In Tahoe they only charge 5%. But like all of them they make their money on repairs and services. I don’t blame them. But if your return is only 8% then all your return goes to your PM
You’re correct that remote everywhere is not 100% there yet. But making remote work efficient is in our DNA (at least in engineering): managers can literally track what engineers are doing down to minutes (whether s/he is compiling code, what code is being written, what documents are being modified, thanks to all these cloud tools). Bug tracking tools are abound. Slack + ML tools are all in the cloud that, at least for engineers, nothing ever gets done on local machines.
In terms of decision making, we just went through a major reorg and I was part of that process from planning, decision making, announcement all remotely. I’m sure the execs & HR were monitoring the efficiency of all this, but my feeling was that it was as good as if we were onsite.
I’m sure different teams would feel differently - e.g. teams working on hardware are way more impacted since they need their lab equipments. For us coders, at least the engineering problem seems to be solved. For management, we’re not 100% there, but I’d say its more than 80%. And the deficiency lies more on “human issues” like people management, rather than technical decision making. For human issues, well, we were never 100% good at being compassionate 
Hm. Very curious to hear.
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Good points. I think @manch argues that you cannot track problem-solving and creativity using the same metrics that you use to track productivity and efficiency (per dollar and per head basis) of repetitive work. A lot of the tracking programs are in the cloud these days. True. But how does one measure creativity?
Can’t previously. Can’t now. Can’t forever.
Let’s assume I was wrong. Tech companies solved the internal process problem and competition turns out to be non-issue. Remote is the new normal for software engineers. Should techies move out of SV?
I think we can agree that if companies can recruit far and wide, the pressure on engineer’s wages will be downward. Zuck has gone on record saying people who moved to low-cost locales will see a wage cut. It will be a race to the bottom, especially for the newly recruited who don’t have a chance to build relationship with teammates and management IRL.
SWE going remote will be like some sort of engineering-as-a-service cloud. Kind of like a company-internal Mechanical Turk. Management uploads some coding tasks to the “cloud” and after a certain time they get done. The service will be a commodity.
Nobody should aspire to become a commodity. That’s why I say techies should resist the temptation to move out of SV and becoming a cog in the machine. I am reminded of this classic essay about commoditizing your compliment:
It’s not exactly the same scenario but similar. People should strive to be the compliment of the commodity, not the commodity. Who will be the compliment to the SWE-as-a-service commodity? Managers. Specifically the managers who serve as the connective tissue and interface with the rest of the business. People who manage engineers but at the same time deal with product designs and business strategy. These functions are more nebulous, difficult to measure and don’t lend themselves readily to remote work.
Let’s say you as a manager have 4 direct reports. If all of them go remote and take a 20% pay cut, you free up the budget to hire a new person. So your productivity will go up 25%. You become more valuable to the company and will likely get paid more. You benefit from commoditizing your reports.
This scenario is super bullish for SV companies. I actually wish my “WFH won’t work” prediction to be wrong. Reasons why:
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Existing tech hubs will be strengthened. If recruiting is no longer an issue there is no reason for companies to set up in second tier cities like Austin. All the wannabe hubs will go by the wayside. SV’s power will go up not down.
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Cheaper and more readily available SWE-as-a-service will enable more startups. This has exactly the same effect as AWS making compute and storage cheap and on-demand. You as an MBA have some crazy product idea you want to try out? Before you have to compete with the likes of Facebook and Google for SV SWE’s. No longer.
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Tech companies will save a lot on compensation. Great for the managers and stock holders.
Lesson: Strive to be the compliment to commodity. Do not commoditize yourself.
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In addition to this, it is going to be a “consulting as a cloud service”, set of big consulting companies such as PWC, Accenture takes a bulk contracts from big companies and service it as cloud consulting. There are very few at SWE level.
Few of my friends company issued some VPN hardware to their home, that makes home office instantly, companies can measure work hours…etc easily.
The biggest advantage for the companies is cost overhead reduction i.e., no big real estate, building, A/C, maintenance, property taxes at every city level taxes.
Still, I feel SV will recover the prices, if there is a dip, as SV is based on stock economy, but not on paycheck basis.We will have many startups, IPOs and it can grow further.
Just like stock market is coming up after every fall/downturn, bay area real estate will come back in future.
Most, companies driving force out of bay area may likely be the highest California tax structure ! Someone like Trump must come as governor to reduce the tax to average across the USA.
SV lifstyle cannot be compared with those of Hongkong or Singapore. SV will not be counted as livable if all one can afford is a 700 sq feet apartment. This I can tell from my personal experience. I have heard some people telling how much they hate the area near Great Mall in Milpitas. They need bigger homes to raise a family and just to escape claustrophobia. And if large enough homes are out of reach, the people will look for alternatives.
Added Later: TATA, an Indian auto manufacturer and owner of brands like Jaguar and Land Rover, launched a very small car for cheap price for Indian market. The company had to shut the production after a few years because there were no buyer for the “small car”, What people wanted was a practical car that can meet most demand at a lower price point.
I can see same thing happening in Bay Area where we are going to see is 700 sq feet apartments to make home affordable.
Affordable housing is a good way to destroy a neighborhood in more than one ways.
