that.

  15. Mike Lally

    Rochester, NY

  16. jason wright

    Push or pull?

  17. Laura Yecies

    I think this is a great and important trend – tech is the future and we need it to provide opportunity in more places. The key though is moving not just the customer service/operations jobs but also dev/mktg/sales

  18. jseliger

    At some point the cost of housing has to impact SF’s tech scene. Founders and/or early employees will simply not be afford to live there.Tokyo gives us a better development model, but few U.S. cities outside of Texas follow it.

    1. Drew Meyers

      Agreed, housing costs are crazy there. In Seattle, we’re rapidly approaching that point as well.

  19. conorop

    We’re starting to see a bit of that in Minneapolis/St. Paul too. Great place to live. Highly educated workforce. Lots of tech talent. Buzzfeed bought their way in a couple years ago. NBC made an acquisition in SportsNgin. WhenIWork and LeadPages are hot startups, just to name a few.

  20. fl1nty

    Can we come up with a list of up and coming cities that are gonna be good for jobs and growth in the tech sector over the next 5-10 years? A few below to get the conversation started:Indianapolis AtlantaPittsburghMinneapolis/St. Paul

    1. Matt Zagaja

      New Haven, CT. As I’ve been watching it change over the past few years, there is something special in the water there. Also the train connection to NYC and presence of Yale does not hurt.

    2. Eric Vieira

      Newark, NJ – no other city has the access to NYC (Boston, Philly, DC) like Newark

      1. PhilipSugar

        I agree with Newark. But I say Newark, DE. Same access. Much nicer.

      2. awaldstein

        Newark is an interesting spot and many of the food incubators in NY are moving there.For food and manufacturing there is a workforce there.But tech–is there a workforce there?On the surface I”m not seeing it.

        1. Eric Vieira

          Audible.com ‘s HQ is there and trying rouse interest, and don’t forget workforce will spill over as well as Manhattan and Brooklyn become saturated or overpriced. Many nice residential areas are close to Newark…Montclair to the North, Maplewood to the West, Westfield/Cranford to the South and Jersey City to the East. As for academics all the NYC schools, plus Stevens, Princeton, Rutgers, NJIT are all a train-ride/car-ride away…has the makings of a good place…but you’re right it’s not there yet.

          1. awaldstein

            Agree with everything you say. Audible stating in Jersey I think but didn’t know about Audible.Think about Jersey is that it’s a car culture so a place like Jersey City which has both Path and water taxi makes it much more desirable.

      3. JLM

        .I used to spend a lot of time in Newark when Mutual Benefit Life, Pru were there. I used to get a sausage with French fries on the bun. It was some regional delicacy and paella — best ever.When I got back to Texas, I’d get my arteries flushed.It was a dark and dangerous feeling joint in those days.JLMwww.themusingsofthebigredca…

    3. Dan Moore

      BendFlagstaff Missoula Walla Walla Ann ArborThese are all small, cheapish towns with good weather and access to the outdoors and universities.Boulder has proven that model works.

      1. ShanaC

        Boulder is already pushing tech into Denver from what I understand

        1. Dan Moore

          Certainly that happened with sendgrid, though there’s a fair bit of cross pollination up and down the I-36 corridor.

    4. sigmaalgebra

      First cut, just pick the towns with good universities with good ugrad/grad STEM programs. E.g., in Indiana, to heck with Indianapolis — just pick Bloomington. It also has one heck of a good music school — symphony orchestras, operas, solo recitals. For Ohio, pick Columbus. Michigan? Sure, Ann Arbor. Wisconsin? Of course, Madison. Likely similarly for all the Big Ten.Then, sure, Cornell, Brown, Harvard, Yale, Princeton, Johns Hopkins, UVA, UNC, Georgia Tech, UT Knoxpatch, Vanderbilt, CMU, U. Washington, etc.But, wait, there’s more! We’re not done yet! As we remember, the Internet was supposed to do a lot to eliminate geographical distances. Okay. In that case, just pick some nice towns. Want lots of nice scenery, say, lakes, mountains, farms — all those things people in NYC want to set aside for their favorite asphalt, aluminum, and glass!In some of those towns, everyone knows everyone else, and have to be on good behavior or the word will spread around town faster than even the Internet, and maybe on the Internet, and the transgressor can be ostracized! So, people have to act nice! For such people, visiting NYC would advise anyone there to say in NYC since in a nice place on the first day they would be tarred, feathered, and run out of town before dusk!Then there is Chattanooga, IIRC, with 1 Gbe Internet for a long time now! And could consider the towns were Google has installed 1 Gbe Internet! Especially consider a town where the town has installed 1 Gbe Internet to the last mile for apartments, houses, schools, hospitals, businesses, police, etc.Part of all of this is to see more clearly: Try to see just what the heck it is that really want?Sure, the first, obvious answer is — be right in the middle of Sand Hill Road. Seeing no better than that, there have been efforts for more Silicon Valleys all around, and nearly all, right, flopped. So, they didn’t see what was important in Silicon Valley even standing in the middle of Sand Hill Road. They couldn’t see the forest for the trees. They held the book in their hands and saw only the cover and not what was inside.Apparently it is much easier just to head for Sand Hill Road, take what’s there, all of it, without trying to understand what is/is not important, thus, join in on the high cost of living, and f’get about the rest. That is, it’s easier just to go with the flow, the pattern, the crowd, the group, the in-group, the A-list, the buzz, and not think! That way, don’t have to think!Alas, the necessary goal is something quite exceptional, even for Sand Hill Road, and for that the flow, pattern, crowd, group, list, buzz are essentially guaranteed to be failures! Ah, cruel, cruel world that demands exceptional in it! Ah, the exceptional, it’s not for everyone yet!

