The Real Silicon Valley

http://jfornear.co/the-real-silicon-valley/

by jfornear • 14 years ago

256 148 14 years ago

jenoneal• 14 years ago

Hey Jesse, great post though I'm sorry to hear about your startup. If you need a place to crash, I have a spare room for friends who are starting companies, folding companies or just passing through the Valley. Feel free to get in touch anytime.

In the meantime, thought you might like this quote from a piece Michael Arrington wrote a while back:

"Some of the richest people I know aren’t really entrepreneurs. They worked at HP and then moved to Netscape when it got hot. They made a fortune and then jumped to Google and made another fortune. And now they’re jumping to Facebook.

They may be very good engineers, or sales people, or marketing, or execs. But they ain’t entrepreneurs. They’re just resume gardening and they’re really no different from everyone else.

I don’t care if you’re a billionaire. If you haven’t started a company, really gambled your resume and your money and maybe even your marriage to just go crazy and try something on your own, you’re no pirate and you aren’t in the club."

http://techcrunch.com/2010/10/31/are-you-a-pirate/

neilk• 14 years ago

You hear that, loser marriage-having people?

eli_gottlieb• 14 years ago

Loud and clear!

zainny• 14 years ago

The title of the article should really be "Are you a Broken Human Being?"

guylhem• 14 years ago

spot on.

And leave the deniers be happy in their mindless happy existence.

They may look as good or even better (richer) but it ain't the true thing.

noname1235• 14 years ago

Why be depressed? If you are young and a programmer making 100K at 25, party with your hipster friends and sock away 40K in savings every year. You'll end up with 200K by 30, not a cool billion dollar but with 6% muni-bonds, you suddenly have tax-free interest income of equivalent of $1.2 million at regular 1% CD rate.

Work on interesting projects that you want to work on. Do some traveling. Go back to grad school for fun. Learn a new language, sport or talk to girls. Go to your favorite startup or software company website and click on the mugshot of the guy who's in 40's in blue dres-shirt, is that who you want to be when you want to be?

If no, don't get on the VC rat-race; it's just as soul-crushing as the investment banker's rat-race except less lucrative.

arbuge4• 14 years ago

Eh? Having $1.2m beats having 200k any day... If 6% muni-bonds are a good investment (I personally have no idea), then presumably the guy with the $1.2m portfolio could buy them too... why is the 1% CD his only investment option?

noname1235• 14 years ago

Point is having FU money, for most people it's $3mil at today's current interest rate to generate $30K which is annual young person's cost of living in a big metro.

If you can cut your cost of living down $12K, then only $200K is needed.

fearless3• 14 years ago

Everyone knows startups are not the optimal economically rational way to make money. But to an entrepreneur, living off 6% muni bond interest is profoundly uninteresting, and dare I say soul crushing.

Repeat after me: If you think it's only about the money, you're missing the point.

And even if it is all about the money, most 25 year olds would jump at a 1% chance to make $10 million over a $100% chance to make $200K. Not mathematically rational, but if everyone was rational there would be no outliers.

sukuriant• 14 years ago

nitpick: It's a loooooooooot less than 1%

noname1235• 14 years ago

Better way to make money is to take out a personal loan for 100K, same opportunity cost of two years of programmer-salary on startups. Buy out of the money options on small-cap pharmacuetical facing FDA decisions, you have the ability to also make $10 million overnight with 30% success. Go for insider-tips to max out on your success.

sayemm3• 14 years ago

Maybe the rational way to play the game then is to make that $200K, then stretch your reach and make $1M, and so on... until you've taken care of the money problem. Then that's when you're ready to start taking shots at the big opportunities, without being motivated by money or being held back by it.

rmason• 14 years ago

Where can you buy muni bonds that earn 6%? Most of the muni bonds yields I've found online are in the 3.5-4% range.

That is unless you're talking about the city of Detroit (which is flirting with bankruptcy) that pays 7% plus and is riskier imho than doing a startup.

http://blogs.marketwatch.com/fundmastery/2010/03/12/goldman-...

noname1235• 14 years ago

Found some Mass. bonds (because it's my home state, so tax-free for both federal and state) yielding 6.43% just now, with expiration date of 2029-05-01 and with credit rating of AA+

http://massachusetts.municipalbonds.com/bonds/issue/914440KJ....

