Which is silly....honestly companies need to start opening offices in more affordable areas. Colorado (Blouder, Denver, The Springs), Texas (Austin, San Antonio), Missouri (Kansas City, Saint Louis)....there are so many places you can put your employees that saves them money as well as your company a lot of money not only in Salaries because you'll be able to employees less but your rent/power/etc.
Where I work (www.crystalknows.com) is based out of Nashville. I'm remote in Portland, ME (tons of good beer & restaurants) and I pay $1200/mo for a mortgage on a 2bedroom condo on the ocean. Just moved from Boston, and I'm saving a ton on living expenses. SF is the last place on earth I would move to.
I too am a remote worker, and I make an engineer salary while living in low cost-of-living US locals. You can live very well if you're not blowing your salary on rent in SF.
>Learn to be remote teams. It makes you a better company in the end.
Does it? I hear everyone on here say that more work should be remote but I haven't seen any studies that show that workers can be just as productive when not in the office. I would assume they would be.
Airbnb's new 72,000-square-foot office allows employees to work wherever they want inside (no fixed workspaces), so why not just let them work remotely instead of spending millions on a new building.
The problem is they explicitly had to create something like Bay Area.
They needed the engineers to be @ place. And the same can happen anywhere if you recreate the Bay Area.
Solution: remote work
Honestly...160k salaries for some sw roles are silly. But there is need for them because the costs of living are so high. That's plain bs.
I'll give you Denver, definitely high quality of life in Colorado. Not Vegas, most definitely not Texas (save for Austin), not Phoenix, and Atlanta is nowhere near friendly unless you work from home and never need to get into a car.
Chattanooga is good, Nashville is good (but getting pricey), lots of space and smart people in North Carolina (Asheville or Raleigh Durham Research Triangle Park). I've heard good things about Des Moines (not a fan of the cold though).
At this point, its just masochistic for SF startups to require their tech staff to live in the area, and throw away so much of their income to landlords.
That's a broad and rather incomplete generalization.
I spent two years in a California high school and two years in a Texas high school. I have seen first hand how terrible schools can be in CA and, conversely, how fantastic they can be in Texas.
For reference, I'm comparing Benicia HS in the North Bay with Seven Lakes HS in suburban Houston.
In California, teachers were restricted to six pieces of copier paper per student per year. One security guard for 1500 students. Ancient textbooks and the most antagonistic administration you can imagine. AP classes? Gone. School buses? Discontinued. Arts and music? Better hope your parents can pay for it.
Between my sophomore and junior years I moved to Texas. Seven Lakes was the most expensive school ever built. We didn't just have a computer science class, we had a computer science department. Our AP US History teacher had more students score 4 or 5 on the AP exam than any other US history teacher in the country.
To Benicia's credit, their band was actually quite a bit better.
And just to underline the difference in affordability, the average home price in Benicia at the time was $629k. Katy's average was $161k.
Safe to say I have no regrets about having left California.
"Texas earns C-minus, ranks 39th in nation on education ranking"
* 52 percent of 3- and 4-year-olds in the state are not in school.
* Hispanics had the lowest rate of 4-year-olds enrolled in preschool at 39 percent. Meanwhile about half of black, white and Asian 4-year-olds were enrolled.
* 64 percent of of 3- and 4-year-olds in households earning at least $100,000 or more attend preschool compared to 40 percent of those living in households earning less than $20,000.
* About 44 percent of those enrolled in Texas preschool attended a private school.
> "Texas earns C-minus, ranks 39th in nation on education ranking"
California ranked 42nd in the same report with a score of D+. [1]
I'm obviously not arguing that every school in Texas is good. There are some utterly terrible districts in that state.
I don't think anyone would that point.
But there are also some great schools. The existence of some (even many) bad schools shouldn't necessarily deter someone from moving to a community in Texas with good schools.
All of that applies equally to California—there are some horrible schools there too.
> Concentrate your tech workers in a area that isn't hostile to expanding the housing supply when needed.
Sure, you can try that.
But if the place doesn't offer the environmental features that make the Bay Area attractive, your going to have to offer them a premium to live there; lower housing costs may cover some of that so that you are only paying the same, but may not.
The Bay Area is expensive, more than anything else, because people want to live there.
That's not a fair way of looking at it, though, from a business-owner's perspective. You need to look at the overall market, and you can find equally good developers in cheaper parts of the country for fractions (50-60%) of that cost.
It's an entirely fair way of looking at it. Just because other developers live in cheaper areas of the country doesn't change how much value a good developer is bringing to your business.
Nope. They are overvalued.
Iphone will cost the same or with small differences everywhere in the world. Ironically in some "poor" places it's more expensive than in the US.
The costs of living in SF are too insane.It will not create more jobs but instead push bigger chunks of money to fewer people that will not really benefit from them.
Or, keep your salary and work remotely for an SF co. Best of both worlds! But, you'll have to do without the longboards if you don't move to a properly hip location.
Assuming that elsewhere you would do 30/30/40 % split on rent/savings/spend, then as long as you're making 40%+ more income (than elsewhere) you're okay to spend 50% on rent because you can save just as much or more.
This is one of those things that is a great idea until it isn't. When your employer goes belly up, in SF, you have to fight off job offers. That's not going to be the case elsewhere.
It's also much harder on the employers: if you think finding one good job is hard, try hiring an entire team of decent employees at once.
Ultimately, it's worth the extra cost of staying where the tech is, prefixing your city name ala 'Silicon xxx' not withstanding.
Anybody in tech in SF is constantly fighting off job offers, not just when their employers go belly up.
At some point, costs will reach a tipping point where people will start to look elsewhere(I don't mean 1% of people and I don't mean the Easy Bay, but actual significant people moving away from the Bay Area).
It's not like those other cities are tech wastelands. You'll be able to find a good job. Maybe it won't pay as much as a city where you're being fought over, but then, it doesn't need to.
I had multiple clients (I'm a developer and a contractor) who had job reqs open for months at a good pay scale and had a heck of a time finding people in the Boulder Denver area.
I think that the tech frenzy is great enough that people are fighting over tech folks in other areas--maybe not as violently as in SF, but still fighting.
In Denver and Boudler I'm seeing SWE postings with salary 100K - 160K. Not really much different then SF and a lot cheaper housing. You are really much better off in Colorado then Norhter California. Don't tell anyone!
