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(Salon)   The new tech boom may be permanent and somehow this is a bad thing   (salon.com) divider line 32
    More: Dumbass, dot-com bubble, venture funding, Voice over Internet Protocol, mobile advertising, internet security, South of Market, food festivals, office complex  
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2321 clicks; posted to Business » on 27 Sep 2013 at 7:25 PM (47 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-09-27 06:44:45 PM
You'd think one could make a fortune by selling the idea that these idiots don't have to converge on SF if they don't want to.  One of the biggest benefits of the internet is allowing physical presence to be optional, is it not?

/other then that, this is a gigantic case of first world problems
 
2013-09-27 06:45:55 PM
Nothing lasts forever

It either evolves or dies

Well, except Japanese Hotels. Some of them are older than the country of England
 
2013-09-27 07:50:40 PM
 
2013-09-27 08:26:07 PM

Mad_Radhu: Now where have I heard this before?


To be fair, the article has a point.  You have to (at least have a story about how you're going to, based on your existing customers and networks,) make money in order to get money beyond seed from investors.  This ISN'T the crazy days of the Dot-com boom.  You have to have revenues(but not necessarily profit) because the rule of thumb for funding and IPO valuation of your company is 10x annual revenue.

Now I think there's a mild bubble as a result of the acqui-hire craze reducing the downside for both investors and founders, but that's a separate story and isn't a fundamental repudiation of the entire business model unlike the craziness from the late '90's.
 
2013-09-27 08:26:55 PM

BumpInTheNight: You'd think one could make a fortune by selling the idea that these idiots don't have to converge on SF if they don't want to.  One of the biggest benefits of the internet is allowing physical presence to be optional, is it not?


No, the tech staffs at these new Web-Two-Dot-Com companies  do work offsite: in India, Ukraine, Vietnam, Colombia, etc.

The job of being a "visionary" can apparently only be done while desk-sharing at a "hackerspace", surrounded by other 24-year-old hoodie-wearing frat boys emeritus whose dads also know someone in venture capital.
 
2013-09-27 08:29:15 PM
By definition a "boom" is not permanent.
 
2013-09-27 08:44:11 PM

BumpInTheNight: You'd think one could make a fortune by selling the idea that these idiots don't have to converge on SF if they don't want to. One of the biggest benefits of the internet is allowing physical presence to be optional, is it not?

/other then that, this is a gigantic case of first world problems


Network effects.

The fact that (for example) Cleveland is roughly a third as expensive (which makes your seed last 3x longer) doesn't overcome the fact that SF has the VC's and the employees and the startups (which are also your initial customers).  It's a 4-pronged chicken-egg problem.

VC's really like it when you can show up for a physical meeting and you need VC's with money.
Employees like working in an environment where there's lots of startups, so that when (and it IS when) their company goes under, they can fall back on another startup.
Employers like having lots of valuable employees around.
Startups also like having other, slightly more mature, startups around because they tend to make great initial customers while you're feeling out your business model and going through beta.

And at least where the traffic and rents are concerned, the problem is that California takes 30 years to plan and execute on infrastructure.

We can't build mass transit because of NIMBY's and we can't build more freeways (and all I'm asking for is free-flowing weekend traffic outside of SF proper when there are no major events.  880 shouldn't be a giant mess even on weekends) because we're legally required to cut carbon emissions.  So rents go sky-high because every block you move away from work adds 2-5 minutes on to your commute and regulations mean there's a limited supply of housing.  Meanwhile, the largely Mexican underclass deals with 3 hour commutes from Los Banos and Tracy because that's all they can (barely) afford.  Combine that with Prop 13 and rent control locking people into long commutes (since you won't move with your job because you're stuck in your cheap apartment/house with $300 in annual property tax) and DUH the traffic sucks until 7:30-8:00 every night.
 
2013-09-27 09:07:23 PM
I get nervous anytime someone tries to convince me that "this time it's different....."  Times may change but fundamentals do not.  Crazy money chasing the "next big thing" will eventually lose its patience and go chasing after "the next big thing" that promises bigger returns.

