The Slaves of Technology
Posted at 11:08h, 29 Mar 2016 in List Archive by Bonnie Halper No Comments 135 Likes Share

We keep seeing articles about the rise of tech hubs outside of Silicon Valley, and the growing number of accelerators launching in some of those newer hubs. One reason why: tech talent is fleeing Silicon Valley and according to Entrepreneur, there are 3 Reasons Tech Workers Are Fleeing Silicon Valley:

  • Not enough affordable housing.
  • Family life.
  • Less competition for jobs.

Of course, it’s really one point, when you get down to it. Between the high California taxes, outrageous rents ($250K Per Year Salary Could Qualify For Subsidized Housing Under New Palo Alto Proposal) and mushrooming number of H1B visa holders taking jobs formerly filled by American-born workers, meaning that American-born workers would have to take a considerable pay cut to compete with the auslanders, it’s all about quality of life. As a recruiter, we will honestly tell you that salaries for tech workers haven’t significantly changed since the ‘90s, despite the fact that the cost of living has risen considerably in the venerated tech hubs – specifically, Silicon Valley and New York City – and rent/home ownership costs have skyrocketed.   And lest we forget, “…More than 80 percent of H-1B visa holders are approved to be hired at wages below those paid to American-born workers for comparable positions,” according to Mother Jones.

Former Intel chief and Silicon Valley icon Andy Grove died last week and a good time to remember Andy Grove’s Warning to Silicon Valley. ‘According to Mr. Grove,” says the article,  “Silicon Valley was squandering its competitive edge in innovation by failing to propel strong job growth in the United States…. Silicon Valley misjudged the severity of those losses, he wrote, because of a “misplaced faith in the power of start-ups to create U.S. jobs.” … But just as American companies have bolstered their profits by exporting jobs (or hiring H1Bs), many now do so by shifting profits overseas. “… All of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability — and stability — we may have taken for granted,” said Grove. Silicon Valley and much of corporate America have yet to live up to that principle.’

But as we’ve said before, entrepreneurs are a scrappy lot, and they’ll move to where the opportunities are, and maybe to where the living is easy. Or easier.

And they’ll make their own opportunities.

“Silicon Valley has become a “monocrop” culture where entrepreneurs are well-educated, have frictionless access to capital, and have their basic needs taken care of. The majority of resources today are going to entrepreneurs whose lived experience is in well-off, well-connected cities,” said Ross Baird and Lenny Mendonca (Silicon Valley’s Unchecked Arrogance), and goes on to warn that “there is a problem with monocrop culture: ultimately, you deplete the soil.”

It should be interesting as Silicon Valley’s developer brain trust moves to the tech outliers and outside of a culture that caters primarily to the entitled – and where a good deal of one’s time goes to making rent or mortgage payments, becoming slaves of technology and basically accomplishing little more than what amounts to running in place. Now that the current crop of developers are looking to buy homes and start families, despite all of the perks, Silicon Valley is not addressing their needs, especially in an era where exits taking longer and longer, and IPOs are an increasing rarity, and by the time the exit does come, chances are early employees’ once potentially valuably equity has been minimized, and it’s the few at the top who really cash out. Sarah Haloubek gives an excellent breakdown on who really wins and who really loses in the startup world, reminding us that “wild successes feel good for staff. But most only receive a small to medium check. For most, they still would have made more, exit check included, working at an established company.”

It’s hard to jump on the successful tech startup bandwagon when you’re stuck on a treadmill.

And there is life – and new solutions to problems, solutions that have yet to be developed – outside of the major tech hubs. Uber started as a uniquely urban problem: in NYC, how do you get a cab during inclement whether/rush hour when there are a finite number available – a number that hasn’t changed in a century, despite the fact that the city’s population has – or in San Francisco, where one doesn’t simply raise one’s hand, and a cab magically appears?  Like most disruptive startups, it arose from a personal need/experience that addressed a far wider reaching problem – one that may not necessarily exist outside of urban hubs/tourist centers. As the Silicon Valley developer brain trust moves beyond the large urban centers, it’ll be interesting what problems they will encounter and address, as a result of a new and previously unknown/unaddressed set of personal experiences.

On the other side of the coin, ditto the glut of H1Bs who are currently being trained in Silicon Valley, many of whom will return to or rotate back to their native countries, and who do and will continue to develop technologies outside of the purview of the SV tech overlords. We already see it happening, if you’ve noticed that investors more and more are looking at tech that’s developing in other countries, some of which is courtesy, no doubt, of the myopia of the West Coast based tech overlords who have been training their future competitors for a while now, and thanks for playing. One thing is certain: there’s no doubt that it’ll be interesting to see how this all plays out and what develops – literally – as we move onward and forward.