I guess that could have been it. I did some hiring a year or so ago and they pay scales were comparable. And the numbers I see are similar to what I've seen with other jobs (friends, email lists, etc).
Spending 50% of your income on rent isn't the same thing as losing money, unless you're defining "losing" to mean "spending." I doubt many of these SF tech workers started with some savings and are watching their savings decrease each month.
No, the context is insane rent prices. That doesn't translate to losing money. Several people have stated that the difference in salary is making up for it, to where they have as much after rent, after tax income or more than in other places.
> When your employer goes belly up, in SF, you have to fight off job offers.
That's a chicken-and-egg problem. Companies choose to set up shop there so employees will feel more comfortable taking risks because of the demand for developers. However, the demand for developers exists because companies tend to set up shop there.
"When your employer goes belly up, in SF, you have to fight off job offers. That's not going to be the case elsewhere."
In my experience, this is not going to be the case in almost every major city and in some areas not near a major city. Places where I've found/been recruited for jobs easily: Seattle, Portland, Austin, Philadelphia, Central NJ, NYC, San Diego, Atlanta, Dallas, DC. And those are just the places I was looking into at the time. Sure, if you're looking for a very specialized niche, the bay area is a better choice, but for most engineers that just isn't the case.
Keep in mind that the job market is not predictable. For the moment, getting a job seems to be a little less painful than it usually is, but I will bet you any amount of money you want that this situation won't last. Remember 2007/2008... nobody was "fighting off job offers" back then.
They are ... for their non-engineering employees (Lyft in Nashville is the most recent example).
But for engineering talent, it doesn't work. I don't know the exact reason but it seems to be some combination of the ability to poach from each other, herd mentality, and the concentration of VC money.
Take a look at the remote engineering jobs on WWR. Most of them aren't in SF. To me that screams "We opened an office in an affordable city but we still can't get people to come here"
Or even Oakland. I don't understand why there aren't as many startups on the eastern shore of the bay: same pool of candidates; often cheaper/quicker commute for people; cheaper housing.
because the Bart, which better than most of what the US has, is basically a shambling 3rd world disaster. It's slow, uncomfortable, constantly delayed and doesn't go that many places.
In Boulder itself houses are far from affordable (but also still far below Bay-area prices) due to growth restriction, but since Boulder is very small in terms of land area the surrounding towns are an easy commute compared to anywhere in the Bay area. And while the locals like to complain about getting scammed out of commuter rail, the existing bus mass transit to and from Denver and the suburbs along Highway 36 is really pretty decent (albeit expensive unless your company or company's tax district subsidizes the pass).
Come to Boulder. While rents in the Denver area have been climbing recently, they still fall short of the craziness of SF/NY (some facts, here: http://www.denverpost.com/business/ci_28740315/denver-area-a... "median price for a two bedroom is $1550") . And we have 4 real seasons and skiing, unlike LA.
If you want startups, Boulder or downtown Denver are pretty good, or if you want more established tech companies, Interlocken or the Tech center are where it's at.
There's a PE firm based out of Austin called Vista Equity Partners that does this. Recently they purchased a tech company and moved their headquarters from San Diego to downtown Dallas. This is probably a great way (for the PE firm) to get high salary employees to quit and hire employees at the lower Dallas salary rates. Also probably a stealthy way for them to shed headcount without layoffs and without running the risk of ruining the culture and having the black mark of layoffs.
PE firms kill companies over the long term by sucking all of the value out, then spitting out the (much smaller) shell of a company.
When a company becomes controlled by PE, cost-cutting is the number 1 priority. Layoffs happen, the company slow-pays its suppliers and is constantly on credit hold, pay gets cut, benefits are cut, schedules become completely unrealistic, and misconceived products are launched which fail.
I've seen this all happen in the last company I worked for.
if you working for a company and it gets bought by PE, leave ASAP.
No doubt. There's a term for this: Harvest mode. I worked at a company pre-ipo all the way to the point where they were almost ready to turn off the lights. This was a 25 year timespan. In hindsight it was a mistake. I should have left when the PE guys took control.
I have a new hypothesis that I may actually try out: it's the business people that should be in the Bay Area but the engineers can be elsewhere. A lot of the companies having a great deal of success are iterating on the business model, customer acquisition and user experience side of things far more so than on the technology or engineering. I am hypothesizing that it is those people that benefit from being in the Bay Area and that the builders can be elsewhere. In fact they might be better off elsewhere far from the echo chamber and framework-of-the-month cattle (and cost, of course).
That's ok. When Airbnb, Square, and Stripe IPO in 12-36 months, all of the people currently flooding into SF to work for them will surely be able to sell their pre-IPO shares to ... Well, I don't know, honestly. I doubt that employee #1000 at Square would even be able to pay the down payment on a SF condo with their earnings.
Also, just FYI: Seattle isn't that much cheaper than SF, the people are way meaner, traffic is awful, and the weather really sucks. So I highly recommend against moving up here.
---
edit: Since people are apparently missing the joke, I've lived in Seattle for 12 years, consider it home, and can't imagine living anywhere else.
Today we substitute Californians with Chinese, but same old same old. I'm a Seattlite living in Beijing, and you don't see me messing with their real estate market (I wouldn't go near it with a 10 foot pole).
Maybe if you beat the bushes hard enough. The companies offering positions without non-competes are going to be rare as the employers labour law council will include it if they can get away with it. It will also very likely be non-negotiable and the documents you get on your first day of employment will be offered up as "sign or be fired".
It's much better for the employee if there is legislation prohibiting non-competes as you can choose any employer to work for.
As a Seattle resident born and raised, and having spent a fair amount of time in other parts of the world, I take issue with your characterization of the people as "way meaner." ;) The traffic is terrible though; I wouldn't want to commute into the city from anywhere outside of it. And the weather... well, let's just call it an acquired taste. :)
Wow, Seattle actually doesn't seem that much more expensive compared to the $1,263 average 1br in Dallas. But SF... Holy shit. And I'm actually seeing $2,965 on Rent Jungle for SF right now.
That's only true if you need to live in new construction. My previous apartment was an old crappy 2BR on Capitol Hill, with Cascade views, from 2012-2014, for $1500. Currently I'm paying $2200 for a 2BR house with a nice yard in the Central District.
