From Bezos to Walton, Big Investors Back Fund for ‘Flyover’ Startups(nytimes.com)
nytimes.com
From Bezos to Walton, Big Investors Back Fund for ‘Flyover’ Startups
https://www.nytimes.com/2017/12/04/business/dealbook/midwest-start-ups.html
159 comments
Energy is the more likely candidate for large-scale startup growth in TX than weapons based start-ups. The energy industry has obviously been important to TX for a long time, but the state of the oil industry creates a gap for new players to fill, either by 1) further automation in the oil industry to improve margins in the face of low oil prices, or 2) embracing the rise of renewable energy tech in a state that has incredibly high renewable potential (solar, wind) and demonstrated investment.
Wish this would accelerate. The Bay Area seems incapable of fixing its problems. Just read an article like this one, and you know we're hosed for a long time to come.
https://nyti.ms/2kfuPVl
https://nyti.ms/2kfuPVl
I ran a remote web agency for years and sought talent in flyover states. I found employees who were just as talented as those out here in Silicon Valley but just preferred where they lived.
A modest Silicon Valley salary was typically well received since their cost of living was usually much lower.
A modest Silicon Valley salary was typically well received since their cost of living was usually much lower.
A region where modesty (especially monetary) is highly valued and the region consistently comes in last for VC funding..
https://www.citylab.com/life/2016/02/the-spiky-geography-of-...
The agribusiness sector imports huge amounts of immigrant talent far from the coasts. If you're a potential immigrant in tech, you might prefer San Francisco over Omaha but if your potential employer is in Omaha, you're probably going to pick it over staying at home.
Except that when any of these companies starts getting successful, they always find that they need to move to a more startup-friendly area in order to get to the next level. (see ModCloth, for example).
The other problem is that venture money wants "lottery tickets" rather than "sustainable businesses". This is a real problem because there are lots of businesses that cannot access startup capital because they don't have a "10x" story. Causing a large funding increase for "sustainable businesses" would employ far more people than generating one or two new unicorns.
The other problem is that venture money wants "lottery tickets" rather than "sustainable businesses". This is a real problem because there are lots of businesses that cannot access startup capital because they don't have a "10x" story. Causing a large funding increase for "sustainable businesses" would employ far more people than generating one or two new unicorns.
I'm not familiar with ModCloth but I looked them up and they have Engineering positions open in Pittsburgh (as well as SF).
Lots of companies follow the Israeli model: sales and money raising in SV, engineering elsewhere.
Lots of companies follow the Israeli model: sales and money raising in SV, engineering elsewhere.
MailChimp has built a huge business in Atlanta, likely closing in on a billion a year in revenue.
Tableau is a billion-dollar business in Provo, Utah, and is not the only big winner there.
Dyn built a half billion dollar business in Manchester, NH.
Nothing can compete with San Francisco—three of the biggest five tech co's are HQ'd there. But there's really very little keeping entrepreneurs from building a billion-dollar business anywhere, provided there's a decent university nearby.
It is MUCH, MUCH, MUCH harder to get funding, but if you can bootstrap, the world is your oyster.
Tableau is a billion-dollar business in Provo, Utah, and is not the only big winner there.
Dyn built a half billion dollar business in Manchester, NH.
Nothing can compete with San Francisco—three of the biggest five tech co's are HQ'd there. But there's really very little keeping entrepreneurs from building a billion-dollar business anywhere, provided there's a decent university nearby.
It is MUCH, MUCH, MUCH harder to get funding, but if you can bootstrap, the world is your oyster.
The big thing is having access to a big university, where students who attend that university want to stay local. BYU students are attracted to Utah, Georgia has enough universities that produce graduates who want to stay in state.
However, we aren't seeing the same happen with UIUC and the state of illinois or University of Michigan with detroit.
However, we aren't seeing the same happen with UIUC and the state of illinois or University of Michigan with detroit.
Tableau isn't Provo based. You are probably thinking of Qualtrics.
I live in SV and love the quality of here. Honestly though, the situation for early stage startups here is becoming untenable.
My theory is the following:
- Seed money is drying up (there's legitimate data to support this) because it's all being saturation in Series Alphabet companies that are all raising on legitimate growth or legitimate track records (but with zero growth and very good connections).
- The housing situation is atrocious, and the tech scene is getting older (read -> having kids).
- This means employees are saturating towards Google/FB/Apple/etc because that's the only thing you can afford to do in the bay area. When you can afford pay hundreds and thousands of developers $500k all-in packages because your yearly profits alone can sustain the whole of the bay area (looking at you Apple) then it's almost impossible to compete for talent in anything that isn't Google/FB/Apple/etc or a Series Alphabet with strong capital.
- The rest of the world has learned all of the failures and lessons of SV and caught up. And yes all of the "inbound content" you created was free consulting to the 5 man shop running out of Madison, WI who is now competing with 3 man Stanford drop-out of the mid 2000's.
My bet is on this fund and other similar funds, like the middle market PE funds in tech (PSG, KKR, GSV, etc), Indie.vc, Venture for America, etc. This is the next big horizon in money making tech investing, not the next Instagram...those days are over.
It's amazing how many tech companies no one here has heard of but are making very legitimate money and are based in very unconventional locations. Tampa Bay, Minneapolis, Charlotte (and the tech triangle), Knoxville, Orlando, Atlanta, Provo, Boise, St Louis, Denver...you name it. I think we're gonna see many more Bandwidth.com's, MailChimps, Kabbage's, Outcome Healths, etc in the very near future.
My theory is the following:
- Seed money is drying up (there's legitimate data to support this) because it's all being saturation in Series Alphabet companies that are all raising on legitimate growth or legitimate track records (but with zero growth and very good connections).
- The housing situation is atrocious, and the tech scene is getting older (read -> having kids).
- This means employees are saturating towards Google/FB/Apple/etc because that's the only thing you can afford to do in the bay area. When you can afford pay hundreds and thousands of developers $500k all-in packages because your yearly profits alone can sustain the whole of the bay area (looking at you Apple) then it's almost impossible to compete for talent in anything that isn't Google/FB/Apple/etc or a Series Alphabet with strong capital.
- The rest of the world has learned all of the failures and lessons of SV and caught up. And yes all of the "inbound content" you created was free consulting to the 5 man shop running out of Madison, WI who is now competing with 3 man Stanford drop-out of the mid 2000's.
My bet is on this fund and other similar funds, like the middle market PE funds in tech (PSG, KKR, GSV, etc), Indie.vc, Venture for America, etc. This is the next big horizon in money making tech investing, not the next Instagram...those days are over.
It's amazing how many tech companies no one here has heard of but are making very legitimate money and are based in very unconventional locations. Tampa Bay, Minneapolis, Charlotte (and the tech triangle), Knoxville, Orlando, Atlanta, Provo, Boise, St Louis, Denver...you name it. I think we're gonna see many more Bandwidth.com's, MailChimps, Kabbage's, Outcome Healths, etc in the very near future.
I have a startup in a state which is very much a flyover: so much so that our license plates read "New Mexico, USA", to assure people that we are, in fact, part of the union.
I moved from LA to Santa Fe a year and a half ago and started a company. Was able to buy a 3 bedroom house, big yard, nice neighborhood, walking distance to restaurants, brewpubs, and a grocery store for ~$1500/month, and got a couple roommates which puts our monthly cost at $400. That's a lot of runway.
There is a lot of underutilized talent here since there aren't a lot of traditional jobs, and we have two national labs within an hour of us (Los Alamos and Sandia) that feed in a steady supply of engineers and scientists.
All of this has created a startup scene both here and in Albuquerque an hour away filled with companies doing really interesting things, none of which are trying to build the next great way to deliver more ads to people. And being able to get outside the city in 20 minutes to go hiking, skiing, etc. is pretty amazing after working through LA commutes.
There are things I miss about LA (the ocean!), but there are just so many advantages to having a startup here that now I couldn't see it any other way.
I moved from LA to Santa Fe a year and a half ago and started a company. Was able to buy a 3 bedroom house, big yard, nice neighborhood, walking distance to restaurants, brewpubs, and a grocery store for ~$1500/month, and got a couple roommates which puts our monthly cost at $400. That's a lot of runway.
There is a lot of underutilized talent here since there aren't a lot of traditional jobs, and we have two national labs within an hour of us (Los Alamos and Sandia) that feed in a steady supply of engineers and scientists.
All of this has created a startup scene both here and in Albuquerque an hour away filled with companies doing really interesting things, none of which are trying to build the next great way to deliver more ads to people. And being able to get outside the city in 20 minutes to go hiking, skiing, etc. is pretty amazing after working through LA commutes.
There are things I miss about LA (the ocean!), but there are just so many advantages to having a startup here that now I couldn't see it any other way.
Are companies in the Albuquerque/Santa Fe startup scene ever hiring? Is it all word of mouth? New Mexico would be one of my top choices but all I ever see online are government Los Alamos etc. positions for people with advanced hard science degrees. It would be hard to resist the temptation to move there if there were any clear opportunity.
I know Descartes Labs is hiring.
I which I could send you a private inbox. I will definitely be interested on moving to NM for family reasons. My github account is huherto.
The SV BigCorps have really poisoned the well out there. It's depressing that the majority of good programmers in the bay area are obsessed with the compensation package. Not saying it's the wrong decision, but like you said, it sucks the air out of everything else. I'd want to blow my fucking brains out if I had the typical Google SDE/SRE's job and the most interesting challenges were whether it was worth it to take the Google Bus to work or how to deftly navigate the D'Amore spiderweb, but that's life if you want to work with good people out there. I've interviewed with "top flight" YC alum etc. startups in the area and came away hugely unimpressed. Maybe it was just luck of the draw, but as a startup guy, I have no reason at all to move out that way. Over time stuff like this will result in bland, money-driven talent with good pedigrees and hurt innovation, to echo your point again.