In the end, pigs get fed, hogs get slaughtered.
 
2013-09-27 09:07:33 PM
Booms are followed by busts.
See also: Capitalism.
 
2013-09-27 09:11:15 PM

BumpInTheNight: You'd think one could make a fortune by selling the idea that these idiots don't have to converge on SF if they don't want to.  One of the biggest benefits of the internet is allowing physical presence to be optional, is it not?



over 70% of VC money goes to graduates of Stamford, Harvard, and MIT. over 70% of VC money goes to SF, San Jose, Boston, NYC, LA, and San Diego.

in order to get the money flowing to cheaper parts of the country, the grads from these schools have to be willing to live there.
 
2013-09-27 09:28:29 PM
What's the solution? I can't imagine how much San Francisco and the surrounding areas have benefited from the large tech firms and their well paid employees adding to the tax base. Sure it's not 100% unicorns and puppies but it doesn't help when fringe groups go on a tangent like protesting the private buses that Google and other firms use to shuttle their employees from San Francisco out to their offices. Reducing cars on the road and pollution isn't good enough since apparently the buses are symbols of gentrification (which is bad for some reason) and classism.

i44.tinypic.com
 
2013-09-27 10:05:29 PM
History doesn't repeat, but sometimes it rhymes.

Take the railroads as an example. The idea gets tossed out, no infrastructure exists for it, the systems are crude and expensive. Then technology progresses, infrastructure grows up. Then there's a tipping point where everyone and their brother gets in, with lots of unprofitable lines snorting up all that capital. Then the system crashes and all the things developed by all the players get snapped up by a few large entities that managed to get something right.

The handful of large players then exert monopolistic control. Things get really efficient and profitable and, eventually, moribund. If something else comes along they may compete, or they may play together.

So, don't confuse a boom with a settling to a new norm.

What does the future hold? Snowcrash. Singularity. Zombie Flu. fark if I know, I've been bombarded by Nassim Taleb and E L James because I forgot to add more audio books to my nano.
 
2013-09-27 10:37:52 PM

meyerkev: Network effects.

The fact that (for example) Cleveland is roughly a third as expensive (which makes your seed last 3x longer) doesn't overcome the fact that SF has the VC's and the employees and the startups (which are also your initial customers).  It's a 4-pronged chicken-egg problem.


And no one wants to be the first to move to Cleveland. One doesn't really want to be last, either, but it still beats moving back in with one's parents. Kinda.
 
2013-09-27 10:46:47 PM

MrEricSir: By definition a "boom" is not permanent.


That's why smart investors call them "boons."
 
2013-09-27 11:48:43 PM

meyerkev: the traffic sucks until 7:30-8:00 every night.


I've lived in the East Bay 22 years; traffic on 80/880 has never not been crappy.
 
2013-09-28 12:12:07 AM
DOW 44,000, baby.
 
2013-09-28 01:16:52 AM

meyerkev: Employees like working in an environment where there's lots of startups, so that when (and it IS when) their company goes under, they can fall back on another startup.


Except for the entire lack of stability in startups that is only exceeded by a nuclear meltdown - in combination with the economy that exists now.  With a more conventional company and job, some sort of stability exists(if only enough to be a statistically significant improvement) to survive events that kill startups.
 
2013-09-28 02:39:34 AM
TLDR.  But there are many reasons to dislike tech booms. The main one being better computing/machinery= less production jobs. Or as others have pointed out, outsourcing of jobs. I mean when we have technology that makes it cheaper for a person in a call center to take drive in orders for fast food restaurants hundreds of miles away.it's easy to see the full negative effect.

This can and will be a problem, but it won't stop it from happening, so we as a society just need to find a solution and limitations.
 
2013-09-28 02:40:37 AM

cman: Nothing lasts forever

It either evolves or dies

Well, except Japanese Hotels. Some of them are older than the country of England


Yes, but they the Japanese lack the British sense of ironic humor.
 
