[LUAU] Top 10 Best / Worst Cities For Software Developer Pay
Jim Thompson
jim at netgate.com
Sat Mar 24 03:47:50 PDT 2007
On Mar 23, 2007, at 5:56 PM, Maddog wrote:
> Jim,
>
> I think it's a perpetual chicken and egg thing. More companies
> would consider moving here if the talent pool existed and more
> software engineers would stimulate more growth of software companies.
>
> There are rich people here but it needs to be rich people that are
> interested in investing in tech companies. Most of our riches are
> invested in Real Estate. There is not very much venture capital here.
Thats because for the past several years, (starting in 2001, after
the dot-com crash), Real Estate has been a fairly good investment.
Here are the last ten years of stats for Oahu, based on the state
report, single-family homes only (no condos, though the condo picture
is worse!)
Year Units median % change %change
Sold price Unit Sales price
Year/Year yr/yr
1997 2,025 $310,000
1998 2,495 $295,000 23.3% - 4.8%
1999 2,855 $291,000 14.4% -1.1%
2000 3,181 $295,000 11.4% 1.1%
2001 3.406 $299,900 7.1% 1.7%
2002 3,906 $335,000 14.7% 11.7%
2003 4,419 $380,000 13.1% 13.4%
2004 4,702 $460,000 6.4% 21.1%
2005 4,617 $590,000 -1.8% 28.3%
2006 4,041 $630,000 -12.5% 6.8%
but look at what happened last year. Home sales were down (a lot)
and prices mostly flattened. Look around, the "for sale" signs are
back out, at least
over here on Windward Oahu. If you graph median price .vs sales,
you'll see that we've 'nosed over'
Now, for those people who "get out" at or near the peak, what do they
do with their money?
Bigger house? Some will, but who really wants a bigger, more
expensive house in a market that is flattening?
Eject to mainland? Some will, but it sucks there.
Essentially there will soon be a largish pool of cash that needs
investing. Yes, folks will need someplace 'new' to live, and
they'll spend some on that, but
the 'rich' people, the people who can fill out the rule 501 (and 505
or 506) paperwork, are the people who become the
"investors" (actually "limited partners")
in a VC fund. The guys you meet when you go to pitch your idea are
typically the "general partners" or their lackeys.
(Perhaps you know all this, but I'll bet that some on the list don't.)
These people are going to find themselves with windfalls off their
real estate (if they're selling it and goodness knows, a lot of them
*are* selling it). The Internet
did not cease when the dot-com bust happened. They all use Google,
and some of them use (or at least know about) several "web 2.0"
companies (Flickr, last.fm,
Odeo, Delicious, Digg, reddit, twitter, ... skype, etc.)
I predict a flight to quality.
That said, there is only "so much" VC (and Angel capital) here.
Typically the firms in Hawaii aren't large enough to support a second
(or subsequent) round, other
than in a non-lead role. This is the stage that crushes VC-funded
Hawaiian companies, as they are forced to go to California for a
lead, and the lead doesn't want to
have to travel to Hawaii for board meetings (etc), so they lead with
the proviso that the company relocates back to the mainland.
The idea then, is to avoid a second round. Get bought, or get in the
black, early.
> Holy Crap Batman! Did Jim just agree with me?
Were you correct?
> MD
> ----- Original Message ----- From: "Jim Thompson" <jim at netgate.com>
> To: "LUAU" <luau at lists.hosef.org>
> Sent: Friday, March 23, 2007 12:46 PM
> Subject: Re: [LUAU] Top 10 Best / Worst Cities For Software
> Developer Pay
>
>
>>
>> On Mar 23, 2007, at 6:09 AM, Maddog wrote:
>>
>>> I think it's more of a supply and demand proposition. There are
>>> not a lot of software development companies here and worker
>>> demand is low, therefore employers can pay whatever workers will
>>> accept and workers have to accept what is offered or not work.
>>
>> Why would a bright, motivated college grad go to work for someone
>> else?
>>
>> What we need are more startups in Hawaii.
>>
>> http://www.paulgraham.com/siliconvalley.html
>>
>> Quoting: I think you only need two kinds of people to create a
>> technology hub: rich people and nerds. They're the limiting
>> reagents in the reaction that produces startups, because they're
>> the only ones present when startups get started. Everyone else
>> will move.