>It's depressing that the majority of good programmers in the bay area are obsessed with the compensation package.
I think many people across a lot of industries are primarily concerned with their compensation packages when evaluating jobs.
I think many people across a lot of industries are primarily concerned with their compensation packages when evaluating jobs.
What a dull truism. I'm not living paycheck to paycheck, I make silly good money for where I live. The fact that I could be making 400k+ total comp in Google Mountain View hell or Facebook Palo Alto hell does nothing for me.
I have a hard time believing that the majority of people making 400k+ at either Google or Facebook would consider their work/life situation a type of hell.
I understand why some people don't want to work for those companies or in those areas, or aren't motivated by money. But I think many others do, and the ones that are living it now are doing so by choice and for their own reasons.
I understand why some people don't want to work for those companies or in those areas, or aren't motivated by money. But I think many others do, and the ones that are living it now are doing so by choice and for their own reasons.
Well to give you and idea on how expensive it is to live, let's talk taxes. Let's say you are married and make 400k a year and live in San Matteo , CA. California tax rate is 9.3% and federal is 33%. So before living you owe have (400,000x(1-(.093+.33))=230,800.
Now let's say you want to house your family. You decide to buy a house. Well you only have $230,000 so you can't put 20% down on a home with an average price of a million won in San Mateo, so you put 10% down on this home ( random home in San Mateo.)[https://www.zillow.com/homedetails/1715-Borden-St-San-Mateo-... ]
It's a 3 bed 2 bath home with 1400 square feet.I'm also assuming you have two kids.(each get their own room)
So now we're at 230800 - $110,000 = 120,800
Now you have to pay the yearly mortgage which is 5606 x 12 =67272
120800-67272= 53,028 left over to live in.
Well don't you need a car to go to work? What about a car for the wife? Car insurance? You are looking at 1200-1500 a month, if you buy a newer car and have great credit with insurance.
(1300x12) - (53028)= 37,028
You see how quickly it goes.
So the thing is I'm not sure if you can put a down-payment on a house less than 20%. That will take off on the mortgage (save you an additional 12-15k) ( I also assumed an interest rate of 4.37% for the 30-year fixed and I believe if you put more down you get a better interest rate)
Now let's say you want to house your family. You decide to buy a house. Well you only have $230,000 so you can't put 20% down on a home with an average price of a million won in San Mateo, so you put 10% down on this home ( random home in San Mateo.)[https://www.zillow.com/homedetails/1715-Borden-St-San-Mateo-... ]
It's a 3 bed 2 bath home with 1400 square feet.I'm also assuming you have two kids.(each get their own room)
So now we're at 230800 - $110,000 = 120,800
Now you have to pay the yearly mortgage which is 5606 x 12 =67272
120800-67272= 53,028 left over to live in.
Well don't you need a car to go to work? What about a car for the wife? Car insurance? You are looking at 1200-1500 a month, if you buy a newer car and have great credit with insurance.
(1300x12) - (53028)= 37,028
You see how quickly it goes.
So the thing is I'm not sure if you can put a down-payment on a house less than 20%. That will take off on the mortgage (save you an additional 12-15k) ( I also assumed an interest rate of 4.37% for the 30-year fixed and I believe if you put more down you get a better interest rate)
You only pay 33% federal income tax on the income over $191,650. If you corrected for that, the amount left over would still be close to the median income for a family in the U.S ($59k).
This is only true until the Republicans exciting new tax plan goes into effect. It kills the State and Local Tax deduction (SALT) to allow them to cut the Corporate tax rate to 20% and eliminate the estate tax while only increasing the federal deficit by $1.5 Trillion ($1 Trillion if you account for increased economic growth).
You are correct.
https://smartasset.com/taxes/california-tax-calculator#NIGzB...
Total income after federal and state taxes is $241,739.
https://smartasset.com/taxes/california-tax-calculator#NIGzB...
Total income after federal and state taxes is $241,739.
It's pretty unreasonable to believe you should be able to just move somewhere and put 20% down on a >$1M house after working for one year... If you are making $400k a year, you can rent a modest place for 2-3 years, and then you will be totally fine and able to buy a pretty nice home without issue.
Your math is way off. First, you don't pay the full 42% on all your income. The effective date will likely be in the 25-30% range. Then you assume that the borrower will keep paying 10% down payment every year. That doesn't make sense.
Who pays a down payment out of a single year's savings?
Not many people. I expect that the more normal situation is years of apartment living, saving up, and then paying the down payment as a dual-income couple possibly with assistance from parents.
yeah you pay the down payment once. so this guys saying next year that person has ¢150k to live on.
no problem
no problem
I assumed, that a person who would be moving there and would be buying a home and or have no savings...
I know hard for some people to imagine, but alot of people have no savings , leave paycheck to paycheck
I know hard for some people to imagine, but alot of people have no savings , leave paycheck to paycheck
Yeah, but unless you're putting the down payment on a house every year, that's an extra 110K (post-tax!) dollars every year after the first. I can't imagine how I could spend that much money, especially since the mortgage and car payments are already taken care of.
You are correct.
You (and the others in this subthread who are splitting financial hairs) are both missing and proving my point pretty hard. Which is that I'm not so money driven to care about doubling my earnings from their already high level, and more importantly, that the people who are out there do care about this and are happy, that is just fine, but that I personally find those opportunities and the people they please mighty drab and repellent. I hope that clears things up. Please re-read my first comment.
I'd stop going to work if they stopped paying me.
Every unit of comp I am paid (and don't spend) now is 1+ units of comp I don't need to earn later. All other things being equal, getting paid more is frikkin' awesome. If you can live a life you'd want and make a lot, too, I highly recommend it.
It's worse in the midwest. 95% of the available tech jobs are boring as hell, so there's not much left to look for in them except money.
I love my BigCo comp package, but to tell you the truth, I would not go to a startup for a 50% raise, because the best part of working for the BigCo is that my code ships to tens of millions of people, and I see it on the service dashboard. You can't get that anywhere else. Hundreds of millions of people a month run my code. That is very cool.
How would a Bay Area tech company then compete with the like of Google of Facebook for top-talent then? It would be nearly impossible for most companies to match the compensation of the Big 4. The influx and concentration of wealth by those companies are essentially crowding out smaller companies and driving up local housing prices. Think about the billions of dollars that flow from around the world, and disperses itself in the small radius that is SV and SF.
What's the solution then? Have smaller companies move to the Midwest? Or radically cap salaries at 100k?
What's the solution then? Have smaller companies move to the Midwest? Or radically cap salaries at 100k?
Right, that's the inner question of my comment, and the answer is, they can't. Hence the "poisoned well" analogy. Unless you're the founder and want access to Googler/FBer/etc. dollars, or you have dreams of transitioning to a BigCorp role, there's not a compelling reason to work at a bay area startup (well, unless you really like SF, a totally valid reason -- I love SF, but the tradeoff is a bit fierce right now).
I look at differently: it sucks that so many are willing to work for so little, or even nothing, that it sucks the air out of negotiating better compensation packages.
Compensation is how we provide for our families in this world. It's important. At least as important as the quality of schools and culture in an area, for example: two areas that lily-white flyovers are worse at. Note: I lived in the Midwest many years. The occasional urban area that defies the above is an exception, not the rule.
Note: I save the equivalent of a down payment on a nice home in the Midwest every year. Compensation is nice. In 5 years even if I have no growth I'll be able to move somewhere in the Midwest and buy a huge house even if my income halves. That security and peace of mind isn't available to folks happy to get paid less out of spite for the Valley.
Compensation is how we provide for our families in this world. It's important. At least as important as the quality of schools and culture in an area, for example: two areas that lily-white flyovers are worse at. Note: I lived in the Midwest many years. The occasional urban area that defies the above is an exception, not the rule.
Note: I save the equivalent of a down payment on a nice home in the Midwest every year. Compensation is nice. In 5 years even if I have no growth I'll be able to move somewhere in the Midwest and buy a huge house even if my income halves. That security and peace of mind isn't available to folks happy to get paid less out of spite for the Valley.
snipped
I bet you think you aren't an outlier.
Good point! I think that the decision skews away from the bay area (for startup work) if you're particularly skilled. A mediocre developer can make a load of money, relatively speaking, in the bay area, and might get screwed in the midwest. As a big fish in a small pond, and as a force multiplier, I have more negotiating power here.
A "Big Fish" in the Bay Area is doing that much better, though. That's the whole point.
Everything I've ever learned about venture capital is centered around the notion that in order for the economics to work, you have to invest in big winners (companies that exit at valuations of hundreds of millions to billions of dollars), such as an Instagram.
Do you disagree with that? And/or are you saying that there are many of those kinds of promising startups outside of Silicon Valley to justify these new investment funds?
My personal opinion is that there's just too much money chasing too few good companies. In other words, I think many startups, including ones that are worth a billion or more on paper today, will ultimately fail to generate the necessary returns for many VC investors and firms. And as a result, the access to money at all stages will constrain greatly, and sharply.
Do you disagree with that? And/or are you saying that there are many of those kinds of promising startups outside of Silicon Valley to justify these new investment funds?
My personal opinion is that there's just too much money chasing too few good companies. In other words, I think many startups, including ones that are worth a billion or more on paper today, will ultimately fail to generate the necessary returns for many VC investors and firms. And as a result, the access to money at all stages will constrain greatly, and sharply.
There are numerous types of venture capital approaches utilized across the US economy.
The SV venture capital firms need massive homeruns because of the investing approach they use and the types of companies they invest into. It's not the other way around. They specifically back companies with zero profit, often zero potential for near-term profit, zero ability to sustain themselves, that bleed red ink in exchange for hopefully extreme growth. These VC firms intentionally avoid investing into less rapid growth, self-sustaining, profitable businesses. It's a choice, not a required direction. They want to play it big, they want to be rock stars, they want to get massively rich, they want to find the next Google. They're gold or oil prospectors, looking for the big haul; my opinion is most of them find that game addicting just as any Wall Street rock star does.