2013-09-28 03:18:59 AM

Harry_Seldon: Yes, but they the Japanese lack the British sense of ironic humor.


Listen, don't mention the war. I mentioned it once, but I think I got away with it all right.

i1.ytimg.com
 
2013-09-28 03:30:08 AM
I thought of this old line on reading TFHL.

Link

It turns out it's a giant pant-load.
 
2013-09-28 09:02:27 AM

tjsands1118: TLDR.  But there are many reasons to dislike tech booms. The main one being better computing/machinery= less production jobs. Or as others have pointed out, outsourcing of jobs. I mean when we have technology that makes it cheaper for a person in a call center to take drive in orders for fast food restaurants hundreds of miles away.it's easy to see the full negative effect.

This can and will be a problem, but it won't stop it from happening, so we as a society just need to find a solution and limitations


This is serious structural concern of mine as well.  It seems like we're building an educational divide of "haves" and "have-nots," where the former will have the education and experience to have good job security and good salary opportunities, while the latter will be stuck in an accelerating race to the bottom when in comes to pay and job security.
And being one of the "haves" won't be much comfort if there's a large number of pissed-off, possibly armed, unemployed people who are struggling to feed their families.  We need to figure out a way to get more people involved in the modern economy so that everyone can benefit from it.  That's going to be the challenging social question of the next 20-30 years, in my opinion.
 
2013-09-28 09:53:45 AM

sirrerun: meyerkev: the traffic sucks until 7:30-8:00 every night.

I've lived in the East Bay 22 years; traffic on 80/880 has never not been crappy.


I live in a town of 2,000.  Our post office is in a farmhouse on the corner.  Our PO Box came with the house we rented, which has been in the same family (the Purintons.. i couldn't make this up) for 193 years.  We have more wildlife in the roads than cars.  Yet, we're 30 minutes from 3 different 'cities' with full amenities.

I couldn't imagine putting the 80/880, 405 or any other major bottleneck between my homestead and career.  Seems like insanity for status' sake.
 
2013-09-28 09:53:47 AM

HMS_Blinkin: tjsands1118: TLDR.  But there are many reasons to dislike tech booms. The main one being better computing/machinery= less production jobs. Or as others have pointed out, outsourcing of jobs. I mean when we have technology that makes it cheaper for a person in a call center to take drive in orders for fast food restaurants hundreds of miles away.it's easy to see the full negative effect.

This can and will be a problem, but it won't stop it from happening, so we as a society just need to find a solution and limitations

This is serious structural concern of mine as well.  It seems like we're building an educational divide of "haves" and "have-nots," where the former will have the education and experience to have good job security and good salary opportunities, while the latter will be stuck in an accelerating race to the bottom when in comes to pay and job security.
And being one of the "haves" won't be much comfort if there's a large number of pissed-off, possibly armed, unemployed people who are struggling to feed their families.  We need to figure out a way to get more people involved in the modern economy so that everyone can benefit from it.  That's going to be the challenging social question of the next 20-30 years, in my opinion.


i've been networking in fintech, and a lot of the new products I'm seeing are aimed at eliminating the need for accounting staff. the types of jobs that you don't need a CPA for necessarily, such as month end closings, A/P, A/R, etc. Until fairly recently one didn't need a 4 yr college degree to do this work, as a 2 year associates degree from a community college was more than enough. heck, i'm seeing some firms now requiring masters degrees for this type of work.

and thanks to these innovations, these firms don't have dedicated finance staff, that gets outsourced to firms like Advisor, where an employee manages the finances of several firms. for the time being these firms are employing Americans, but if as the technology improves these types of jobs can easily move somewhere else.

say goodbye to a whole bunch of white collar jobs with good pay and benefits.

there is another startup that automates building of pitch decks for finance deals, including all financial models. this could eliminate another group of highly paid, white collar jobs.
 
