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Businesses The Almighty Buck

High-Tech Start-Ups Put Down Roots In New Soil 141

Posted by samzenpus
from the welcome-to-nowhere dept.
ThousandStars writes "The Wall Street Journal says that 'High-tech start-ups are increasingly setting up shop in places previously not known for attracting high-tech firms. A number of cities, such as Kalamazoo, Mich., and Toledo, Ohio, are offering grant money and tax breaks to high-tech start-ups, just as the usual venture-capital hot spots, such as Silicon Valley and Boston, continue to see a pullback in venture lending.""
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High-Tech Start-Ups Put Down Roots In New Soil

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  • by KingFeanor (950059) on Wednesday May 27, 2009 @07:47PM (#28117193) Homepage
    I work for a big tech company from a small city in Wisconsin. It is great. For the company, office space is cheap, internet access is cheap, energy is cheap, salaries are less than in big cities and employees are still happy. As an employee, I'm happy since I don't have traffic nightmares getting to work and home (I have a whole 5 minute commute), the cost of living is low (I live in a remodeled 3 bedroom home that is worth $120K) and in a small office (200 people) you can know everyone by name. It is a win-win deal for a tech company to locate outside the major tech areas.
    • Re: (Score:3, Insightful)

      Hiring is the problem. If you require highly specific skill sets you end up paying relocation... and who knows how well the relocation itself goes for the candidate.

      • by rubycodez (864176)

        no problem at all for company, plenty of highly skilled people are desperate for work! companies say NO RELOCATION and if you want a job you move.

      • Re: (Score:3, Insightful)

        by sumdumass (711423)

        You would be surprised at how many people live in those areas or want to because of family or whatever with the skill sets your looking for.

        Ohio state and Michigan state both have top notch computer science courses as well as many niche courses in the same area. Plus you have people who moved to where the work was who would like to move back or closer to their real home.

    • by Anonymous Coward on Wednesday May 27, 2009 @08:18PM (#28117487)
      I grew up in WI, lived in Seattle for seven years, and am now in San Francisco. I'm fairly familiar with the laws regarding businesses in all three states; I started an LLC in Seattle that I never really did anything with due to my day job, while now I've been completely dedicated to a personal project for eight months and am looking into starting a real business out of it. While there are trade-offs between WA and WI -- WA has better business and tax laws, while WI has lower cost-of-living in many cases -- CA is quite clearly dead last in starting a business where physical proximity to other particular businesses or people isn't a key factor to success. I now thoroughly understand why my former employer moved their entire business, including providing handsome travel and housing packages for then-current employees, from the Bay Area up to the suburbs of Seattle.

      The first big warning sign was when I saw that along with other fees and taxes, a CA LLC with absolutely no income is charged an $800 fee by the state every single year. This is four times or more of the initial fee in other states, and most other state only charge a legitimate filing fee for subsequent years -- along the lines of $50. The business taxes, plus the sales taxes, plus the income taxes, plus ridiculously high cost of living all add up to a massive inequity in ROI compared with other locations, and in return you get to live in a state on the verge of bankruptcy and your non-local business gets essentially no boost in sales due to its location. The single reason why I'm considering incorporating here is because if my business doesn't work out, this location has more jobs for my somewhat unique specialty compared with other locations. I can only see that lasting for so long, though.
      • by Grishnakh (216268)

        Can't you just incorporate your business somewhere else, like Nevada, and still operate in California if you need to?

    • Actually, it's quite interesting to see how - in terms of infrastructure - smaller cities compare to the big ones. Two years ago, I lived in a city (my hometown) of about 85,000 in BC, Canada. Internet access was generally quite fast, especially with cable providers, etc for residential. Around when I was leaving, the city in conjunction with various local businesses had been in the process of laying fiber in all areas.

