February 1, 2014

I Can Haz Stock Optionz?

Here’s a piece of investment and career advice: If your job doesn’t give you a piece of equity in the company you’re working for, it’s time to move on.

You Need Equity To Live In Silicon Valley

140131-stanford-memeMay 22, 2013 – Andy Rachleff Wealthfront

The other day we were modeling our typical client’s spending when we realized something disturbing – an average Bay Area-based young couple has to own equity in a business if they hope to send their kids to a good university and be able to retire well.

Investing well alone can’t get you there.

Our analysis found you need to work for at least one company where your equity stake can generate at least a few hundred thousand dollars after tax to make your economics work in the Bay Area.

The problem is the hole that opens up in a typical couple’s budget when they are in their late 30s. Three big pressures converge then: the mortgage on your expensive Bay Area home, and the dueling needs to fund your retirement and your kids’ college early so that you take advantage of compounding.

That’s why we say: You need equity to live in Silicon Valley.

And we say, you need even more equity to live in The Real Silicon Valley.  Then again, you could always rent AND send your kids to Community College and Cal State AND move to Arkansas for your Golden Years.

Basically this is another one of those “We make $250,000 a year and we feel sooooooo poooooor” pieces. Please all join in this First World Problems Pity Party because in lieu of another crap house for your disapproval.

Comments (9) -- Posted by: madhaus @ 7:06 am






March 31, 2013

We’re Number One! We’re Number One!

130329-disposable-successLast week Richard Florida found himself defending his research from an amusing little pissing match started by Joel Kotkin. The argument was over whether “creative class” metros drive the economic engines (Florida) or whether suburban sprawl has it all (Kotkin).  Florida himself dubbed this dustup Flo-Ko. So instead of looking at just which areas are the most “economically advantaged” (a PC way of saying loaded with rich bastards), he addressed X’s objection and decided to subtract out the cost of housing from the index.

What’s left is a disposable income advantage index of the 20 metros with the most money left over after paying the housing nut.  And, you guessed it. Silicon Valley, as represented by the MSA called San Jose-Sunnyvale-Santa Clara, is totally first on the list.  Let’s take a gander at the top five.

Rank Metro Name Income after Housing: Month Income after Housing: Year
1

San Jose-Sunnyvale-Santa Clara, CA

$3,901

$46,812

2

Durham, NC

$3,513 $42,156
3 Washington-Arlington-Alexandria, DC-VA $3,441 $41,292
4 San Francisco-Oakland-Fremont, CA $3,342 $40,104
5 Trenton-Ewing, NJ $3,270 $39,240

New York was Lucky #8, Seattle came in at Less Lucky #13 (right behind a couple of Connecticut metros), and Philly brought up the bottom at #20.  This scatter graph shows how the housing costs versus income data looks, and that’s Silicon Valley in the extreme upper right.  You should see datapoints labeled as you hover over them.

What makes a metro have so much disposable income?  There’s a high correlation between number of knowledge worker jobs (that creative class thing again), at 0.73, high incomes (0.60) and number of college grads (0.53).

Inotherwords, Florida 1, Kotkin 0.  x1000.

Comments (1) -- Posted by: madhaus @ 5:09 am

February 13, 2013

We’re Number Two! We’re Number Two!

The good news: We beat LA and Chicago and New York and Washington DC and even SAN FRANCISCO. W00t!

The bad news: We lost to Connecticut. Connecticut? Haven’t they been in the news enough already?

The US Metropolitan Areas Packed With The Most Rich People

Rob Wile | Business Insider | Feb. 11, 2013, 8:24 PM

The U.S. Census has published its list of U.S. metropolitan areas with the highest concentrations of wealth in the country.

These are places where a large percentage of your neighbors earn incomes in the top 5th percentile.

Here are the top five.  For the full list, see the article at Business Insider.