Mark Cuban is fond of saying that his preferred investing time frame is forever. What he means is, he ideally wants to invest into companies that actually have a sustainable business model, generate profit, and can pay out profits. He's basically a giant angel investor or his own VC firm, and he's on record as strongly disliking the SV model. In general terms, he represents an alternative approach to Silicon Valley.
You can find investors like Cuban all over the US. His particular wealth scale isn't necessary at all for what he does as an investor. Finding wealthy angel investors in Pittsburgh, or Salt Lake City, or Dallas, or Atlanta, is not particularly difficult.
The SV venture capital firms need massive homeruns because of the investing approach they use and the types of companies they invest into. It's not the other way around. They specifically back companies with zero profit, often zero potential for near-term profit, zero ability to sustain themselves, that bleed red ink in exchange for hopefully extreme growth. These VC firms intentionally avoid investing into less rapid growth, self-sustaining, profitable businesses. It's a choice, not a required direction. They want to play it big, they want to be rock stars, they want to get massively rich, they want to find the next Google. They're gold or oil prospectors, looking for the big haul; my opinion is most of them find that game addicting just as any Wall Street rock star does.
Mark Cuban is fond of saying that his preferred investing time frame is forever. What he means is, he ideally wants to invest into companies that actually have a sustainable business model, generate profit, and can pay out profits. He's basically a giant angel investor or his own VC firm, and he's on record as strongly disliking the SV model. In general terms, he represents an alternative approach to Silicon Valley.
You can find investors like Cuban all over the US. His particular wealth scale isn't necessary at all for what he does as an investor. Finding wealthy angel investors in Pittsburgh, or Salt Lake City, or Dallas, or Atlanta, is not particularly difficult.
I agree with you and I think that's why, despite good intentions, this fund might be a little misguided. On their site they discuss how they are sticking w/ the tried and true of what they know in terms of VC investment in tech companies. You can't fault them for that since it is what they know and are used to.
The issue with that in context of the geography of where they are looking is that yes, there will be talented tech workers out there and entrepreneurs (within the tech sphere) that they might stumble across. What could be more necessary in terms of stimulating economic growth is looking at non-tech entrepreneurs in this areas, or at least ones that are not some version of an internet company.
There are probably a lot of folks out there that have ideas for companies, ones that might be hyperlocal or regional, that could be good, sustainable businesses but won't grow like a unicorn. Their costs might not be so much personnel but capital expenditure. They might not be sexy investments. But, if the intent is stimulate economic opportunities in 'forgotten' areas, this is the more likely scenario than finding a superstar developer in a haystack.
The issue with that in context of the geography of where they are looking is that yes, there will be talented tech workers out there and entrepreneurs (within the tech sphere) that they might stumble across. What could be more necessary in terms of stimulating economic growth is looking at non-tech entrepreneurs in this areas, or at least ones that are not some version of an internet company.
There are probably a lot of folks out there that have ideas for companies, ones that might be hyperlocal or regional, that could be good, sustainable businesses but won't grow like a unicorn. Their costs might not be so much personnel but capital expenditure. They might not be sexy investments. But, if the intent is stimulate economic opportunities in 'forgotten' areas, this is the more likely scenario than finding a superstar developer in a haystack.
I think angel investors are different than venture capitalists. The former typically make small investments, starting anywhere in the low five figures, up to seven figures, but more commonly capping out in the low to mid six figures and receiving a corresponding stake size in the companies.
Venture capital often requires taking sizable stakes in companies by investing millions of dollars, in order to have a chance at producing the returns it's seeking.
After thinking about it more, this Rise of the Rest fund for the Midwest, to me, is more like Y Combinator (and likely a competitor to it), in that it's essentially a giant seed fund that will then bring in its big-name investors and business magnates to make VC-like investments in the most promising companies.
Instead of having a large network of former YC grads, it has a network of some of the most well-known investors and business magnates in the U.S.
With that said, Steve Case is quoted in the article saying, "First and foremost, our goal was to generate top returns.”
Venture capital often requires taking sizable stakes in companies by investing millions of dollars, in order to have a chance at producing the returns it's seeking.
After thinking about it more, this Rise of the Rest fund for the Midwest, to me, is more like Y Combinator (and likely a competitor to it), in that it's essentially a giant seed fund that will then bring in its big-name investors and business magnates to make VC-like investments in the most promising companies.
Instead of having a large network of former YC grads, it has a network of some of the most well-known investors and business magnates in the U.S.
With that said, Steve Case is quoted in the article saying, "First and foremost, our goal was to generate top returns.”
Mind if I butt in with a noob question? What do you mean when you say "Series Alphabet"? Are these things funded by the company Alphabet? It feels like there a lot more background that I'm not privy to.
I think he's talking about Series A, Series B, Series C, etc. compared to seed stage/high risk companies.
Exactly this.
[deleted]
I think it refers to the fact that companies like Uber have had ABCDEFG rounds of funding
look at the last "who's hiring?" ...every month I see more and more listings outside of the Bay area
if you think you can build startup culture without immigrants sweat and hard work you are kidding yourself. There is a reason for the way things are.
Not sure why this is being downvoted because ime there are typically very many immigrants in start ups and running them. Myself included. Although, I'm also in a flyover state these days.
I don't doubt that this is a good thing for the flyover states. But I am little skeptical of the whole goody two shoes and "impact investing" angle.
With the amount of money sloshing around it is becoming increasing difficult to find places to generate alpha on investments. While people can be like Softbank and bet money on a unicorn becoming a super-unicorn but the risk reward is skewed.
Then there is this:
> In other words, if they discover a nascent but promising e-commerce company in Allentown, Pa., they will not only invest in it, but they might also help it establish a relationship with one of the fund’s investors — Mr. Bezos, for example — who might invest even more.
With the amount of money sloshing around it is becoming increasing difficult to find places to generate alpha on investments. While people can be like Softbank and bet money on a unicorn becoming a super-unicorn but the risk reward is skewed.
Then there is this:
> In other words, if they discover a nascent but promising e-commerce company in Allentown, Pa., they will not only invest in it, but they might also help it establish a relationship with one of the fund’s investors — Mr. Bezos, for example — who might invest even more.
Yeah. Worth noting Amazon fulfillment already has a presence in Allentown.
Presence of a fulfillment center doesn't mean much, though. I've been on site at an Amazon fulfillment center and they primarily provide unskilled labor opportunities with a handful of shipped in corporate roles to oversee operations, manage supply chain, etc. Doesn't quite resemble the vision of the fund.
They specifically say that they are not impact investing but seeking strong returns.
The biggest danger to the flyover states is the states themselves. While investment in education remains high, the future doesn't look great. Top tier state research universities are seeing their budgets slashed and faculty poached by the ivys. Declining tax base, reduced federal funding and sadly an anti intellectual voter base will destroy the advancement opportunity of the middle class and hurt American R&D. The coasts meanwhile continue to pour money into investment and state schools.
Excellent article on the issue: https://www.theatlantic.com/business/archive/2017/10/midwest...
Excellent article on the issue: https://www.theatlantic.com/business/archive/2017/10/midwest...
Anti-intellectual is an odd criticism to level at the Midwest. The Midwest has some of the highest performing (by NAEP math scores) education systems in the country (Iowa, Wisconsin, Minnesota, the Dakotas). Some of the strongest growing states, like California, have among the worst.
The article doesn’t support your statement either. It’s basically a comparison of funding at Midwestern public schools versus expensive coastal private schools. E.g. they compare the endowments of midwestern publics to Harvard, etc., while leaving out U Chicago and Northwestern. Your last point is also wrong. Out of the handful of 5 states that spent more on universities in 2017 than 2008, 3 are in the Midwest. Most states cut funding, with no noticible pattern of the Midwest cutting more than the costs. MN cut about the same as MA and CT, IA and MO cut about the same as NJ.
The article doesn’t support your statement either. It’s basically a comparison of funding at Midwestern public schools versus expensive coastal private schools. E.g. they compare the endowments of midwestern publics to Harvard, etc., while leaving out U Chicago and Northwestern. Your last point is also wrong. Out of the handful of 5 states that spent more on universities in 2017 than 2008, 3 are in the Midwest. Most states cut funding, with no noticible pattern of the Midwest cutting more than the costs. MN cut about the same as MA and CT, IA and MO cut about the same as NJ.
Three of the top ten richest public universities in the United states, by endowment, are in the Midwest, potentially 5 if you want to count Pennsylvania as part of the Midwest (4 if you count Pittsburgh, 5 if you count Pittsburgh and Penn State)[0]. These are definitionally the university systems that don't require much state funding, and I'm perfectly happy having my state not spend a ridiculous amount on a university worth more than 1/6 of the entire state budget for the year. To reinforce the comment I'm responding to: Minnesota is #9 on that list and that's one of the states that cut funding. Clearly they're doing ok still.
To the anti-intellectual point, I would argue that while rural voters in Michigan might be somewhat anti-intellectual, they clearly get drowned out by the pro-intellectuals in the urban areas. Take a look at a county-by-county breakdown of voting sometime -- the entire state is red except for 4 or 5 counties, but the state often elects democrats to statewide office.
[0]http://www.businessinsider.com/richest-public-universities-i...
To the anti-intellectual point, I would argue that while rural voters in Michigan might be somewhat anti-intellectual, they clearly get drowned out by the pro-intellectuals in the urban areas. Take a look at a county-by-county breakdown of voting sometime -- the entire state is red except for 4 or 5 counties, but the state often elects democrats to statewide office.
[0]http://www.businessinsider.com/richest-public-universities-i...
In Michigan, the majority of students don't benefit from the huge endowment that UM has, the schools don't have financial ties.