If anyone wants to rent a nice 3BR house north of the UW for $3-4K, email me, I know of one for rent.
The economics of equity for employees in general is out of line with most people's expectations.
You can expect pre-Series A shares to drop by an order of magnitude in ownership proportion between issue and IPO. Since this can take 5-10 years, the equity carrot is nothing more than a bonus unless the company unicorns. It's less than one could probably make in the same time at an established company.
From a compensation standpoint, there's no point being an employee at a startup that isn't aiming at a billion dollar+ exit: there just won't be enough money to go round unless it does.
> The weather was great (two days of sunny blue skies).
Seattle from October through January is nothing like this. I literally didn't see the sun for over 20 days straight at one point (it's foggy and rainy non-stop during the winter).
Smart-assery aside, yeah, Seattle has awesome summers, albeit mighty short some years. November comes, you better head down to the NorthFace outlet and get a GoreTex jacket or two.
That's nothing. In 1998 (I'm pretty sure) Seattle had 96 days of light drizzle with nary a ray of sunshine. The suicide rate went up massively, and I decided to move to CA as soon as I had the means.
I remember that winter well. I was founder-CTO of a Silicon Valley-based startup, and we were working on a big deal with Microsoft. After they hired away the first two people we put on the project, I stepped in, and spent several weeks a month up in the Seattle area. I still remember telling the board, "the only way they'll be able to hire me is to buy the company!" and we all had a good laugh.
Which is of course what happened -- they decided they wanted the technology and the engineering team (including me) and after some negotation got to a price that worked for everybody. Moving up to Redmond was part of the deal.
At the celebration party, people gave me various presents -- including a scuba mask, flippers, rubbers, several umbrellas...
And yeah, everything they say about the winters here is true. So please please please don't move here :)
NOOOOOOO. Don't tell anyone. It is terrible here and there is lots of sadness from all the rain. I hate Seattle.
Seriously though F* 405 traffic. The new "Toll route" is a nightmare and now everyone is using side roads making my drive to work from a quick 10 min jaunt into a 25-30 min parking lot.
It will, in a few years. The plans are already set and they've held the public meetings on it where the public doesn't get any chance to change the plans.
I ride a motorcycle every day from Redmond to Seattle. The new express lanes have screwed it up even for me, even though I get to use those lanes. Problem now is getting to those lanes. Traffic in the other lanes is now worse, and I can't cross the double white lines until about a mile after I get on 405. Granted, it adds maybe five minutes at most. But it poses the question: who are those lanes supposed to help if it only adds time an inconvenience even for those that have access to them?
Who do you think is making money on running this system? Surely someone is, that's why (in their view) it's 'successful' everywhere... (Successful being to extort the upper middle class for an unfair share of taxes, and regressively dis-enfranchise everyone under them by making their commutes worse so those 'lucky few' can pay a premium to drive at least 45MPH.)
The real solution, as pointed out above, involves incentives for desired behavior from all actors via taxes/tax breaks (stick/carrot). Parties that should be affected include businesses, employees, housing providers, and civic planners on all levels. The true cost of living rural should be felt (you should /pay/ for your share of the infrastructure required to provide /you/ with modern services; but you should /get/ them, including actual /good/ Internet). The true cost of employing should be felt (pay for the infrastructure to get workers to you, and for the education that trained them). Housing should be more consistently priced, in city and out, and should also scale up large enough to have 'raise a family well' sized dwellings. Also while you're at it, discount taxes slightly for better auditory insulation (or make it a side effect of /awesome/ fire codes).
This way workers would be more likely to be able to afford to live, and thus move closer to their jobs. With the lack of 'lifetime employment' at a company, responsible living is now an apartment, not a house.
Everybody is running with your Seattle humor but your comment on IPO'ing is worth discussing. 1) The reason a startup is appealing is because you're supposed to make a great low 6 or even 7 figure sum once your company goes public. 2) To achieve success you're supposed to work intensely hard and smart (@pmarca) for a short period of time (3 - 7 years) and then if you've picked successfully you'll create a really nice nest egg for yourself while you're peers who graduated will only be up to around $50K in their contributing 401K's. 3) Based on the size of that exit you are free to go somewhere else and enjoy luxury or double down in the Bay Area but this time with a little more money to get a better apartment or even buy something in the burbs.
So the point is looking at just Income isn't helpful. One would hope your stock is appreciating in value at an equivalent or greater pace than your income.
> One would hope your stock is appreciating in value at an equivalent or greater pace than your income
One would, but given the stock performance of GRPN or ZNGA, or more recently HDP and BOX, I'd be leery of this.
Betting that you happen to pick the unicorn that's gonna IPO is a tall order. Betting that you happen to pick the IPO'ing unicorn that isn't going to fall apart post-IPO seems like too much to ask for.
> One would hope your stock is appreciating in value at an equivalent or greater pace than your income.
OTOH, hope is not the same thing as reality.
Some startups will exit successfully and yield really big payouts. Some startups will have modest exists, and equity will have some additional value, but nothing to write home about.
And some startups will fail.
If you are a capital investor in lots of startups, the small share where the first occurs have a good chance of being enough to make the average return good. But if you are a 20-something that's putting 3-7 years of labor into each swing at the startup piñata...
I love the mental image evoked by a startup piñata because it is so deep with symbolism: blindly swinging away at a brightly-painted papier mâché dream, hoping for the outpouring of sweets by sheer random luck.
Hopefully people are putting a little more thought into their career choices than that, but piñatas are definitely fun, and you're surrounded by your friends shouting encouragement and direction at you all the while. So while I'm positive that life isn't as bleak as this image conveys, I'm still going to borrow it to use in the future!
Contribution limit has been 17500 or 18000 last few years, it's only expected to go up, and lots of bigcorps have good 401k matching.
Also, the 17.5k (plus possible match) that you put in 3-7 years ago has been compounding for 3-7 years. Sure, the stock market may have taken a tumble in the interim and you might say that that means you end up with less in your 401k, which is true, but broad market movements affect startups' prospects as well, so you are still likely to come out ahead with the safe bigcorp option.
Seattle is the worst place I've ever lived in including multiple third world countries. The weather really, really, really sucks to the point where it ruins your whole life.
May be intended to be joke, but the weather is atrocious, and the traffic is worse than the Bay Area (but probably not worse than LA). People are nice though!