      After that I moved to Toronto, Ontario (population over 2,500,000). Internet and telecomm

  • by localroger (258128) on Wednesday May 27, 2009 @07:55PM (#28117269) Homepage
    A manufacturer we represent whose business center and plant was in rural Minnesota bought a competitor whose business was located in San Francisco. They decided who they wanted from the eated company and offered them jobs. Most of the SFicans were appalled at the idea of moving to the great frozen flyover wasteland, but the eater company paid for all of them to come visit for a couple of weeks. In that time they learned that they could own acres of land with three thousand square foot homes for what they had been paying for a walk-up condo, that they could commute in minutes and leave their doors unlocked without worry, and nearly all of them ended up moving to Minnesota. And most of them are still there today, even though their company eventually got eated by a European company and you now hear a lot of British accents around the place.
    • by Tiro (19535) on Wednesday May 27, 2009 @08:12PM (#28117415) Journal
      Reminiscent of Wells Fargo, the bold SF bank that got eated by the very cautious Minnesota-based Norwest Corporation in 1998. Regarding your story, this is a fundamental aspect of capitalism: the dislocation of production from established areas to lower cost areas. That can mean Ohio to China, or San Francisco to Ohio. It is rather interesting to me that places like Gary, IN* don't rejuvenate on their own. There is definitely some cultural preference to other places, which is why there is more to the story than pure economic cost/infrastructure advantage. * Interesting that much new growth in the US Midwest comes from Mexican immigrants, for whom there is less bias against these 'boring' towns.
      • Re: (Score:3, Insightful)

        by superdana (1211758)
        I think Gary is a special case. It has an appalling crime rate, for one: they've only recently managed to get themselves off the list of top ten crime-ridden places in the United States. I also suspect that an element of racism (not necessarily overt, but racism nonetheless) prevents companies from even considering places like Gary, which is overwhelmingly populated by African Americans. Kalamazoo and Toledo are, by comparison, lily white.
        • by jez9999 (618189)

          Also, the name of their sister city really doesn't help matters. I can see some employers being worried about the turn of phrase, "Gary? Fuxin, China" coming about somehow.

        • Racism? because companies prefer to locate in cities with low crime rates (Kalamazoo) rather than cities with high crime rates (Gary)? Yeah, the companies aren't locating in Gary because of the proportionally high number of African Americans. I mean why would they care that the crime rate is much higher there?
        • Also remember that the racism door swings both ways. Being in the Region, I make it a point NOT to drive through Gary, IN after dark.

          The police have stopped me and others on occasion simply for driving through town. Their understanding is that a white person in Gary after dark is only there for 1 of 2 things: Buy Drugs or Get Robbed/Assaulted.

          Really. I've had a police escort out of town twice (thought it was a joke the first time)...

      • by ishobo (160209)

        Reminiscent of Wells Fargo, the bold SF bank that got eated by the very cautious Minnesota-based Norwest Corporation in 1998.

        Eated? Is stupidity that infectious?

        It is not reminiscent at all. After the merger, the acquiring company (Norwest) moved its headquarters from Minneapolis to San Fransisco, the existing home of Wells Fargo.

    • Plus... (Score:5, Insightful)

      by maz2331 (1104901) on Wednesday May 27, 2009 @08:18PM (#28117485)

      I wouldn't move from Pittsburgh to anywhere in California for any amount of money.

      • When I quit Big Medical Co. in NYC back in March and had to hit the pavement, again, I noticed a lot of postings on Craigslist for Pittsburgh. I actually went back to Big Medical Co., but I'm still keeping an eye on Pittsburgh, since it's three hours closer to home. I'm a weekly commuter, so less time on the road is a plus.

        What's PGH's claim to fame, lately? Yeah, sure, the Steelers won #6, but that can't have a whole lot to do with it.

        • by el_benito (586634)

          Pittsburgh's always been a strong college town with CMU and Pitt, especially with the extremely strong UPMC hospital group. A few years ago, city leadership finally figured out that if they encouraged those students to stick around post-graduation, they might just have something there. Furthermore, housing prices were depressed in Pittsburgh before the housing bubble, so values increased to more in line with actual worth, as opposed to going far beyond. When the bubble burst, there was little to no drop in

      • It's not quite as bad as The South or Middle America but Pittsburgh PA is it's own little brand of inbred white trash hell.

