HP and Oracle don’t exactly represent the heart of Silicon Valley today and what makes it special/unique. I actually think zombie corporations like Oracle, companies that haven’t innovated in decades and instead rely on an army of sales people to sell legacy software, are somewhat the antithesis of Silicon Valley which is really about real technological innovation and disruption at it’s core. I know there are lots of exceptions to this somewhat idyllic version of Silicon Valley but at the same time, you can’t really argue that there is a place in the US (or the rest of the world for that matter) that produces more technological advancements than Silicon Valley. I’m not a believer in American Exceptionalism — just stating facts. This is a long winded way of saying who cares if those companies leave, the Bay Area is probably better off.
This general topic seems to come back into focus on a regular basis on HN (last time, 1 week ago). People have been leaving SV in numbers for the 30 years I've been here, always citing traffic & cost of housing as the primary reasons. Though this time, you could add decriminalization of petty crime. Nonetheless, the population growth remains net positive.
The fundamental design of the Internet was to be robust against various forms of damage to the network. I see Silicon Valley as a similar type of system. It is not difficult to look back 40 years and see how at each inflection point, The Valley's constituent technologies, and the companies they spawned, led the rest of the world and scaled The Valley up.
- In the 1980s, Silicon Valley's Intel lost it's dominance in DRAM production to Japan. The economic impact was dire, and yet
- In the early 1990s, networking and workstations emerged from the likes of SUN and Cisco. They carried through until global competition stole their wind, and it was on to
- The late 90s and the .COM boom. And what a boom it was, Amazon, Google, followed by another death knell for myriad .COM corpses. Promptly engendering
- The 2000s birth of social media. MySpace faltered, then LinkedIn, then Facebook, then Twitter, came up and are still going strong on the foundation of
- 2010s open source platforms. Still mind-blowing: At one point WhatsApp had 40 software engineers and 400,000,000 users. At 3 years old.
I've heard about the exodus from California, usually citing so many thousands or 10s of thousands of people leaving. But looking a the net population changes, Santa Clara County is down 5,000 from 2018-2019. Alameda, San Mateo, San Francisco are all up.
Silicon Valley is a system that regenerates from one generation to the next, and so far, always bigger and more influential than the last.
Since cities thrive based on network effects, my question is: did everyone in past exoduses move to the same location? If not, is that not a good reason to believe this time will be different?
Smart, ambitious people tend to congregate, and capital follows. If during past exoduses, people moved to random places, I can see why SV remained the primary magnet. But, this time everyone seems to be moving to Seattle and Austin (based on my anecdotal experience of ~20 SV startups that have moved to Austin in the past 6 months).
Other things that make this time different: remote work being generally acceptable & higher state income tax
Of course, "every time is different", but eventually SV will fall. The question is just when and what the right conditions are.
HP Enterprise and Oracle did not move because Texas is "more tech friendly." Instead they moved because HPE and Oracle are no longer primarily tech companies. While they do substantial technical work, most of that will remain in SV.
It's sort of the mirror of Apple, which also has a substantial presence in Austin (finance, etc) but is headquartered in SV because it is primarily a tech company.
I think this is over played because the articles get views. First the Bay was in trouble because everyone is going to work from Tahoe and Iowa. Then tech companies continued to lease new office space so we've got to have a different doomsday.
Are the headquarters staff for these three companies vital to the Bay area economy? I'm not too worried.
The more interesting question is which city will have the largest crop of unicorns in the next business cycle. If those companies go remote or hit their hyper growth phase in non-Bay cities there will be something to talk about.
"Fleeing California" articles are evergreen on HN. I can never tell if there's anything new, or if it's just people voting up the usual nothingburger, presumably to express displeasure with California culture or governmental policies.
I wonder if the people fleeing California will end up voting for the same bad policies that are the reason they had to leave in the first place. That is, do they connect the bad policies to the bad outcomes, or will they still favor the bad policies?