Also can also buy some REITs with annual high-dividend yield of 17% such as AGNC or NLY. These are a bit riskier due to fluctuating principal out on the open equity market. However, can mitigate this risk by owning ITM calls prior to ex-dividend dates and capture also run-up profits.

smartician2• 14 years ago

Leveraged closed end bond funds are an option to get close to 6% with the added benefit of diversification (but the disadvantage of management fees, but the 6% yield are AFTER subtracting the fees): http://cef.morningstar.com/quote?t=FCUSA0004E&ops=&p...

Personally I have a diversified portfolio that yields about 6%, with corporate junk bonds (US and emerging market), emerging market sovereign bonds, business development companies, REITs, mREITs, and international high dividend stocks.

bsims5• 14 years ago

This stock/bond chart blew my mind. The bigger question is how long high bond rates will last?

http://www.businessinsider.com/t-rowe-price-us-equity-outloo...

bsims5• 14 years ago

It is hard to tell if this is a serious or sarcastic response.

If you think Muni Bonds will stay at 6% for a lifetime, you're misinformed. 1) Government owned consumer debt is up nearly 5x in 5 years 2) Lately Muni Bonds have been swinging more than stocks themselves 3) Take Pimco Municipal Income Fund (NYSE: PMF) as an example. It's price has appreciated 7% over 10 years, TOTAL. Even with dividends you're looking at best 3% and at that point you've successfully managed to do nothing more than keep up with inflation.

noname1235• 14 years ago

I'm not buying JNK or ETF tracking bond funds but underlying bonds. If you are buying the ETF, you are not getting the best yield but at average the 3% yield for lesser risk due to diversification - which is kinda BS given the systematic risk we've witnessed over the past 10 years. Pick muni for high yield and low default risk yourself.

smartician2• 14 years ago

Given that the last ten years include the greatest financial crisis since the Great Depression, a net gain of 7% is pretty good. Plus, the annual distributions were consistently over 6%, so you're looking at a total return of almost 7% per year. That's actually pretty good.

leviathant• 14 years ago

If you think success will cure depression, your youthful inexperience is showing.

scarecrowbob• 14 years ago

Maybe off topic here, but there is a song that is popular out here in Texas that makes a useful observation (fame don't take away the pain, it just pays the bills): http://www.youtube.com/watch?v=tBjxmJIRnS8

michaelochurch6• 14 years ago

Success cures depression that is caused by lack of success or, relatedly, low social status.

That doesn't apply to most depression, that being often a serious biological problem. No amount of success will cure that. That requires psychiatric help.

It does alleviate a certain gnawing unhappiness that most ambitious people experience (unless the definition of success is raised, which it often is).

seiji• 14 years ago

Nobody has mentioned taxes yet.

I assume your "making 100K" is the salary. The pre-tax salary. Taxes will chop that pretty much in half. So if you save $40K/year, you get to live off of $10k in the second most expensive MSA in the US. Good luck.

natural219• 14 years ago

You and I are looking at different marginal tax rate tables if you're talking about US income tax.

jcdavis2• 14 years ago

This is way overly pessimistic. At 100k total taxes (Federal+CA+SS+Medicare) are in the 30% range. That leaves 30k to spend (not too hard for a single 25 year old assuming you don't have lots of student loans, even in SF) and 40k to save.

And this ignores tax-advantaged savings

mahyarm• 14 years ago

I get the impression from your post that balls to wall burnout effort isn't the key to success, so why do you do it that way?

zaidf• 14 years ago

The real Silicon Valley will never be televised.

I feel this way as well but I am curious as to why. My reasoning is that the incentives for entrepreneurs to swap dirty laundry for publicity isn't a worthwhile exchange for most entrepreneurs. I hear about how startups are extremely boring but I think people overestimate how much "fun" other professions are and how television works. It doesn't matter if 90% of a start-up is writing code like a robot; what matters is the other 10% and I think we have plenty of true, crazy stories to go around if founders had much of an incentive to play them out on air. I sure don't. I don't want my B2B customers nor investors to judge me only from the 10% dramatic part of my life.

amirhirsch• 14 years ago

author appears to be an expert in start-up vernacular.

tarr11• 14 years ago

It'd be great if the author wrote about something specific. This article contains little detail about anything that actually happened.

