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LA Times Examines Silicon Valley
Richard Finney writes "The Los Angeles Times has a special section on Silicon Valley. Most of the stories focus on the 'survivors struggling through the toughest stretch in tech industry history.' There's also a story on
Five Reasons to Hope -
New technologies that may help Silicon Valley rise again: Biotech, microsensors, nanotechnology, flexible electronics and data mining. We'll see."
Tech boomed, then bust. It happens. It'll happen again. Move on, do something worthwhile, and quit whining about it already.
You have to realize that the PC boom didn't segway immediately into the Internet boom. Nor was the period between the two a time of consolidation before change in focus. Indeed there was no directed change in focus at all, it was an organic market driven shifting toward e-tech.
The difference between the period of time between the PC boom and the Internet boom, was that the hardware of the PC boom was a springboard for the Internet boom.
I'd be hard pressed to come up with more then a handful of examples where new types of hardware was needed to drive the boom. Of course the increase in processor speeds, and other changes in the tech can't be dismissed out of hand, but these were incremental increases in technology, not true advances.
But with the five items mentioned in the article, with the exception of datamining, require great strides in research before they become truely feasible as the focus of a new boom. Nanotech is still five to ten years away before it's first truely practical uses, as even the most ardent proponent will admit when pressed.
These are hardware advances, and thus we face a slow march toward the next boom, waiting for advances in research and technology.
http://www.santacruzbynight.com/index.shtml Santa Cruz By Night Vampire Larp
In spite of the downturn, the cost of living in Silicon Valley is still way too high. A typical mortgage on a modest three bedroom house (typical middle-class, nothing fancy, under $200K in Omaha) can easily run well over $3000/month in Mountain View. There is absolutely no affordable housing within reasonable commuting distance. The bottom line is that anybody who would consider re-locating to Silicon Valley for fewer than six figures is insane.
Is it important? Is it relevant? Haven't we learned that the power of the Internet is that a design team can be geographically dispersed and still productive? There is still the issue of multi-billion Fabs in the valley, but the people can be anywhere. (probably for less money in Iowa, than in San Jose)
'ta
One of the quotes mentioned above was "survivors struggling through the toughest stretch in tech industry history" - and frankly, this is the wrong way of looking at it.
When I first became interested in Silicon Valley was back in 1980 - back when the valley was a syntonym for technical innovation, the idea was
1). go to the valley
2). make an innovative product
3). Sell product to VC for millions
4). Start all over again.
But the principle here is that it was driven by technical innovation - and turning this innovation to product. Heck, my idea, which was revolutionary 23 years ago was the idea of creating a color lcd TV (Hey, don't laugh, back then, we only had black on silver lcd's, and they bled if you touched them).
But once the internet took off and became what it is today (which was helped by some the valley innovation), people started to look at the valley differently. First - way too many people saw the valley as only internet and computer technology. Second - they viewed running a web site as technology. Having a bunch of dot com startups all based on running web sites and services is not technologically innovative. Third - people fell into the falacy that because there are millions of computer users/internet users, that if they could create something and sell it to 1% of that market, they would make millions.
At this point, it was not about technical innovation or creating interesting and useful products, but it because how fast can we whip something together. It is easy to see why so many dot coms failed. What is really surprising is that so many VC's fell for the trick.
The 'natives' of the valley are still doing the same thing that they have done for years - innovative research and product development. And the products that are eventually produced from this research will be revolutionary. The biotech and nanotech products that people are working on will be revolutionary.
But all of those pretenders that jumped on the internet bandwagon AFTER the techology was already out and in use were just the pretenders that never belonged their in the first place.
Now that they are gone (well, most of them at least), the valley will continue to do what it has done for decades.
"Microsoft has made computing accessible to a population who would otherwise not be able to use computers" - B. Kernigha
That is, until all the jobs get outsourced to India where there are millions of over-qualified people willing to work at slave wages.
I'm graduating with a BS in CS next year, you think I'm all that optimistic?
Feh. Both of these concern me.
:(
Data mining concerns me to no end because it's designing an industry around invasion of privacy. If ever there were a volatile industry, that's it.
