Silicon Valley’s Real Estate Crunch Is A Golden Opportunity For Other American Cities

Silicon Valley’s Real Estate Crunch Is A Golden Opportunity For Other American Cities


When Curse CEO Hubert Thieblot told his employees last year that he was moving the company’s San Francisco headquarters to Huntsville, Alabama last year, they thought he was crazy.

About 20 of his employees quit because they didn’t want to relocate.

“It was very controversial,” said Thieblot, who had lived and run the company out of San Francisco for at least five years. “A lot of people did not like me for that decision.”

But today, the profitable, 110-person person company operates out of an Alabama city with a population of just under 200,000 people and the highest number of Ph.Ds per square mile given Huntsville’s history with NASA as the nation’s “Rocket City.” Curse just closed $16 million in funding earlier this week too from the China-centric venture firm GGV Capital.

“If you want to build a long-term company, you might have a better chance of keeping people outside of San Francisco,” Thieblot said. “The job market is too crazy here.”

Indeed, the cost of living and commercial real estate is also pricing smaller startups out of San Francisco. I’m seeing bootstrapped founders, who have yet to a take full round of funding, trickle into surrounding cities like Oakland, Daly City and the Bayview neighborhood of San Francisco, if they’re not considering urban hubs in other parts of the country altogether.

Jon Wheatley, a British entrepreneur who co-founded DailyBooth, wrote a good post about this when he decamped for St. Louis, Missouri to dream up new projects.

“If you’re trying to bootstrap, being based in San Francisco is awful,” he said. “The leading cause of startup death is running out of money. Moving to a cheap city and doubling (or more!) your company’s runway will more than likely vastly increase your chances of eventual success.”

Are we supposed to cry for these entrepreneurs, like the teachers, public servants, artists and the elderly who have already faced several decades of gentrification in San Francisco?

Um, no. Not really.

From a national perspective, it’s a good thing to see these job opportunities become more geographically diversified. (I mean, did you see the first quarter U.S. GDP numbers?! The economy contracted at an annualized pace of 2.9 percent.)


While the rest of the country is only starting to see the kind of job recovery that may make the Federal Reserve finally raise interest rates later this year, the San Francisco Bay Area is bursting at the seams.

The city is at its highest employment levels ever and the population is expected to reach 1 million people by 2032. The city grew by 32,207 people between 2010 and 2013, but only added 4,776 housing units in the same period. Hence, our housing crisis.

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Similarly, commercial rents are nearing dot-com period highs. The Information reported last week that the average price per square foot for so-called Class A office space in San Francisco is $64.45, just shy of the dot-com bubble peak of $67.20 in the third quarter of 2000.

Commercial real estate developers are all scrambling to get their projects entitled as quickly as possible before they run into a nearly twenty-year-old San Francisco law called Prop M, that caps the amount of office space that can be built in a given time period.

Many startups are coping by operating distributed teams, with one founder here in Silicon Valley and another working with engineers in a different part of the country (or world).

Jason Citron, a veteran founder who sold OpenFeint to GREE for $104 million two years ago and is backed by Benchmark in his new hardcore tablet gaming company Hammer & Chisel, works in Burlingame while his co-founder Brandon Kitkouski is based around Dallas.

“His family’s in Texas. He’s got a nice house. If he had it in the Bay Area, it would cost millions of dollars,” Citron said. “He was commuting for awhile, but that was hard. The Bay Area is at capacity. It’s freaking expensive.” (And by the way, why is housing affordable in Texas? Houston had more housing starts than all of California in the first quarter of this year. Am I saying we should be Houston? No. I’m just pointing out policy trade-offs.)

Similarly, Jen Lu, who started YC-backed toy company ZowPow, splits her startup between San Francisco and Portland. Her co-founder Brian Krejcarek moved back to Oregon after living in San Francisco for many years.

“It’s been a good thing for us,” she said. “We’ve been looking to hire engineers and it’s just really hard to do it here because it’s so competitive and expensive. But he has a network and is able to find talent there.”

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Some of the Valley’s best-known investors are also encouraging geographic diversification. Andreessen Horowitz is incubating a startup called Teleport, which will help knowledge workers improve their quality of life by moving to places that maximize the difference between their cost of living and take-home pay. Marc Andreessen recently published an essay in Politico, arguing that other regions across the U.S. should remove regulatory hurdles around specific technologies they want to attract — be they self-driving car, stem cell or Bitcoin-related startups.

Is this bad for the Valley over the long-run?