2013-09-28 10:00:45 AM

HMS_Blinkin: tjsands1118: TLDR.  But there are many reasons to dislike tech booms. The main one being better computing/machinery= less production jobs. Or as others have pointed out, outsourcing of jobs. I mean when we have technology that makes it cheaper for a person in a call center to take drive in orders for fast food restaurants hundreds of miles away.it's easy to see the full negative effect.

This can and will be a problem, but it won't stop it from happening, so we as a society just need to find a solution and limitations

This is serious structural concern of mine as well.  It seems like we're building an educational divide of "haves" and "have-nots," where the former will have the education and experience to have good job security and good salary opportunities, while the latter will be stuck in an accelerating race to the bottom when in comes to pay and job security.
And being one of the "haves" won't be much comfort if there's a large number of pissed-off, possibly armed, unemployed people who are struggling to feed their families.  We need to figure out a way to get more people involved in the modern economy so that everyone can benefit from it.  That's going to be the challenging social question of the next 20-30 years, in my opinion.


Considering that I can easily & legally buy a pretty good rifle for less than the price of a decent bicycle (Savage Arms, FTW), you have a good point....

/ and I'm on the bottom-rung of the middle-class, hanging by my fingers...
// not that pissed off......yet.
 
2013-09-28 10:16:52 AM

dumbobruni: say goodbye to a whole bunch of white collar jobs with good pay and benefits.

there is another startup that automates building of pitch decks for finance deals, including all financial models. this could eliminate another group of highly paid, white collar jobs.


And that's the real structural problem from an economic perspective.  The economy runs on middle-class consumer spending---middle-class people buying widgets and services employs the other middle-class people who make the widgets and provide the services.  I'm concerned that technology is taking those people out of the equation.  It saves money in the short run, but what happens when laid-off workers can't afford to buy stuff anymore?

The reality is that the rich need us middle-class schmucks to keep them afloat.  If the rich can only sell their shiat to other rich people, then they'll be just as poor as the rest of us.  And I think that's ultimately the question---using technology to streamline production and business and reduce costs isn't evil, it's inevitable.  But businesses have to have SOMEONE to sell stuff to, and that pool appears to be shrinking in the long term, even on a global level.  Those workers in China that got an American's outsourced job are going to be similarly victimized by Vietnamese workers, who in turn may get screwed by African workers, etc.

The long-term question has to be: who is going to form the base of the consumer pyramid?
 
2013-09-28 10:33:32 AM

dumbobruni: i've been networking in fintech, and a lot of the new products I'm seeing are aimed at eliminating the need for accounting staff. the types of jobs that you don't need a CPA for necessarily, such as month end closings, A/P, A/R, etc. Until fairly recently one didn't need a 4 yr college degree to do this work, as a 2 year associates degree from a community college was more than enough. heck, i'm seeing some firms now requiring masters degrees for this type of work.


Thank monopsony-like forces for requirement inflation and reduced job security.  That is, too many people chasing too few jobs while there is no desire to penalize outsourcing by making it no less costly.

One response would be to make the benefits no less generous or costly for indirect hiring - so that it does not pay to dodge benefits.  If the costs of dodging are no better than the costs of not dodging, the decision reverts to the less costly alternative.

In addition, one might consider the idea of just making all forms of non-FT labor(staffing firm/contingent/contract/1099/PT/etc.)  something that cannot be a condition of accepting work(instead, one would have to make a choice) combined with making the unemployed a protected hiring status(to thwart any efforts to avoid the unemployed).

Take away all the means to slight workers and things can get better (aside from Randians displeased that they can't deploy their favorite tactics).


and thanks to these innovations, these firms don't have dedicated finance staff, that gets outsourced to firms like Advisor, where an employee manages the finances of several firms. for the time being these firms are employing Americans, but if as the technology improves these types of jobs can easily move somewhere else.

say goodbye to a whole bunch of white collar jobs with good pay and benefits.

there is another startup that automates building of pitch decks for finance deals, including all financial models. this could eliminate another group of highly paid, white collar jobs.


Automation in itself has no issue, but there is a problem when the losses exceed the gains in terms of quantity and speed.   That leads to the situation above.
 