Now, even if the above were to cause more IT/IS people to regain employment, re-employing yourself back into a volatile position is barely an improvement, the part that improves is that you get a paycheck for a while.
I count myself lucky, as I had family cross-country, and I was able to find a job near them and just dropped everything and moved to get a job. I feel for those who have not been so lucky, and if anything will incur my wrathe it is those breeding hopes based on things that are not stable.
Karma: Chameleon (mostly due to the fact that you come and go).
And the economic results of a bubble are devastation -- at least, they always have been. Japan went through a bubble in the late 80s. It started to pop in around 1990. 13 years later, they are still suffering; in fact, their stock market, the Nikkei, just hit a TWENTY-YEAR LOW and it's STILL going down. Bubbles create hangovers that are far worse than their preceding highs, and EVERYONE suffers from them, not just the people who benefited from the bubble. The last bubble we had was in the late 1920s, and its bursting resulted in the Great Depression.
Folks, Silicon Valley will not return to what it was. In terms of real purchasing power, salaries will not return to what they were in your working lifetimes, and maybe never. Tech is already suffering from a true Depression, and the rest of the economy is most likely headed there too. We had the biggest bubble in the history of mankind, and if past experience is a guide, we will go through the biggest bust in history as well.
The Fed has cut rates faster and farther than they ever have in their 90-year history. Money is flooding the system via easy credit and a bubble in mortgage finance. We are at 40-year lows in interest rates..... and STILL the economy is failing. States are in the worst fiscal crisis "since the Great Depression" (their words, not mine.) Layoffs are rampant, stores are closing, bankruptcies are steadily rising -- and that's BEFORE the spigot of much-too-easy credit is closed.
The Great Depression left deep scars in this country, and a profound fear of credit and debt. Unemployment rates were around 30%. Healthy, strong men were living in cardboard shacks in great numbers. (which were called Hoovervilles, as people blamed Hoover for the Depression. This wasn't even remotely the case; the Depression was caused by the vast excess and waste of the 20s, not the little bit of nothing that Hoover did.)
The bubble we had this time was far larger, and encompassed much more of the economy... in fact, it sucked the whole world in. Likely results of the ensuing bust left as an exercise for the reader. Hint: it's not going to be fun.
A final suggestion: "buy and hold" is a good recipe for going broke in this environment. Wall Street has indocrinated everyone about 'buy and hold', but remember that they are trying to sell you something. These were the clowns giving you $500 price targets on Amazon. Do you REALLY trust them to manage your retirement savings?
From 1930-1932, the Dow lost over 90% of its value. The Nikkei, from 1990 until now, has lost about 70%. This is not a good way to save for retirement.
--the article to me split it right down the middle. What the author found interesting and I guess exciting in some of the cases I find horrible. Wasp sized flying surveillance drones? Umm, no thankew. Universal data mining? I'd like to pass on that. Smart dust? Tracking chips for all products, and then humans-the "little kid wandering more than 50 feet away from mommy"?
It's like no mention of the abuse potential here. I don't think that should be ignored, we have as humans ignored that in the past, to continue to do so will most likely result in planetary suicide. It's a variant of the short term profits mentality.
This could just as well been in the "how to make science reading more enjoyable" thread. It's a great example of something "close" but no seegar. I would have liked this article better if it was balanced better, show what is promising and the relative merits of it, as opposed to the obvious dangers of developing it without having a grasp of modern social paradigms and realities.
I think humanity needs a bitter reality pill-our hard science is advanced,and advancing much faster than anything else,but our social science is woefully inadequate to use our hard science advancements without abusing it. this isn't a theoretical world, nothing is pure science, you have to always consider the implications of what you are doing. It's like driving a car, really, a simple analogy. You can build a car that goes 200mph, but without some societal norms and without at least a minimum set of rules that are easy to see make some "common sense"and that are followed by most people, the potential for abuse would make universal adoption of the 200mph car a disaster on the roads we have and with the people we have now.
I guess I am a moderate, neither a luddite nor a "build all we can now, now, NOW!" kinda guy.
