Could High Bay-Area Prices Make Sacramento the Next Big Startup Hub? 190
waderoush (1271548) writes "Don't laugh. As the cost of housing spirals out of control on the San Francisco peninsula, neighboring metro regions like Sacramento are beginning to look more attractive to startup founders who prefer a Northern California lifestyle but haven't worked in the Silicon Valley gold mines long enough to become 1-percenters. Today Xconomy presents Part 1 of a two-part look at innovation in the Sacramento-Davis corridor and efforts to make the region more welcoming to high-tech entrepreneurs. In Sacramento's favor, there's a talented workforce fueled by a top-20 university (UC Davis), space for expansion, proximity to the ski mountains at Tahoe, and a far lower cost of living — the average house in Sacramento is selling for $237,000, compared to $909,000 in San Francisco. The downsides include a shortage of local investment dollars and a lower density of startups, meaning there's less opportunity for serendipitous collaboration. But locals say recent efforts to boost the local high-tech economy are working. 'I really feel like we are in a renaissance area,' says Eric Ullrich, co-founder of Hacker Lab, a Midtown Sacramento co-working space."
Re:Insert any city here (Score:4, Interesting)
But I could almost see Davis/Sacramento becoming a tech hub(unlike, say, Montana or Arizona), since it's a relatively easy interview/move for tech workers currently in the Bay Area. Certainly it would take a long time & a lot of luck to become anything somewhat comparable to Silicon Valley, but I could see it as a satellite of the Silicon Valley.
Already doing it (Score:5, Interesting)
After living in SF for 10 years as an Independent Contractor, I realized that paying $3,100/month rent (house in the Presidio etc) was keeping me from doing anything productive other than working night and day on client projects or hunting for more projects when the work was done, I'd have ideas for apps and the like, but I'd be lucky to get two weeks into something only to get sucked into a project for a month or three, by which time, I'd be lucky to have another week or two to pick it up again, and by then had already forgotten where I was at and lost all momentum.
So I said fuck it, have been living out of a monthly hotel room billed as a "efficiency studio" (it has a full bath and kitchen), first in Sac and now in Fairfield, paying only $1,000/month including utils and housekeeping and have been making excellent progress creating some underlying frameworks and services that will be powering my app ideas. Yes, I still have to take clients and put down my personal projects, but now I take smaller projects for weeks at a time, not months at a a time and now my ambitions are really starting to come together, with my first round of OSS frameworks and services in reach. And while some people have looked down on me as trash for living out of a hotel instead of renting a house or apartment, fuck them. It's my life, ambition and goals, not theirs. Once I'm done, I plan on leaving the Bay Area, and hope to expat from the US and legally renounce my citizenship since I no longer view this as a Free Country under a Government that recognizes it's own Constitution, hence the desire to be as unencumbered as possible.
You forgot a third, but very important negative re (Score:5, Interesting)
3. The cities are islands in a sea of rural nothingness. Seriously, if you make your home in (e.g.) Austin, just try to commute somewhere else. San Antonio is a stretch (1.5-3 hours each way, depending on which sides of the city you are commuting to), and Houston and Dallas are out. Every other town is too small and too isolated to attract tech industry jobs.
This means that when a major tech industry in your chosen metro area craters, it takes YEARS for the economy to recover, and there's no other option available except for you to move. So if you move to the area seeking fame and fortune, remember to keep a deep nest egg, and don't expect to put down any deep roots.
Believe me, my family moved to Austin to follow the growing tech industry in 1983, and they ditched the place in the late 90s because they were tired of dealing with the boom-bust cycle. Since they moved, Austin crashed yet-again (Dell + Dot Com Bubble at the same time). The place has finally recovered and looks attractive again, but it will only be a short matter of time before another crash hits. So keep your nest egg close, and your roots shallow folks!
Re:Detroit would be better! (Score:4, Interesting)
Read "American Drive" [amazon.com], by someone who did a startup in Detroit. His approach was to buy a failing GM axle plant cheap using money from a private equity firm, kick out the union, cut wages over 50%, put in some decent machinery, and make big bucks. That's a Detroit startup for you.
The most amusing part is how they dealt with the crack house across the street from their parking lot. They weren't getting much help from the Detroit cops. So they put stadium-sized lights on the light poles in their parking lot and aimed them all directly at the crack house. When those were switched on for the first time, it was like spraying an ant nest. People ran from the house. The crack house went out of business after a few weeks under the lights.