[LUAU] Top 10 Best / Worst Cities For Software Developer Pay

Maddog maddog at heavymetalradio.net
Sat Mar 24 09:12:53 PDT 2007


All that is good but by many standards those with money from the single 
family market won't become VC investors. By real estate I meant more along 
the lines of hotel, condo and timeshare developers and investors. Even that 
market is in decline and we will see the same problems that happened here in 
the late 80's and through the 90's when the place was over built and the 
market had to absorb the excess. That took 12 years.

Real estate overall is a safe bet. Over time the investment gains in value. 
VC investing is much riskier. I think tax breaks and a concentration on 
turning out quality software engineers will go a lot farther to help build 
an industry. It has been proven time and again to work. In the short run 
there are setbacks but in the longrun it is very profitable. Look at San 
Diego, Raleigh, NC, and the Boston/Jersey areas. All the technology 
companies there were attracted by tax breaks and the universities 
concentrating on turning out IP and a workforce.

The VC problem is a large part of the puzzle though and I don't what the 
hell can be done about that. The Hawaii Venture Capital Association has 
tried to get the state to create a fund but I think the only way to get VC's 
here for the second round or to convince some of the RE investors to part 
with their cash, is to have matching government funds (for now). How about 
you Jim, any ideas? Maybe something can be hatched on this list and passed 
on to the governor?

MD
----- Original Message ----- 
From: "Jim Thompson" <jim at netgate.com>
To: "LUAU" <luau at lists.hosef.org>
Sent: Saturday, March 24, 2007 12:47 AM
Subject: Re: [LUAU] Top 10 Best / Worst Cities For Software Developer Pay


>
> 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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>>>>
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