It’s the question on everyone’s mind: Are we in a tech bubble?
San Francisco itself is one giant bubble, says one engineer based in New York City.
Lawrence Finn, an engineer at ad tech firm AppNexus, wrote about a recent trip to San Francisco on Friday. He says too much money and demand for engineering talent has led to a city that is “expensive and just weird.”
The post generated a lot of fervor on tech discussion board Hacker News, as people debated the veracity of Finn’s findings.
Some startup ideas are just plain dumb
“Sure, some startups solve legitimate problems and have a lot of talent and chance for success, but a majority of them are silly,” wrote Finn. “A company to ‘disrupt the banana hammock ordering process’ cannot possibly do well, yet someone invested money into it and it is paying employees.”
Who’s responsible? Those with the ideas, yes, but also those enabling these companies.
“It feels to me that VCs and angel investors are pumping money into SF. This money helps fund many tiny crappy startups,” he said.
One commenter on Hacker News agreed: “I’ve had the (figurative) banana hammock recruiter call me, too, and it’s shocking to me how many people are repeating the mistakes of the ’90s boom.”
The demand for engineers is creating a troubling phenomenon
Finn touches on two points here. He notes that there are so many roles for engineers, that they can’t possibly all be talented. He says just the fact that they’re getting hired — and paid a lot of money — doesn’t reflect their actual skill level.
Finn says many are receiving certificate degrees, but being “quality,” requires “great mentorship and at the job learning,” things he does not believe most receive.
The high pay, and high demand, for engineers also results in “particularly spoiled” employees, he said.
“They can take an arbitrary sabbatical from work, they cannot be told no or reprimanded, and they make so much money that they can just take random breaks from employment to chill,” said Finn.
Ironically, he is on sabbatical from AppNexus, which is valued at $1.2 billion, according to CB Insights. The company is one of tech’s “unicorns,” the term for privately-held companies worth $1 billion or more. A sabbatical is one perk that AppNexus offers its employees after five years of service.
The rent is too damn high.
This much we know. But in San Francisco, it’s not just rent, it’s everything — from $35 museums to $15 “crappy local IPAs” to “tiny artisanal salads for $16.
Some said Finn is being overly dramatic.
“I’ve actually never found a beer for this price. There is no shortage of $7 craft beers you can buy at a brewery or bar, no shortage of Trader Joe’s with the same prices as, say, Charlottesville, VA,” wrote another commenter.
Despite his observations, Finn doesn’t rule out moving to San Francisco one day.
“You can tell this article touches on something sensitive … It’s a pretty accurate description of SF, I just doubt NY is any different,” wrote devsquid.