      1. ShanaC

        Chicago has tier one research activities across disciplines, including comp sci because of U of C, Northwestern (fehhh), IIT, Fermi lab, and commuting distance for WashUStLoius, Urbana-Champaign, and Notre Dame. It’s also really easy to get flights to Detroit.I would do near there, except it’s freezing!!!

        1. sigmaalgebra

          Yes, I couldn’t include everything!I like Chicago — one of my favorite authors P. Halmos was there for a while. My wife started grad school there, department of Morris Janowitz, etc. — she finished elsewhere at an even better department.But I’d wonder about the safety of the neighborhood around U. Chicago. And you are correct — it gets COLD there! Maybe if had a big Diesel Ford Super Duty with huge snow tires for getting around!Two days after my wedding, the IBM Chicago BO gave me an offer — I turned them down. Might have been a mistake because I might have worked with R. Gomory and gotten deep into optimization of operations in Houston!I omitted U Texas at Austin — JLM will be torqued!For a while, E. Cinlar was at NW before he went to Princeton. My favorite prof was a star student of Cinlar.For UI at Urbana, right, home of the HAL 9000, a com sci prof couldn’t read my paper! So, his editor in chief, a high end EE guy, handled it himself, approved it, and invited me to give it at his conference — I stayed home! I’m not trying to be famous!

    5. Kirsten Lambertsen

      Asbury Park, NJ – not joking. There’s a lot of tech talent there, and it’s making a comeback.And Providence, RI (as I’ve mentioned).

      1. Chimpwithcans

        To promote Asbury Park, someone should make a great rock n roll album and title it something like “Greetings…”….oh wait πŸ˜‰

      2. JLM

        .Haha, Stone Pony.JLMwww.themusingsofthebigredca…

      3. Drew Meyers

        A place to see reviews of all cities from tech industry locals would be awesomeI consult for streetadvisor.com (yelp for neighborhoods) part time, which has an entire white label offering already built in. I wonder if @fredwilson:disqus would be interested in having a AVC branded location based reviews/Q&A offering for the community here to swap advice more efficiently..

  21. Kirsten Lambertsen

    Like my beloved Providence – http://www.entrepreneurprov…GE Digital is bringing jobs to Providence to work on its “Industrial Internet” Platform. http://wpri.com/2016/06/09/…Cities that work hard to create a great lifestyle will attract tech talent, and Providence has done that in spades. Get in before the rents go up πŸ˜‰

    1. Dan Moore

      I have family in the Providence area and it seems pretty depressed. Elevated unemployment rate compared to the rest of the USA, corruption in the government, lots of old industry remnants but nothing new. Are they missing something?

      1. Kirsten Lambertsen

        Sounds like San Francisco πŸ˜‰ But seriously, they do have some history they’re still overcoming. You shoulda seen it 20 years ago for comparison.It’s still got some challenges to overcome, but I really believe it’s an up and comer, a diamond in the (not too) rough, a place to get in on early. I think it’s a great place for creators of all types, maybe not so attractive to people who don’t appreciate a certain amount of patina.I lived in PVD for three months in 2012, and while I found it edgy, I also found it to be a place full of opportunity, interest, creativity, innovation, community and collaboration. They have a really interesting (and gorgeous) micro-living space project right downtown, for example.There are some great startups there like Wistia and TeeSpring to name just two. Hasbro is headquartered there. The healthcare industry is big there.

    2. ShanaC

      Providence is a truly wonderful city

      1. Kirsten Lambertsen

        So glad you agree πŸ™‚ I forgot to mention the gorgeous architecture and enchanting historical sites.

        1. ShanaC

          I did a sumer program at Brown and I enjoyed wandering around the city. I was 16 years old and wore ridiculous arm warmer tthings with slightly more feminine birkenstocks and made wallets out of duct tape. It was a fun city for me at that age, small enough to be reasonable, with cool enough things to do (plus stuff I could grow into, and probably appreciate even now, without the arm warmers)

  22. Natalie Diggins

    I’ve had a lot of companies lately ask me where they should build operations outside of “hot” cities. My counsel has generally been to build in lower-cost cities: 1) with good airports that have frequent, on-time flights; 2) with a university (independent of IP benefits universities often promote the culture tech workers seek); and 3) on a different tectonic plate from their existing location (if applicable to infrastructure). Adding international cities complicates communication, which is surmountable, and it provides a terrific opportunity for follow-the-sun operations. I also founded a company with a successful exit in a city that at the time wasn’t a hotbed of tech; in my current role I work remotely. The point is that there are great options to companies today, and no one-size fits all.