        I'm amazed beyond belief with all of these people who JUST LOVE PITTSBURGH. There are 100's of developers with graduate degrees from good schools WHO FREELY CHOSE TO "LIVE" IN PITTSBURGH. These people could go anywhere and yet they choose to rot here in Pittsburgh! What's wrong with them? I wish I knew!

        I'm counting the days until I can leave this place.

        (I'm a Pittsburgh native. I'v

    • by Technician (215283) on Wednesday May 27, 2009 @08:30PM (#28117599)

      What we see on a state by state basis to attract jobs while at the same time we try to make the evil multinational corporations pay (Obama and taxes) we may start to see many start ups simply avoid the US.

      Intel has been accused many times of avoiding paying taxes for the massive tax breaks they get to have a location in the Portland Oregon area, but most people don't realize they not only pay salaries taxed by the state, they also are taxed for their property. Nike also in the area has a much lower inventory tax because they don't have a fab full of multi million dollar manufacturing tools. To attract Intel, the city of Hillsboro had to adjust for this.

      Failure to do this would let them have a larger piece of nothing, With no concessions for the value of the factory equipment Intel would have built elsewhere. The clean water and moderate electricity rates are what attracted them. High local tax areas could soon erase the advantages.

      I am afraid that Obama's economic plan will drive the rest of large manufacturing overseas. The Union obligations are already having a severe toll on the auto industry without the help of taxes driving them out of business.

      Tax the rich simply is to send them elsewhere in a global market where conditions are better.

      • Re: (Score:3, Interesting)

        by timeOday (582209)
        I don't know what Obama policies you are referring to, unless it is closing offshore tax loopholes. Personally I am fine with that one; if they think they can operate better by physically relocating to Bermuda, let them try.

        Show me a business that never loses a customer or employee to the competition, and I will show you a business that charges customers too little and pays employees too much. State giveaways to business are the same. I'd rather live in a state that grows slower but is financially bett

        • Yes, for a lot of them it seems it's not so much about physical locations are monetary ones.

          The fact is that a lot of the offshore locations are finding that they get shafted just as easily (or worse) by companies pinching pennies, and then companies execs themselves often find it harder to keep a thumb on operations that are half a world away.

          I'm not sure that the companies who worm through tax laws and others by setting up off-base tax havens are the types you'd want around right now anyhow, as they seem

        • Re: (Score:3, Insightful)

          by Technician (215283)

          I don't know what Obama policies you are referring to, unless it is closing offshore tax loopholes.

          This thinking is prevalent. The value a multinational corporation makes or is worth is often up for debate. Often the tax rates are based on the company bottom line regardless of how much of the work is done where.

          Examples are Nike where most labor is overseas and Intel where the US fabs produce the chips that are packaged overseas. The completed product is made in 2 countries. If both countries try to tax

          • by Grishnakh (216268)

            The result is loss of jobs and a trade deficit as that country now has to rely more and more on foreign imports like the US. The US is rapidly becoming a service industry nation writing software and providing medical services, but most goods are imported.

            Writing software? We're busy outsourcing that to India as fast as we can. Pretty soon, not much software will be written here.

            It's ok, though. We can all get rich by selling each other houses.

      • by twostix (1277166)

        Yeah do like Ireland did! Whoring themselves out to multinationals has worked out *perfectly* for them.

        They're doing really well now, now that all those multi-nationals that they sold themelves out out to have run back to their own countries where all those 'high' tax rates and corporate regulations offer a little bit of protection to them...

        If all you have to offer is low tax rates to attract big businesses, then you've got nothing.

        • Point well taken. Yeah do like Ireland did! Whoring themselves out to multinationals has worked out *perfectly* for them.

          Multinational corporations are quick to use the competitive advantages to use as a bargaining chip. As in my earlier example, Intel.

          http://www.intel.com/community/ireland/index.htm [intel.com] Intel does have a manufacturing plant there.