Source: Lived there 22 years, moved to the Bay Area a dozen years ago, bought a house here, love it. Also, nobody complains about all the "outsiders" driving up housing costs here, whereas in the Northwest, blaming outsiders has been a mantra for decades.
How much does a decent house or decent condo cost in an nice (not very nice) neighborhood in SF? I can look at Zillow but I do not know which areas are good vs. bad.
This is not surprising at all. We keep complaining about it here and elsewhere but it's not going to change any time soon. The more people flock to SF the worse it will become.
When I left SF my studio "jr. one-bedroom" in SOMA was $3100 a month. I'd walk or muni to work by the ballpark and usually saw at least one person smoking meth, shooting up heroin, or pissing on the street. I pay less than half of that now for a 2 bedroom house in Michigan and have a stress-free 20 minute commute to the FarmLogs office.
3100 is almost double the average salary of IT worker in Central/Eastern Europe and these people are considered middle class.
Take a look at China and India there they earn even less.
How many and for how long can these companies keep hiring people for such huge salaries ? And if these people can't live comfortably off these salaries then there is something wrong.
Complex cross-geo projects aren't the same as local projects, except everything happens overnight. There are explicit and implicit expenses involved in managing and supporting projects in widely varied time zones that aren't obvious until you're involved in one. Especially if there's hardware involved.
A few questions if you don't mind. What percent of your after tax income was rent? Are you making the same salary in Michigan? And what is the percent of your after tax income is rent now? Thanks! I would love to work remote / in a cheaper location, but salary decrease is worrying me.
This is not a great analysis. What they measured was average salary compared to average rent in the neighborhood where the company is located, not what their employees are actually paying. At Weebly I would estimate less than 10% of employees live in Soma where our office is.
I have no interest in moving to SF mostly because of the rent. Spending 33%+ of your paycheck on rent is absurd. I'd rather get a remote job and live somewhere cheap enough to where I could potentially put a down payment on my own place.
The nicest, most expensive 1 bedroom apartment I can find in $my_medium_sized_city is $1200/mo. Brand new, great view, walking distance to everything...I don't even own a car anymore.
Any kind of six figures goes very, very far if you are willing to be away from the center of the universe. If living in SF to work at a startup with options is speculating in penny stocks, living in a second or third tier city and squirrelling away a nice chunk from $120k a year is buying bonds. Lower variance, lower maximum rate of return.
Seriously, the number of companies still not hiring remotes is ridiculous. We work in the most flexible industry out there yet most companies still want you sitting in a chair in some downtown office of a giant and expensive city. No thank you. No you don't need to make your entire team remote but you can easily augment a large portion with talented remotes. Keep your high living costs and horrendous commutes, been there done that. There are other options.
I deeply enjoy when recruiters are convinced that I'll move to SF for their company, even though I haven't over the past decade. They also balk when I ask for the cost of living adjustment to make the move (+180%, give or take).
Hell, I live in the peninsula and I ask for a $40k ($2k/mo after taxes) raise to cover the rent differential to move back to sf in order to be in the office 5 days per week and companies are taken aback.
try moving to SF short term, put in the hours in the office of a flexible, reasonable company and then ask to move to remote after they are more comfortable with you. It worked for me :)
Employees at these companies don't mind paying 50% of their salary for rent because their salary is at most only 60% of their total compensation. Lot of people are getting 1M + deals paid out over 4 years.
and, do you mean 4 years of salary + the equity grants, or just the equity grants, because not very many people get $250k/yr worth of equity [from any company]. A few do, but not the unwashed masses.
This article makes the rather flawed assumption that all the housing in SF is being taken up by people who work at startups, and not by people who work at Facebook/Google but live in the city and commute, who likely are both more numerous and have even greater salaries.
The article doesn't mention studio prices at all, which are high but not stupid high.
Always remember the #1 industry sector in CA is real estate, not tech. Furthermore, this is why I generally won't consider offers for work in the Bay area (as much as I love NoCal). I do the math and realize I'm cutting my own throat.
On the other hand, I'd love to get a great offer and then buy a Blue Bird bus and convert it into a rolling home but only if I could semi-permanently park it in the company parking lot!
Pretty sure I see people living in RVs in Palo Alto, on El Camino and around Cal Ave. Definitely plenty doing it in SF. Has something changed in PA recently?
Most people don't live by themselves in a 1 bedroom. They usually live 2+ people per room, so that they can afford it. For example, a 2 br apt might have 5 people living there, two couples and then one living in the living room. That's how they can afford the $5000/month rent.
By "most people" you mean mostly 20-somethings? It's hard to imagine people in their 30s and older, married and starting to have kids, living like that. I mean, great if you can pull it off, but you'd have to stagger the shower schedule not to mention maybe get a 2nd refrigerator?
That's not uncommon in London, especially amongst immigrants from Eastern Europe — it makes sense, if the aim is to save money rapidly to put a deposit on a house in Poland/Romania etc — and people in their 20s.
I took a room for ~9 months in what was originally a 3 bedroom house. It was (a) very flexible regarding the contract (b) very cheap (£400/mth). (I had to move out of my previous place, but was looking for a new job, so didn't want to commit to something that might be in an inconvenient area.)
I had my own room, and for most of the time there were 4 people in the three other rooms, age 30-40s and one at 50.
Everyone apart from me worked in the kind of jobs where you have to be in by 7-8am, so I never had an issue taking a shower. We had 2 fridges.
This was a "nice" house, in a nice area, with nothing dodgy about the contract / rent etc. In other areas there are really scummy landlords overcharging people for individual rooms, often none of them are British / western European, so they don't seem to know that there are regulations in their favour, for example for getting a deposit returned, or not paying for wear-and-tear repairs.
This is the bigger problem. Companies like Google & Salesforce have been there long enough for their early hires to have grown up and gotten ready to lay down roots ... but they can't afford to buy a house and they don't want to raise a family in a small/crappy/inconvenient apartment or condo.
> Most people don't live by themselves in a 1 bedroom.
Citation required. None of my post-college friends are sharing a room (though many do share their apartment). Yes, rent is high, but it's not that high when compared to dev salaries.
"in a 1 bedroom" means living in a 1 bedroom apartment (might also include living in a studio. What you're referring to would be "in 1 bedroom". The article "a" changes the meaning of the phrase.