  23. LaMarEstaba

    It would be interesting to see Indianapolis turn into a tech center. I know that there’s an existing group of tech people and companies there. It’s great when there are a few universities around. I think that Pittsburgh is growing, too. But the NYT article makes a case that Arizona has some non-tolerant laws that make people uncomfortable. The RFRA debacle in Indiana definitely made a lot of people uncomfortable, even native-born Hoosiers like myself. But Indianapolis has affordable housing and some good schools, and I grew up in a county that was considered the #1 place to live in the United States, so Indy has a lot of factors going for it. With Mike Pence as Indiana’s governor, I’m not holding my breath, though.

  24. Vendita Auto

    Spend a lot of time in India great technical talent (cannot resist the cliche) I have always wanted to be a VC Indian scout

  25. Sebastian Wain

    Weird nobody mentioned Argentina yet, where we have strong computer security professionals, including the official security reviewer of Bitcoin Core and Ethereum. It has many excellent professionals relative to the South America region.

    1. Natalie Diggins

      You’re right on Argentina being one to watch. Personally, I’ve been waiting to see how Macri’s policies execute. Blue dollars, debt, corruption – he’s had (and has) a lot to deal with.

      1. Sebastian Wain

        Sincerely, my 15 year old company was more affected by the US 2007/08 crisis than to the bad governments we had. I am obviously speaking in the context of the IT sector.

  26. JLM

    .The big winners will be places which have great universities like Austin by God Texas. It is incomprehensible this discussion could have gone on this long without ATX being mentioned.https://austintexas.gov/ran…Austin’s star began to ascend with the creation of the JJ Jake Pickle Research Center, Sematech, MCC and other gov’t-university coalitions. This is not a recent phenomenon.All the big players (Google, Apple, etc) have been adding headcount in Austin for a decade while the startup scene has been blossoming for some time now.No income tax doesn’t hurt and the comparatively low cost of living and the weather (OK, August can be a little warm and July is no picnic either but wearing sunscreen on Christmas, that’s a good thing).I will not mention BBQ and TexMex and I will definitely not mention our professional sports teams like the Texas Longhorns (ugh, football team really sucks).So, y’all, come on down and bring that equity with you.Tell them I sent you (Jeff Carter, I’m talking to you, Ace).JLMwww.themusingsofthebigredca…

    1. PhilipSugar

      We totally agree. There is nothing like living in a college town that has a decent cost of living. I have been saying this for years.Nobody cares what you have to pay employees. But you want your employees to live well and not have to worry they hit the lottery.If you pay a developer six figures in Austin, TX or Newark, DE they are well off. Not rich but well off. Pay them that in SF or NYC?? Poor.Is there they same amount of talent?? No.But are the people doing it there doing it because they love doing it not because they want a lottery ticket???Yes.

      1. JLM

        .There is not just a “spillover” effect as Fred notes; there is a cost of living implication. I see this all the time with TechStarsAustin when three founders are living large in a single apartment on S Congress and working their magic.Plus, Texas and Austin are just cool. It is different and it is hospitable.JLMwww.themusingsofthebigredca…

        1. PhilipSugar

          Yup we agree with each other. I am a big person on what is your monthly “nut”.It’s conservative thinking I know. But when your “nut” is low you have the beauty of not caring.When it is super high it is tough.

        2. sigmaalgebra

          TX? A lot going for it, but the only time I was there it was HOT. So, if there, need an air conditioned place to live AND an air conditioned car. Also, never want to park the car in the open; instead, need a garage or at least an awning to keep the sun off the car. Good news about cars in TX — they tend to rust less! So, have to add in all the A/C and awnings/garages.

          1. JLM

            .All the AC in ATX works. My AC can handle 110F any time at all. Set it at 69F and put on a sweater.A young person willing to work can make $100K handling summertime OT AC work.JLMwww.themusingsofthebigredca…

          2. LE

            You get a 41 degree drop in temperature on your HVAC? What kind of ice is blowing out of those vents?

          3. sigmaalgebra

            Often much of the energy for A/C is due to the latent heat of evaporation. That is especially the case in a place like Memphis with 105 F and 99% relative humidity. Sure, that way get a thunderstorm each afternoon.So, right, have to cool the air but be careful to let the condensed water not freeze but just run down the drain.But TX may be drier!Of course, can do it, but might have to do it in stages.One approach, long used in computer rooms, was to cool the air down to maybe 40 F, mostly to let the water run out, and then heat the air back up before blowing it into the room. Then, warmer, got the cool air with the low relative humidity wanted.

          4. PhilipSugar

            I get 40 out of mine as well.