Rank Metro % MSA households in US Top 5% Primary Industry
5 Trenton/Ewing NJ 11.6% Protection, extralegal goods, beating the shit out of rivals
4 San Francisco/Oakland/Fremont CA 13.0% Social Media, Investment (hypothetical shit)
3 Washington/Arlington/Alexandria DC-VA-MD-WV 14.1% Lobbying (access to shit)
2 San Jose/Sunnyvale/Santa Clara CA 15.9% Inventing new shit
1 Bridgeport/Stanford/Norwalk CT 17.9% Insuring shit
Comments (3) -- Posted by: madhaus @ 5:07 am

January 19, 2013

For foreigners without suitcases full of cash

130118-blueseed-cargo

Everyone knows that Silicon Valley is the best place to launch a startup.  But what if you have a brilliant idea and want to move to the area to network with all those brilliant people, but you are held back by two things?

1. You aren’t an American citizen (or non-citizen who managed to snag Permanent Residency), and

2. You don’t have enough cash that Immigration would wave you through the line

Enter Blueseed.

130118-blueseed-boat

Take a Good Look at Me, I’m on a Futhermucking Boat!

Blueseed claims to have solved this problem.  All you need is a short-term visa, because you’re not staying in the United States.  Instead, you’re staying on a futhermucking boat outside the 12 nautical mile limit of the U.S.  (The 12–24 mile zone is also known as the contiguous zone.) Blueseed plans to build some kind of floating city 12 nautical miles beyond Half Moon Bay and run twice daily ferries to the mainland.  And by “floating city,” they mean raft-up.

Your job, dear Burbed readers, is to figure out if this is a project by The Onion or whether these people are actually serious.  But get this.  They’re charging “a combination of rent and equity.”  Does this mean you would not be a rentard aboard?

Top 10 Facts about Blueseed

130118-blueseed-formula

1 Who is this for? – The world’s best entrepreneurs and visionaries
The boldest, brightest, and most talented tech entrepreneurs from around the world. Plus the individuals and organizations that support and invest in them. 1100+ have already expressed interest.

Yes, you’re about to be priced out forever.  Again!

2 Where will it be? – Right near Silicon Valley
On a ship anchored half an hour (12 miles) from Silicon Valley, in international waters outside the jurisdiction of the United States.

But well within drone strike range. So don’t get cute with the industrial espionage.

3 What does it cost? – Around $1,600 USD/person/month
We’ll charge a combination of rent and equity to accommodate the stage of your startup. The price per person will include living and office space, and will range from $1200 for a shared cabin to $3000 for a top-tier single accommodation cabin.

And you better spring for that top-tier single, or it won’t be Special.  Come on, you want to live in the Real Boat Area, don’t you?  Avoid the cabins on busy hallways, or next to the helipad.

130118-blueseed-cabins4 Why should it be done? – Because innovation is awesome
The world’s best entrepreneurs should be able to gather and collaborate in one place, and not be limited by antiquated work visa restrictions.

And if those antiquated work restrictions force you to move onto a cast-off cruise ship, then you can make lemonade out of lemons, provided you’re willing to call lemon juice lemonade.

5 How can I get aboard? – Do something that matters, and be awesome
Get referred to us through a reputable angel, venture capital firm, entrepreneurs network, or trusted contact. Or surprise us.

Throw yer grapple and haul yerself aboard, matey! Why not commit a little actual piracy so you can convince us you want to work on the digital variety?

6 Can I legally work? – On Blueseed, yes.
You can legally earn an income working on your startup while on the Blueseed vessel regardless of your nationality, but you can’t legally earn a paycheck while visiting the mainland, unless you have a US work visa or are a US permanent resident.

So please don’t do anything more useful than winning a round of Angry Birds when leaving the boat.

130118-blueseed-12miles7 Can I travel to the mainland? – Yes
You can travel to the mainland using business/tourist visas (B1/B2), for up to 180 days/year (these are significantly easier to obtain than work-visas). US residents can travel to Blueseed at any time.

Unless they’ve already been vaporized by a drone strike.  Sorry!

8 What happens when I succeed and outgrow Blueseed? – We help you move to the mainland.
Silicon Valley is the best place in the world to scale a company, and once you’re large enough there are legal channels available to move into Silicon Valley proper. We will provide you with the resources and contacts you need to make the transition.