(Michigan State alone has larger enrollment than UMich and then there are quite a few more public universities and then also community colleges)
(Michigan State alone has larger enrollment than UMich and then there are quite a few more public universities and then also community colleges)
Pennsylvania isn't considered the Midwest. It ends at Ohio. Eastern Pennsylvania is closer to NYC than it is to Chicago.
As an entire state no, but Pittsburgh and the western half of the state definitely feels Midwestern.
Well, as a Michigander, I think of the Midwest as the Rust Belt, which I realize may be disagreeable to some, like another commenter in this thread. That said, culturally speaking, Pittsburgh has far more in common with Cleveland than with Philadelphia. Pennsylvania is a very divided state, so I would count part of it as the East Coast and part as the Midwest, geographically if nothing else. But that very disagreement is why I called that part out separately.
Start driving down 76W and you'll see quite the opposite. Yes, eastern PA is urban, but after you get far enough west the only thing on the radio is country and gospel.
I also wouldn't claim Pittsburgh is anti-intellectual considering the startup scene and the universities in the area. The suburbs around Pittsburgh are a bit of a different story.
I also wouldn't claim Pittsburgh is anti-intellectual considering the startup scene and the universities in the area. The suburbs around Pittsburgh are a bit of a different story.
And Western Pennsylvania is closer to Chicago than to NYC. Eastern Penn cities like Philly are definitely considered part of the East Coast, culturally, but western Penn such as Pittsburgh is definitely part of the Midwest.
I made a typo. Western Pennsylvania is closer to NYC than Chicago. I did a google maps from the northwestern corner where I-80 crosses into Pennsylvania, to Chicago and NYC.
Measuring intellectualism by voting pattern is :-/
The problem is when talking about anti-intellectualism, people say "Midwest" instead of "Rust Belt."
I grew up in Minnesota, so to me "Midwest" is Iowa, Wisconsin, Minnesota, the Dakotas, maybe Michigan and Illinois.
But the anti-intellectualism streak is really in the Rust Belt, like Ohio, Pennsylvania, Indiana, West Virginia, and sure, parts of Wisconsin, Illinois, Missouri, and Michigan.
The apparent contradiction of anti-intellectualism and high educational attainment is due to broad brush strokes in our definition of "Midwest." Minnesota especially doesn't fit into that mold.
Moral of the story: you guys need to get off the coasts once in a while.
I grew up in Minnesota, so to me "Midwest" is Iowa, Wisconsin, Minnesota, the Dakotas, maybe Michigan and Illinois.
But the anti-intellectualism streak is really in the Rust Belt, like Ohio, Pennsylvania, Indiana, West Virginia, and sure, parts of Wisconsin, Illinois, Missouri, and Michigan.
The apparent contradiction of anti-intellectualism and high educational attainment is due to broad brush strokes in our definition of "Midwest." Minnesota especially doesn't fit into that mold.
Moral of the story: you guys need to get off the coasts once in a while.
You are the first person I have heard define Midwest that way. Midwest includes Ohio, Indiana, Michigan, Illinois, Missouri too [1]. Although many people view the Northwest Territory [2] after the revolutionary war as the "Midwest": Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota. Culturally, the second definition makes more sense to me as someone who has lived in Ohio, Indiana, Illinois, and spent significant time in several of the other states in the first definition.
1. https://en.wikipedia.org/wiki/Midwestern_United_States
2. https://en.wikipedia.org/wiki/Northwest_Territory
1. https://en.wikipedia.org/wiki/Midwestern_United_States
2. https://en.wikipedia.org/wiki/Northwest_Territory
The University of Wisconsin at Madison has been largely targeted by Governor Scott Walker. He has made large cuts to the budget, had tried to remove professor tenure, and has more or less filled the Board of Regents with his political friends. When I was still in grad school (~2 years ago), people were worried about a brain drain from the school. Why would a great professor want to stay at UWisc if the Governor is taking away tenure and threatening to do performance reviews? Of course, Walker is trying to get reelected now so he is proposing tuition cuts for students to try to save face.
In Illinois, the University of Illinois at Urbana-Champaign has been hit hard by funding shortfalls as well. This has been going on for years now since the state government cannot get its act together. The university is still great, but you have to wonder at what point the cuts will take their toll. A rising star professor may not want to stay at an institution that always needs to worry about funding and whether or not they need to furlough employees. At some point, the best researchers and teachers leave and go elsewhere.
In Illinois, the University of Illinois at Urbana-Champaign has been hit hard by funding shortfalls as well. This has been going on for years now since the state government cannot get its act together. The university is still great, but you have to wonder at what point the cuts will take their toll. A rising star professor may not want to stay at an institution that always needs to worry about funding and whether or not they need to furlough employees. At some point, the best researchers and teachers leave and go elsewhere.
The anti-intellectual image is due to the voters of those states. They consistently vote against personal freedoms due to their religiousness, vote against spending money for fellow citizen’s healthcare and education and infrastructure, but are for spending on military, subsidizing stadiums for sports, and tax cuts for corporations. All while claiming they’re fiscally conservative, but actually adding to the deficit.
They are anti net neutrality, anti efforts to combat climate change, and anti marijuana, but pro spending on police and pro asset forfeiture. Also, their legislators have had problems with teaching evolution and/or have wanted to introduce religion into public schools.
It's really an urban vs rural/suburban divide though, but enough to paint basically the states that vote Republican as backwards, because almost every time there a political issue coming up, they seem to be on the opposite side of where most young professionals, especially in science related fields are.
They are anti net neutrality, anti efforts to combat climate change, and anti marijuana, but pro spending on police and pro asset forfeiture. Also, their legislators have had problems with teaching evolution and/or have wanted to introduce religion into public schools.
It's really an urban vs rural/suburban divide though, but enough to paint basically the states that vote Republican as backwards, because almost every time there a political issue coming up, they seem to be on the opposite side of where most young professionals, especially in science related fields are.
Could we please not take this discussion right into the same old tired partisan politics?
You're just describing political positions you disagree with. Nothing you said is disproportionately midwestern. I'd need to see polls to believe that they hold these positions. Midwest has been pretty purple in many of the past elections.
How has the midwest show themselves to be anti net neutrality? How have they shown themselves to be anti marijuana? Illinois and Michigan are in talks of legalizing it, and already have very light penalties on having it in small amounts. Subsidizing stadiums for sport? St Louis just lost the Rams to LA for refusing to build a stadium.
I think you need to stop painting anyone that has voted Republican in the past decade as a political enemy. Most of those issues you stated don't even seem that partisan.
How has the midwest show themselves to be anti net neutrality? How have they shown themselves to be anti marijuana? Illinois and Michigan are in talks of legalizing it, and already have very light penalties on having it in small amounts. Subsidizing stadiums for sport? St Louis just lost the Rams to LA for refusing to build a stadium.
I think you need to stop painting anyone that has voted Republican in the past decade as a political enemy. Most of those issues you stated don't even seem that partisan.
I've lived on the Midwest pretty much my whole life and Illinois and Minnesota are generally Democrat states with large city populations. The other state I've lived in, Iowa, historically has been pretty tolerant (but that is changing recently) and was the fourth state to legalize gay marriage. I know people from a lot of small towns where they were taught evolution and were not anti-intellectual at all. The Midwest covers an absolutely huge area and while some people follow this stereotype probably the majority of people in the Midwest don't.
You've shown that many midwesterners are anti-progressive, but that is not the same thing as anti-intellectual. Furthermore, the optics of where they stand relative to young professionals in the sciences are just that - optics that don't necessarily reflect anything. Consider student movements in the past that haven't gone anywhere or were really misguided in hindsight (there are enough).
My response is in the context of anti intellectualism being an odd criticism for why tech startups might not consider Midwest. There are other factors of course, but my reasons, in my experience, are big reasons why employees tech startups would want don't want the Midwest due to anti intellectualism.
I'd argue that it's both anti-progressive and anti-intellectual. I live in a stereotypical flyover area, and the sentiment is spot on. People vote against things that would clearly help them, because that's what everyone at church is doing.
This isn't an overstatement either. I know these people. Their opinions are what someone told them to think. Almost completely void of logic. Fox news said some shit, so it must be true! This sounds exaggerated. It isn't.
Some guy was running for office and totally did the "Jesus, show me the way" campaign. Crosses on his election signs, the whole nine yards. He was neck in neck with the incumbent (who was well liked, I might add) just based on this crap. Until he got arrested for nearly beating a guy to death. Not very Jesus of him, is it?
This isn't an overstatement either. I know these people. Their opinions are what someone told them to think. Almost completely void of logic. Fox news said some shit, so it must be true! This sounds exaggerated. It isn't.
Some guy was running for office and totally did the "Jesus, show me the way" campaign. Crosses on his election signs, the whole nine yards. He was neck in neck with the incumbent (who was well liked, I might add) just based on this crap. Until he got arrested for nearly beating a guy to death. Not very Jesus of him, is it?
I live in a stereotypical flyover area, and the sentiment is spot on.
As have I, and the sentiment is a silly caricature.
People vote against things that would clearly help them, because that's what everyone at church is doing.
Can you list some of these things?
As far as I can tell, the progressive legislative agenda has done nil to help anyone in the flyover country. Obamacare is a disaster, factories have been shuttered because they can't compete in a globalized economy (neither the left or right are at fault here), and progressive cultural values do not align with the moral and ethical stances of these people.
Not to mention, they are continually mocked, condescended too, and made fun of by coastal elites.
This isn't an overstatement either. I know these people.
I know them too, and you've painted a caricature.
Their opinions are what someone told them to think. Almost completely void of logic. Fox news said some shit, so it must be true! This sounds exaggerated. It isn't.
Oh, like almost every mainstream liberal that I know? CNN, ABC or MSNBC told them some shit, so it must be true.
Some guy was running for office and totally did the "Jesus, show me the way" campaign. Crosses on his election signs, the whole nine yards. He was neck in neck with the incumbent (who was well liked, I might add) just based on this crap. Until he got arrested for nearly beating a guy to death. Not very Jesus of him, is it?