          5. JLM

            .AC should be blowing 50-55F supply air at the air registers which should be blowing 1 CFM per SF of floor area for 9′ ceilings. Gross the air flow up for taller ceilings and install ceiling fans plus window coverings for added comfort.Return air — the air returning to the air handling unit (fan and fan coil carrying the refrigerant) will be about 75F.The Delta T (change in air temp) is 20-25F (75F minus 50F = 25F Delta T).The OAT (outside air temp) has more to do with the temperatures inside the attic space where the air handling unit is located (if located in the attic). You are not mixing any OAT with the return air so the temperature outside is not truly relevant to the closed air cycle of the AC system except for it driving the temperature through the windows and walls (solar and ambient air heat gain taken together with lights, appliances, electronics, cooking, people).I have two AHUs in the attic and both attic spaces have reflective coatings under the roof shingles plus blown on insulation on the underside of the roof joists. This keeps the attic spaces much cooler.I did both of these things after the house was built and I could immediately tell the increased performance from the AHUs.One of my AHUs is in an overgrown closet in a hallway and it never sees an OAT higher than the return air temp. If I were building a house from scratch today I would do that with all of them or put them in a basement.A good rule of thumb is also 3-400 SF/ton of AC with two stage compressors and variable speed fans. You have to have humidity control which is just your AC running at a low speed (fan) after you have satisfied the temp set point. This dries the air and makes it way more comfortable. Dry 78F air feels like wet 72F air.It also dries the Hell out of your woodwork which makes it shrink and you have to have it pookied (caulked) and repainted.JLMwww.themusingsofthebigredca…

          6. PhilipSugar

            Here is what hard working people do where I live when it is hot. Notice my wife puts out 10lbs of ice from our ice maker in the start of the day and here is what is left

          7. Robin S

            you’re pool is empty?

      2. sigmaalgebra

        “Talent”? We’re talking talent?Okay, talent exists. And there are ways to measure it. With those measures, Silicon Valley definitely really is the JV team, back of the door when the talent was passed out.For the future of computing and, thus, for “talent”, a key is academics. Alas, academic computer science is nearly irrelevant for that future. Bluntly, the department that is just crucial is mathematics. In some cases can also include high end departments of electronic engineering, statistics, applied mathematics, operations research, and industrial engineering. For the future of computing, academic computer science? A really bad joke. Computer science outside of academics? An even worse joke.The talent in Silicon Valley is essentially just self-taught people with computer skills, which usually means that they have a lot of experience working through a lot of really bad documentation and software. For them to be the future of computing would be like asking WWI experienced artillery soldiers to lead the WWII Manhattan Project. That’s actually a close analogy.You can see much of this situation from (A) the really weak backgrounds of computer science students and nearly all the computer science professors, (B) what the computer science profs and students write in the computer science journals (some of the material in the computer science journals is okay but, then, rarely from the computer science community), (C) the announcements, project descriptions, technical media buzz, etc., and (D) nearly everything on Hacker News except for some material from some people good at physics or mathematics.In simple, obvious terms, the computer science community and the Silicon Valley “talent” struggle terribly, really are hopelessly lost, with just the basics they need for any real progress. Basically they just didn’t take the right courses in college and grad school. So, for the important material, they can’t write it or read and understand it. So, they flounder around and don’t get anywhere and are not a significant part of what is crucial for the future of computing.But in an important sense, the situation for the future of computing is in quite good shape: There’s lots of good stuff with more good stuff coming forward nicely. There will be good, new stuff 10 years from now, next year, next week, and tomorrow. There is good, new stuff today and was yesterday, last week, last year, and 10 years ago. Indeed, the shelves of the QA section of every good research library in the world is just awash in really good stuff heavily, nearly totally, neglected, especially by computer science and the Silicon Valley “talent”. There are some good people in and near Silicon Valley, at Stanford, Berkeley, Davis, UCLA, Cal Tech, U. Washington, and more. Alas, for those people, don’t bother looking in the computer science departments.For exploiting the good stuff in computer science, look to parts of US aerospace, energy research, and at times biomedical science. For pushing the good stuff ahead, look to NSF, ONR, DARPA, NRL, etc.That’s where the “talent” is for what is crucial for the future of computing. Computer science? F’get about it! E.g., if they saw a good research paper, then they wouldn’t be able to read it. Similarly for good work in computer science. E.g., they might fumble around with really silly things, e.g., “large metric spaces” — gads, nearly every metric space of interest has uncountably infinitely many points with distances between pairs unbounded above.Computer science still sees their foundations as Knuth’s TACP. There they concentrate on just the algorithms and data structures. Soon they get into related algorithms from optimization and fumble terribly. Then they consider language processing, i.e., lexical, syntactic, semantic, and code generation. They commonly work on the fundamentals of database. They cover a few more topics. Then their weak backgrounds slow them to nearly a stop. And that’s where they have been for decades.For the good stuff in the QA sections, neither the students nor the profs have the backgrounds to read it so ignore it.Net, there is good work in computer science, both old and new, but nearly none of it is from, or even understood by, the computer science community.

        1. PhilipSugar

          To be frank. I’ve never hired anybody that thought they were that “smart” frankly because they could get the work done.