> Yes, rent is high, but it's not that high when compared to dev salaries.
This is skewed if all your friends are devs. The sentiment is true to my experience as far as my non-dev friends go. Many share rooms with strangers or live with their significant other.
yes people live with roommates in separate rooms, and some convert a part of their living room to another room (this is actually really common) but I know very few people living 2+ (you seriously mean 3 or 4 here?)
Why aren't more companies investing in building out remote teams? Have the main office with a small core team in SF but hire remote devs, customer service, sales. Seems like it would save companies a ton of money and devs would be happier too because they would actually be pocketing more.
I love these high salaries. My thought is to find a job in SF, live there temporarily for 3-6 months, then become remote and move back to my real home on the east coast. Is that feasible? Aren't these kinds of companies pretty comfortable these days with video conferencing, IM, screen sharing etc.?
There are strong advantages to working in direct contact, despite what sentiment on HN and logic dictates. Working in SF for a few months wouldn't make you super rich anyways.
I think his/her strategy of working in SF for a few months at first is not to become "super rich", but to establish a high salary that could then be "exported" to a cheaper area while staying on with the same company.
I'm reasonably sure that a decrease in CoL would be adjusted into the salary, or at the least, any company in a lower CoL is less likely to give a competitive salary.
Solution: buy a property in a lower CoL area and then rent it out to yourself. It helps if you establish a few shell and holding companies. Charge as much rent as you're paying in SF and then they can't lower your salary based on CoL because your CoL is still high. Win-win-win! ;-)
So if you are living and working in SF and making $150K (plus bonus, stock options etc) and you decide to move to, say, Phoenix and buy a house for $140K, they'll say, "OK, minimaxir, we'll be cutting your salary to $90K to reflect the vastly diminished cost of living, although of course we'll be able to give your desk to a new hire and save money on office space!" -- ??
Seems unlikely. If you're contributing, no rational company is going to suddenly cut your salary. Basically, no one cuts salaries in the U.S. unless it's a company-wide belt tightening move to stave off bankruptcy.
You can't make a statement like that without facts to back it. The truth is that companies do this all the freaking time. Besides that, it has also been common for a decade+ for CA-based employees (both LA & SFBA) to sell their artificially inflated house and quit their job to move a lower COL state (often Texas, Washington, Oregon, or North Carolina, all of which are much cheaper and have lower income tax schedules). If they stay with their existing company, their salaries are frequently decreased based on COL calculations. Otherwise they use the previously mentioned tactic and quit for something different, using their current salary as a negotiating point.
Any citations for this "all the time" claim? It's not against the law, but I would think (and online discussion/blog/advice seems to support) that most people would rather quit, as you suggest.
I was on site for 2 years, then have been remote for the past 3. Five years is the longest I've been at any job, and remote is what's kept me here.
But my salary is well below the $140K averages I'm seeing in SF. So hire me at $160K, I'll be on site for a while, then if it's all right with y'all, I'll go back and be with my family and my productivity will be even higher!
Everything's negotiable in this world. I can see why 20-somethings want to be in the big city and are willing to compromise on their living conditions. That's always been true. But there comes a time when you just can't do that any more.
In my experience, no, most people assume you're not working if they can't see you working..
I'm a sysadmin, I could do my job anywhere with stable power and a low latency internet connection- but people insist on sticking me in a room with 80+ people so they can observe my work.
"Sorry, blisterpeanuts... we know telecommuting is really attractive, but we like to have people in-office at least four days per week so we can get together in a room and really hash out problems. But feel free to work from home on No Meeting Thursdays!" - Your future SF manager
In the 1950s, the average New York City resident paid 10% of the income for rent. It was federal, state, and city policy to keep rents down, with new low-cost housing being built by Government agencies and insurance companies.
Do (m)any of the SF startups allow workers to occasionally commute from places like Sacramento? I actually knew bankers who lived in Sactown and got up at 5AM to head out to SF every morning. But technology requires less in-person time. And Sacramento is much, _much_ cheaper than the Bay Area...I shared a great 2-bedroom place in the nicest area of town for around 1,200, where you could walk to great food, parties, and bars. I now pay way more for that to live in a converted garage in Palo Alto...in fact, this garage costs more than my nice 2-bdr apartment did in downtown Manhattan.
Even if you commute 3 times a week from Sacramento, you'd save a lot of money while still having a good social life...and 3 days/week in-person seems sufficient for a lot of dev work projects.
The commute from Sacramento to SF is not really workable. Traffic across the Bay Bridge has reached a point where there's almost no lull, and parking at BART stations is impossible to find. I go to a Sacramento colo sometimes and would never dream of trying to make the trip on a weekday or Sunday afternoon.
I remain surprised that Bay Area tech companies don't move to Sacramento. Near the Bar Area for quick access, near the state seat of power for lobbying, well away from major faults so less prone to earthquakes, significantly lower costs of housing (2 Bdrm apt would be about $1k) - so presumably could save on salary.
um, have you been to sac? Given the choice, people (both founders of the companies & the best employees) would rather live in the bay area vs. sac. Hence the price difference. SF bay people are paying for things like: 20 min access to world class airport, one of the most human friendly climates on the planet, access to the capital of the internet & the people from around world building said internet, a stop on world tours of every major music act or performance, Ocean, Bay, coastal ranges, the ability to get to work, beach, entertainment without getting in a car, etc etc. I personally trust the wisdom of the crowd and find the best places on the planet to live/visit are often the most expensive: NYC, Copenhagen, Tokyo, Paris, Maui, Coastal Los Angeles, SF
The problem is that "near the Bay Area" is pretty relative; the travel between them is 2+ hours without substantial traffic, and most people aren't going to want to make that commute. So that leaves you with some of the drawbacks others have mentioned in this thread: if your company is there, you'll likely have a smaller talent pool to draw from; if you live there and you lose your job, you'll have a smaller pool of companies to move to.
Having said that, Sacramento is a much nicer place than a lot of folks in the Bay Area give it credit for -- a lot of pretty, walkable neighborhoods, a lot of good cafes and bars and restaurants and "third wave" coffee places, and as you mentioned a way lower cost of living. The only real downside (setting aside the commute) is that it gets ungodly hot in the summer.
I don't know about the US. In Germany there is the general rule that you not pay more than 30% of your income for rent, if you want to have decent living.