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@manch, I think you are inadvertently confusing people with overuse of word commodity. The technical meaning of word commodity is a good or service that can be near-perfectly exchanged or substituted with the same good/service from another source or provider. So gold from one mine can be perfectly substituted with gold from another mine. That’s all. The word commodity does not mean cheap or something lacking value. There are techniques companies use to make their products stand out from others like Starbucks is able to sell a coffee for $5 that can be had for $1. Similarly, a cup of fountain coke sells for 10 in a theme park that barely costs .50 to produce.
I do not think you will ever be able to hire a hardware or software engineers at minimum wage rates ever. The maximum locational difference in wages of software engineers within the US is only 10-20%. So, on salary front, a company will save no more than 10-20% on wages due to work from home.
@manch you give the impression is bullish for residential RE in SV and then talk about startups 
would be more profitable. And you didn’t give a reason why startup must get a physical commercial property in SV and not just startup at home. What is the impact on commercial property? We know cost of labor is cheaper means more profit for businesses but is not clear how is it good for residential property nor why established companies won’t move some operations away.
F for analysis 
So far, impact of WFH/ remote work on SV:
- Plunging rents of apartments/ condos/ THs
- Plunging rents of commercial property
- Surging stock prices of SV companies
- Stable home prices of SFHs
@manch So what are you saying different?
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This place was worst affected with Y2K dot.com (worst hit bay area) and Santa Clara population was reduced by 500000 people, but came back, then 2008 - deep trouble with 40% price reduction in some places, came back again.
Even though this sounds odd, with past history can not predict future, I have the strong gut feeling the RE will resume when downturn is over and stocks resumed. It will take few years and will spike as usual no matter how much job is outsourced or moved to WFH model. We will see this in just 5 years from now.
As long as people are crazy to come to USA (elsewhere from the world), there is a growth in bay area. Still this place is enviable position for outsiders, simply rotation of people will be there.
Bay Area will not be a Detroit (2008) in near future.
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People will sure flock to SV so long as it is a better option than other places. That is all I am saying. I have not seen the future and I do not know what tomorrow holds. But, if people have to live in 700 sq feet apartments and take 10 min to cover 2 miles, it does not sound like a place with a strong magnetic pull.
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Can I presume people come here because of startups and increased hiring by established biz?
What are the core reasons for the rebound for those two times?
Availability of funding?
Availability of tech talents?
Nearness of suppliers and partners?
Pro business environment?
Do above matters in a WFH/ remote work environment?
Don’t forget there are many stakeholders and drivers, and many kinds of RE property.
And do compare political and cultural climate between two periods 2000 and 2020. Do you feel your money and investment is safer in 2020 from predatory policies of the state?
In year 2000, the internet boom had just started. 2000 was end of the dominance of the PC era, and shift was happening to connected machines era. People were still connecting with 33.6kbps modem. Mobile phones were still fewer with different tech, analog, digital (TDMA), and GSM. Google was pretty much unknown. No Facebook, no Twitter. E-commerce was in nascent stage. There was no concept of social media. People still watched films on CD and VHS. DVD was just starting to pickup. Netflix was a DVD mailing service.
These don’t explain rebound in SV. Why these companies come here/ start here?
Past few years, why are Apple/ Google/ Facebook start expanding operations elsewhere e.g. Apple Campus I and II in Austin?
Do WFH/ Remote work facilitate/ accelerate these trends?
You need to explain the connection clearly and explicitly. Description doesn’t help explanation because we can all see WHAT had happened. We don’t know the WHY WHY is important because it will tell us whether the trend will change/ continue because of WFH/ Remote work.
I had seen 2 BD, 2BH condo for $310k in Cupertino, now they are selling 1.25M !
Can I presume people come here because of startups and increased hiring by established biz? => You can not. There is no single solution, established companies madly hire when stocks shoot up. The only part you can account is : How crazy people are there (overseas) to come to USA, particularly coming to SFO area. This is wealthier community, still rest of the world people are ready to migrate here for better earning and std of living.
Do above matters in a WFH/ remote work environment? => Matters short term (2-3 years), but when stocks go up, and medicine for Covid in place, companies madly hire.
Don’t forget there are many stakeholders and drivers, and many kinds of RE property. => True, if RE dips, those young investors or primary home seekers should not miss buying at low. The simple stock concept buy low and sell high works out nicely in real estate. When stocks are at deep low, buy real estate within 6 months.
Having seen worst days of 2000 and 2008, BARE comes back after recovery. The local BA economy is like this cyclically coming back.
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We know. But why? Why may have changed. The reasons for the rebound in 2000 and 2008 may not be there.
For tech jobs. Otherwise, most prefer NYC and LA.
You have to define what is standard of living. The number of homes in Bay Area has increased but the infrastructure to support the population has stayed the same. Same roads, same number of lanes, same intersection. Same schools, same hospitals etc.
And living standard is relative. Someone coming from a place with lower standards, they will find bay area amazing, others may not. Lot of subjectivity and availability of alternatives matters too.
It will be good idea to compare prices of homes in other cities during the same period. That will tell us how much of gain in home prices is due to things that only silicon valley can offer.