Wilduck• 14 years ago

Agreed. I read this:

> What Hacker News doesn't prepare you for, however, is when a competitor gets acquired for a billion dollars, work-life imbalance, and getting dumped by your World of Warcraft girlfriend.

and was pretty interested. It sounds like the start of two pretty interesting stories. Instead of actually telling these stories, however, the post descended into platitudes. I'm beginning to feel that I should be flagging posts that are as meatless as this one.

zacharyz• 14 years ago

From his site it sounds like he was a designer working on picplz and app.net. My guess is the competitor he was talking about was instagram.

timjahn2• 14 years ago

Couldn't agree more. Amazing intro and then the post hits a brick wall. I thought maybe the rest was cut off....

nodesocket4• 14 years ago

Jesse,

I completely feel your pain. I moved up to San Francisco the previous June with the grand vision of building out my team, raising a round of investment and building my PaaS for hosting node.js apps (NodeSocket) to something really special. I left a cushy director level job in San Diego and left a core group of good friends as well. I simply packed up everything in my car and made the drive up. The first couple of months I stayed on friends couches and did AirBnB, essentially living out of my suitcase, and hacking all day and night.

The trough of sorrow is deep, with extreme peaks and valleys. One day I was talking with Sequoia Capital and first tier angel investors flying high and optimistic, the next day, they are all passing, and I realized that I have burned through my entire savings.

The thing about startups is they are born easy, but die a very long and drawn-out death. I recently just came to terms, and announced that NodeSocket is shutting down (http://blog.nodesocket.com/shutting-down) to pursue a new opportunity Commando.io (http://commando.io).

Keep with it, take some time off from startups and entrepreneurship. Doing a startup is the hardest thing most people will ever do.

VexXtreme• 14 years ago

Why move to San Francisco? One of the benefits of living in this day and age is that you can start a business from pretty much anywhere in the world. Sure, it is presumably easier to acquire VC, talent and deal with general logistics if you're located in the valley but still... It's pretty obvious that leaving your job, friends, moving to a different city and living off your savings is a high risk move vs staying where you are and working from there. Not knocking you or anything (I don't know your entire story), I'm just saying.

If I were to start a company now, I'd probably stay right where I am and keep my job until I saw a level of success with my new project.

untog• 14 years ago

I think he answered the question- he was looking for funding. You can do a great many things remotely these days, but investors want face to face meetings, so you have to go to tech hubs to get them.

nodesocket4• 14 years ago

The connections, venture capital money, talent, and general startup/technology environment aside, San Francisco is an amazing city. By the far the best place I have lived. I don't regret moving one bit.

davidandgoliath3• 14 years ago

You should come back to San Diego and work with me on Fused ;)

nodesocket4• 14 years ago

Humm web hosting. Do you have physical servers in colo, or are re-selling an existing provider such as AWS, Rackspace, Softlayer?

pvdm• 14 years ago

Narcissism (Delusions of grandeur) is a psychological affliction, not a drug.

spdy• 14 years ago

Sometimes Silicon Valley looks from the outside like Las Vegas but for programmers. Make a billion dollars with an idea you have no clue about how to monetize in the first place.

acchow3• 14 years ago

> Technically I am now homeless and unemployed.

But if you can code, you could be in a 100k job with a 10k signing by Monday. That's hardly "homeless".

yen223• 14 years ago

Where are these 100k jobs that people keep talking about? Because there is no such thing where I come from.

intellegacy• 14 years ago

Silicon valley, Boston, and NYC are paying $100k for senior level developers.

Of course Malaysia and S.E.Asia and the rest of the world has a lower level of salary (except perhaps Singapore).

oscargrouch7• 14 years ago

I quit my TI job, lost my beautiful fiancee, lost my friends and came back to live with my parents, and all of this after thirty.. Im pretty sociable guy.. and had a very rich and good social life before all this..

Im living in Brazil, without access to this garden of VC funds you guys have in the Valley..

But i live in front of a beautiful beach, where i go out everyday to run, and let some stress behind me..