Between giants like Google, Facebook and Apple and then later-stage companies like Uber, Square, Dropbox and Twitter, the region has a healthy mix of employers.

Yet the heated real estate market favors capital-rich, growth-stage companies right now, often at the expense of other kinds of creative experimentation, be it a longstanding artist’s collective or a not-yet-Ramen-profitable entrepreneur. The cost of living and the competition for talent simply doesn’t give startups a lot of time to find product-market fit here unless they’ve raised a lot of capital.

In contrast, Google, founded in 1998, and Facebook, founded in 2004, came of age when the Valley was weathering slower economic times and it was easier and cheaper to form a cluster of AAA technical talent inside any single company.

Is that worrisome? Maybe a little. When you look at other cities that have historically been dependent on a single industry like Detroit, the population declines started after power consolidated to a handful of companies like GM, Ford and Chrysler, which then began distributing their plants around the country in the 1950s to avoid the risk of production disruptions from worker strikes. (These changes predated competition from Asian auto manufacturers by at least a generation.) Ideally, you want a mix of firm sizes, and younger and older companies.

But ultimately, these things come and go in waves, and the Bay Area is an undeniably attractive place to live no matter what. A decade ago, the world’s leading mobile OS was built out of Helsinki by Nokia. Today, both of the world’s leading mobile OSs, Android and iOS, are here in Silicon Valley.

Cities have to maintain a certain equilibrium between people moving out and people moving in. Right now, the escalating costs and sheer limits of Bay Area’s housing and transit infrastructure are tilting that balance back out to the rest of the country.

So if you’re a mayor of another U.S. city and you want to attract jobs, now would be a good time to drop by a Y Combinator or 500 Startups demo day to make a pitch.

We have our hands full.


Are You Creating Meaningful Content?

Source: Written by Brian Clark

how to deliver beneficial results

Everyone’s creating all this online content, but does it matter?

More importantly, are you accomplishing your goals with the content you deliver, or are you simply spinning your wheels?

Well, if you’re doing it right, your content is highly effective and tightly tied to your ultimate business objectives. Otherwise, you’re just filling up space on an ignored web page.

Content marketing is the most effective and lucrative form of online marketing, because it not only works, it also builds a media asset at the same time. So it makes sense to understand exactly what makes content effective, right?

The key is meaning.

Effective content is meaningful

The simple definition of content marketing is giving away valuable information in order to sell something related.

Value is a function of perception. You want the people you’re trying to reach to perceive your content as valuable, even if people you’re not trying to reach perceive it as worthless.

This is an important point, even though it seems simplistic.

The snarling enemy of meaningful content is the urge to water it down for the lowest common denominator, in hope to either:

  • (A) Reach an unreasonably mass audience, or
  • (B) Not offend anyone

The result of that approach is content that means very little to anyone.

Meaningful content is an experience

As Sonia Simone has discussed over the years:

Content (what you say) without copywriting (how you say it) can be a complete waste of otherwise valuable information. But no matter how you say it, what you say has to have meaning to the right people.

Meaning is a function of what people believe before you find them. What people believe is how they view the world, and your content has to frame that view appropriately to be effective.

As a function of belief, meaning is derived from the context in which your desired audience views your content. From there, your content has to provoke a desirable reaction.

For example:

  1. Content: 10 Tips for More Productive Writing
  2. Context: Your ideal prospect believes productive writing is important
  3. Reaction: Your ideal prospect believes he can now write more efficiently

While everything we perceive is technically an experience, experiences begin to become meaningful at the reaction stage. It’s at that point that your content is good.

But is it great (meaning highly effective)?


Meaningful experiences involve action

A higher grade of experience involves active participation from that ideal prospect. So, beyond the belief that your advice is beneficial, your ideal prospect actually acts on your advice.

  1. Content: 10 Tips for More Productive Writing
  2. Context: Your ideal prospect believes productive writing is important
  3. Reaction: Your ideal prospect believes he can now write more efficiently
  4. Action: Your ideal prospect implements your productivity tips

The action taken can vary. It can be acting directly on your advice, sharing your content, buying your software that helps implement the advice, buying your book for more details, or hiring you as a personal productivity coach.

At this point, your content is truly meaningful and truly aligned with your objectives. There’s only one level that’s better.

The content holy grail: results

What’s better than action? It’s action that leads to beneficial results.

Now, this won’t happen with every piece of content. In fact, it’s safer to say that reader (or viewer or listener) results happen thanks to the totality of the story you tell over time.