          Along those lines, many people missed the Redmond giant is building a new headquarters.. If taxes get bad, they are not locked into the US tax the evil corporation

          • Use this one.http://news.bbc.co.uk/2/hi/uk_news/scotland/edinburgh_and_east/7725221.stm Microsoft has a new headquarters in Edinburgh Ireland.

            • by stevey (64018)

              Ummm .. Edinburgh is in Scotland.

              Scotland and Ireland are very different places!

              • Scotland and Ireland are very different places!

                They're both full of redhaired drunks who hate the English.

    • Re: (Score:3, Funny)

      by Golddess (1361003)

      they could commute in minutes and leave their doors unlocked without worry

      And what town did you say this was? >.>

      • by guruevi (827432)

        Just about any town in rural America. PA, MN, OH, NY all have these towns where you can just walk into anyone's house without a problem. Criminality is low because a) a neighbor or somebody else might see you b) any scoping out before a job is impractical as a stranger in a neighborhood where everybody knows each other c) it's even more impractical to follow the habits of a 3 generation household in a house that stands by itself without anything around for miles d) there is a high chance of getting shot (th

        • Re: (Score:2, Interesting)

          by bladesjester (774793)

          Just about any town in rural America. PA, MN, OH, NY all have these towns where you can just walk into anyone's house without a problem.

          I can't speak for PA, MN, or NY, but I grew up in small rural towns in Ohio. I can assure you that people certainly *did* lock their doors and that crime, while not *insanely* rampant, was far from rare. I am, however, told that people were less likely to lock their doors when my father was a kid.

          I knew a number of people whose homes were broken into while I was growing u

          • by paganizer (566360)

            OK, I don't understand, what exactly is your problem with this?

            In case you are wondering, note the sig.

          • Add to this the fact that there is a prevailing sentiment in a lot of the smaller rural communities here that the entire world should be Christian (and they are willing to trample the civil rights of others to that end), that anyone less conservative than W is causing the ruin of this country, that all Muslims are evil and want to destroy America (I kid you not. Actual comments from the local paper), and, frankly, that if you're not a white, "God fearing", good ol' boy that you should just get out.

            I've see

            • I've seen just as crazy and worse people in large cities. The mix of crazy is slightly different in a large city, but there is plenty of crazy in any metropolis, suburb, or rural town.

              Crazy does indeed exist everywhere. The concentration of it in a lot of the small towns here, however, tends to be rather higher than I have experienced in larger cities.

              You also have the fact that there tends to be quite a bit of, shall we say, "shady" activity that everyone who is halfway observant knows about but nobody t

          • by guruevi (827432)

            I know the issues in those small towns. I was just saying criminality is low especially in "farming" communities. I didn't say anything about the religious nutjobs but those can be found anywhere. It's just less prevalent in the cities. I currently live in the city myself because small towns don't have the need for an IT person like me and there was no cable to be found and DSL wasn't possible on the phone line that also had the local radio station on it in the background (it was fun when they were taken ov

    • by grepya (67436)

      They decided who they wanted from the eated company

      ...most of them are still there today, even though their company eventually got eated by a European company...

      Will I have to surrender my usage and grammar books at the border if I move to Minnesota ? (sorry for being a language nazi, but the second and third repetition of "eated" really grated..)

      • by GaryOlson (737642)

        Will I have to surrender my usage and grammar books at the border if I move to Minnesota ?

        No, but you will have to learn how to talk and fish at the same time.

    • by ishobo (160209)

      They decided who they wanted from the eated company...

      I think you are looking for the word acquired. I recommend some remedial classes.

      ...they could own acres of land with three thousand square foot homes...

      Ah yes, what America needs, more sprawl.

    • by twostix (1277166)

      Have I woken up in some sort of parallel world where "eated" is even a word?!!

      Who are you people?!