May be in the US it is different because there are diffrent costs for food.
50% and more just for living seems to be to high for me.
I always see articles like this and I wonder...who is winning here?
I'm waiting for an article to break out the stats on who owns which property in these types of areas. What % of housing is owned by the government, foreign investors, domestic investors, institutional investors, real-estate holding companies, and the actual inhabitants of the property?
For all we know, the whole story could just be that tech companies are hiring some kids from ivy leagues and well-off families that are just paying rent back to their parents, who somehow or other own shares of the SF property market. Or that a lot of rent money is flowing to foreign investors, as is the case in NY and London.
So while it's interesting to see who is losing and by how much, what I'd really like to know is - who are the winners? Where is the money flowing?
Long story short: people that own single family homes in SF are winning the most because of the massive gains in value and we don't have to pay increased property taxes because of proposition 13. Basically anyone who currently owns property in SF is a "winner" and that includes the many small time property owners that own the 2-6 unit buildings that dominate the city. The rent money is flowing to those people. Who probably are mostly local.
I certainly think rising housing costs are a problem, but is no one going to comment on the fact that this company put together a list that just so happens to put them in a very favorable light against companies they are competing with for talent? We probably shouldn't just accept RadPad's statement as fact that RadPad's employees are much better off than other startup employee even though they are paid less. I would be very interested in seeing the actual raw data that includes companies not listed here and includes other costs besides housing (e.g. transportation costs are higher in LA due to a worse public transit system).
Unless I won the stock option lottery, I think it'd be more cost effective for me to do a complete career transition to, say, medicine or dentistry, including lost income and educational debt, than it would be to move to SF as a programmer. Granted, I'm fortunate to have a relatively high salary in a much cheaper location right now.
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[ 3.5 ms ] story [ 288 ms ] threadSFBA companies! Get it together! Learn to be remote teams. It makes you a better company in the end.
EDIT: And you're not slaving your employees by forcing them to spend so much of their income on the unnecessary expense of SFBA housing.
Does it? I hear everyone on here say that more work should be remote but I haven't seen any studies that show that workers can be just as productive when not in the office. I would assume they would be.
Solution: remote work
Honestly...160k salaries for some sw roles are silly. But there is need for them because the costs of living are so high. That's plain bs.
Concentrate your tech workers in a area that isn't hostile to expanding the housing supply when needed.
http://www.wsj.com/articles/construction-in-new-york-city-go...
Chattanooga is good, Nashville is good (but getting pricey), lots of space and smart people in North Carolina (Asheville or Raleigh Durham Research Triangle Park). I've heard good things about Des Moines (not a fan of the cold though).
At this point, its just masochistic for SF startups to require their tech staff to live in the area, and throw away so much of their income to landlords.
Having sampled a fair number of places, I can safely say quality of life in Houston and San Antonio is far better than people on HN believe.
Unless you have a family. Texas schools are absolutely terrible.
I spent two years in a California high school and two years in a Texas high school. I have seen first hand how terrible schools can be in CA and, conversely, how fantastic they can be in Texas.
For reference, I'm comparing Benicia HS in the North Bay with Seven Lakes HS in suburban Houston.
In California, teachers were restricted to six pieces of copier paper per student per year. One security guard for 1500 students. Ancient textbooks and the most antagonistic administration you can imagine. AP classes? Gone. School buses? Discontinued. Arts and music? Better hope your parents can pay for it.
Between my sophomore and junior years I moved to Texas. Seven Lakes was the most expensive school ever built. We didn't just have a computer science class, we had a computer science department. Our AP US History teacher had more students score 4 or 5 on the AP exam than any other US history teacher in the country.
To Benicia's credit, their band was actually quite a bit better.
And just to underline the difference in affordability, the average home price in Benicia at the time was $629k. Katy's average was $161k.
Safe to say I have no regrets about having left California.
"Texas earns C-minus, ranks 39th in nation on education ranking"
* 52 percent of 3- and 4-year-olds in the state are not in school.
* Hispanics had the lowest rate of 4-year-olds enrolled in preschool at 39 percent. Meanwhile about half of black, white and Asian 4-year-olds were enrolled.
* 64 percent of of 3- and 4-year-olds in households earning at least $100,000 or more attend preschool compared to 40 percent of those living in households earning less than $20,000.
* About 44 percent of those enrolled in Texas preschool attended a private school.
http://educationblog.dallasnews.com/2015/01/texas-earns-c-mi...
California ranked 42nd in the same report with a score of D+. [1]
I'm obviously not arguing that every school in Texas is good. There are some utterly terrible districts in that state.
I don't think anyone would that point.
But there are also some great schools. The existence of some (even many) bad schools shouldn't necessarily deter someone from moving to a community in Texas with good schools.
All of that applies equally to California—there are some horrible schools there too.
[1] http://www.edweek.org/ew/qc/2015/state-highlights/2015/01/08...
Sure, you can try that.
But if the place doesn't offer the environmental features that make the Bay Area attractive, your going to have to offer them a premium to live there; lower housing costs may cover some of that so that you are only paying the same, but may not.
The Bay Area is expensive, more than anything else, because people want to live there.
When you think about the value that a single SWE can create it's not that crazy
The costs of living in SF are too insane.It will not create more jobs but instead push bigger chunks of money to fewer people that will not really benefit from them.
The amount of choice in employer I have as an individual is also much greater here.
Still, I'll probably head back to one of those "small" towns soon. Not really worth it here for me personally, despite the employer-choice and the $.
You only have to spend 50% if you want to live in a hipster/trendy area of SF.
(rhetorical, trying to imply you might make quite a bit more than me)
Now I feel bad for spending 50% of my income and still not living anywhere hip.
Assuming that elsewhere you would do 30/30/40 % split on rent/savings/spend, then as long as you're making 40%+ more income (than elsewhere) you're okay to spend 50% on rent because you can save just as much or more.
https://news.ycombinator.com/item?id=10051282
I'm so biased.
It's also much harder on the employers: if you think finding one good job is hard, try hiring an entire team of decent employees at once.
Ultimately, it's worth the extra cost of staying where the tech is, prefixing your city name ala 'Silicon xxx' not withstanding.
At some point, costs will reach a tipping point where people will start to look elsewhere(I don't mean 1% of people and I don't mean the Easy Bay, but actual significant people moving away from the Bay Area).