Im still here.. working.. penyless.. and you know what keep me moving?

is not the money i can make.. (i dont even know if this dream im pursuing will make me any rich).. but the simple fact to be able to live working on my dream.. have the possibility to not only change my life, but also the life of many others for better.. make me go everyday.. believe, work hard..

i dont know if i will succed.. but i know that the most important thing in life is to try.. to make diference.. to make this place better.. im sure theres no payment better than this..

You see, the right amount of money that we all really need, is enough to give us freedom to do what we thing we should..

So i think you need to get another sort of payment, while you are (dollar) broke.. you must be payed by your own dreams.. this may look stupid.. but when we are in the edge of our lifes, because we believe in something.. we have the ultimate freedom.. a freedom that not only can change our lifes.. but make a wave of new unthinkable possibilities become reality

Im sure that when all this im passing now has gone.. i will remember this time with joy..

Try to imagine your future you, talking with your present you.. the future you are happy? what he got to tell you..

Im here man, im a warrior and i wont give up...

If you think you have made a mistake then, go on .. and maybe latter you will try again something else.. and succed tremendously.. but deep inside we all know if we are in the right path.. Your heart will tell you this everyday.. and if thats is the case.. go on man! the world are made by the hands of the ones who didnt give up. The ones who dare to dream..

Life for game changers are hard.. and they only succed because they are harder.

Its a wonderful time for you to discover your real you, and what you capable of.. you will probably surprise yourself.. No better payment than this :)

Good luck in your path!

braco_alva• 14 years ago

This is exactly how I feel, Im in Guatemala, where we don't have much access to VC funds either.

A year has passed since we started, and we still don't have a steady income, but it is worth it, totally worth it, when I realize that I am doing exactly what I want to do, even if the odds are against me, I know I have to keep trying.

oscargrouch7• 14 years ago

I think whatever we do, we should avoid the trap of being payed to be unhappy.. we pass the most part of our living time sleeping and almost all the rest working (with little to something else, family, fun, rest..)

We should have fun in what we work, in what we do.. trying to be excited just for the profit of it, wont do..

things like; "I Will work for 3 to 5 years on this thing and then sell it(because i cant stand working on it) and buy a boat, put some chicks on it with champagne and travel the world with my fortune" wont make anybody stood still in harsh times.

faith is the engine of soul and in the end you are what you believe. by corrupting and selling what you believe, you will become void, empty, bitter..

It starts from there, money or success is a consequence

imperialdrive• 14 years ago

Well put - life, the pursuit, the lessons, and mainly all the fell good times to be had... for some reason running along the beach is something I relate to the most. I'm taking a year off after directing start-up operations for almost 10 companies in 15 years... so much learned but so nice to be away from it all too. Thinking of getting out of tech and using the people skills learned along the way to do something in manufacturing or research/education. Anyway, thanks for sharing. Good luck.

oscargrouch7• 14 years ago

Looks like you got a lot to teach.. I would be glad to listen and learn from you :)

da02• 14 years ago

Do you have a blog or website? I would like to read more of your thoughts and commentary (tech/housing/whatever).

oscargrouch7• 14 years ago

Sorry but right now, im in a "zen thing" of trying to unite my actions with my thougts, and think, and express my thinking process through the action itself..

After observing nature, i came with this uncommon conclusion, that wherever the gods my be, the creators of this whole scenario we live in, are in such a state of perfection, that they communicate with actions, with the own things they create..

If you look at a flower, or listen to a bird .. isnt a way of communication? a message by itself?

After look to ourselves, wherever we have acomplished or made... i felt i did so little yet.. what can i teach to others, does it apply to myself?

I think the fruit of a tree, tell everything about what the tree are.

thats why im more silent right now.. there some things i need to acomplish first.. that will tell more about how i think about things, even without a spoken or written word.

Theres too much noise in the world already, and all this misleading noise make people crash..

Will i produce more noise? i dont know yet.. but while i try to figure out whats real from whats ilusion , i can work on things that can act, and be used in the same way i think.