Hope this makes some sort of sense. When I first read 1984 it seemed farfetched to me, today, all I have to do is go to any large city and it's close, real close. I look at the headlines, the "robotization" of warfare, the reduction of humans to "collateral damage", the impersonality and reduction of the value of LIFE itself to just another commodity, well, it's scary. Then I read an article like this, and I think "heck, we are a year or two away from it being totally "1984" except with a turbocharger and on steroids.
Can we deal with as humans? No idea, I have serious doubts at this time though.
I think that your answer typifies the problems that lead people to believe that the valley is dead.
Having your MCSE and Cisco certs doesn't mean anything other than you can study for a test where you know the questions going into the test. It has nothing to do with quality of coding. And being a good coder doesn't mean that you are able to create revolutionary technology that will transform an industry - it means that you understand the symantecs of a language and can solve problems within that language.
What drives the valley are those who are innovative and visionary, those who can create revolutionary technology. Look back to early Apple - Jobs and Woz. Jobs was the visionary and Woz was the brains, and together they created what was revolutionary. No one looks at these guys and says "gee, they were good coders who had good certifications". That kind of thinking is what caused people to believe the valley was dead and why the valley has far too many unemployed deadbeats. Too many coders with certs moved in and didn't realize that they didn't have the chops for what it really drove the valley to greatness.
"Microsoft has made computing accessible to a population who would otherwise not be able to use computers" - B. Kernigha
The valley is too overpriced. It doesn't have that "thinking out of the box" culture anymore. Its more of a consumer-oid culture. My company has an office out there and its strange to walk around.
I think some lean, smart and hungry types will burst ahead - but it will not be in the Valley. Hopefully it will be in the USA but it could very well be in India or China next.
"Very good coders" are not in short supply, and in the Bay Area, an MCSE or Cisco certification is as illustrative of potential value to a company as, say, a driver's license. Same goes for quantity of resume buzzwords, which only carry a premium when hype is king, which now unfortunately it is not.
The start-ups doing best in this are lean (principals and architects only) and outsource a lot of work to places like Bulgaria and Bangalore.
The people doing best in this area have breadth, depth, experience building services, experience shipping products, experience managing teams, communication ability, and of course (of course), connections.
And those of us who meet the above criteria but don't have 6+ figures in the bank (from either prudent savings or a stint at a dot-com that actually went public), well, we are still pretty nervous.
Housing prices are finally starting to come down to earth though, and knock on wood I'll be able to buy a 1600sq.ft. 3/2 house in a relatively nice neighborhood in Sunnyvale for less than $550K come summer.
There are no karma whores, only moderation johns
You want chip specs? You download them as .PDFs whether the company is in Sunnyvale or Moscow. You need to ask a development engineer something? You email or phone her whether she's in Santa Clara or Austin, TX. You want programmers? Start here or anywhere.
You want industrial capability near a major university campuses? Lots of that going around these days.
What's left in the Valley for us other than overcrowding and expensive real estate? A chance to hang with over-the-hill high-tech zillionaires? A chance to see industrial parks that look like ghost towns? (no URL, this is based on a friend's e-mail from 2 days ago) All I can really think of is tradition, and that's not something that will help anyone crank out code or improve ROI.
It has some cool high-tech museums. Perhaps the whole area should be declared a "historical monument" to make it official that progress will be coming from somewhere else from now on.
The place for a startup (unless you really are doing nanotech, in which case, why are you here?) is where there's cheap high-quality bandwidth available. The way that gets delivered these days is via CitiLEC... the window on this was closed by the state legislature in exchange for campaign cash from cable companies and telcos, the local power company had their chance to do it themselves and blew it. If I wanted to do a startup in California, I'd look at the City of Alameda (next to Berkeley and across from SF), whose muni power company has rolled out fiber to the home/business... or even the part of LA served by Los Angeles Water and Power.
I'm an ex-resident, I left after the high-tech boom led by the Commie 64 and Apple II... and I can't think of any reason why I'd ever start a company there.
Tech Public Policy stuff
Might I point out something else as well...
What saved us from the Great Depression?
World War.