So some crazy guy ran for office and lost. What's your point?
As have I, and the sentiment is a silly caricature.
People vote against things that would clearly help them, because that's what everyone at church is doing.
Can you list some of these things?
As far as I can tell, the progressive legislative agenda has done nil to help anyone in the flyover country. Obamacare is a disaster, factories have been shuttered because they can't compete in a globalized economy (neither the left or right are at fault here), and progressive cultural values do not align with the moral and ethical stances of these people.
Not to mention, they are continually mocked, condescended too, and made fun of by coastal elites.
This isn't an overstatement either. I know these people.
I know them too, and you've painted a caricature.
Their opinions are what someone told them to think. Almost completely void of logic. Fox news said some shit, so it must be true! This sounds exaggerated. It isn't.
Oh, like almost every mainstream liberal that I know? CNN, ABC or MSNBC told them some shit, so it must be true.
Some guy was running for office and totally did the "Jesus, show me the way" campaign. Crosses on his election signs, the whole nine yards. He was neck in neck with the incumbent (who was well liked, I might add) just based on this crap. Until he got arrested for nearly beating a guy to death. Not very Jesus of him, is it?
So some crazy guy ran for office and lost. What's your point?
> problems with teaching evolution
This is literally the only thing in your whole list that is "anti-intellectual". Everything else just stems from a different set of values than your own.
This is literally the only thing in your whole list that is "anti-intellectual". Everything else just stems from a different set of values than your own.
Even if this were true at a macro level, I've got to imagine there are plenty of investing opportunities at the micro level. Smart people with the right skills who for various reasons don't want to live in SF, NY, etc. And because their expenses are lower, they are happy to work for a lower salary than their peers in those cities.
And who knows - maybe if top talent can be enticed back to these places then the trends you describe above might start to reverse.
And who knows - maybe if top talent can be enticed back to these places then the trends you describe above might start to reverse.
I've heard NYC smells bad.
(Seriously. Not everyone wants to do the big city thing.)
(Seriously. Not everyone wants to do the big city thing.)
It smells like dog shit mixed with parmesan cheese... 42nd Street
Its part of the charm /s. Yes, the streets smell of garbage in the summer.
Try smelling Market street in San Francisco. ;)
Live in NJ!
That's a pretty complex financial problem that you're over simplifying. The flyover states can't very easily invest more, they don't have the growth to do it. The coastal areas do largely have the growth to invest (in some cases a lot of growth), which makes it dramatically easier to do so. They have the flowing tax base expansion, the labor expansion.
It's the difference between being Facebook with 45% net income profit margins, and being a manufacturer in Ohio with 4% net income margins. If you're Facebook, you're drowning in opportunity and cash. Growth does that for you, in many cases it begets further easy growth. The manufacturer's scenario is rock and a hard place stagnation, and if they slip up even a bit, it's bankruptcy.
In 77 years, Arkansas has added one million people. They might add 20k to 30k per year in a good year.
West Virginia hasn't grown its population 84 years.
Mississippi has added one million people in a hundred years.
Ohio, Michigan, Pennsylvania have barely grown their populations in half a century.
Some of this is down to their mistakes, some of it is shit luck of getting slammed by very large macro economic forces, huge technology changes (whereas earlier technology changes had blessed those locations).
These states are perpetually trapped in a scenario where they can't afford to make the moves to attract sustained growth, and they can't grow because they can't afford to make those expensive moves. It's stagnation hell. The only likely way out, is a major technology inflection point, and being sure to catch the wave.
It's the difference between being Facebook with 45% net income profit margins, and being a manufacturer in Ohio with 4% net income margins. If you're Facebook, you're drowning in opportunity and cash. Growth does that for you, in many cases it begets further easy growth. The manufacturer's scenario is rock and a hard place stagnation, and if they slip up even a bit, it's bankruptcy.
In 77 years, Arkansas has added one million people. They might add 20k to 30k per year in a good year.
West Virginia hasn't grown its population 84 years.
Mississippi has added one million people in a hundred years.
Ohio, Michigan, Pennsylvania have barely grown their populations in half a century.
Some of this is down to their mistakes, some of it is shit luck of getting slammed by very large macro economic forces, huge technology changes (whereas earlier technology changes had blessed those locations).
These states are perpetually trapped in a scenario where they can't afford to make the moves to attract sustained growth, and they can't grow because they can't afford to make those expensive moves. It's stagnation hell. The only likely way out, is a major technology inflection point, and being sure to catch the wave.
Percentage-wise, the population of Ohio has grown more than New York since 1960.
edit: Another way to put it is that Mississippi has doubled in population in 100 years - roughly 1.5 million to 3 million
edit: Another way to put it is that Mississippi has doubled in population in 100 years - roughly 1.5 million to 3 million
Did you know that one of the best places in the US for biotech is Indiana? That is because both Purdue and Indiana University, state schools, are powerhouses in that field. I don't see any significant funding issues for them from a research/education perspective. More funding does not necessarily mean better outcomes nor does less funding necessarily mean worse outcomes. How the funding is spent matters much more. In my experience at Purdue, much of that funding goes toward research and education in the science and engineering departments.
Excellent article from the same coastal thought-bubble that predicted Clinton's 99% chance of victory.
Simpler explanation would be that specialties with the luxury of centralizing (ex: investment banking, tech, advertising, certain types of law, etc.) typically do--for all of the obvious reasons.
edit: And I did not write this as a celebration of her loss or political flamebait. I wrote it to point out that there is a gaping blind spot in the coastal worldview, which has already had severe real-life consequences.
Simpler explanation would be that specialties with the luxury of centralizing (ex: investment banking, tech, advertising, certain types of law, etc.) typically do--for all of the obvious reasons.
edit: And I did not write this as a celebration of her loss or political flamebait. I wrote it to point out that there is a gaping blind spot in the coastal worldview, which has already had severe real-life consequences.
Is centralization of resources really needed for a thriving economy though? Germany begs to differ [1].
[1] http://freakonomics.com/podcast/secrets-german-economy-steal...
[1] http://freakonomics.com/podcast/secrets-german-economy-steal...
Well, Germany is half the size of Texas with nearly 4x the population, so it could easily be argued that Germany does have centralization of resources...
With the wild-west capitalism we worship and embrace, entropy propels us toward increasing centralization. Gates and Thiel called it clearly, a very long time ago, that most of these markets are natural monopolies (under our system).
Not happy about it, and perhaps if we exercised a little sanity like the Europeans, we could reverse the trend. I'm not holding my breath.
Not happy about it, and perhaps if we exercised a little sanity like the Europeans, we could reverse the trend. I'm not holding my breath.
Eh. Classical Christaller-Lösch theory holds that there are two patterns of spatial expansion, the hierarchical centers model and the moving frontier model.
In the hierarchical center model, the balance between economies and diseconomies of agglomeration lead to a pattern where smaller centers linked to the big center emerge; then these centers become large in their own right and growth goes on recursively. This is usually more clearly seen in cities (look up on Google Maps with the satellite photo layer: Berlin, London, Tokyo, Sao Paulo....) but some nations like Germany will apear to have this pattern too.
In the other model spatial growth is constrained on the one side by a coast or something like that, and has a vast, gradually developing frontier on the other hand. Brazil has one coast only and is like this. Rio de Janeiro is a major city next to a coast and is like this, Sao Paulo is the singular major city further inland and is the opposite of this (a cobweb).
The US has two coasts. And for reasons, the west coast started developing on its own, not as a tributary to the east coast. Flyover country could have grown in the cobweb hierarchical centers fashion, but what's the undeniable capital of the Midwest? Not to mention farm belts etc. and an agrarian economy propped up by subsidies, etc.
In the hierarchical center model, the balance between economies and diseconomies of agglomeration lead to a pattern where smaller centers linked to the big center emerge; then these centers become large in their own right and growth goes on recursively. This is usually more clearly seen in cities (look up on Google Maps with the satellite photo layer: Berlin, London, Tokyo, Sao Paulo....) but some nations like Germany will apear to have this pattern too.
In the other model spatial growth is constrained on the one side by a coast or something like that, and has a vast, gradually developing frontier on the other hand. Brazil has one coast only and is like this. Rio de Janeiro is a major city next to a coast and is like this, Sao Paulo is the singular major city further inland and is the opposite of this (a cobweb).
The US has two coasts. And for reasons, the west coast started developing on its own, not as a tributary to the east coast. Flyover country could have grown in the cobweb hierarchical centers fashion, but what's the undeniable capital of the Midwest? Not to mention farm belts etc. and an agrarian economy propped up by subsidies, etc.
I didn't know there was a name for that. Thanks!
Civilization has typically been tied to the water. We have a Chicago-New Orleans-St. Louis triangle. My guess would be that the interstate highway system and container shipping have severely diminished its importance.
Civilization has typically been tied to the water. We have a Chicago-New Orleans-St. Louis triangle. My guess would be that the interstate highway system and container shipping have severely diminished its importance.
The biggest reason the west coast jump started development on its own would be the California Gold rush.
Europe has the same problems and no real engine for growth and innovation. There are plenty of innovative and brilliant companies and people in europe but the system kills most efforts because its so tightly regulated.
I am not even talking banking sector here. Just in general.
I am not even talking banking sector here. Just in general.
Fair enough, but consider the US predicament.
We have the coastal areas of high education, high income, and high costs that mostly end in a wash if you exclude the prestige of it all. Prices so high that people who do ordinary jobs can't even afford the place.
We also have an incredible number of rural areas mired in meth and joblessness. The elites say "Invest more in education!" Where's the money when the tax base is jobless? Where are the students when the scholars packed their bags for greener pastures long ago? Where are the jobs when it only takes a few smart people to automate something for the entire world? I've been to factories where they only need two to satisfy the entirety of world demand, and there are only a handful of people there, and the second factory is just for redundancy...
This is what "growth and innovation" have given us. Two unattractive monocultures.