    • by metamatic (202216)

      In that time they learned that they could own acres of land with three thousand square foot homes for what they had been paying for a walk-up condo, that they could commute in minutes and leave their doors unlocked without worry, and nearly all of them ended up moving to Minnesota.

      Yes, but... -45 degrees! I couldn't live in Minnesota, I'd blow my brains out after a few winters.

    • by Grishnakh (216268)

      While there's many more rural areas I wouldn't mind living, I don't think Minnesota is one of them. I haven't been there, but my wife used to live in nearby North Dakota, and not only was it ridiculously cold there (-40), there were no trees. Sure, acres of land is nice, but not when it's barren, open land with nothing on it. Apparently, one of the jokes they'd tell new Air Force recruits who were being sent to ND was that "it may be cold, but there's a cute girl behind every tree!" It wasn't until they

  • by Anonymous Coward on Wednesday May 27, 2009 @07:56PM (#28117291)

    My wife & I left silicon valley about 5 years ago at the tail-end of the dot-com bust. I had a GREAT time there, aside from the worthless options and 80-hour work weeks. We thought it was time to start a family, and wanted a bigger, less-expensive house, no traffic, slower quality of life. We were willing to trade a premium salary for it.

    WHAT A HUGE MISTAKE.

    Turns out that when you're in a smaller town, you have NO OTHER employment options. What happens if you don't like your little tech company? uh, you're screwed. In Silicon Valley you always had a network three deep that could get you a fun, interesting job in a little bit. You had options. A backup plan. In smaller towns you're running without a safety net. If you leave the relocated tech-company, you've got the small-town mindset and businesses. I see plenty of craigslist ads that read, "must have 5 years networking experience, cisco preferred. Be able to build and administer our 50-person network. References required. $10/hr, contract only." I'm seriously NOT kidding.

    I wish I could completely rewind my experience and still be in silicon valley. Higher rents, more traffic, silly housing prices and all.

    • by megaditto (982598)

      "must have 5 years networking experience, cisco preferred. Be able to build and administer our 50-person network. References required. $10/hr, contract only." I'm seriously NOT kidding.

      Is that really unreasonable? Except for an occasional hands-on network lag testing (quake, UT, half-life), your scripts should be able to run the whole thing. Am I right?

    • by Anonymous Coward

      Turns out that when you're in a smaller town, you have NO OTHER employment options. What happens if you don't like your little tech company? uh, you're screwed.

      It depends on the size of community you're in.

      I would think sticking with places (giving US examples) like Atlanta, Chicago, Philadelphia, Portland, Seattle, Boston, etc., would help people avoid some of the headaches of Silicon Valley, but still give you decent options.

      I'm sure somewhere like Erie, PA is nice place (pop. 103,650), but your options techie choices will be limited. Stick with 600,000 and up, and you'll probably have a decent amount of variety:

      http://en.wikipedia.org/wiki/List_of_United_Sta

      • by QuoteMstr (55051)

        You probably want the US Metro Area Rankings [wikipedia.org] instead, actually. Unfortunately, a lot of economic activity occurs outside of cities. (tl;dr: sprawl.)

      • I would not look at just a cities population, but rather look at Metropolitan Statistical Areas (MSA).
        See <http://en.wikipedia.org/wiki/Table_of_United_States_Metropolitan_Statistical_Areas>. I think that gives a better representation of potential jobs.

        Note that Kalamazoo's MSA is rated 148 if sorted by population (323,264). Ann Arbor's is 141 a mere 26,739 more (350,003).

        Within a hour's drive there is also Grand Rapids (66th by pop. - 776,742), Lansing/East Lansing (106th - 456,440), South Bend, IN
      • Re: Erie. Aside from the Peach St. exit off of I-90, it's kind of "rugged." The Peach St. area, however, is going bonkers with all kinds of retail. I like Cleveland much better, even though it's two hours further away from me.

    • Re: (Score:1, Insightful)

      by Anonymous Coward
      If you qualify for an above-average salary for a location, you're usually going to be better off working in a high-wage high-expense city due to the larger margin involved. Do that while living well below your means and it's not difficult to find yourself in your thirties with a wad of cash (not counting retirement funds) that can sustain you for ten years in a smaller and cheaper location, and your options in life open up tremendously.