That means we’ll give you a link to Craigslist.

9 When are you launching? – End of 2013
We plan to launch between Q4 2013 and Q1 2014.

You know how those house construction projects always run late?  What do you think would happen if you tried building all this in the Pacific Ocean? That’s why we said we plan to launch then, not that we would.

10 My organization supports startups, how do I join the project? – Partner up or Contact us
We’re primarily looking for incubators, support networks, and individuals or organizations that make our environment more awesome while solving a startup’s problems.

But we’ll take anyone’s money as long as you don’t ask to live here.

130118-blueseed-conceptAnd the above isn’t even the FAQ!

Blueseed is already pitching themselves as a relative bargain compared to actually living in Silicon Valley.  The rent (starting at $1200 a month for shared living space, mind you) also includes collaborative office space, more conventionally known as “good luck finding a seat somewhere in here.”

And while you won’t need a suitcase full of cash (as you would for an EB-5 investor visa), you would need to deposit enough money to pay for your ticket home. 

Maybe the folks running Blueseed could invest your ticket deposits by buying a place near Google.  Now that’s some equity.

Comments (6) -- Posted by: madhaus @ 5:01 am

January 14, 2013

Home Buying: Comps, Mortgage Pre-qual, and Letter Writing

Can there be any question that The Bubble is Back? Buyers are returning to that delightful 2005 method: the Begging Letter. It must be true, because it’s in a newspaper.

Can I Buy Your House, Pretty Please?

By JOANN S. LUBLIN, The Wall Street Journal, January 10, 2013

Rob and Julia Israch won a fierce bidding war for a three-bedroom townhouse in Mountain View, Calif., late last year even though their $750,000 offer—while $92,000 above the asking price—was topped by 11 rivals and was several thousand dollars below the highest bid.

A key reason: The seller, software engineer Lev Stesin, was moved by a letter in which the Israchs said they worked in the technology industry and explained how the home’s spacious layout would be perfect given the imminent arrival of their first child. Among other things, the townhouse has three bathrooms, a wood-burning fireplace and a roomy backyard.

The only problem with this real estate story is the author’s contention that it isn’t just happening where it’s Special, namely Mountain View. Pitch letters are also going to sellers in Seattle, San Diego, suburban Chicago, and Washington D.C. Hah, and you thought we were going to say Belmont or something. No, we really meant places where it isn’t Special at all (e.g. where you can make an offer and be the only one! Redfin’s CEO said 95% of the offers their agents made in Silicon Valley had competing offers.)

The WSJ piece included two examples of House Begging Letters that worked. Both were from Silicon Valley buyers. Here’s one.

Note the use of photos. Don’t beg without them. Also don’t house beg with form letters. You’re going to have to write an individual letter for each seller, calling attention to their home’s marvelous features. Comments such as “Of all the 1954 era crapboxes we looked at today, yours had the fewest pet odors and the least offensive paint scheme” will probably not be effective. Some tips:

  • Remind the seller how attractive your offer is. You could write this note on the back of a hundred dollar bill to show how many more you have waiting.
  • Mention all the things you have in common with the seller, so they identify with you and not any of those other Less Special buyers. If you can’t find the sellers on social media, a good private detective can ferret that info out. Or spend some of those C-notes on the gabbiest neighbors.
  • Gush about their house and neighborhood without overdoing it. Otherwise they’ll figure you’re using irony. After all, it is one of several hundred 1954 era crapboxes in the tract. But — close to Google! (Don’t mention this if they tried and failed to get jobs there.)
  • Describe your difficult house hunt without sounding whiny. If you can fake sincerity here, you’ll have it made:

A few years ago, the owners of an older Los Altos home got more than 21 offers and picked the one from a woman who also submitted a love letter from her dog, said Kathy Bridgman, an Alain Pinel Realtors agent who represented the sellers. “She won’t touch a thing,” promised the letter, signed with a paw print. “I will be able to play in the yard.”

After closing, the buyer immediately tore down the home and built a bigger one.