But let’s look at it in its simplest form:

  1. Content: 10 Tips for More Productive Writing
  2. Context: Your ideal prospect believes productive writing is important
  3. Reaction: Your ideal prospect believes he can now write more efficiently
  4. Action: Your ideal prospect implements your productivity tips
  5. Result: Your ideal prospect is a more productive writer

It doesn’t matter whether or not you know about these results — you’ve now earned a true fan. Odds are, a true fan is going to tell someone.

That’s the fantastic last part of a cycle that repeats itself over and over in social media, all thanks to content marketing.

And all the while, you’re building a media asset on your own domain that has independent value beyond the cash flow you pull in every month.

You are building that asset, right?

Editor’s note: The original version of this post was published on January 12, 2011.

“Who’s Responsible for Ditch Maintenance,” an article from the City of Huntsville –

Source: Huntsville CityBlog, Written by Mark McCarter

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You don’t even notice them until you make it a mission to go find them. Then you can’t help see them everywhere you drive, big and small, well-reinforced or bordered by vegetation.

Hundreds of miles of ditches, weaving through Huntsville like the body’s circulatory system, are an unnoticed yet essential part of the city’s infrastructure. There are 250-plus ditches in the city of varying breadth, length and function.

As Joy McKee, Director of Landscape Management for the City of Huntsville, says, “All ditches are not created equal.”

They come with various labels and challenges.

They also come – most important for citizens to recognize — with shared responsibility. The city’s primary task is to keep the water flowing. The residents’ task is to perform whatever landscaping work they might choose.

Likely as not, the ditch in your world is yours. The vast majority of ditches in the city are on private property. They might be 50-50 shared with your neighbor, or maybe just one bank is on your side. It’s your responsibility for mowing and minor upkeep.

Even if it’s, say, a concrete ditch the city has built to alleviate draining problems, it’s yours as far as your property extends, and your choice on how it’s landscaped.

The city is not shirking responsibility. That’s merely common sense at play. But as noted by as Brian Walker, supervisor in the Landscape Management office, the City of Huntsville has often gone above and beyond in helping residents with maintenance.

Let’s take a narrow ditch that slices through English Village. Rows of fenced-in yards line both sides. When the city reinforced the ditch as a small concrete culvert, residents may have believed it had become city property and city responsibility.

However, members of Walker’s staff visited the neighborhood, going door-to-door to explain the situation. Walker then agreed to send a crew into the ditch area to eliminate growth and make it a simple enough task for residents to maintain afterward.

“We try to help everybody when we can,” Walker says.

As with much of City of Huntsville, the operation is a partnership. Maintaining the ditches is shared between Landscape Management, the Department of Public Works and Department of Engineering, each utilizing its skill-set for whatever unique challenge might be presented.

Public Works is called upon to repair ditches threatened by erosion. Because, as McKee puts it, “We don’t have the big-boy toys,” Public Works uses its machinery for major clean-up, like fallen trees or large debris that inhibit water flow. Landscape Management does clean-up work, whether through machinery or the careful use of what Walker calls “low-volatility chemicals.” As he says, “We want to encourage the good grasses to stay and the bad grasses to go.”

The largest ditches are owned by the Corps of Engineers. They’re called “blue-line ditches,” have more water and are most often considered creeks. The city’s role typically involves enlisting contractors to manage them and their larger tributaries, though it’s often difficult to wade through the permit process necessary with federally owned property.

The second group includes the ditches owned by the city. They are natural ditches or concrete culverts, and usually are bordered up to the creek banks by private property. The city maintains the concrete and makes sure there is not debris that obstructs water flow.

The last group includes the majority of ditches, the easements. They are ones that are totally on private property or maintained through a home-owners’ association. The city’s concern with them is the efficient flow of water, and it will take steps to correct that if a problem occurs.

“We do limited amount of maintenance,” McKee says. “All we’re required to do is make sure the water flows. Just because there is vegetation doesn’t mean water isn’t flowing.”

Walker reminds residents that the best avenue to address problems with ditches is through Huntsville Connect, the City’s service request app that filters residents’ concerns and funnels them to the proper departments.

Benaroya Lane is Now Open!

Benaroya Lane is now open, which was truly a collaborative effort between the public and private sector. Thank you to the City of Huntsville, Alabama Department of Transportation, South Huntsville Business Association, and the private property owners who donated land to make this road project happen.

Benaroya Lane connects Martin Road to Byrd Spring Road and serves as entrance for Redstone Arsenal commuters into Main Street South, Office Park South, hotels, and retail-oriented shops. The Benaroya Connector allows patrons to access many south Huntsville businesses more easily during the ongoing South Parkway construction.