I think that the tech frenzy is great enough that people are fighting over tech folks in other areas--maybe not as violently as in SF, but still fighting.
Each client did end up hiring, but it was a slog.
Sure, maybe you would be better off somewhere where the competition isn't as hard, and the living costs aren't as high.
That's a chicken-and-egg problem. Companies choose to set up shop there so employees will feel more comfortable taking risks because of the demand for developers. However, the demand for developers exists because companies tend to set up shop there.
Framing it that way doesn't make it any easier to resolve.
In my experience, this is not going to be the case in almost every major city and in some areas not near a major city. Places where I've found/been recruited for jobs easily: Seattle, Portland, Austin, Philadelphia, Central NJ, NYC, San Diego, Atlanta, Dallas, DC. And those are just the places I was looking into at the time. Sure, if you're looking for a very specialized niche, the bay area is a better choice, but for most engineers that just isn't the case.
But for engineering talent, it doesn't work. I don't know the exact reason but it seems to be some combination of the ability to poach from each other, herd mentality, and the concentration of VC money.
Take a look at the remote engineering jobs on WWR. Most of them aren't in SF. To me that screams "We opened an office in an affordable city but we still can't get people to come here"
https://weworkremotely.com/categories/2-programming/jobs
However, as soon as my employer opens up an office in Berlin, I'm out of the US. Even denser, even cooler and way better public transit.
Boston, Chicago, Philadelphia, and Miami would all like a word with you.
> SF has all the 99% of the good tech jobs
Boston would really like a word with you, now...
Uptown is getting busier, and this just happened: http://www.bizjournals.com/sanfrancisco/blog/real-estate/201...
If you want startups, Boulder or downtown Denver are pretty good, or if you want more established tech companies, Interlocken or the Tech center are where it's at.
When a company becomes controlled by PE, cost-cutting is the number 1 priority. Layoffs happen, the company slow-pays its suppliers and is constantly on credit hold, pay gets cut, benefits are cut, schedules become completely unrealistic, and misconceived products are launched which fail.
I've seen this all happen in the last company I worked for.
if you working for a company and it gets bought by PE, leave ASAP.
Also, just FYI: Seattle isn't that much cheaper than SF, the people are way meaner, traffic is awful, and the weather really sucks. So I highly recommend against moving up here.
---
edit: Since people are apparently missing the joke, I've lived in Seattle for 12 years, consider it home, and can't imagine living anywhere else.
Just saying. Might not be Seattle that's the problem.
As to traffic, I commute via boat, which is rad, since there are dolphins and orcas sometimes. Seriously!
Every few years these Californians muck everything up with their SF equity turned into bidding wars, and their fancy cars and stuff.
Stickers, that'll keep 'em out!
Seattle is still quite affordable, especially where startups tend to have their offices (in boring east side office parks).
And roving gangs will steal your teeth
It's much better for the employee if there is legislation prohibiting non-competes as you can choose any employer to work for.
Unions or advocacy groups are a potential third, too.
If anyone wants to rent a nice 3BR house north of the UW for $3-4K, email me, I know of one for rent.
Source: http://ny.curbed.com/archives/2015/05/14/rents_rise_across_n...
You can expect pre-Series A shares to drop by an order of magnitude in ownership proportion between issue and IPO. Since this can take 5-10 years, the equity carrot is nothing more than a bonus unless the company unicorns. It's less than one could probably make in the same time at an established company.
From a compensation standpoint, there's no point being an employee at a startup that isn't aiming at a billion dollar+ exit: there just won't be enough money to go round unless it does.
The people were super friendly. The weather was great (two days of sunny blue skies). The food was great. Even the roads were easy to deal with
I do take bitcoin.
Seattle from October through January is nothing like this. I literally didn't see the sun for over 20 days straight at one point (it's foggy and rainy non-stop during the winter).
Smart-assery aside, yeah, Seattle has awesome summers, albeit mighty short some years. November comes, you better head down to the NorthFace outlet and get a GoreTex jacket or two.
Which is of course what happened -- they decided they wanted the technology and the engineering team (including me) and after some negotation got to a price that worked for everybody. Moving up to Redmond was part of the deal.
At the celebration party, people gave me various presents -- including a scuba mask, flippers, rubbers, several umbrellas...
And yeah, everything they say about the winters here is true. So please please please don't move here :)
Huh, just noticed this: http://minimsft.blogspot.com/2007/11/low-hanging-late-harves...
It looks like you and I left Microsoft in the same week. Funny timing.
Seriously though F* 405 traffic. The new "Toll route" is a nightmare and now everyone is using side roads making my drive to work from a quick 10 min jaunt into a 25-30 min parking lot.
The real solution, as pointed out above, involves incentives for desired behavior from all actors via taxes/tax breaks (stick/carrot). Parties that should be affected include businesses, employees, housing providers, and civic planners on all levels. The true cost of living rural should be felt (you should /pay/ for your share of the infrastructure required to provide /you/ with modern services; but you should /get/ them, including actual /good/ Internet). The true cost of employing should be felt (pay for the infrastructure to get workers to you, and for the education that trained them). Housing should be more consistently priced, in city and out, and should also scale up large enough to have 'raise a family well' sized dwellings. Also while you're at it, discount taxes slightly for better auditory insulation (or make it a side effect of /awesome/ fire codes).
This way workers would be more likely to be able to afford to live, and thus move closer to their jobs. With the lack of 'lifetime employment' at a company, responsible living is now an apartment, not a house.
So the point is looking at just Income isn't helpful. One would hope your stock is appreciating in value at an equivalent or greater pace than your income.
One would, but given the stock performance of GRPN or ZNGA, or more recently HDP and BOX, I'd be leery of this.
Betting that you happen to pick the unicorn that's gonna IPO is a tall order. Betting that you happen to pick the IPO'ing unicorn that isn't going to fall apart post-IPO seems like too much to ask for.
OTOH, hope is not the same thing as reality.
Some startups will exit successfully and yield really big payouts. Some startups will have modest exists, and equity will have some additional value, but nothing to write home about.
And some startups will fail.
If you are a capital investor in lots of startups, the small share where the first occurs have a good chance of being enough to make the average return good. But if you are a 20-something that's putting 3-7 years of labor into each swing at the startup piñata...