>>
>> We have a plethora of rich people here. What we need are more
>> "nerds". If Hawaii could get off its ass and educate more people
>> with programming skills, in a generation we would have a lot more
>> startups.
>>
>> So yes MD, I agree, the solution is "more software companies",
>> but I'm not sure that getting existing software companies to
>> "move here" is the right move.
>>
>> Jim
>>
>>> In some sectors there is a high demand, such as network
>>> engineers. There are several network integrators that have had
>>> to hire workers from out of state. Higher demand means better
>>> wages and employees have the upper hand and can demand more
>>> money. The employer has to accept the higher salary demand
>>> unless he wants to take his chances and look outside the state
>>> to find someone for less (unlikely).
>>>
>>> So if Lingle was to "do something" about the situation, it would
>>> be to encourage more software development companies to move
>>> here, i.e., tax breaks. That would increase demand and
>>> competition for better workers and would increase salaries.
>>>
>>> MD
>>> ----- Original Message -----
>>> From: "Jim Thompson" <jim at netgate.com>
>>> To: "LUAU" <luau at lists.hosef.org>
>>> Sent: Tuesday, March 20, 2007 9:39 AM
>>> Subject: Re: [LUAU] Top 10 Best / Worst Cities For Software
>>> Developer Pay
>>>
>>>
>>>>
>>>> On Mar 20, 2007, at 7:42 AM, Eric Hattemer wrote:
>>>>
>>>>> Jim Thompson wrote:
>>>>>> Where are the "exports" for Hawaii?
>>>>>>
>>>>> I think this is the key question. You can't pay people with
>>>>> money you don't have. It's not so much about how much are
>>>>> "they" paying as "who is there that can actually pay?" I
>>>>> think the only way to solve this problem would be to get
>>>>> more companies with more cash- earning products to Hawaii.
>>>>> It's not direct, but there's definitely a small correlation
>>>>> between corporate earnings and employee salaries. How many
>>>>> giant (Microsoft, Adobe, IBM, Apple, etc.) software/computer
>>>>> companies have offices in Hawaii? The only one I can think
>>>>> of is IBM.
>>>>> -Eric Hattemer
>>>>
>>>> Sun has one. I don't know the current status, but they're
>>>> still in the phone book. It could be an 'e-suite' for a
>>>> salesperson and perhaps an SE. That said, IBM is unlikely to
>>>> be doing development here, either.
>>>>
>>>> The biggest problem with Hawaii is logistics. While its no
>>>> more expensive to FedEx from here than from many locations on
>>>> the mainland, its impossible to ship "overnight" from here.
>>>> You could setup to do most everything over the Internet, but
>>>> there is a huge lack of local infrastructure in terms of co-
>>>> location, etc. Having "lava.net" host my servers just isn't
>>>> going to cut it.
>>>>
>>>> And then there is the simple fact that we're currently 6 hours
>>>> out of 'sync' with the East Coast, and even California is 3
>>>> hours away. If you think that doesn't matter, consider the
>>>> 'window of opportunity' to speak with customers, suppliers,
>>>> fellow employees, etc on the East Coast.
>>>>
>>>> By the time you're sitting at your desk, with the second cup
>>>> of coffee consumed, its 8am (haha!) here, and 2pm on the East
>>>> Coast. They won't want to schedule conf calls past 4pm their
>>>> time, so there is a mere 2 hours of "overlap" per day. Of
>>>> course, if you're willing to stay up past 2am, then you can
>>>> catch them mid-doughnut, explain the issue du jour, and
>>>> perhaps have a solution by their COB.
>>>>
>>>> There is also the none-too-subtle suspicion on their part that
>>>> you spend every spare moment on the beach, ogling the gender of
>>>> your choice, or surfing, that you have achieved a state of
>>>> "permanent vacation", and they are none-too-happy that your off-
>>>> hours are spent in in a tiki-lit paradise while they return
>>>> home to either sub-urban blandness or urban blight.
>>>>
>>>> After that, you're faced with a workforce that (in the large)
>>>> isn't technology savvy, (the Microsoft-touting sheeple are as
>>>> thick here as anywhere), and can't even find the motivation to
>>>> return to work reliably. ("Sorry I fo'got to call eh...but chu
>>>> know I always got choke aloha foa ya brah!")
>>>>
>>>> All that said, I don't think its impossible to 'do' high-tech
>>>> here, but its very difficult to 'scale' it.
>>>>
>>>> Jim
>>>>
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