          1. sigmaalgebra

            Yup, I can understand why you wouldn’t want to hire anyone who “could get the work done.”If, as is likely, you are talking about me, then at times I did do quite well at getting “the work done.”. Usually in those times I tried to use whatever smarts I had.Ah, I was working in a software house. We were in a competition with several other little companies for a Navy contract. I looked at their proposal for generating sample paths of ocean wave noise. Probably shouldn’t say just why! Well, their proposal didn’t look quite right. So, each day the next week, at dinner I got smart on the statistics of power spectral estimation for second order stationary processes — right, J. Tukey math — and wrote some software. On the Friday, I called a guy at the Navy, and we met at the computer. I showed him the software I’d just written for his sample paths and the associated power spectra. I explained that some of what he was looking for was not possible but how he could get what he needed anyway.In a few days, our team gave our presentation to the Navy. At the end, I was asked to explain my work in power spectral estimation. I did.By correcting and improving on the Navy’s proposal, our team got “sole source”. My boss was thrilled. I can understand why you wouldn’t like something like that, but he loved it! Gee, he very much wanted to get the contract! And his boss did, also!But, I’d found a new job, systems guy at Georgetown University. There a prof had written some software, but, in testing, some of his routines were way too slow. And one of his routines had horrible numerical accuracy. I showed him how to write routines that made the two slow ones nicely fast and solved the numerical accuracy problem. From that, I got hired! Then I delivered the three routines, and all three worked as I had promised. The numerical thing-y was from some custom orthogonal projections in a vector space of infinitely many dimensions. The alternative, that was giving trouble, was the notorious Hilbert matrix.Later I was working at an applied math shop, again for the US Navy. Suddenly they had a pressing problem, the survivability of the US SSBN fleet under a special scenario of global nuclear war limited to sea. They wanted the results in two weeks. No problem: You want us to wash and wax all the submarines for you, too?So, I looked again at the B. Koopman’s WWII math, saw a continuous time Markov process, wrote the software, and got the results on time. My work passed peer review by expert J. Keilson, after I mentioned the strong law of large numbers. We looked really good to the Navy.Of course, you would have preferred the other employee: She was a second effort, but she made no progress at all. It appeared that she got stuck on time steps or some such. I doubt that she has ever understood how my work had no time steps! Arrivals of a Poisson process, yes; time steps, no!Later the work was sold to a leading US military lab — I could tell you which one, but then I’d have to ….Yes, the work that failed didn’t get sold; you’d like that much better!Later NASA had a question: How to assign some signals to a satellite to minimize the worst case of signal interference with a second satellite. So, here had to assign the signals to minimize a non-linear function of the assignment. I’d been given the problem as I arrived at work. So, I pulled up a chair, sat on it backwards, and listened. As soon as they finished explaining the problem, I saw a solution: Make the assignment essentially ignoring the interference. Then look at the worst interference and mark that assignment as not to be used. Then assign again using the candidates left. How to do that can look tricky, maybe in NP-complete, but actually there is a fast, easy, optimal way. Keep this up, assigning and marking as not to be used the worst case of interference. This process quickly yielded the best solution. I gave them the answer faster than I am typing now. So, it turns out, I reinvented the classic solution to the bottleneck assignment problem.Soon another person used an integer linear programming package to implement my solution. He was proud that the package worked right away. He was proud it its integer functionality. Without looking, I explained to him that the integer functionality never got used. Instead, starting with an integer solution, which he clearly did, on such an assignment problem the ordinary non-integer algorithm will report only integer solutions. I know; you would have preferred not to have been told that and would not have wanted around anyone who knew that!A guy had been flying F-4s in VN. Getting home he wanted to do something productive for a change. He had some funds from his father who had founded Southern Greyhound, Dobbs House, etc. Right, F. W. Smith, founder, COB, CEO, of FedEx. One day he tried to schedule the fleet, spent the afternoon, walked out tired, and said “we need a computer”.That was heard by a guy who had been with me in freshman physics. On the first test there were four questions. I got all four. Otherwise he led the class — he got two. The prof counted the best 3 as 100%. So, the other student got 66 and I got 133. I never missed anything else that semester. So, I led the class by a nice margin.So, from FedEx, he respected my smarts and gave me a call. While teaching computer science at Georgetown I typed in 6000 lines of PL/I to schedule the fleet. Smith said I’d “solved the most important problem”. The BoD was thrilled. Funding was enabled. FedEx was saved, literally. But I can understand that you would have preferred the alternative, a guy with a 8 1/2 x 11″ map of the US using his intuition.I knew a guy like you: This was the days of super-mini computers, e.g., Prime with some bit sliced hardware and some software ideas borrowed heavily from Multics. IIRC, that is what Mike Bloomberg used for a while. Well, as a B-school prof, I wanted one. I was opposed by the longest sitting CIO in US higher education. He didn’t like smart profs either. My deans liked my proposal; I grabbed most of the carpet and drapery money and got the computer. I was appointed Chair of the college computer committee and gave a graduate course. Then I served on a committee to pick a new CIO for the university. Yup, the CIO, like you, didn’t like smart profs!I’ve got some more, but the above show a pattern.By the way, a common definition of AI is some software that does something that was thought to need humans, although only ordinary humans. Well, to me, that is asking for a big step backwards because commonly my software does things ordinary humans have no chance of doing.So, some of the work samples above are like that and, thus, better than AI! I can understand why you would be unhappy!It’s an old story: The boss wants to believe that he has all the smarts, and the people he hires are there just to add muscle to his ideas. He certainly doesn’t want a subordinate who might know more than he, the boss, does. Yup, old story.For how to judge “talent”, the qualifying exams in my grad program were a telling example. I got the highest score on three of the five exams. For the fourth there was an error on the exam, and I took an oral makeup and got a rare High Pass. For the fifth exam, that was supposed to be on a midlevel course (not really true; also needed another course I later did take and do well in) where I’d already taken and graded in a much more advanced course and used that course material, right, with sigma algebras, for my Ph.D. research, which I did independently in my first summer. Look, Ma, no Ph.D. advisors, yet!Once I got that High Pass, my department Chair was like you — really torqued! Later we got a new Dean; I was invited to give my thoughts; the department got a new Chair, and the old one ended up in another university.Was my research any good? The chair of the committee that passed it was a world expert and Member, US National Academy of Engineering. One of my advisers was later a Dean at Yale and then President at CMU. They thought my research was good!Ah, for the topic where I’d gotten the High Pass, I’d seen a question but no answer. So I signed up for a one semester reading course to try to say at least something about an answer. Two weeks later, I’d nailed it — had a terrific answer. Had also solved a problem stated but not solved in the famous paper in mathematical economics by Arrow, Hurwicz, and Uzawa. I got a bright halo in the department. Right A and H won Nobel prizes. For that two weeks of work, later I published it in JOTA — a good journal.So, those are some ways to evaluate “talent”. I can understand why you would prefer other ways!E.g., ask for a proof that there are no countably infinite sigma algebras! I was the only one in our class who got it. That’d be another reason for you to be torqued at me! Sure, don’t want anyone around with any evidence of talent!Okay, with some of the theorems of linear programming, can tap lightly and prove the von Neumann result in game theory. So, von Neumann has a payoff matrix. But what if one player has one payoff matrix, and the other player has a different one? Now what? I don’t think you want to know!Sure, for my startup, I like business guys like you! No chance of any serious competition!Gee, as a grad student and then as a prof, I helped get one department Chair fired and one CIO fired.Then there was the statistics prof who didn’t know the sigma algebra approach to sufficient statistics — we’ll set that one aside!Then there was the computer science prof who liked me less than you do and dumped on me; I wrote a letter, and the next year he was gone.The guy who pushed me into taking the oral exam where I got the High Pass — the next year he was gone, too. Apparently the error on the exam was his! Besides, he didn’t like me.The time I did that two weeks of work for the Navy, some people felt threatened and decided to gang up on me. The Navy did like my work and didn’t like the gang up thing-y hurting the results where the Navy was spending money, and several people were fired.Then there was the time where two guys wanted to attack me due to “talent” — both of them were demoted out of management.Yup, in not liking talent or people who get good things done, you have some company!Yes, a second time I saved FedEx from going out of business. I’ve related that at AVC before — you are welcome to look it up. To do that work, I needed some “talent”; all the rest of the FedEx C-suite got a grade of F, and that is why the company nearly died. General Dynamics didn’t like the low grades. They did like my work. Doing such work might not get one liked but can get one respected and even feared. I can understand why you might be afraid!Ah, just listen tohttps://www.youtube.com/wat…where the Russians beat the brains out of a lot of French! You will feel better!