      I followed that plan into my late twenties and ended up with enough c
      • Well said. It also helps if you don't have children or a spouse. Though a spouse can definitely help if she's also working and making good money.

    • by fuzzyfuzzyfungus (1223518) on Wednesday May 27, 2009 @09:51PM (#28118209) Journal
      Sounds like you've just identified a major perk for companies that move out into the sticks...

      Sooner or later, they'll just start paying in scrip, redeemable at the company store, and it'll be the good old days all over again.
    • Re: (Score:3, Insightful)

      by bigbird (40392)
      With house prices crashing in Silicon Valley (well, everywhere in the US it seems), perhaps it is time to head back there?
    • What happens if you don't like your little tech company? uh, you're screwed. In Silicon Valley you always had a network three deep that could get you a fun, interesting job in a little bit. ... In smaller towns you're running without a safety net. If you leave the relocated tech-company, you've got the small-town mindset and businesses.

      To create a hi-tech center you need to create the whole structure. You can't just attract a single hi-tech company for the cheap labor, for the reasons given above. You nee

      • I live in Detroit, but my company is headquartered in Long Beach, CA, and my employment agreement specifically said the "We own everything" clause was limited by the California labor laws (it even included a copy of it at the back). I checked with an IP lawyer that it really would be limited that way when I wasn't in California, and was much happier about signing on.

  • Online Economy (Score:5, Insightful)

    by alain94040 (785132) * on Wednesday May 27, 2009 @08:04PM (#28117351) Homepage

    The economy is moving online. Soon, it won't matter anymore where you live and who you work with.

    And I'm not talking about the scams such as "make $100K working from home". I mean real, legitimate, value-added work (like programming), that you do wherever you want, whenever you want, as long as you deliver a good product.

    • by stbill79 (1227700)
      Isn't this a problem for all of us in this field, then? Yesterday San Francisco, today Minnesota, and tomorrow Bangalore. While many jobs can be offshored, those industries that have absolutely no artificial barriers to entry backing them up, for example the AMA for doctors, Bar Association for lawyers, unions for teachers, cops, and firemen, etc. will be most easily shipped to lower cost workplaces. It is a race to the bottom, and places like Minnesota and Wisconson are simply short stops along the way.
      • Re: (Score:3, Insightful)

        Can you outsource doctors, lawyers, teachers, cops, firemen, etc. even in the absence of "artificial barriers"? Medical tourism is possible, and some legal research could be done from overseas, but it would be difficult for Bangalore firemen to respond to a blaze in Peoria. Some things just can't be outsourced.

        • Let's generously estimate that the number of jobs that can't be outsourced represents 25% of the total number of jobs. Once 75% of the jobs disappear, there will be so many applicants for each position that the wage will probably fall below that of an Indian. While government jobs like firemen tend to be overpaid, with low tax collections because of mass unemployment, cities will be forced to cut budgets by privatizing services. Private fire companies won't have unions to stop them from paying almost nothin
    • Re:Online Economy (Score:5, Insightful)

      by xant (99438) on Wednesday May 27, 2009 @09:42PM (#28118149) Homepage

      Uh, that's been possible for, like, 10 years now. When's that going to happen?

      • Re:Online Economy (Score:4, Insightful)

        by Eil (82413) on Thursday May 28, 2009 @12:54AM (#28119347) Homepage Journal

        Uh, that's been possible for, like, 10 years now. When's that going to happen?

        It already did. In India.

      • by Aceticon (140883)

        It's happened already: most pure software development jobs moved to India.

        The great "software development is a portable skill that can be practiced remotely from anywhere" discovery didn't end up in "rich nation nationals, living in far away, cheap and exotic locations, being paid rich nation salaries" instead it ended up as "nationals in far way, cheap and exotic locations, being paid local (cheap) salaries".