The grim reality is that the World Wars are what turned the American economy around, and might I be so bold as to say that just about every time the US economy has struggled, it has been war that has turned it around.
That being said, thing long and hard about Bush's motivations re: Iraq.
I actually have no qualms with Bush's arguments. I hate sending people into harm's way, but better we lose some life taking nukes away from Saddam than losing many thousands getting nuked.
But I would be hard pressed to say that the economy isn't a motivator either. Bush Sr. started the recovery from the last recession by starting the Gulf War.
Just a lone opinion.
Karma: Chameleon (mostly due to the fact that you come and go).
Apple was founded by two people with remarkable talents, but they needed highly skilled people to help them fulfill their vision. Companies are built by people with a vision and drive to see that vision come to fruition. They must have a great team of people to help with the building.
What the Valley and tech sector in general are missing is... wait for it... Vision! Microsoft has kicked real innovation in the nards. Microsoft is completely into innovating Microsofts stranglehold on the consumer and business computing environments. What innovations are coming in the near future? Maybe another niche product that runs on Windows you say? The problem here is that too many "tech" people now have windows-tunnel-vision. Their products are conformist with the Microsoft vision and increasingly drab. Very little that is new and exciting, which is what makes people want to spend their money and therefore create jobs for those tech people to work in.
This is just a brief summary of what is currently wrong in the American tech sector, so pick away. It is by no means complete.
Kindness is the language which the deaf can hear and the blind can see. - Mark Twain
We see case after case of Dot-Com companies folding because they can't afford to locate their offices in San Francisco, Silicon Valley, Los Angeles, etc. Property taxes throughout the state are through the roof, environmental "taxes" are stiff, all for who's benefit? The politicians? It sure isn't the stockholders...
How about all of these tech companies consider kissing the "Silicon Valley" goodbye by moving out of California? I don't understand why on earth these corporations, much less the citizens, put up with the excessive taxes in CA. These companies have lost their shirt, and now have a chance to start over. Why not start over in a location where your company has the opportunity to cut their costs?
As sad as it is to say, this is not a problem with the tech industry. This is a problem with American society in general. No one actually values innovation, intelligence, or creativity. They value the money those things can get them. So, when it comes time to cut corners at the expense of quality, there are no tears shed. The execs line their pockets with a few extra dollars and everyone else gets the shaft when things start to fall apart.
I blame this on a fairly stupid and extremely greedy general population. Greed drives them to forgo their intelligence in place of an easy dollar. Greed drives them to believe the lies of shady execs, who themselves are just smart enough to capitalize on others' ignorance. Greed leads them down the path to bankrupcy, all the while banking on some manipulative joker's get-rich-quick version of the American dream. By the time they get to the end, they're holding onto ten grand in credit card debt, a house, and a car payment, wondering why everything went wrong.
If you're one of those people, here's something to chew on: Sillicon valley went wrong because you never thought about what the hell you and your company were doing. You didn't really care if what you were doing was useful or could stick it out in the long-term. You had your dumb eyes on the IPO and it made you blind to the fact that you were living a lie. Do I feel bad for you now because you can't get a job? Hell no. You had no skills and and you had no good itentions, you just got lucky.
Instead of trying to get lucky again, why don't you actually get off your ass and do some real work?
Data mining isn't just about invading privacy. Data mining is also about "mining" data out of existing databases. When you have a huge enterprise database with thousands of tables and millions upon millions of records... all of which have been added to over the past 20-30 years... There are bound to be all kinds of interesting relationships that have never been discovered. Data mining may be rearranging relationships to better suit the reporting that you want to do TODAY instead of 20 years ago... or writing reports that display data in a novel and interesting way, maybe seeing a correlation between two things that you had never expected... That isn't an invasion of privacy, that's just using the data you already have in a different way.
Five Reasons to blow you life savings.
Exactly, in fact the first and primary reason has nothing to do with technology at all. It's about remembering that there are types of people who will infiltrate any industry, no matter how beneficial that industry is to mankind, and sell everyone short just to make a buck in a hurry.