      3. LE

        Did you ever notice that when discussions of startup towns have come up on AVC that Fred seems to leave out Philly? [1] After all it has a decent cost of living and at least 1 world class university that he (as well as the both of us) have attended. I wonder what’s up with that? It’s as if he had a bad time here while he went to school. I mean seriously UT Austin vs. Penn?[1] He mentioned Pittsburgh it’s hard for me to believe that that’s a better place even just based on geography and location. No train straight into NYC and DC etc.

        1. PhilipSugar

          Totally agree. Super happy Aronson had his second exit with Jet.comDon’t know how he did it.I think Josh Koppleman who I went to school with dominates Philly with Aronson.

          1. LE

            Almost as if there is some meeting up in the Poconos where they fix steel prices or decide which mafia family (in that case in the Catskills) controls which region.Koppleman and Fred agree “you stay out of Philly I stay out of Manhattan”.Half is one of those ideas that worked well enough that a greater fool (ebay) bought it however it is obviously not an idea that is working now or certainly not as the original idea was intended back when Koppleman started it.That is the tough thing about this business. The people who have ideas that don’t make any sense that end up doing well in spite of that because if enough people try enough shit something works for some unintended reason statistically.

  27. Paul Sanwald

    I grew up in Raleigh, NC. Because of Research Triangle Park, there are tons of tech jobs, and a very reasonable cost of living. Plus, there are a bunch of great universities there. My alma mater, NCSU, has a great CS program and very cheap in-state tuition.My last company was HQ’d in baltimore, even lower cost of living, and also great university system: UMD, JHU, etc.The devil in the details when it comes to tech hiring is that depending on what kind of business you want to build, it can be very challenging to find folks with the skills you need. in NYC/SF you have a lot more options hiring, but there’s a $ premium attached to that.