This is mind-action harmony.. this is me training myself while im in a journey..

its not just about what i have acomplished but also what i have becomed

we can exchange ideas any time you want! i prefer dialogues to monologues :)

braga• 14 years ago

Although very far from SV levels of funding, it's not that hard to find VC if you're in Rio or São Paulo. If you need any details or help, feel free to contact me.

oscargrouch7• 14 years ago

Not in Rio or SP, but in Fortaleza.. but i know that at least in the fresh start.. i will need to move, because of the workforce quality..

the project is in c++, using the chrome source code as a base.. graph database and algorithms, net protocol architecture, VM embedding.. will need help with all that.. but not easy to find people who still face this sort of chalenges

anyway.. how can i contact you?

timjahn2• 14 years ago

If this is what the "real Silicon Valley" is like, this explains why I've never had the burning desire to move there and build a company there instead of Chicago.

That and the realization that there's more to life.

shmerl• 14 years ago

Sorry for off-topic but why specifically Silicon Valley? While it has many historical technological centers and is often hyped, it's not the only possible place to open a technological startup.

suyash• 14 years ago

You need to update the photo before you speak about SV..SV !== San Francisco

svachalek2• 14 years ago

Don't ever gamble more than you can afford to lose. That applies to a lot more than just money.

pla3rhat3r• 14 years ago

The race to the "American Dream" is not a one lane road. Keep pushing. Someday your tenacity and passion will be rewarded.

jacoblyles2• 14 years ago

And nobody will ever advise you that the large cost and huge risk might not be worth it because then they would have to admit the same thing to themselves.

Have you ever met anybody that works on the weekend, even when the startup doesn't need them to, just because they don't know what else to do?

There are incredibly amazing things happening in Silicon Valley. And also lots of people burning their lives away for little reason or return. Keep your eyes open to both sides of the ledger is the best advice I can give. Be sure that what you are doing is something you truly love, and not just something you want to love or want to portray that you love for the benefit of others. And it's okay to give up and/or take a break.

eric-hu• 14 years ago

> Be sure that what you are doing is something you truly love, and not just something you want to love or want to portray that you love for the benefit of others.

Can you expand on this? How do you ever know? Whether I love what I do has been one of my existential questions for the last decade, and why I didn't immediately follow through with my CS degree out of college.

I feel like I can never know whether I'm doing something I "truly" love...but I'd like to be wrong

jacoblyles2• 14 years ago

It's fine to do something that you don't "love". But you better damn well love it if you're going to sacrifice your financial, emotional, and physical health for it like the typical Silicon Valley founder.

cabinguy• 14 years ago

Bah Humbug (please excuse me, it's just a seasonal expression). While I can feel your pain, this story has nothing to do with SV - it's the story of an entrepreneur. The same story exists in every state in the U.S. and every major city (and most small ones) in the world. Entrepreneurship is very hard.

I'm 41 y/o and bootstrapped my first internet company at 24. I owned a nice home, a beautiful vacation (lake) home, a big office building, 2 Mercedes Benz (wife's SUV, my car) & an awesome FICO score before I was 29. It all went away (except for my primary home) by the time I was 35.

As entrepreneurs we believe that the charts will always go up and to the right (we can't help it) - but they don't.

This year, after TEN (10) F'ING YEARS of working on what everyone in SV would label a little "life style business," we hit $1M+ in revenue. I am confident we will hit $2M+ next year and $100M eventually. Our company is debt free and my co-founder (and best friend since kindergarten) own 100% of the company.

My point: It's not easy. We have been working very, very hard for TEN (10) F'ING YEARS on this thing. I lost almost everything along the way...but I never, ever stopped believing in what we were building. When you hear those billionaires claim that "perseverance" is the key to success - listen to them, they are telling you the truth.

the_cat_kittles2• 14 years ago

Well said. I was struggling today with my art, and your words resonated- the truth is deeper than entrepreneurship. I realized that for the millionth time, I was expecting something to be easy, and it never is. It always helps to hear real life stories, thank you.

kposehn• 14 years ago

Well put.

mav3r1ck• 14 years ago

The whole point of Monty Python's "Dark Night" sketch was because Cleese wanted to show the ridiculousness of the statement of "always persevere".

http://en.wikipedia.org/wiki/Black_Knight_(Monty_Python)

I agree with your statements and am glad to hear you're doing well, but I think that sometimes, it is wiser to know when to stop and take a long, hard look at what you are actually best at. But at least most Silicon Valley startups don't make quadriplegics out of survivors.

jseliger2• 14 years ago

>I owned a nice home, a beautiful vacation (lake) home, a big office building, 2 Mercedes Benz (wife's SUV, my car) [. . .] It all went away (except for my primary home) by the time I was 35.