I like western europe better. To each his own.
edit: If I were more awake, this probably could have been condensed into: Why speed up entropy?
We have the coastal areas of high education, high income, and high costs that mostly end in a wash if you exclude the prestige of it all. Prices so high that people who do ordinary jobs can't even afford the place.
We also have an incredible number of rural areas mired in meth and joblessness. The elites say "Invest more in education!" Where's the money when the tax base is jobless? Where are the students when the scholars packed their bags for greener pastures long ago? Where are the jobs when it only takes a few smart people to automate something for the entire world? I've been to factories where they only need two to satisfy the entirety of world demand, and there are only a handful of people there, and the second factory is just for redundancy...
This is what "growth and innovation" have given us. Two unattractive monocultures.
I like western europe better. To each his own.
edit: If I were more awake, this probably could have been condensed into: Why speed up entropy?
> The elites say "Invest more in education!"
No, the actual dominant elites don't; as they are behind the “starve the beast” movement that seeks to dismantle public services including education.
> Where's the money when the tax base is jobless?
The people actually saying “invest more in education” tend also to support greater federal funding of that function, especially for economically disadvantaged areas, and also to support shifting the federal tax burden more toward capital holders and/or profitable corporations, rather than the working class, so joblessness in the local economy of certain regions for which increased educational investment is sought isn't really a barrier to their preferred policy.
Of course, they also tend to support other targeted shorter-payoff-window programs to support local economic development as well, also with out-of-region funding.
No, the actual dominant elites don't; as they are behind the “starve the beast” movement that seeks to dismantle public services including education.
> Where's the money when the tax base is jobless?
The people actually saying “invest more in education” tend also to support greater federal funding of that function, especially for economically disadvantaged areas, and also to support shifting the federal tax burden more toward capital holders and/or profitable corporations, rather than the working class, so joblessness in the local economy of certain regions for which increased educational investment is sought isn't really a barrier to their preferred policy.
Of course, they also tend to support other targeted shorter-payoff-window programs to support local economic development as well, also with out-of-region funding.
Not talking Koch brother 0.0xxx1% elites. Just people I know who went to good schools and serve professional functions.
Left wing ones lament that we haven't spent more on education. Right wing ones lament that people aren't taking advantage of the opportunities that have already been afforded.
From my own perspective (automation, and this could be my thought-bubble?), we have a situation where we need fewer and fewer people to do most of the important things. Due to that leverage, these positions are relatively few, and demand a very high level of knowledge, intelligence, and responsibility. If the world only needs a full-time staff of 30 to do X, training 30,000 to do it is just wasted time and effort.
The buzz currently seems to be around UBI to address this. Maybe the right way, maybe not. I have no crystal ball on that one.
So many people pin their hopes on "growth", but is that what we really need? We are already devouring the earth just to keep people busy cranking out and devouring BS. Watch the cartoons with your kids one day. Behold all of the neon goo and plastic junk being pushed on them. Then watch FOX with the parents. Advertised medicines to fix health problems they earned at the advertised restaurants and leisure activities. Advertised financial products and scams to maintain enough revenue to afford the rest of it.
So, as a prescription for making better-rounded individuals, education is fantastic. As a prescription for fixing "flyover country", I don't buy it.
Left wing ones lament that we haven't spent more on education. Right wing ones lament that people aren't taking advantage of the opportunities that have already been afforded.
From my own perspective (automation, and this could be my thought-bubble?), we have a situation where we need fewer and fewer people to do most of the important things. Due to that leverage, these positions are relatively few, and demand a very high level of knowledge, intelligence, and responsibility. If the world only needs a full-time staff of 30 to do X, training 30,000 to do it is just wasted time and effort.
The buzz currently seems to be around UBI to address this. Maybe the right way, maybe not. I have no crystal ball on that one.
So many people pin their hopes on "growth", but is that what we really need? We are already devouring the earth just to keep people busy cranking out and devouring BS. Watch the cartoons with your kids one day. Behold all of the neon goo and plastic junk being pushed on them. Then watch FOX with the parents. Advertised medicines to fix health problems they earned at the advertised restaurants and leisure activities. Advertised financial products and scams to maintain enough revenue to afford the rest of it.
So, as a prescription for making better-rounded individuals, education is fantastic. As a prescription for fixing "flyover country", I don't buy it.
Why speed up entropy?
-Quality of life for employees - there are plenty of economically stable regions across the midwest where you can get a 4 bedroom house in a great neighborhood for $200,000.
-Political stability for the investor class. The tech industry effectively has 6 votes in the Senate right now, and they've realized what a vulnerability that is.
-Quality of life for employees - there are plenty of economically stable regions across the midwest where you can get a 4 bedroom house in a great neighborhood for $200,000.
-Political stability for the investor class. The tech industry effectively has 6 votes in the Senate right now, and they've realized what a vulnerability that is.
If you have some time. I wrote about the problem with European businesses.
http://000fff.org/why-is-europe-failing-to-create-more-unico...
http://000fff.org/why-is-europe-failing-to-create-more-unico...
I will read it. Thanks!
edit: Just read it. Always refreshing to talk to someone who doesn't have all of the answers!
Only thing I would add is to look at the glass as half-full. Western Europe's political systems seem to be in better shape than our own, their safety nets more generous, their public debt generally lower, and their inclination to start wars greatly reduced. If we have to sacrifice a few unicorns for that, seems like a fair trade to me.
edit: Just read it. Always refreshing to talk to someone who doesn't have all of the answers!
Only thing I would add is to look at the glass as half-full. Western Europe's political systems seem to be in better shape than our own, their safety nets more generous, their public debt generally lower, and their inclination to start wars greatly reduced. If we have to sacrifice a few unicorns for that, seems like a fair trade to me.
Yeah but that is also it's Achilles heel. It's one of the reasons they can't make immigration work. Which contrary to popular belief it actually does quite well in the US despite it's many flaws.
I grew up in Denmark and is used to the Scandinavian way of thinking all I am saying is that it has it's own issues and one of them is growth despite a few places.
I grew up in Denmark and is used to the Scandinavian way of thinking all I am saying is that it has it's own issues and one of them is growth despite a few places.
Because of the expontantial growth of technology. Every technolocial advancement open up the door for a new competitor to become a threat to an incumbent.
Very few european companies become global players which you have to to survive. You have no choice.
Very few european companies become global players which you have to to survive. You have no choice.
Your entire argument is predicated upon the current American model of taxation/funding - i.e. that education spending is funded by individual states. There is an argument that this funding model is completely broken for the reasons outlined. It's not a death spiral if you don't want it to be.
My entire argument is predicated on:
A) current technology has drastically reduced the headcount required to get the important things done
B) we papering over that with make-work. defense is mostly make-work for engineers/managers/clerks/tradesmen. farming is propped up with direct and indirect subsidies. US healthcare and higher ed are packed to the gills with admin staff. cranking out more professionals is just going to put more stress on the make-work systems.
C) Fueling growth to bridge the gap between supply and demand is an ecological time-bomb.
A) current technology has drastically reduced the headcount required to get the important things done
B) we papering over that with make-work. defense is mostly make-work for engineers/managers/clerks/tradesmen. farming is propped up with direct and indirect subsidies. US healthcare and higher ed are packed to the gills with admin staff. cranking out more professionals is just going to put more stress on the make-work systems.
C) Fueling growth to bridge the gap between supply and demand is an ecological time-bomb.
1. It's more of a coastal thing it seems than a trend of the West (I say that jokingly).
2. Is it capitalism that leads to centralization, or the lack of it? I suppose it's how you define the term -- is it a passive accumulation of capital (like money that just sits in a bank), or is it the active use of money to attempt innovation and generate more wealth?
In the latter case, I'd hope to imagine a cycle of continuous disruption and redistribution of capital that prevents centralization.
3. Are monopolies inherently bad? Or is it simply the lack of interoperability (i.e. lack of choices / cost of switching is too high for a consumer)?
4. Reverse the trend. What do you suggest then -- a break-up of tech monopolies? Or maybe forget all about the coasts, and try to emulate the German economy in the Midwest?
2. Is it capitalism that leads to centralization, or the lack of it? I suppose it's how you define the term -- is it a passive accumulation of capital (like money that just sits in a bank), or is it the active use of money to attempt innovation and generate more wealth?
In the latter case, I'd hope to imagine a cycle of continuous disruption and redistribution of capital that prevents centralization.
3. Are monopolies inherently bad? Or is it simply the lack of interoperability (i.e. lack of choices / cost of switching is too high for a consumer)?
4. Reverse the trend. What do you suggest then -- a break-up of tech monopolies? Or maybe forget all about the coasts, and try to emulate the German economy in the Midwest?
#2) I'd say it's the combo: the interaction of unregulated capitalism and specific types of business that can centralize, or "scale", nicely. Most of the trades are doing quite nicely right now because geography, licensing, and the bespoke nature of their work have somewhat protected them from the tech onslaught. Taxi drivers, not so much. Of course, more/less regulation would raise/lower the bar for what would be scalable.
#3) Unregulated monopolies, certainly bad, not as much from a consumer perspective as from one of raw power. I don't really care if I don't have the latest shiniest gadget for the best price. I do care that Bill Gates probably has more say on how my kids are educated than I do.
Regulated monopolies are another story. Like the power company, they're subject to far more rules and due process than the tech giants. Google can shut down a paying customer with impunity. Power company has to honor a process even for customers that are late on their bill. I like that aspect, but then there's the regulatory capture, so... Even under Obama, who is supposed to be the "liberal" guy, we had the "Holder Doctrine" of let's not enforce the law too hard if it costs US megacorps any money. This will probably have to get worse before it gets better.
#4) I have no silver bullets. I was just disappointed that the top comment dismissed an entire region as a victim of its own foolishness, making little mention of all the other externalities, of which there are many.
Thanks for hearing me out. Do you have any silver bullets?