    1. JLM

      .And, of course, the best basketball rivalry and conference in the US. Hook ’em, Heels!JLMwww.themusingsofthebigredca…

  28. Joel Natividad

    I prefer to call it #UrbanGlocalization – combining the benefits of urban living, with the mobility afforded by tech.Urban – because cities afford all the serendipitous network connections that accelerates innovation, without the associated high-cost of living of existing Tier 1 magnet cities.And Mobility in all its senses – from the ability to work wherever there is high-speed internet; to the ability to move up the ladder; to the ability to shift jobs from fading industries of the industrial age, to the tech-heavy jobs of the information age.As an added bonus, its phrasing echoes double-edged sword phenomena like “Urban Gentrification.” πŸ™‚

  29. howardlindzon

    Im in Phoenix for the year….the town is so spread out so I am skeptical of the ecosystem but it is cheaper to live here for sure.

  30. creative group

    CONTRIBUTORS:On the ground facts regarding Phoenix Metropolitan Area which includes surrounding and connected cities to the capitol of Arizona.Education: (Which actually effects those relocating with children, who will be educated in the State of Arizona) The Workforce in Arizona benefits from transplants from other states. If you ask the average person they will tell you they are from some another state. (There are positives and negatives in every state. The positives should to outweigh the negatives anywhere. Here in Arizona weather seven months out of the year is 75 degrees to 80 when other states are experiencing life threating weather and the cost of living is below average compared to New York, SF, LA, etc. (But there are three months of intense, did we say intense heat averaging over 105 (Second week in June, July, August). It has been a mild summer if you can call it that this year)Fact: Arizona ranks 47th in education. http://www.copamonitor.com/…Best Charter Schools in the country but the public schools continue to be defunded by the Republicans which accounts for poor education rankings nationally.http://www.azcentral.com/st…When the majority of Tech Startups are Progressively centered to invite a broad and talented workforce nationally, Arizona is considered one of the most conservative and regressive thinking states and legislatures in the country.One State Law struck down by the courts. The first of the national Immigration bills crafted by outside Conservative groups is Arizona SB 1070. This law would have been passed earlier in 2007 if former Democratic Governor Janet Napolitano didn’t veto it two times.https://en.wikipedia.org/wi…Now what makes Arizona a great State!1. The Cost of Living is the best compared to major cities with similar population growth and needs. Compare to NYC, SF, LA, Denver, etc.https://www.expatistan.com/…2. The Tech scene is fertile and open for business. (That is surprising considering Motorola, Honeywell and Intel have a large presence in Phoenix Metro and employthe largest group of Scientist and Technical workers it should have occurred twenty years ago. A correlation in how the first two companies have dropped the ball over the years is telling.The assistance at the City of Phoenix Community and Econmic Development assistsall Startups. https://www.phoenix.gov/eco…3. We have posted before regarding Steve Case investing $100,000 in a Startupin Phoenix his fifth β€œRise of the Rest” bus tour in October 2016. http://www.riseofrest.com/ (Old news to those who pay attention new to those who don’t)4. Arizona State University (ASU) Sun Devils Arizona Tech Investors formerlyArizona Technology Investor Forum with a combination of the SkySong Innovation Center assists Startups in various ways. There is no real support for Startups if major Universities are not a partner.5. The Arizona Technology Council (AZTC) https://www.aztechcouncil.o…6. The first place any investor who hasn’t a clue about the Startup scene in Phoenixshould review are the following site.http://phoenix.startups-lis…7. Best Startup Story in Phoenix currently:Tuft & Needle (TN) (Casper Funded)https://www.tuftandneedle.c…8. Would be remiss if we didn’t mention the following group or businesses who have been critical to the startup efforts of the Phoenix Tech scene by creating Startups.Brad & Heidi Jennenga who founded WebPT, Moses Digital Marketing Agency and Dudley Ventures. They are also apart of the Warehouse District Council which we live. Levine for providing the Warehouse space and buildings he owns for new Startup businesses.We of course have left out some critical names without intending.Disclosure: We have no position in any of the companies mentioned and never completed any transactions in the Commercial RE Investing with any of the cited people, Startups, City, County or State entities.#Termlimits#Unequivocally&UnapologeticallyIndependent#TrueIndependent

  31. Marissa_NYx

    Australia has great benefits as the go to place for tech dev: 1. Very modern infrastructure , early adopters of tech , good, smart talent pool, can make product decisions. 2. 30% cheaper on account of currency conversion to the US 3. 45% R&D cash credit for genuine product development . This means an engineer at $100k, would cost net E=100 x 0.7 x .55= $38.5k p.a. In Sydney or Melbourne 4. Afternoons in PT (evenings in ET) is morning in Sydney and Melbourne. 5. A career path for a generation who want mobility and opportunities in the US 6. A unique immigration category , E3 for professional Australians in the US and 90 day ESTA work travel for everyone else. 7.You love the accent . 8. Capable of creating worlds largest businesses eg. The worlds largest miner. Downsides: 1. Jet lag for US folk on return to the US 2. Sunny skies and beaches πŸ™‚

  32. Supratim Dasgupta

    Its a catch 22 situation. VCs will go where Startups are and Startups will go where VCs are.