One lesson here might be to not buy the fancy, expensive stuff and the lifestyle that goes with it. I bet things would've been a lot smoother with fewer gee-gaws and more cash in the bank.

sliverstorm2• 14 years ago

Yes, ideally you should earn as much money as possible, and spend as little as possible. Money only does you any good when you don't spend it.

beambot• 14 years ago

Indeed. To put it another way: when your income variance is high, averaging (smoothing out expenses) seems pretty important -- at least, it would be to me. Calling a cavalier lifestyle intrinsic to entrepreneurs (in general) seems misplaced. It sounds more OP's individual choice.

cageface• 14 years ago

This is exactly why I'd discourage anybody from doing a startup unless they really enjoy the challenge and independence of running a startup for its own sake. If you run the odds and compare them against expected returns for a more conservative tech career it just doesn't make sense.

Personally, I did the startup thing twice, struck out twice, and don't intend to try again.

larrys• 14 years ago

I like your points in general and agree but with regard to this statement:

"it's the story of an entrepreneur."

I think there is a big difference. The life of an entrepreneur doesn't have anywhere near the echo chamber that is on the web especially with regards to tech and silicon valley (and as the OP says "Initially it was everything you read on Hacker News"). Yesterday in fact on HN there were all sorts of high fives over a list of "30 under 30" of dubious origins (no mention of the "expert" judges that picked them). PG was right up there with the congrats as well on that.

Back in the day, we had articles in Inc. Magazine (the 80's) and some people read "Entrepreneur" and there was an article here and there in the local newspaper and it was probably more about someone who worked hard then got lucky. I was actually featured in one of those articles and of course it was 7 day a week work as well as luck. But it was definitely not "hit out of the ball park" like you read about today. (I was able to buy a Mercedes at 25 iirc and that was back when they were not as ubiquitous). So there were much less dreamers and more realistic people that entered entrepreneurship then you have now.

nhebb• 14 years ago

Your comments are an inspiration, but I think they are tangential to the blog post. The way I read it, I think the OP is addressing the Bravo TV show http://www.bravotv.com/start-ups-silicon-valley. I was able to make it through about 5 minutes of the show. It's all hipster fluff and pretty faces.

gavanwoolery• 14 years ago

During any gold rush, there are a small amount of people that get rich and many who don't. The only ones who are guaranteed a small fortune are the ones who sell the tools to the miners. Maybe not the best abstraction, but in this case the company I work at does not do anything except for build products that other people ask for (namely, iPhone/Android apps). We raised $0 in capital, started as a one-person company, and grew to 10 people (a bit under 20 with our contractors) in 2 years, several million in gross revenue this year. We have no debt, owe nobody equity, and make all our own decisions (at the cost of working for the occasionally difficult client). Everybody at the company usually works 40 hours a week at most, although I sometimes do up to 80 in light of my stupidly overkill work ethic. We don't have a product, and we don't have an exit, but we are making real money at least an can perhaps bootstrap our own products at some point. (I think 37 Signals did this? Not sure...)

oscargrouch7• 14 years ago

i think the "come to silicon valley to become a entrepreneur" myth its looking the same as the 30´s "come to hollywood to became a movie star" myth..

The majority of those girls ended coming back to their little towns or showing the boobs in night clubs..

Why with the entrepreneur myth would be any different?

devgutt• 14 years ago

My reply is a little too late, but I'd like to thank you, such inspiring history...I'd love to hear more about you would do different and what would avoid.

seanlinehan• 14 years ago

Entrepreneurship truly is a roller coaster. You constantly swing from ecstasy to depression, sometimes on a day by day basis. The underlying truth is that over time this cycle does not cease; it will continue in full force. However, over time things get better. I may be an optimist, but I believe that in the long run things always get better. One of my professors showed my class a graph that described this effect, which I have recreated. [1] In the long run, an entrepreneur's lows can be better than the rest of the world's highs. That is the future we seek.