Note: In case you’re noticing that we’ve repeatedly reformatted this piece, you’re correct. Our blogging tools aren’t as compatible with each other as we wish they were.  In this particular case, one tool supports photo captions but won’t strip styles out properly, the other is the reverse.  Don’t even get us started on what WordPress is doing to both of them.

Comments (14) -- Posted by: madhaus @ 5:07 am

January 13, 2013

San Francisco is the Brooklyn to Silicon Valley’s Unbuilt Manhattan

Discuss.

130112-sfbrooklyn-startrekAs disappointed visitors and new employees discover, Silicon Valley is a dull and ugly landscape of low-rise stucco office parks and immense traffic-clogged boulevards. The fancy restaurants are in strip malls, like you’d find in Arizona or something. There is nothing to do, nowhere to go. Massive arcologies like the new Apple campus are where the tech giants are headed, but until there are living urban neighborhoods connecting these monstrosities, anyone with hopes for a life outside of work will pay a ridiculous premium to live in San Francisco and spend two hours of every day sitting on a bus.

Meanwhile, the areas around and in between the tech giants of Silicon Valley are mostly ready to be razed and rebuilt. There are miles and miles of half-empty retail space, hideous 1970s’ two-story apartment complexes, most of it lacking the basic human infrastructure of public transportation, playgrounds, bicycle and running and walking paths, outdoor cafes and blocks loaded with bars and late-night restaurants. This is where the new metropolis must be built, in this unloved but sunny valley.

And then the new supercity gets linked to San Francisco by an existing boulevard of run-down old malls and decrepit car lots that pours right into the Mission District and downtown SF, 40 miles north. The boulevard is El Camino Real, or California Route 82, the one-time king’s highway that could be a new corridor of high-rise apartments and HQs and restaurants and museums filling in the long gaps between downtown San Jose and Apple/Google/HP/Yahoo/Intel and Stanford University and San Francisco. With local light rail at street level and express trains overhead or underground, the whole route could be lined with native-landscaped sidewalks dotted with pocket parks and filled on both sides with ground-floor retail, farmers markets and nightlife districts around every station. Caltrain already runs just east of Route 82, and BART already reaches south to Millbrae now.

130112-sfbrooklyn-bartconceptThe above is from a piece in The Awl that notes the large number of young, hip techies who may work in Silicon Valley but definitely don’t want to live in a ginormous, boring suburb.  Yes, there are well-paid people out there who don’t want to spend a million dollars for a sixty year old tract house, or even three thousand a month to merely rent one.  So what would you replace the endless clone houses of San Jose with?  Or would you simply raze most of Redwood City and rebuild Manhattan there?

This is also a great time to whip out this map of the region again, to remind everyone what makes The Bay Area So Special.  Pay careful attention to the region along The Street of Kings.

Thanks very much to Apocryphon at MetaFilter for linking to these sites above.

Comments (8) -- Posted by: madhaus @ 5:06 am

November 10, 2012

“Home Prices Near Highs in Some Cities”

It’s been an emotional week, so let’s end on an upbeat, high note!

Home Prices Near Highs in Some Cities

By AMIR EFRATI

As housing prices nationwide start to recover from their depths, home prices in Silicon Valley are close to an all-time high.

Many Silicon Valley cities have come nearly all the way back from the real-estate bust of just a few years ago, in terms of how much buyers are willing to pay per square foot for existing single-family homes.

Driven by technology employees looking to buy and a constrained housing supply, Los Altos, Palo Alto and Burlingame have registered the strongest comebacks. During the third quarter of this year, home prices in those cities were just several percentage points away from peak levels in 2008, according to new data from research firm DataQuick

[snip]

20121108a

WOOT!

Congratulations Bay Area. We are officially back and on track.

This weekend, go out and put a bid on every house. I predict that 2013 will be the year that the starting price of every home will be $1,000,888!

If we all pull together, I know we can do it.

Nothing can stop us now!

Comments (10) -- Posted by: burbed @ 5:28 am

September 8, 2012

Calling things what their logos look like

120907-logos-oaklandThere’s a cute piece over on Buzzfeed that renames all 32 NFL teams according to what their logos resemble, instead of what the team is actually called.  For your enjoyment and discussion purposes, we’ll share the Bay Area entries.