Best case in point is Lucent Technologies. Lucent was a spin-off of Bell Labs, and represented some of the very best and brightest in the industry. The corporate culture was one of innovation, and progressive technologies.
The company is now a smoking crater. Largely due to wholely irresponsible internal fiscal management. This was a great company, with a history of producing highly innovative products and services. Most of that has been irrevocably destroyed.
It's a story of a few greedy, self-serving people at the top of the organization selling out the lives, careers and dreams of the thousands of technicians and engineers that comprised the company in its best years. One could argue that "stock options fever" is in part responsible for creating an environment like that...but I'm hoping that we've all suffered enough from that delusion to ensure that it doesn't happen again any time soon. Real products, for real people, in the real world....and hopefully real accountants to make sure things stay that way.
*crosses fingers*
The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky
When I moved to Newfoundland in the spring of 2000 to get married to my Canadian wife, I was paying $1275 a month to live in a 2 bedroom house with a one car garage and a tiny front yard. It was half of a duplex.
I'd lived in Santa Cruz for fifteen years, but I didn't plan to return because the place had got so crowded. I could afford the rent at the time, but what really got me down was that it would take over an hour to drive across town between 3 and 6 in the afternoon. Coming home after work on highway 17 from the valley was maddening - and the main reason I became a consultant, so I could work out of my home.
After our wedding, we decided it would be best to be back in the US but Bonita wanted to live near her friends and family. We decided to buy a house in Maine.
Neither of us had ever been to Maine before we came house hunting. We picked the mid-coast Rockland area out of a tourist handbook.
We ended up with a four bedroom house with an oversized 2 car garage (it has 3 small rooms to the side) on nearly 2 acres of wooded land.
And how much does it cost me? Prepare to puke. The mortgage is $799 a month.
I think the loan officer was a little taken aback at this dot-commer from california coming and wanting a loan to buy what is a pretty upscale house for the area. But from my point of view, it was dirt cheap.
Things got a lot harder for us after the collapse. Many times we've wondered whether we did the right thing to buy a house, and to be away from Silicon Valley.
But only one of my clients have been from the valley since the collapse, and I have saved enough money from what I used to pay in rent on my old squalid hut to pay back the thousands of dollars that it cost to get a moving company to bring our stuff here. (We had it all in storage while we were living in newfoundland.)
I do OK because I work as a consultant for remote clients. There's not a lot of software here, mostly big-company IT stuff. There are a couple of chip plants in South Portland (Fairchild and National Semiconductor.)
I recently had a job interview where I would have had to move back to California. I'd been thinking of giving up consulting.
Before the interview I used a spreadsheet to calculate the salary I would ask for, adjusting the money I made last year upwards to account for the higher housing prices in the Bay Area.
When we discussed the salary, I explained that my request was based on the higher housing prices out there, and I told my interviewers what I paid for a mortgage out here. I planned to rent a considerably more modest place if I took the job.
They were pretty taken aback when I gave them the number. They said it was far more than they could pay, and that they had lots of candidates who would work for much less.
So I guess I'm going to continue being a consultant from Maine.
I feel really bad for everyone who's stuck in the Bay Area still paying those exhorbitant housing prices. Being out of work with a $2k/month rent bill just has to suck.
I probably wouldn't have made it through the last couple years if I hadn't moved to Maine.
Request your free CD of my piano music.
>Having your MCSE and Cisco certs doesn't mean anything other than you can study for a test where you know the questions going into the test.
unfamiliar with the CCIE i assume?
Silicon Valley is now in India where the market is thriving as American employers move their operations oversea's to cut costs. Infact Sun and Microsoft are estimating that the current market will triple as more companies view IT workers as inexpensive and unimportant commidities that need to be valued down at any cost. It seems we are now viewed as or valued as an equal to a highschool dropout who works at Mcdonalds and should be paid as such.
After all the CEO's do the real work and we should be on our knees and begging for forgiveness to live in poverty like our fellow Indians. Microsoft and Sun are laying off programmers left and right and replacing them with cheap Indians working for less then minimal wage. Even Chinese programmers are viewed as too expensive and its getting rediculous.
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