[1] http://i48.tinypic.com/20hxbbt.jpg

michaelochurch6• 14 years ago

I really wish there was a way to: (a) have the autonomy and interesting work of a startup tech founder (while a full-time technologist, not a manager) but (b) without the extreme income variance. If your job requires you to take personal loans, there's something wrong. I also think there are a lot of people who have the talent but not the ability to afford the risk.

The extreme income variance is a bug, not a feature, in my opinion. I'd be willing to sell all upside past $100 million (which would have median value of zero, but reasonable expectancy given the autonomy I'd have) in exchange for downside insurance, because I can't possibly imagine why I'd even want $10 billion.

dxbydt• 14 years ago

you are looking for a rose without the thorns:) you'd be better off with a lily ( ie. straight job at big-co/small-co, no income variance )

michaelochurch6• 14 years ago

I don't think it's an unreasonable possibility, actually. What I'm describing is an R&D like environment. There's no reason autonomy has to come with the extreme and mostly random income volatility of the VC-istan ecosystem.

It's not that I want zero income variance. How many people would want to live in that world? I don't. It's that I'd be willing to give up the upside over $50 million in exchange to never have to worry about being unable to support a family.

There has to be a way to structure that kind of insurance plan without requiring a compromise of autonomy.

SatvikBeri2• 14 years ago

There's plenty of in-between. The key concept is career capital.

Career capital is basically how much a company values you. You can more or less trade career capital for things like money, promotions, freedom, etc.

Different companies will let you trade career capital for different things. Small startups generally grant more autonomy and less cash. Investment banks will let you get plenty of cash, but all the career capital in the world won't buy you autonomy.

The mistake most people make is that they don't consciously invest their career capital. They take raises and promotions when they should really be negotiating for more freedom and interesting projects.

If you want to love your work, figure out

1. How to become extremely valuable and earn lots of career capital,

2. What you want to spend it on. There is usually a constraint in your life-feeling that you don't have enough freedom, enough cash, etc. Spend your career capital on your biggest constraints.

patio11• 14 years ago

I really wish there was a way to: (a) have the autonomy and interesting work of a startup tech founder (while a full-time technologist, not a manager) but (b) without the extreme income variance.

Bootstrap a product business, optionally with a side of consulting. It is pretty much exactly what you want.

The downside insurance doesn't work like "sell all upside", though -- it just means that it takes you N years to reach the relative position with regards to $1 billion that Mr. Swing For The Fences is on day 1, but when that day arrives, you'll have five or six figures of recurring income in your back pocket.

majani• 14 years ago

The closest you can get to that is a consulting business.

SeoxyS• 14 years ago

If you're buying into the Silicon Valley hype, and then get disappointed, you're doing it wrong. Silicon Valley is not a place that's amazing a first, and then awful once you fail. It's simply a place that happens to have the highest concentration and best resources for building tech companies.

Ultimately, though, surviving Silicon Valley comes down to one simple rule: don't build stupid shit. Work on a business, get revenues from the start, and don't fall into the trap of trying to build an Instagram.

Frankly, most of the stuff everybody here is working on is idiotic. The business models & grand vision plans people come up are ridiculous. With a little more care for building things that are actually useful and that people will pay for, we'd have much less "blew my life savings trying to make a social network for pets and am now homeless and girlfriend-less" stories.

onedev• 14 years ago

I agree. I hear about a lot of "companies" here trying to do stupid shit, and I can't believe that they can't see what I see.

Instagram for pets, Pinterest for gardeners, what's next?

oscargrouch7• 14 years ago

I think this is a "Show me the money" effect.. People read news about 1B instagram deal.. and think about doing something similar.. to become the next startup billionaire

I think this is not the right reason.. you need a lot of emotional background to support you when things get ugly

entrepreneur are masochists, they have fun doing it.. this billionaire wannabe with the silly idea, won't stand still

agorabinary• 14 years ago

I could not agree more. I wonder how much of the SV environment is created from the trickle down investments of legitimately good ideas --- that is, a Facebook spawning thousands of millionaires, some of which happen to invest in their brother's friend's silly idea not out of any rational analysis, but from just being young and stupid and lucky enough to grab up a few early FB shares.