There is one major area for tech people where Texas may prove a nasty surprise to employees: non-compete agreements. For large employers this may be a bonus though as they can keep wages low by stifling competition. Texas does limit non-compete agreements to some degree, but it seems they can still be a serious problem.
Is there any evidence that the people moving are responsible for the bad policies? Something tells me the NIMBYs that bought their homes decades ago and pay $3.50 in annual property taxes aren't going anywhere.
For me a very frustrating thing was trying to figure out where my tax money went in California. Roads suck. Public education sucks. Tent cities everywhere. Then COVID-19 hit and you could tell, early on, that it was going to be mismanaged, similar to our tax money. So glad I bailed back in May. No Texas for me. Arkansas instead!
I think the last new tax I voted for was in 2004. Back when I was 25 and didn’t fully understand how terribly mismanaged the funds were.
Alternatively, the influx of tech money greatly increases the cost of property in Texas. In turn, senior residents start to no longer be able to afford to keep up their property taxes. Eventually a proposition appears on the ballot to limit the growth of property taxes...
At least the front page might stop constantly having posts ranting about Californian cities. Reading about Texas not being liberal enough instead will be a refreshing change of pace.
> I wonder if the people fleeing California will end up voting for the same bad policies that are the reason they had to leave in the first place. That is, do they connect the bad policies to the bad outcomes, or will they still favor the bad policies?
They are leaving because of high prices caused by factors that are just as present in cities in Texas.
They're bringing their money and jobs with them, so they'll bring some of those higher prices too.
It's supply and demand, not liberal or conservative policies.
Texas conservative suburb-dwellers don't want higher density housing either. They especially don't want lower income folks near them! Look at how litle public transit exists, because such things would let the poor people get closer to their little burb.
Why are so many people falling for this "hey, look, we have lower prices, therefore we have better policies" talking point? Been there, done that. Lower prices are because I wouldn't pay as much to live there, that's not higher desirability.
They will probably favor them in the beginning but I think a lot of that comes from the SF bay area echo chamber. Getting exposure to different cultures will probably average things out more politically leading to greater acceptance and diversity of thought.
could you give me like an eli5 explanation of what specific policies you are referring to? I ask this as a left leaning person living in a right leaning state. So from where I sit, I see some of the dumb things my right leaning politicians do but I would love to understand what specific policies people think are some of Califoria's dumbest.
This is a possibility, since an average Californian is far to the left of an average Texan and if we randomly picked few million Californians and transported them to Texas it would have indeed moved the voter base to the left. However, I've seen reports on the new voters in Texas voting to the right of the native Texans (e.g. from Ted Cruz's campaign, might not be a good source for HN, but there is no evidence of the opposite) and since majority of these are from California it could be that California expats in Texas are far to the right of the average Texan. It could be that more conservatives than liberals are escaping California or it could be that liberals prefer to move to other states (like Washington?) or a combination of the two.
I am a libertarian and I have felt pretty miserable living in California. Some other people telling what I can or can not do for greater good and then forcing those things down my throat is what made my life miserable.
The last straw off camels back was San Jose banning gas powered stoves. WTF really ? Lucky for me I was under contract for a new house before that. Now I have the house and its prices have gone up suddenly. I feel sorry for sods who will end up buying my house for 5% premium for the pleasure of owning a gas stove, the sort of thing that is kind of free almost everywhere else. Good luck saving the planet with these antics.
I left downtown SF in 2018 for Nashville and couldn't be happier. I am fiscally conservative/libertarian so definitely did not align with the bay area politics and echo chamber. The last three years in Nashville have been some of my happiest, but also the most financially successful of my life. Just purchased a home here in Nashville that would be unobtanium in California.
I made this point about not voting for the same policies that caused people to leave California in the Oracle exodus story and got downvoted to death.
I'd imagine the owners will, but who knows about the employees. Liberalization in general is happening through the government schools. Pull the kids out, teach them at home or put them in a private school you trust.