        With hindsight it's all a pretty obvious outcome.

    • by Grishnakh (216268)

      Wrong. This thing already exists: check out rentacoder.com. If you live anywhere in the US, it's not worth it to take any of those jobs. They're usually only about $100 each, for jobs that will take at least a week to complete. That wouldn't come close to paying most peoples' rent. But there's tons of Indians and Romanians taking these assignments.

  • by aafiske (243836) on Wednesday May 27, 2009 @08:06PM (#28117377)

    Problem is, and all jokes about single engineers aside, that means the spouse has to find something viable in that location as well. Some professions are pretty portable, others aren't. But it's not just about where you can lure a single person.

    Plus, if you lose your job, suddenly you're in Toledo where there's not that many other companies. At least in the Bay Area, you know you have multiple options to switch to should you want to. Without having to sell your house which no one wants or needs to buy. (Admittedly this is a chicken-and-egg problem; if enough companies move to Toledo or wherever, this goes away.)

    • by Anonymous Coward

      I can support a wife and a kid on $38k a year around the Kalamazoo MI area mentioned in the article.

      Did it ever occur to you that maybe your wife just won't have to work if you weren't paying so much for stuff?

    • by Ogive17 (691899)
      From Toledo you could get to Detroit quite easily. Cleveland is only 90 minutes away (from downtown Toledo). Columbus is also not terribly far. There are plenty of nice communities between the larger cities to live.

      While there might not be as much in Toledo itself, there are plenty of opportunities in the general area. In Ohio you can travel 60 miles in 60 minutes. In California you can travel 10 miles in 60 minutes.
    • by SoupGuru (723634)

      So paying out the nose for a house, sitting in traffic all day, living the rat race, hopping between jobs every 2 years is more appealing to you?

      Keep in mind in a smaller city the companies don't have such a large pool of job candidates either so they might tend to make it appealing to stick with the company for longer if you're a decent employee.

      I moved from SoCal to Spokane, WA and couldn't be happier. Any job at this point would just be a source of funding for living here, enjoying the outdoors, walking

      • by Grishnakh (216268)

        So paying out the nose for a house, sitting in traffic all day, living the rat race, hopping between jobs every 2 years is more appealing to you?

        I'm not a Silicon Valley worker myself, but I think the mentality is more along the lines of putting up with the rat race for a while, saving up a large nest egg, then moving someplace cheaper to retire early.

        For your small-town companies, the only option is usually work there until you die. Sure, you might not sit in traffic much, but you'll never be able to leav

  • by bADlOGIN (133391) on Wednesday May 27, 2009 @08:09PM (#28117391) Homepage

    Check out How to Be Silicon valley (http://www.paulgraham.com/siliconvalley.html).

    Based on the description of the right environment, we're not talking Kalamazoo or Toledo by
    a long shot. Besides, didn't people try this crap en-mass before the dot.com bust?

    • by OrangeTide (124937) on Wednesday May 27, 2009 @08:16PM (#28117457) Homepage Journal

      I've heard so many of these stories about how XXX will be the new place for tech. I don't see any reason to start believing it now. If you want to relocate away from Silicon Valley or one of the other tech areas of the US, you might as well relocate to India or east Asia or somewhere that is even cheaper than Kalamazoo.

      • Re: (Score:2, Funny)

        by Viperpete (1261530)

        I've heard so many of these stories about how XXX will be the new place for tech.

        Sweet! I've been waiting for some high tech porn.

    • It's only become one of the top places in medicine on the planet. That's pretty good for an old steel town.

      It is possible to build out the educational and corporate infrastructure in a "cheaper" place.

      • Re: (Score:1, Insightful)

        by Anonymous Coward
        Pittsburgh has Carnegie-Mellon. Kalamazoo doesn't.
        • Maybe just as or more importantly, Pittsburgh has the University of Pittsburgh and it's massive medical and hospital operations.
      • by Samrobb (12731)

        Not to mention robotics, file systems and a few other areas - seems to be a nice intersection of hardware + software expertise in the area.