  33. stevanpopo

    This is certainly the case in Europe too. You’re seeing companies with London HQ’s building large engineering teams in Eastern Europe (e.g. Transferwise has a team in Talinn, Estonia).Question – what teams can be most successfully housed elsewhere? Historically, CS has been successfully housed in low cost areas. Can this now work across other core functions such as engineering, product, design etc.?

  34. digitalwaveride

    There is a platform that actually provides all the data to compare cities worldwide regarding salaries, costs of living, all kinds of other life-quality data https://teleport.orgIncludes even a tool for startups to do runway calculations: Curious where you should build a team in order to extend your runway? https://teleport.org/runway/

  35. Humberto

    Eastern Europe and Southern Europe! Actually, pretty much ALL Europe asides from Dublin, London, Berlin, Paris, Stockholm and maybe another city of two!Many, many coties in Europe have remarkable engineering schools (Go Porto!) and many are unexplored, inexpensive and/ or have a great lifestyle!

    1. Drew Meyers

      I’m a huge fan of europe… though I haven’t spent much time in eastern πŸ™

  36. The WallStreetRanter

    They should have figured this out YEARS ago…..

  37. Peter Barnes

    As this phenomenon continues and employee’s follow the path to becoming founders, will VC’s have to broaden their portfolio focus to regional areas or risk missing out on the best new talent/companies.

  38. Robin S

    We’re moving to Playa Vista. Where Google put YouTube and fb is building a new office.

  39. Collin

    Very rarely.

  40. JLM

    .Don’t get it. Help.JLMwww.themusingsofthebigredca…

  41. PhilipSugar

    Uuuummmmm. Dallas is about the same distance. Let me think. Eagles ever???? Nope.

  42. awaldstein

    I don’t know much about what is going on in Philly but Pittsburgh from a wine and local spirits perspective has a decent and growing rep.

  43. LE

    See my reply to Phil Sugar re: Fred and Philly.

  44. ShanaC

    Pittsburgh vs Philadelphia?

  45. LE

    Which means absolutely zilch with regards to startups of course.

  46. Drew Meyers

    That comment makes me think of one of the first posts I ever put on Medium, “The Coming Shift of Niche Online Communities into Hubs in the Physical World” https://medium.com/@drewmey

  47. awaldstein

    Culture means absolutely everything when it comes to attracting young people to live there.And the redone warehouses, the restaurants, the watering holes, the work spaces, the startup culture there in food and consumer goods is a giant start. It already has a culture, not just tech.

  48. LE

    I don’t know anything about the wine or restaurant scene in Pittsburgh [1] but given that Philly is 5 times as large population wise and has a superb restaurant scene as well it’s impossible for me to believe Pittsburgh could touch it with amount of quality venues. Plus it has proximity to NYC by train and by car as the upside. Philly is also much more of a college town in fact the saying is “eds and meds” (because of amount of medical schools in the metro area). Center city housing is also abundant and reasonable. We rent out a 1 bedroom in a luxury high rise in society hill for $1600 per month.http://independenceplace.com/Walking distance from Old City, South Street and Center city easy to reach University City by the subway.[1] Or the wine scene in Philly.

  49. awaldstein

    Sounds interesting but like I said, I know nothing about Philly. I know that Pittsburgh is courting this segment and it shows and that matters.

  50. ShanaC

    Pittsburgh has cmu

  51. PhilipSugar

    I have spent a ton of time in both (we had a Pittsburgh office)Pittsburgh is very nice. The food scene is good and the strip district is hip. Pittsburgh likes to say they are the Portland of the East Coast (never like when you say you are the this of that)The quality of life is good, there are many things to do. No it doesn’t have as many restaurants as Philly but there are enough really good ones that it is not an issue. Its a great place. Downtown not nearly as vibrant as Philly.However…..after U.S. Air essentially pulled out because they increased landing fees you aren’t really getting a direct flight anywhere. Not a killer but a pain if you travel frequently.Also as you point out Philly is much bigger close to NYC and Washington DC.

  52. awaldstein

    On my first visit!You know I”m heading to Europe for a couple of weeks to meet with friends and clients to hug them, get drunk with them, listen to them.Maybe i should come to Lancaster and do the same.

  53. PhilipSugar

    Except Dallas.Five.Phiilly….well they took a nice beating against the Raiders.

  54. Donna Brewington White

    I am actually looking at using a WeWork space in Chicago this fall in anticipation of building up to an office there. Do you suggest one in particular?

  55. PhilipSugar

    How can you be a Philly and Washington fan?I understand Philly and Baltimore. I am Dallas and Baltimore. But you can’t like two teams in the same conference much less division.

  56. PhilipSugar

    You know we were talking about the Stone Balloon yesterday. We have 8 emergency exits in our building because of them, the City of Newark thought they could put a lid on things by requiring tons of emergency exits. The Stone Balloon owner just put in a wall of emergency exits. I know him and he says he spent over $1mm in legal fees fighting the city of Newark over the years.So many good bands. Love Seed Mamma Jump live at the Stone Balloon is a great album.Thursday night mug night (bring as big of a mug as you can find and they will fill it with cheap beer) caused more petty property damage than any other promotion ever devised.

  57. Donna Brewington White

    Appreciate the advice/suggestions.