Furthermore, consider the difference in building a startup and building a typical brick and mortar business. Think of how simple the thought was to create a social network where users choose friends to create a distinct social circle. Or Drew Houston allegedly conceiving of Dropbox by repeatedly forgetting his USB drive in college. Very many SV startups build themselves off of some eureka moment that, being based on the internet, requires minimal investment, effort, connections, and reputation to establish early stage. Then, as long as it is a good idea, investment and employees flood in. Compare this to the enormous barriers of entry extant in a traditional brick and mortar with the bank loans and industry connections and disparate business resources, and combined with a barely-out-of-college aged potential CEO with or without good ideas. You get two entirely different standards of discrimination. It almost seems sometimes like SV considers bad ideas as a normal state of affairs, as a "learning experience" to future brilliance. Fail to succeed? Most successful startup founders hit it right on their debut--- why? Because they have a mentality of, "Should I do this?", and not merely, "Can I do this?".

I'm not saying low barriers to entry are necessarily a bad thing. It just seems like either there are one, a lot of fools with grand visions or two, ulterior-minded entrepreneurs looking to pad their resume or impress their friends with some social networking rip-off that only cost them $10k to build. Bustling, metropolitan environments often offer that billion dollar jackpot or Hollywood walk of fame, but require in turn a more demanding degree of discrimination to tell that shiny metal from mere fool's gold.

fudged713• 14 years ago

How important is this concentration for modern technology, anyway? Do flights to SF not make up for this in terms of meeting investors and other contacts?

And sometimes I feel like the SF filter bubble is harmful. There are niche markets around the world called "cities not named San Francisco". I know that where I live, there are no good quality websites for local services or other keen initiatives. Many of the SF "Failures" could easily kickstart themselves in a town like mine, I think.

spitfire• 14 years ago

So is there anywhere people outside the US could watch this silicon valley show? I'm curious but can't find a source that doesn't block those outside the US.

phatbyte2• 14 years ago

I advice everyone on HN to view this video:

http://www.youtube.com/watch?v=8nif01WZ9aI

Maybe this won't change anything, but there's more in life than just getting funded with millions of dollars. I feel pretty bad for people who get depressed or worse because they didin't made it in SV...that's so superficial about life and things in general. Do we all really need millions of dollars and IPO to be happy and be considered "successful" ? What does that even mean ?

Do what you love, that's my advice. My girlfriend is a nurse and when people are in their dead bed, she said that the thing most people regret is not doing what they loved, spend time with their families, going on trip around the world. And that hospital is used mostly by high class people, with lots of money.

martinced• 14 years ago

My only regret on my dead bed is going to be to have make the world progress faster than I could have.

I've writing technical books helping to share knowledge and that's the one thing I feel the most proud about. I won't regret having brought my contribution to sharing knowledge.

I love my family, but I also love my work. I love R&D. I love trying to create something that shall help people. I'll never ever have any regret about moving to California (not there anymore) and worked there like crazy for someone else's startup.

Then "success" has never been measured only by money: there are very succesful non-profit organization out there. But people are typically working hard to make them work too.

It's not about "making an IPO" or "getting rich". It's about "making a difference".

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."

phatbyte2• 14 years ago

I got nothing against people who pursue that, I speak against myself on my first post. I also want to create something that makes a difference, I want to generate value and create something meaningful for other. But I would never replace my dream with all the other things I love in life. In the end the balance will always be negative for me.

With this said, It doesn't mean I aim low on things I want to achieve, I just thing balance is the correct path to have in life.

hnriot• 14 years ago

Real life is seldom like a tv show. I don't think this should be news to anyone. I bet physicians don't like Grey's Anatomy either.

While I'm sorry things didn't work out for you, I don't see this as anything to do with this area. Your story is one that is playing out all over America in this economy.

peripetylabs• 14 years ago

I read countless horror stories before launching my own startup, without hesitation. If your goal is to do what you love, and hopefully earn a living from it, you have my sympathy; if your goal is to get rich quick, well, that's always been a fool's game.

The Real Silicon Valley

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