> the cost of housing is one-third of Bay Area prices and the absence of a state personal income tax amounts to a 13.3% raise for top earners.
This point always makes me laugh because anyone who lives in affluent TX neighborhoods knows your property tax is _enormous_ and usually makes up for a majority of state income tax you save. They still need to pay for roads and schools, right?
There appears to be no problem here: California is still the same sunny beautiful state and its now hopefully going to become slightly more affordable to a different class of people. At the same time, Texas gets an opportunity to get more "averaged" giving more opportunities for the popular vote and electoral college to be correlated.
Prop 13 is one of the few reasons many could consider staying in California, vs having to pay property taxes on the bubble prices here. Property taxes do go up at what amounts to reasonable inflation numbers.
Why do you think this is? I find it really bizarre.
My own family in the Midwest kind of passive aggressively implies that they hope I “feel the effect” of these “oppressive laws” and I’m out here shooting guns, enjoying the desert on HOVs, and visiting Yosemite to bask in the beauty. Oppression seems like the last thing I’ve found here, honestly.
Like what grinds people’s gears so hard about CA? Really would love a clear answer
The real state I wonder about is Illinois. Who the hell wants to live in Illinois? Both the state income tax and property tax is absurd and you can easily cross state lines to somewhere cheaper with pretty much the same scenery.
I’ve read a lot of “the party is over” Bay Area exodus articles and this one is pretty limp, it did nothing but reiterate the news that a couple companies recently left and then poorly rehashed all the usual tropes. It even misrepresents how taxes work with “the absence of a state personal income tax amounts to a 13.3% raise for top earners”.
I know multiple people considering abandoning California due to the homelessness crisis, as the unhoused population (and the problems associated) are expected to increase 10x in the near future as a consequence of the pandemic, with no hope in sight.
I think it's interesting that people forget anything network based tends to unwind just as fast as it winds up. Decorrelation (e.g. low viral coefficient) can be antifragile. If everyone moves to your city for a different reason, it is more resilient to downturns than if everyone moves to your city for the same reason and conditions change. Facebook may unwind for the same reason it was successful: the lack of privacy.
“Some who have already left San Francisco complained of mismanagement of the city and state. Though it's not clear what exactly they're referring to” (read this the other day)
“Haven't left Silicon Valley; they're still continuing to employ people”
There is this general aloofness of the problems. They need to address it head on and make it more hospitable for companies and residents.
High taxes, regulations for everything, the government running every part of your personal life, cancer labels on everything... seems like a dream come true. What went wrong?
I had a pretty popular take last week on Elon Musk leaving. The same station is now pushing this narrative. I think they are click baiting us all.
HP is not SV. Oracle isnt SV. They arent major players. Maybe there is a larger trend that may come to fruition, but I dont think that will happen. Also, Austin Tx is over crowded already. There is a housing shortage there, we are doomed to see another SF real estate shortage if this becomes true.<rushes to buy Austin property>
Oracle, HPE, Schwab may not be the hubs of innovation, but they acquire a lot of SV startups, supporting the startup ecosystem. Of course Google, FB will continue to acquire startups just fine, but the pool of acquiring money just got a bit smaller. If large companies continue to leave, they pool will get even smaller over time. I think it represents a potential problem for SV. These departures affect B2B startups so far. But, what happens if Twitter moves HQ? I remember Jack Dorsey saying the SF workforce does not reflect Twitter's user base and he was considering to adjust that.
I think that talks of the wealth tax in CA, is another problem. Now that the possibility has been put forward, the high-net individuals may not be waiting around for that to happen. High-net individuals are funding a lot of startup ecosystem as well. I think that might be a problem.
[+] [-] dkobran|5 years ago|reply
[+] [-] 11thEarlOfMar|5 years ago|reply
The fundamental design of the Internet was to be robust against various forms of damage to the network. I see Silicon Valley as a similar type of system. It is not difficult to look back 40 years and see how at each inflection point, The Valley's constituent technologies, and the companies they spawned, led the rest of the world and scaled The Valley up.