2013-09-28 10:38:04 AM

dumbobruni: i've been networking in fintech, and a lot of the new products I'm seeing are aimed at eliminating the need for accounting staff. the types of jobs that you don't need a CPA for necessarily, such as month end closings, A/P, A/R, etc. Until fairly recently one didn't need a 4 yr college degree to do this work, as a 2 year associates degree from a community college was more than enough. heck, i'm seeing some firms now requiring masters degrees for this type of work.

and thanks to these innovations, these firms don't have dedicated finance staff, that gets outsourced to firms like Advisor, where an employee manages the finances of several firms. for the time being these firms are employing Americans, but if as the technology improves these types of jobs can easily move somewhere else.

say goodbye to a whole bunch of white collar jobs with good pay and benefits.

there is another startup that automates building of pitch decks for finance deals, including all financial models. this could eliminate another group of highly paid, white collar jobs.


You know how they kept saying the meek would inherit the earth?
Well, it's finally our time.

Nerds finally have the technology to replace almost all of humanity as productive workers completely.  Soon, EVERYBODY will either be a nerd of some stripe, or a service sector worker servicing the nerds' every whims for minimum wage!  All those years of after-school beatings WILL BE AVENGED.

MUAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
 
2013-09-28 12:21:19 PM
There is no such thing as a "permanent boom". How many of the top employers 100 years ago exist today?
 
2013-09-28 02:21:18 PM

stratagos: How many of the top employers 100 years ago exist today?


I don't know, but a little company called CTR with a few hundred employees eventually was renamed IBM, and we all know what happened to them.  Oh, yeah, they're still around and they have almost half a million employees.

60 years ago we had: GM, US Steel, GE, Chrysler, Standard Oil, Amoco, CBS, AT&T Tech, Goodyear, and Firestone.  Out of those, maybe 3 collapsed, 3 others merged or were bought out, but 4 are still going strong.
 
2013-09-28 02:45:55 PM

Bacontastesgood: stratagos: How many of the top employers 100 years ago exist today?

I don't know, but a little company called CTR with a few hundred employees eventually was renamed IBM, and we all know what happened to them.  Oh, yeah, they're still around and they have almost half a million employees.

60 years ago we had: GM, US Steel, GE, Chrysler, Standard Oil, Amoco, CBS, AT&T Tech, Goodyear, and Firestone.  Out of those, maybe 3 collapsed, 3 others merged or were bought out, but 4 are still going strong.


see also 3M (1902), Dupont (1802), Sears (1893), A&P (1859), Colgate (1806), Ford (1903)
 
2013-09-28 05:33:17 PM

HMS_Blinkin: dumbobruni: say goodbye to a whole bunch of white collar jobs with good pay and benefits.

there is another startup that automates building of pitch decks for finance deals, including all financial models. this could eliminate another group of highly paid, white collar jobs.

And that's the real structural problem from an economic perspective.  The economy runs on middle-class consumer spending---middle-class people buying widgets and services employs the other middle-class people who make the widgets and provide the services.  I'm concerned that technology is taking those people out of the equation.  It saves money in the short run, but what happens when laid-off workers can't afford to buy stuff anymore?

The reality is that the rich need us middle-class schmucks to keep them afloat.  If the rich can only sell their shiat to other rich people, then they'll be just as poor as the rest of us.  And I think that's ultimately the question---using technology to streamline production and business and reduce costs isn't evil, it's inevitable.  But businesses have to have SOMEONE to sell stuff to, and that pool appears to be shrinking in the long term, even on a global level.  Those workers in China that got an American's outsourced job are going to be similarly victimized by Vietnamese workers, who in turn may get screwed by African workers, etc.

The long-term question has to be: who is going to form the base of the consumer pyramid?


The Chinese, Vietnamese, and Africans, etc. I think the effect of developing markets on consumer goods sold in America is visible if you look. For instance, I have the impression that Buick would be long dead except for the fact that they sell well in China, so GM has money to invest in redesigning them and improving them even if they struggle in the US.
 
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