#3) Unregulated monopolies, certainly bad, not as much from a consumer perspective as from one of raw power. I don't really care if I don't have the latest shiniest gadget for the best price. I do care that Bill Gates probably has more say on how my kids are educated than I do.
Regulated monopolies are another story. Like the power company, they're subject to far more rules and due process than the tech giants. Google can shut down a paying customer with impunity. Power company has to honor a process even for customers that are late on their bill. I like that aspect, but then there's the regulatory capture, so... Even under Obama, who is supposed to be the "liberal" guy, we had the "Holder Doctrine" of let's not enforce the law too hard if it costs US megacorps any money. This will probably have to get worse before it gets better.
#4) I have no silver bullets. I was just disappointed that the top comment dismissed an entire region as a victim of its own foolishness, making little mention of all the other externalities, of which there are many.
Thanks for hearing me out. Do you have any silver bullets?
538 predicted Trump chances of winning with 30%, which is a huge number. Clearly we are living in one of those timelines. I think people failed to interpret what that 30% meant.
Edit: I am reading the rest of your comments which are very insightful.
Thanks huherto!
I made bets on the outcome, but did not collect figuring that it would be ill-gotten gain and bad karma. If our city people had to hang out with their in-laws in Appalachia for a month every year, they would have seen it just as clearly.
I made bets on the outcome, but did not collect figuring that it would be ill-gotten gain and bad karma. If our city people had to hang out with their in-laws in Appalachia for a month every year, they would have seen it just as clearly.
> Excellent article from the same coastal thought-bubble that predicted Clinton's 99% chance of victory.
Not wrong though, eh?
Not wrong though, eh?
I mean, without addressing your empty ad hominem, are you seriously saying the fact that schools suck has nothing to do with service/intellectual jobs moving elsewhere?
Ad hominem is after the person, not the thought bubble.
Most of the big places are going after IQ more than anything else. Know plenty of local students and interns who went on to take lucrative jobs at big companies with either a state diploma, or no college at all.
I don't believe it is coincidental that so many of the founders in this space are college drop-outs.
Most of the big places are going after IQ more than anything else. Know plenty of local students and interns who went on to take lucrative jobs at big companies with either a state diploma, or no college at all.
I don't believe it is coincidental that so many of the founders in this space are college drop-outs.
guelo(2)
The notion of “flyover states” as an intrinsically pejorative term is a desperate attempt by those, who have already given up their natural lives for the collective allure of cities, to drag those with more (land, peace, free time, wisdom, etc.) along with them, to satisfy the appetite of their ever-growing shadows.
No...that's "filler states".
Plenty of CA and plenty of NY is not "coastal". IMO VC is leaving a ton on the table by not leveraging the excellent state universities and low cost of living relative to SF/NY
> anti intellectual voter base will destroy the advancement opportunity of the middle class
Chicago, Detroit, Baltimore, etc. Most of the failing inner cities with bad schools and high crime rates have been run by democrats for decades. If anything, it is the far left that should realize that their policies to do not work long term.
Chicago, Detroit, Baltimore, etc. Most of the failing inner cities with bad schools and high crime rates have been run by democrats for decades. If anything, it is the far left that should realize that their policies to do not work long term.
Um, to counter one example... Maryland actually tops US News and World Reports' high school rankings overall. [1] Their city public schools were recognized for improvement by the US Department of Education for a number of years. [2] I'm sure there are problematic areas, but it seems bad practice to go after the entire Baltimore public school system over this -- on the whole, my impression is that it seems pretty decent.
The Atlantic article reflected concerns about Midwest research spending. Since the Midwest has states that are both Democrat dominated and Republican dominated in politics, I'm not sure you can actually draw any partisan conclusions from that article.
(There is a political divide on research spending opinion per surveys [3], but even here, most Republicans either support increased scientific research spending, or keeping it at the same levels.)
[1] https://www.usnews.com/education/best-high-schools/articles/... [2] https://www.ed.gov/labor-management-collaboration/conference... [3] http://www.people-press.org/2017/04/24/how-republicans-and-d...
The Atlantic article reflected concerns about Midwest research spending. Since the Midwest has states that are both Democrat dominated and Republican dominated in politics, I'm not sure you can actually draw any partisan conclusions from that article.
(There is a political divide on research spending opinion per surveys [3], but even here, most Republicans either support increased scientific research spending, or keeping it at the same levels.)
[1] https://www.usnews.com/education/best-high-schools/articles/... [2] https://www.ed.gov/labor-management-collaboration/conference... [3] http://www.people-press.org/2017/04/24/how-republicans-and-d...
Did you notice how all of your examples happen to be Rust Belt cities? Also note that you didn't mention San Francisco, Seattle, New York or Los Angeles which have all been run by Democrats for decades. Is it possible that the economics have more of an impact than the politics? Meanwhile, according to this analysis, 3 of the 6 best public high schools in the country are Chicago Public Schools.
https://www.niche.com/k12/search/best-public-high-schools/
https://www.niche.com/k12/search/best-public-high-schools/
> didn't mention San Francisco, Seattle, New York or Los Angeles which have all been run by Democrats for decades.
Are you really citing SF, New York, and Los Angeles as success stories. Those areas have some of the highest rates of homelessness in the US. In addition to the run away costs of living in those cities, they are certainly not models for success. Those examples don't help your argument...
Are you really citing SF, New York, and Los Angeles as success stories. Those areas have some of the highest rates of homelessness in the US. In addition to the run away costs of living in those cities, they are certainly not models for success. Those examples don't help your argument...
I am citing them as places that are not "failing inner cities with bad schools and high crime rates have been run by democrats for decades." as OP claimed. Chicago doesn't fall into that category either, but that is a discussion for another day. Bringing up cost-of-living or homelessness is simply moving the goalposts from the original claim.
The focus of my post was that it seems clear that economics is what forced those cities to crash. Look at Rust Belt cities (Milwaukee, Cleveland, Baltimore, Detroit, Buffalo, Gary) and you will find significant population decline and high crime rates. Trying to make it a political discussion brings in personal bias.
The focus of my post was that it seems clear that economics is what forced those cities to crash. Look at Rust Belt cities (Milwaukee, Cleveland, Baltimore, Detroit, Buffalo, Gary) and you will find significant population decline and high crime rates. Trying to make it a political discussion brings in personal bias.
> The focus of my post was that it seems clear that economics is what forced those cities to crash.
Economic policies from politicians influence economics. If policies are bad for business, jobs will leave, crime will rise and populations will decline. Economics don't happen in a vacuum. Most if not all of those declining cities have been consistently run by democrats
Economic policies from politicians influence economics. If policies are bad for business, jobs will leave, crime will rise and populations will decline. Economics don't happen in a vacuum. Most if not all of those declining cities have been consistently run by democrats
>Most if not all of those declining cities have been consistently run by democrats
And so have most of the growing, thriving cities. Individual cities have very little say in global economic shifts. We are seeing this same story play out in Republican-controlled rural areas.
First some jobs leave (outsource or automation), then laborforce participation declines, next we see drug use increase, which makes more people unemployable, as a result employers leave the area and more jobs are lost. Then you go back to step 1 and re-run.
Trying to cast everything in a partisan light may be blinding you to the similarities.
And so have most of the growing, thriving cities. Individual cities have very little say in global economic shifts. We are seeing this same story play out in Republican-controlled rural areas.
First some jobs leave (outsource or automation), then laborforce participation declines, next we see drug use increase, which makes more people unemployable, as a result employers leave the area and more jobs are lost. Then you go back to step 1 and re-run.
Trying to cast everything in a partisan light may be blinding you to the similarities.
Baltimore is Rust Belt?
It is certainly debatable, some lists include it and some don't. Baltimore is not in the traditional industrial heartland or even the Midwest, but it's economic makeup in the mid-20th century is very similar to traditional Rust Belt cities (large ports, metal production, manufacturing).
includes - https://www.thoughtco.com/rust-belt-industrial-heartland-of-...
doesn't include - https://en.wikipedia.org/wiki/Rust_Belt
includes - https://www.thoughtco.com/rust-belt-industrial-heartland-of-...
doesn't include - https://en.wikipedia.org/wiki/Rust_Belt
zero surprise that the Atlantic staff would free up time to do a hit piece on the Midwest. It's not like anyone had previously thought that UW Madison would match Yale in the endowment Dept. Atlantic loves doing cultural victory laps over the Midwest to assauge their other more obvious setbacks
I'm in flyover country, and I'm pretty skeptical of this.
Seems to me that China, Russia, and Europe are focused on "rolling their own" so to speak--especially after the Snowden leaks. China has already made a lot of progress on that front. India will probably join the party if the visa/offshoring pipeline dries up.
If the big 4/5/6 finally end up with some viable international competition, I don't think minting more tech startups is a particularly good long-term plan.
Seems to me that China, Russia, and Europe are focused on "rolling their own" so to speak--especially after the Snowden leaks. China has already made a lot of progress on that front. India will probably join the party if the visa/offshoring pipeline dries up.
If the big 4/5/6 finally end up with some viable international competition, I don't think minting more tech startups is a particularly good long-term plan.
If flyover states didn't produce these startups during the last decade of easy capital, I am struggling to see how there would be a new breed of startups when capital eventually tightens in the next few years.
Another problem with investing in "flyover" states is that you are spreading your investment across many states and cities, individually any one of them lack the capital and talent concentration to compete with coastal cities. A much better strategy is probably to focus the entire investment portfolio in Chicago or Detroit.
Finally, when you scale your startup to 10s of billions, you will need to attract immigrant talent. Which is much easier to do in the coasts.
Another problem with investing in "flyover" states is that you are spreading your investment across many states and cities, individually any one of them lack the capital and talent concentration to compete with coastal cities. A much better strategy is probably to focus the entire investment portfolio in Chicago or Detroit.