- In the 1980s, Silicon Valley's Intel lost it's dominance in DRAM production to Japan. The economic impact was dire, and yet
- In the early 1990s, networking and workstations emerged from the likes of SUN and Cisco. They carried through until global competition stole their wind, and it was on to
- The late 90s and the .COM boom. And what a boom it was, Amazon, Google, followed by another death knell for myriad .COM corpses. Promptly engendering
- The 2000s birth of social media. MySpace faltered, then LinkedIn, then Facebook, then Twitter, came up and are still going strong on the foundation of
- 2010s open source platforms. Still mind-blowing: At one point WhatsApp had 40 software engineers and 400,000,000 users. At 3 years old.
I've heard about the exodus from California, usually citing so many thousands or 10s of thousands of people leaving. But looking a the net population changes, Santa Clara County is down 5,000 from 2018-2019. Alameda, San Mateo, San Francisco are all up.
Silicon Valley is a system that regenerates from one generation to the next, and so far, always bigger and more influential than the last.
[+] [-] microtherion|5 years ago|reply
Prominent local superstars included Dell, Nortel and Enron (As well as numerous companies who fared better, admittedly)...
https://www.nytimes.com/1997/11/30/business/a-new-breed-of-w...
[+] [-] fairity|5 years ago|reply
Smart, ambitious people tend to congregate, and capital follows. If during past exoduses, people moved to random places, I can see why SV remained the primary magnet. But, this time everyone seems to be moving to Seattle and Austin (based on my anecdotal experience of ~20 SV startups that have moved to Austin in the past 6 months).
Other things that make this time different: remote work being generally acceptable & higher state income tax
Of course, "every time is different", but eventually SV will fall. The question is just when and what the right conditions are.
[+] [-] gonehome|5 years ago|reply
Though back then you could get a house in Cupertino for 300k?
It’s now $3M.
This has some effect and makes living here to start a company higher risk.
[+] [-] millstone|5 years ago|reply
HP Enterprise and Oracle did not move because Texas is "more tech friendly." Instead they moved because HPE and Oracle are no longer primarily tech companies. While they do substantial technical work, most of that will remain in SV.
It's sort of the mirror of Apple, which also has a substantial presence in Austin (finance, etc) but is headquartered in SV because it is primarily a tech company.
[+] [-] cheriot|5 years ago|reply
Are the headquarters staff for these three companies vital to the Bay area economy? I'm not too worried.
The more interesting question is which city will have the largest crop of unicorns in the next business cycle. If those companies go remote or hit their hyper growth phase in non-Bay cities there will be something to talk about.
[+] [-] rectang|5 years ago|reply
[+] [-] throwaway1777|5 years ago|reply
[+] [-] readams|5 years ago|reply
There is one major area for tech people where Texas may prove a nasty surprise to employees: non-compete agreements. For large employers this may be a bonus though as they can keep wages low by stifling competition. Texas does limit non-compete agreements to some degree, but it seems they can still be a serious problem.
[+] [-] pb7|5 years ago|reply
[+] [-] NDizzle|5 years ago|reply
I think the last new tax I voted for was in 2004. Back when I was 25 and didn’t fully understand how terribly mismanaged the funds were.
[+] [-] lavishlatern|5 years ago|reply
[+] [-] thatguy0900|5 years ago|reply
[+] [-] shiftpgdn|5 years ago|reply
[+] [-] ewmiller|5 years ago|reply
[+] [-] majormajor|5 years ago|reply
They are leaving because of high prices caused by factors that are just as present in cities in Texas.
They're bringing their money and jobs with them, so they'll bring some of those higher prices too.
It's supply and demand, not liberal or conservative policies.
