HN Explorer

Ask HN: Who is bridging the economic divide?

2 points by FiatLuxDave ↗ HN
In the late 1950s/early 1960s, Arthur Rock brought finances from the East Coast, where the money and advertising was, to the West Coast, where a new industry based on silicon processors was developing. This was the beginning of the Silicon Valley venture capital industry.

Now, Silicon Valley is where the money and advertising is located. Venture capital expects young companies to move nearby. It seems to matter a lot who you know. In short, SV now appears to be the 2010's analogue of the 1950s East Coast.

Meanwhile, in the rest of the country, costs and wages are low. The money pumped into the economy by low interest rates has pooled in coastal cities with ties to the financial industry. Like a gardener with a clogged hose and only control of the spigot, the Fed can't fight deflation in the rest of the country without driving inflation sky-high in the financial centers. The economic divide is visible in political results, with the interior clearly unhappy with the economic status quo.

So, which VC's and startups are bridging the divide? Who is arbitraging the economic differences between inflationary coastal cities and deflationary interior? What techniques and strategies are they using? Who is going to be the next Arthur Rock, bringing money from where it is to where it is needed?

3 comments

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PaulHoule
where is 20fold based?
FiatLuxDave
Near Cape Canaveral, Florida. Seeking funding here is a bit ironic: I've been told I should move to a "tech capital" like Silicon Valley. We have plenty of high tech here, but it's funny how if you want to start a high tech company located here, step one seems to be 'start in California'.

Btw, I've seen your posts on here before. I happen to know another Paul Houle who is also a physicist, but who works with radon in Pennsylvania. I'm not sure if he's a relative of yours, but based upon my current sample set, being named "Paul Houle" gives you a 100% chance of being a physicist. :)

FiatLuxDave
Just to be clear, I'm not asking just to gripe about funding difficulties. I see a huge differential, and I would like to know what strategies are being used to arbitrage the difference. Is there something an everyday Joe can do, or do you have to be in finance? I am interested in the economics of the situation. I'm not an economist, but as far as I am aware, it is unusual to have two regions with a common currency and labor market, to have such a large differential in economic conditions. It's like if oranges sold for $1 in Florida and $10 in Minnesota, and nobody was shipping oranges. I figure someone has to be making money on the difference - how?