    • Re: (Score:1, Informative)

      by Anonymous Coward

      The angle on Kalamazoo is is not high tech, but biotech. It is the (former) headquarters of the Upjohn company before it was acquired by Pharmacia and then Pfizer. Around it is a very good infrastructure for pharma/biotech; many small companies were started when Pfizer gutted the old Upjohn. It is not comparable to the Big Three locations (SF Bay area, San Diego and Boston) but there is much more there than you would expect. Particularly for the size of the community.

  • by Anonymous Coward
    Without cons and sin.
  • by Animats (122034) on Thursday May 28, 2009 @01:11AM (#28119451) Homepage

    Silicon Valley is definitely in decline. The current recession is hurting, but that's not the real problem. Part of the problem is that manufacturing moved out. Venture capital isn't doing well. Venture funds as a group are losing money, and have been for several years now. There was one tech IPO in 2008 before the crash.

    Worse, there's an idea shortage. Here's a list of companies looking for venture funding this month. [launchsiliconvalley.org] "Short dial codes" "Timeshare lead generation". "People powered search" (yes, that again). Yawn. There's nothing in the pipe that looks like a big win even if it succeeds.

    • by maxume (22995)

      Perhaps in this environment more interesting companies don't have to resort to posting on some website?

  • I was part of a company in San Diego that was acquired by a group in Overland Park Kansas. They had a habit making offers to move to Kansas with no relocation package. You can take a tax break. State of Kansas or state of unemployment deals. After 3 to 6 months of cross training the immigrants from California were laid off. Repeat with the remaining body count. I turned down several of these deals, it was an attractive deal, but unemployment 10 minutes from the beach is better than unemployment in the
  • by Qbertino (265505) on Thursday May 28, 2009 @04:48AM (#28120583)

    People seem to forget that Shockley went to death valley because there was absolutely nothing there and you could get all the basics dirt cheap. The nutcases that started the silicon revolution did that in barns and garages and of those in the cheapest they could find. The shockley five went to start Intel in the neighbourhood and thus Silicon Valley was born.

    If I where building a startup in the US today, I'd seriously consider Detroit. You can buy houses for 500$ right now in Detroit and infrastructure is just good enough to live. You could spent years there on the most minimal VC and since Detroit is so super-boring now the team actually would have a personal interest in concentrating on the thing their building.

    Revolutions very often start in extremely unspectacular places, where the artists and crazies move in because they have other things to worry about than finding the best way to rake in cash. It's only a few decades later that these places become the hippest areas on the planet. Notting Hill in London, Schanzenviertel and Hafenstraße in Hamburg, etc. etc. - all the same story.

    • I admire your pluck, but Detroit itself may be unrealistic. There's infrastructure, yes, but the police department is borderline non-functional [freep.com]. Startups still need civil order, and that may not be something you can count on in Detroit anymore.

      Still, I'm over in Grand Rapids, MI. I've been independent and working from home for years, and decided I'd rather live here, closer to family, than in Atlanta, which admittedly is much more of a tech and VC hub. Not counting on much tech popping up here (GR is a

    • If you are considering Michigan, consider Ann Arbor or Lansing. Both areas have excellent Universities nearby (U of Michigan, Michigan State), which provide both labor pool of CS grads and a vibrant cultural environment. I would also suggest looking to Ohio, especially around Cincinnati (U of Cincinnati) and Columbus (Ohio State). All these areas also have a start-up culture, often engaged in by Professors at the local Universities.

      • I won't deny that Ann Arbor has a better atmosphere than Detroit, but Wayne State is pretty comparable to Michigan State, and neither are that far off from the University of Michigan. Within the Detroit metro area, you also have Lawrence Tech, U of M Dearborn and Oakland University.

  • I grew up near Kalamazoo, and can attest that it's a great place to raise a family. I would have considered working there if they only had more tech jobs. I'm pleased to see their name in the running on Slashdot and WSJ. Michigan is much more than Detroit.

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