Texas conservative suburb-dwellers don't want higher density housing either. They especially don't want lower income folks near them! Look at how litle public transit exists, because such things would let the poor people get closer to their little burb.
Why are so many people falling for this "hey, look, we have lower prices, therefore we have better policies" talking point? Been there, done that. Lower prices are because I wouldn't pay as much to live there, that's not higher desirability.
[+] [-] bcheung|5 years ago|reply
[+] [-] ryankshaw|5 years ago|reply
[+] [-] pandaman|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] kbenson|5 years ago|reply
[+] [-] bawolff|5 years ago|reply
If this is how to fail at policy making, more places should try failing.
[+] [-] eplanit|5 years ago|reply
[+] [-] claudeganon|5 years ago|reply
[deleted]
[+] [-] KorematsuFred|5 years ago|reply
The last straw off camels back was San Jose banning gas powered stoves. WTF really ? Lucky for me I was under contract for a new house before that. Now I have the house and its prices have gone up suddenly. I feel sorry for sods who will end up buying my house for 5% premium for the pleasure of owning a gas stove, the sort of thing that is kind of free almost everywhere else. Good luck saving the planet with these antics.
[+] [-] nodesocket|5 years ago|reply
I made this point about not voting for the same policies that caused people to leave California in the Oracle exodus story and got downvoted to death.
[+] [-] tesmar2|5 years ago|reply
[+] [-] BowBun|5 years ago|reply
This point always makes me laugh because anyone who lives in affluent TX neighborhoods knows your property tax is _enormous_ and usually makes up for a majority of state income tax you save. They still need to pay for roads and schools, right?
[+] [-] ramraj07|5 years ago|reply
[+] [-] tolbish|5 years ago|reply
[+] [-] Ericson2314|5 years ago|reply
But if it instead helps wake up California to actually rezone, densify, remove prop 13, and improve social services, that could be quite good.
[+] [-] deeeeplearning|5 years ago|reply
But there is no race since Texas hasn't made any changes to accommodate these companies
[+] [-] gedy|5 years ago|reply
[+] [-] driverdan|5 years ago|reply
How is that terrible? That's the best thing that could happen.
[+] [-] tayo42|5 years ago|reply
Crab mentality I think, people love these articles
[+] [-] dannyincolor|5 years ago|reply
My own family in the Midwest kind of passive aggressively implies that they hope I “feel the effect” of these “oppressive laws” and I’m out here shooting guns, enjoying the desert on HOVs, and visiting Yosemite to bask in the beauty. Oppression seems like the last thing I’ve found here, honestly.
Like what grinds people’s gears so hard about CA? Really would love a clear answer
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] almost_usual|5 years ago|reply
[+] [-] hellisothers|5 years ago|reply
Not worth arguing about here.
[+] [-] lwansbrough|5 years ago|reply
[+] [-] Jerry2|5 years ago|reply
[+] [-] synaesthesisx|5 years ago|reply
[+] [-] sbinthree|5 years ago|reply
[+] [-] dude3|5 years ago|reply
“Haven't left Silicon Valley; they're still continuing to employ people”
There is this general aloofness of the problems. They need to address it head on and make it more hospitable for companies and residents.
[+] [-] exabrial|5 years ago|reply
[+] [-] S_A_P|5 years ago|reply
HP is not SV. Oracle isnt SV. They arent major players. Maybe there is a larger trend that may come to fruition, but I dont think that will happen. Also, Austin Tx is over crowded already. There is a housing shortage there, we are doomed to see another SF real estate shortage if this becomes true.<rushes to buy Austin property>
[+] [-] g42gregory|5 years ago|reply
I think that talks of the wealth tax in CA, is another problem. Now that the possibility has been put forward, the high-net individuals may not be waiting around for that to happen. High-net individuals are funding a lot of startup ecosystem as well. I think that might be a problem.
[+] [-] dmode|5 years ago|reply
[+] [-] bnchrch|5 years ago|reply