F’rinstance, you may recognize this as the official sigil for the Oakland Raiders.  According to Buzzfeed, this is actually the Oakland Swords ‘n’ Severed Heads.  They left out that the severed head had an eyeball removed.  Sloppy, sloppy. 

120907-logos-sfAnd this design on the right, which breaks out of grayscale, is for the San Francisco Forty-Niners, right? Not if you name the team starting 120907-logos-sdfrom the logo.  Then it’s the San Francisco Abbreviations for San Francisco.

Here’s one more, and also from California. Ladies and Gentlemen, put your hands together for the San Diego Cartoon Character’s Hair!

I hope you see where this is leading. 

120907-logos-apples

Here is the corporate logo for a major tech firm, including a couple of guesses on how the image may evolve.  Got any better names for this company than the first thing that pops into your mind?  The far-future version looks more like Pac-Man.

120907-logos-starbux

Not a Bay Area company, but quite familiar to us.  Again, the last three entries are inspired guesses.  What is this a logo for, shampoo?  Contortionist classes?

120907-logos-firefox

This one’s tech-related plus the 21 December meteor strike leads to severe climate change.

120907-logos-winx

Flags getting bricked, vaporized, sliced, englobed, dissolved and now, speaking of flags…

120907-logos-w8

120907-logos-msA new logo was announced earlier this year.  Here’s the redesigned Greek flag at left, ready for when they leave the European Union.  We say it’s a Chanukah present.

Then the corporate parent got a logo update.  But when they changed the flag for the whole EU to go with…  We call it FourSquare®: A Way To Make You Pay $40 for a Game Court You Could Draw with a Piece of Chalk (ball not included).

 

120907-logos-sun120907-logos-chip120907-logos-xx120907-logos-asj

 

120907-logos-narCan you identify these tech company logos?  More importantly, can you name these tech companies based on what each logo looks like? We get

  • 8 purple magnets
  • A half-screened green eye
  • Red cable-wrapped beachball
  • Now landing on red runway 1

Surely you can do better than this.  In fact, surely you can do best of all with this one at right.  Or discuss anything else you wish in this Open Thread.

Comments (36) -- Posted by: madhaus @ 5:07 am

July 1, 2012

You Know You’re Really from X When You Y

Recently seen in the San Francisco Chronicle:

You Know You’re a Real Marinite when you…120630_marin_kids

…Think a redhead adds “diversity” to your kid’s class… (Deanne Fitzmaurice / The Chronicle) / SF

and…

120630_berkeley

120630_sunnyvale_libbysHa.  If we only see three Priuses parked anywhere around Google, it’s only because the rest of the vehicles are plug-in electrics.

So… let’s hear your suggestions for X and Y, where X is your city or town, and Y is whatever you come up with to best exemplify its essence.

We’ll start.  You Know You’re Really from Sunnyvale, when you can’t come up with anything other than the general case using the letters X and Y where X equals “Sunnyvale” and Y remains undefined for now but might have something to do with a gigantic can of fruit cocktail.

But we’re sure you can do better with whatever place you call home.  RBA-only entries not required, but please confine your suggestions to Northern California locales.  (We do have SOME standards around here.)

120630_billboard_box

You can also nominate your entire region, such as “You Know You’re Really From Silicon Valley when you 1. See a billboard like this, 2. Understand it, and 3. Contact the advertiser for a better job.”

The best examples will be featured in a future weekend column, complete with random photos!  Your name or handle on the front page!

Okay… go!

 

Comments (12) -- Posted by: madhaus @ 5:02 am

March 25, 2012

UPDATED: Trulia weighs in on Buy vs Rent by putting finger on the scale

120324-trulia-usamapTrulia has a new blog entry on the eternal Buy vs Rent question, and they have lots of meaningless aggregate data to wave around!  Here’s their Winter 2012 Rent vs Buy Index, and and it isn’t restricted to the Real Bay Area. 