Hopefully people are putting a little more thought into their career choices than that, but piñatas are definitely fun, and you're surrounded by your friends shouting encouragement and direction at you all the while. So while I'm positive that life isn't as bleak as this image conveys, I'm still going to borrow it to use in the future!
a) you love the company and the mission b) you are a founder or a very early employee
I am not sure the expected value is there from a pure financial point of view for late employees, compared to working for an established company
I'm saving quite a bit with my $bigcorp job, and at the current rate, I'd be way over that in 3 to 7 years.
Also, the 17.5k (plus possible match) that you put in 3-7 years ago has been compounding for 3-7 years. Sure, the stock market may have taken a tumble in the interim and you might say that that means you end up with less in your 401k, which is true, but broad market movements affect startups' prospects as well, so you are still likely to come out ahead with the safe bigcorp option.
[1] http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/...
[2] http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/...
[3] http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/...
[4] http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/...
http://www.washington.edu/uwired/outreach/cspn/Website/Class...
This is the cheapest home available in SF, for $288,000, in the worst neighborhood http://sf.curbed.com/archives/2015/05/27/at_288k_san_francis...
When I left SF my studio "jr. one-bedroom" in SOMA was $3100 a month. I'd walk or muni to work by the ballpark and usually saw at least one person smoking meth, shooting up heroin, or pissing on the street. I pay less than half of that now for a 2 bedroom house in Michigan and have a stress-free 20 minute commute to the FarmLogs office.
Take a look at China and India there they earn even less.
How many and for how long can these companies keep hiring people for such huge salaries ? And if these people can't live comfortably off these salaries then there is something wrong.
This is why I like living in an area with -20F winters... keeps out the riff raff, oh and winter sports too.
At least that's what the window said when I walked by it every morning on the way to work.
Any kind of six figures goes very, very far if you are willing to be away from the center of the universe. If living in SF to work at a startup with options is speculating in penny stocks, living in a second or third tier city and squirrelling away a nice chunk from $120k a year is buying bonds. Lower variance, lower maximum rate of return.
http://www.sf-moh.org/modules/showdocument.aspx?documentid=7...
This figure does not surprise me in the slightest.
In London I was _easily_ paying 50% of my salary after tax in rent, because I didn't want to share an apartment with someone else.
Clearly there are benefits (worth to many people) of being collocated.
and, do you mean 4 years of salary + the equity grants, or just the equity grants, because not very many people get $250k/yr worth of equity [from any company]. A few do, but not the unwashed masses.
The article doesn't mention studio prices at all, which are high but not stupid high.
On the other hand, I'd love to get a great offer and then buy a Blue Bird bus and convert it into a rolling home but only if I could semi-permanently park it in the company parking lot!
http://www.wsj.com/articles/SB100014240527023038478045794799...
and a few articles like it. It seems the laws aren't well enforced though (probably for the better).
I took a room for ~9 months in what was originally a 3 bedroom house. It was (a) very flexible regarding the contract (b) very cheap (£400/mth). (I had to move out of my previous place, but was looking for a new job, so didn't want to commit to something that might be in an inconvenient area.)
I had my own room, and for most of the time there were 4 people in the three other rooms, age 30-40s and one at 50.
Everyone apart from me worked in the kind of jobs where you have to be in by 7-8am, so I never had an issue taking a shower. We had 2 fridges.
This was a "nice" house, in a nice area, with nothing dodgy about the contract / rent etc. In other areas there are really scummy landlords overcharging people for individual rooms, often none of them are British / western European, so they don't seem to know that there are regulations in their favour, for example for getting a deposit returned, or not paying for wear-and-tear repairs.
http://www.theguardian.com/society/2015/jun/25/overcrowding-...
https://www.rt.com/uk/312452-london-property-overcrowding-la...
http://www.telegraph.co.uk/news/politics/10863346/Figures-sh...
Citation required. None of my post-college friends are sharing a room (though many do share their apartment). Yes, rent is high, but it's not that high when compared to dev salaries.
This is skewed if all your friends are devs. The sentiment is true to my experience as far as my non-dev friends go. Many share rooms with strangers or live with their significant other.
There are strong advantages to working in direct contact, despite what sentiment on HN and logic dictates. Working in SF for a few months wouldn't make you super rich anyways.
Seems unlikely. If you're contributing, no rational company is going to suddenly cut your salary. Basically, no one cuts salaries in the U.S. unless it's a company-wide belt tightening move to stave off bankruptcy.
But my salary is well below the $140K averages I'm seeing in SF. So hire me at $160K, I'll be on site for a while, then if it's all right with y'all, I'll go back and be with my family and my productivity will be even higher!
Everything's negotiable in this world. I can see why 20-somethings want to be in the big city and are willing to compromise on their living conditions. That's always been true. But there comes a time when you just can't do that any more.
I'm a sysadmin, I could do my job anywhere with stable power and a low latency internet connection- but people insist on sticking me in a room with 80+ people so they can observe my work.
Some people do it, but at most companies the "butt in the chair employee is best employee" thing still sticks.
In the 1950s, the average New York City resident paid 10% of the income for rent. It was federal, state, and city policy to keep rents down, with new low-cost housing being built by Government agencies and insurance companies.
Even if you commute 3 times a week from Sacramento, you'd save a lot of money while still having a good social life...and 3 days/week in-person seems sufficient for a lot of dev work projects.
Having said that, Sacramento is a much nicer place than a lot of folks in the Bay Area give it credit for -- a lot of pretty, walkable neighborhoods, a lot of good cafes and bars and restaurants and "third wave" coffee places, and as you mentioned a way lower cost of living. The only real downside (setting aside the commute) is that it gets ungodly hot in the summer.
50% and more just for living seems to be to high for me.
That's why the 50% figure in SF is newsworthy.
I'm waiting for an article to break out the stats on who owns which property in these types of areas. What % of housing is owned by the government, foreign investors, domestic investors, institutional investors, real-estate holding companies, and the actual inhabitants of the property?
For all we know, the whole story could just be that tech companies are hiring some kids from ivy leagues and well-off families that are just paying rent back to their parents, who somehow or other own shares of the SF property market. Or that a lot of rent money is flowing to foreign investors, as is the case in NY and London.
So while it's interesting to see who is losing and by how much, what I'd really like to know is - who are the winners? Where is the money flowing?
Wow, had to look this up. That is one insane law.