Finally, when you scale your startup to 10s of billions, you will need to attract immigrant talent. Which is much easier to do in the coasts.
>If flyover states didn't produce these startups during the last decade of easy capital, I am struggling to see how there would be a new breed of startups when capital eventually tightens in the next few years.
The cost of living is lower here (the Midwest) and outside the coasts in general. It's easier to bootstrap. There's plenty of successful startups that started in the Midwest, they're just not the Big 3.
>individually any one of them lack the capital and talent concentration to compete with coastal cities. A much better strategy is probably to focus the entire investment portfolio in Chicago or Detroit
And create another SV situation where all of the talent is squeezed into one small geographic area (granted, with less insane building regulations than SV), in an age where we can effectively work from anywhere in the world that we want to? Hard pass.
>Finally, when you scale your startup to 10s of billions, you will need to attract immigrant talent. Which is much easier to do in the coasts.
I'm not convinced that we actually lack Americans capable of doing the jobs we need to do. Immigration has been increasing in the past 10 years or so in the Midwest though, despite still lagging behind the coasts, for whatever that's worth.
The cost of living is lower here (the Midwest) and outside the coasts in general. It's easier to bootstrap. There's plenty of successful startups that started in the Midwest, they're just not the Big 3.
>individually any one of them lack the capital and talent concentration to compete with coastal cities. A much better strategy is probably to focus the entire investment portfolio in Chicago or Detroit
And create another SV situation where all of the talent is squeezed into one small geographic area (granted, with less insane building regulations than SV), in an age where we can effectively work from anywhere in the world that we want to? Hard pass.
>Finally, when you scale your startup to 10s of billions, you will need to attract immigrant talent. Which is much easier to do in the coasts.
I'm not convinced that we actually lack Americans capable of doing the jobs we need to do. Immigration has been increasing in the past 10 years or so in the Midwest though, despite still lagging behind the coasts, for whatever that's worth.
I think you just hit on part of why they weren't attracting VC money the last decade of easy capital in your second sentence. VCs were afraid of spreading themselves out so they just continued investing in NYC/SF. If the mantra is "don't spread your investments out geographically" and you're already heavily invested in an area, how do people not from that area attract your money?
Now that the traditional startup hotspots are over saturated with investors, those who can't set the best terms for themselves in those areas are finally realizing they can likely get better terms in places that aren't currently competing as heavily for VC money.
Now that the traditional startup hotspots are over saturated with investors, those who can't set the best terms for themselves in those areas are finally realizing they can likely get better terms in places that aren't currently competing as heavily for VC money.
This seems like a really encouraging initiative.
Somewhat tangentially, I also feel like the following ideas would help spread the Silicon Valley fortunes across the US better:
1.) Mainstream the idea of prefab housing built in flyover states/cities and transported to the coasts by truck/rail. It seems incredibly promising. Construction workers can work in a comfortable climate controlled indoor environment, work regular hours at a steady pace, no fighting traffic, live in cost appropriate areas. Basically car/airplane building techniques/uniformity applied to houses with built-in limits on how far it can be outsourced to foreign companies (at some point transportation costs start to outweigh outsourcing advantages).
Modular developer working with Google with housing built in East Bay/Sacramento: Factory_OS at Mare Island https://vimeo.com/228412494
Utah based builder: http://www.guerdonmodularbuildings.com/modular-now-marriotts... with a building in San Jose: http://www.palisadebuilders.com/projects/domain/
2.) FAANG and WeWork should invest in always on, life-size, fiber-to-fiber Telepresence like video conferencing systems that connect dedicated hallways/open office/meeting spaces Silicon Valley to their corresponding spaces in remote offices instead of attempting to do Google Fiber residential installs to a handful of lucky chosen people. Always on means meetings start immediately without fumbling with the meeting configuration UI. Surreptitious hallway meetings can occur. This would actually work really well for offices in the same Pacific Timezone (i.e. Fresno, Gilroy, Bakersfield, Reno, Las Vegas).
Here's an example connection between MIT and Stanford. http://tech.mit.edu/V131/N31/wormhole.html
Somewhat tangentially, I also feel like the following ideas would help spread the Silicon Valley fortunes across the US better:
1.) Mainstream the idea of prefab housing built in flyover states/cities and transported to the coasts by truck/rail. It seems incredibly promising. Construction workers can work in a comfortable climate controlled indoor environment, work regular hours at a steady pace, no fighting traffic, live in cost appropriate areas. Basically car/airplane building techniques/uniformity applied to houses with built-in limits on how far it can be outsourced to foreign companies (at some point transportation costs start to outweigh outsourcing advantages).
Modular developer working with Google with housing built in East Bay/Sacramento: Factory_OS at Mare Island https://vimeo.com/228412494
Utah based builder: http://www.guerdonmodularbuildings.com/modular-now-marriotts... with a building in San Jose: http://www.palisadebuilders.com/projects/domain/
2.) FAANG and WeWork should invest in always on, life-size, fiber-to-fiber Telepresence like video conferencing systems that connect dedicated hallways/open office/meeting spaces Silicon Valley to their corresponding spaces in remote offices instead of attempting to do Google Fiber residential installs to a handful of lucky chosen people. Always on means meetings start immediately without fumbling with the meeting configuration UI. Surreptitious hallway meetings can occur. This would actually work really well for offices in the same Pacific Timezone (i.e. Fresno, Gilroy, Bakersfield, Reno, Las Vegas).
Here's an example connection between MIT and Stanford. http://tech.mit.edu/V131/N31/wormhole.html
Bezos is the worst person to invest in flyover areas. Amazon culture is extremely classist. Every bad stereotype you can think of happens. If you are from a rich family on a coast and went to an ivy you get lots of funding, support, and an easy management job. If you are from flyover country you are supposed to be a robot slave whether working in a warehouse or coding through the weekend. Yeah, if you are from some village in Asia tech companies will help you out and hold you up as an example, but guess where people in flyover states are not from.
Imagine if Big Capital started investing in cities instead of companies. That would be a nice thought.
Property would be the new stock; hostile takeovers would be fights over the city-government board.
Investors would profit when they managed to increase the value of the properties they own. So they start building better public schools, improve the local infrastructure, make the downtown a bit more appealing, etc. -- Hell, why not build a community college, an actual communal one where anyone can freely attend, and have that as the new "church"?
Of course there's the issue with gentrification -- which I'm not sure is avoidable given the influx of capital -- but if equal access to these new resources is guaranteed, an investment in cities may perhaps produce compound interest not only for the investors but also for the residents long term.
Thoughts?
Property would be the new stock; hostile takeovers would be fights over the city-government board.
Investors would profit when they managed to increase the value of the properties they own. So they start building better public schools, improve the local infrastructure, make the downtown a bit more appealing, etc. -- Hell, why not build a community college, an actual communal one where anyone can freely attend, and have that as the new "church"?
Of course there's the issue with gentrification -- which I'm not sure is avoidable given the influx of capital -- but if equal access to these new resources is guaranteed, an investment in cities may perhaps produce compound interest not only for the investors but also for the residents long term.
Thoughts?
This is basically how Big Real Estate already treats most cities.
Yes. Developers that obtain approval for neighbourhood plans operate in exactly this manner, putting in sewage, roads, schools, parks, etc. in order to improve the value of the commercial/residential units they are selling.
Additionally, some less 'saleable' improvements end up being included as concessions in negotiation with the local municipal authority to get the development plan approved.
Public transit financing in greenfield areas works similarly.
Additionally, some less 'saleable' improvements end up being included as concessions in negotiation with the local municipal authority to get the development plan approved.
Public transit financing in greenfield areas works similarly.
To me, this feels like a pretty normal market process, more than a giant leap of human goodness.
These investors are seeking returns. For the past 6 decades, a tiny area of the country provided great returns. The compacted nature of the “Valley” helped concentrate resources and grow companies.
But at some point there is less incremental benefit to stuffing one more tech startup into SF than there is looking “afield” to further reaches of the country.
This is a fantastic sign for people like me who live in lowly (but lovable) Columbia SC. For too long, the investment pool has been a drip, even while the talent pool grows.
Good job investors. We can’t wait to see you. And if I may, please don’t imply that you’re doing this for any reason other than maximized returns. We’re all adults here.
These investors are seeking returns. For the past 6 decades, a tiny area of the country provided great returns. The compacted nature of the “Valley” helped concentrate resources and grow companies.
But at some point there is less incremental benefit to stuffing one more tech startup into SF than there is looking “afield” to further reaches of the country.
This is a fantastic sign for people like me who live in lowly (but lovable) Columbia SC. For too long, the investment pool has been a drip, even while the talent pool grows.
Good job investors. We can’t wait to see you. And if I may, please don’t imply that you’re doing this for any reason other than maximized returns. We’re all adults here.
These are fair points, yet the most prominent names attached to this fund are also pretty active participants in the national political conversation (J.D. Vance, Bezos, Buffet). Vance, who is leading this, is famous for moving back to his home region, beleaguered Appalachia, on mostly altruistic terms. Bezos has been targeted with tweets from the president suggesting a thirst for brute force regulations on Amazon and WaPo for nakedly political reasons. I don't think it's naive to posit that altruism and a concern for the political order are at play here.
This group of people suggests to me that they're realizing that having so much of our economy concentrated in a few states is a political vulnerability that can be easily exploited by a demagogue.
This group of people suggests to me that they're realizing that having so much of our economy concentrated in a few states is a political vulnerability that can be easily exploited by a demagogue.
If you ever attended one of its ("Rise of the Rest") events you'd know it's nothing but a Case vanity project. He even describes himself in a fireside chat as a mix of Steve Jobs and Bill Gates....
How about weapons based start-ups?
There are a fair few micro-armories that do firearm based products out of TX. Investors would be mindful to watch out for them. Remember that gun with the gyrometers that would turn you into a sniper? Or the 3-D printed guns? Or the 'smart' guns? You may/not be making the world a better place, but you will change it.