Don’t be surprised that Trulia thinks signs point to Buy.  Their being in the listing information and real estate agent referral business shouldn’t have anything to do with their conclusion, right?  After all, Now is Always the Time to Buy!

120324-trulia-prr-graphRemember, the Index is the Price Rent Ratio: sales price divided by annual rent.  So, if a house in the RBA sold for $1.5 million, and rented for $4,500 a month, the rent ratio would be 1500000 / (4500 x 12).  That equation simplifies to 27.8, which sounds about right for the RBA.  Trulia considers 15-20 to be the swing zone between whether buying or renting is a better option; below 15 is buy and above 20 is rent.  We’ve written about the price rent ratio before, and 15 was always the inflection point mentioned in these articles, not 15-20.

Update 10:26 AM: The swing zone was 15-20 from other sources, but the other sites and articles counseled renting over buying unless the home you were considering was an unusually good find.  Trulia considers the rent vs. buy decision as completely balanced when the ratio is between 15-20.  That’s the thumb on the scale.

120324-trulia-logoTrulia is pushing their own agenda with this redefinition of terms by asserting a higher ratio for the buy zone.  The lack of yellow on the map above could indicate homes are more affordable, or it could show that the unlabeled color key breakpoints were chosen incorrectly.  Perhaps they simply wanted the map to match their brand color.

Now for some bad news. The Bay Area appears at #2 and #4 on Trulia’s list of least buy-friendly metro areas. It’s always a disappointment to not first on a list.

120324-trulia-most-expensive

At least SF beat NYC this time, but they’re going to gripe that was because New Jersey pulled them into the Hudson like a pair of cement overshoes.  We can counter that SF has the East Bay to contend with, and San Jose has, well, East San Jose. 

Here’s a little bit more breakdown, by county, but this still doesn’t get to the city level, let alone by zip code. 

120324-trulia-bayarea

Look, Pacific Heights is going to have a higher rent ratio than the Outer Sunset.  Palo Alto is going to completely clean Gilroy’s clock.  Foster City will stomp Daly City, Montclair mauls Hayward, and Danville going to defeat Discovery Bay in the “mine’s bigger” sweeps.  Even when outside the RBA, we still have an idea which places would be contenders, and which are permanently assigned to LOLsville.  And it’s the Definitely Not In The RBA places that are going to have the lower ratios.

Here are some other metros that score lower on the Index.

120324-trulia-least-expensive

The same rule applies within the Bay Area as well.  The not-so-Special places that are “slow-growing with high vacancy rates and land to spare” will have the best ratios.  These places also have the most foreclosures, which might explain why so many FBs are turning into renters themselves.  Too many foreclosures thus drive home prices down and rents up, resulting in a lower price rent ratio.  But in the RBA, prices are sticky because more owners can afford to wait out the price lulls.

These ratios are much lower than what we’d been seeing before.  Do you agree that prices are down and/or rents are up where you live?  Here’s what Trulia has to say about how the Index has changed recently: San Jose has been stable but San Francisco is dropping. 

Updated 11:14 AM: Added Oakland, Sacramento and Fresno to the table.  Note how the numbers don’t agree with those in the Bay Area table.  Stockton not called out separately.

Metro Winter 2011 Spring 2011 Summer 2011 Fall 2011 Winter 2012
San Jose 14.8 13.6 14.5 14.3 14.5
San Francisco 19.5 16.9 17.2 17.4 15.5
Oakland 12.8 11.0 11,9 11.7 11.6
Sacramento 11.2 10.4 10.0 11.1 9.9
Fresno 7.5 7.5 7.8 8.1 7.9

San Jose Metro also has the second lowest vacancy rate (3.9%) of the 100 regions surveyed. The “winner” is Long Island, NY, by one tenth of a percentage point. It’s also the third highest in growth in the employment rate, at 3%.  In the first two spots are Louisville, KY and Salt Lake City.  The latter is gearing up for a ginormous government data mining operation, so there may be some tech jobs!

Their  full press release on how they came up with these numbers is here.

Comments (7) -- Posted by: madhaus @ 5:07 am