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High-Tech Start-Ups Put Down Roots In New Soil

samzenpus posted more than 4 years ago | from the welcome-to-nowhere dept.

Businesses 141

ThousandStars writes "The Wall Street Journal says that 'High-tech start-ups are increasingly setting up shop in places previously not known for attracting high-tech firms. A number of cities, such as Kalamazoo, Mich., and Toledo, Ohio, are offering grant money and tax breaks to high-tech start-ups, just as the usual venture-capital hot spots, such as Silicon Valley and Boston, continue to see a pullback in venture lending.""

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141 comments

better places to work (5, Informative)

KingFeanor (950059) | more than 4 years ago | (#28117193)

I work for a big tech company from a small city in Wisconsin. It is great. For the company, office space is cheap, internet access is cheap, energy is cheap, salaries are less than in big cities and employees are still happy. As an employee, I'm happy since I don't have traffic nightmares getting to work and home (I have a whole 5 minute commute), the cost of living is low (I live in a remodeled 3 bedroom home that is worth $120K) and in a small office (200 people) you can know everyone by name. It is a win-win deal for a tech company to locate outside the major tech areas.

Re:better places to work (0, Troll)

morgan_greywolf (835522) | more than 4 years ago | (#28117249)

So you work for CDW, eh?

Re:better places to work (0)

KingFeanor (950059) | more than 4 years ago | (#28117289)

SAP actually.

Re:better places to work (1)

Ihmhi (1206036) | more than 4 years ago | (#28119199)

Are those the people that make those little Spanish Language buttons for teevees?

Re:better places to work (3, Insightful)

ushering05401 (1086795) | more than 4 years ago | (#28117267)

Hiring is the problem. If you require highly specific skill sets you end up paying relocation... and who knows how well the relocation itself goes for the candidate.

Re:better places to work (1)

rubycodez (864176) | more than 4 years ago | (#28117955)

no problem at all for company, plenty of highly skilled people are desperate for work! companies say NO RELOCATION and if you want a job you move.

Re:better places to work (2, Insightful)

sumdumass (711423) | more than 4 years ago | (#28120499)

You would be surprised at how many people live in those areas or want to because of family or whatever with the skill sets your looking for.

Ohio state and Michigan state both have top notch computer science courses as well as many niche courses in the same area. Plus you have people who moved to where the work was who would like to move back or closer to their real home.

Re:better places to work (5, Informative)

Anonymous Coward | more than 4 years ago | (#28117487)

I grew up in WI, lived in Seattle for seven years, and am now in San Francisco. I'm fairly familiar with the laws regarding businesses in all three states; I started an LLC in Seattle that I never really did anything with due to my day job, while now I've been completely dedicated to a personal project for eight months and am looking into starting a real business out of it. While there are trade-offs between WA and WI -- WA has better business and tax laws, while WI has lower cost-of-living in many cases -- CA is quite clearly dead last in starting a business where physical proximity to other particular businesses or people isn't a key factor to success. I now thoroughly understand why my former employer moved their entire business, including providing handsome travel and housing packages for then-current employees, from the Bay Area up to the suburbs of Seattle.

The first big warning sign was when I saw that along with other fees and taxes, a CA LLC with absolutely no income is charged an $800 fee by the state every single year. This is four times or more of the initial fee in other states, and most other state only charge a legitimate filing fee for subsequent years -- along the lines of $50. The business taxes, plus the sales taxes, plus the income taxes, plus ridiculously high cost of living all add up to a massive inequity in ROI compared with other locations, and in return you get to live in a state on the verge of bankruptcy and your non-local business gets essentially no boost in sales due to its location. The single reason why I'm considering incorporating here is because if my business doesn't work out, this location has more jobs for my somewhat unique specialty compared with other locations. I can only see that lasting for so long, though.

'Bout time! (1)

WheelDweller (108946) | more than 4 years ago | (#28118623)

I've been saying this was true for the last 25 years. Evansville, Indiana (Southern Tip, second-or-third largest city) has everything NYC has to make a business run, MINUS:

-Crime
-High Taxes
-High spot on terrorist lists
-Noise
-Crappy Schools
-Crowding

There's just no reason for most companies to go. Rail lines, telecommunications, all the things a _business_ needs to live, they have it. Few businesses need Les-Mis, prostitution, murder rates like crazy...

Did you know before Rudy the murder rate in NYC was 3,000/year? THREE TIMES the loss of life in Iraq, per year. Maybe we should pull out of NYC? :)

Under Rudy it dropped to like 600. Still a lot, but so much better.

Re:'Bout time! (1)

megaditto (982598) | more than 4 years ago | (#28118701)

That's just stupid. How many Americans do we have in Iraq? How many in NYC? You can't compare murder rates unless you adjust per capita.

Re:'Bout time! (0)

Anonymous Coward | more than 4 years ago | (#28118727)

Point of order: while the US military loss of life in Iraq may have averaged around 1,000 per year, the civilian lives lost there averaged over 20,000 per year.

Never forget that the American war of choice in Iraq has resulted in the violent death of over 100,000 civilians.

Re:'Bout time! (0)

Anonymous Coward | more than 4 years ago | (#28120393)

Not American civs, who cares?

Technology and internet access (3, Informative)

phorm (591458) | more than 4 years ago | (#28118915)

Actually, it's quite interesting to see how - in terms of infrastructure - smaller cities compare to the big ones. Two years ago, I lived in a city (my hometown) of about 85,000 in BC, Canada. Internet access was generally quite fast, especially with cable providers, etc for residential. Around when I was leaving, the city in conjunction with various local businesses had been in the process of laying fiber in all areas.

After that I moved to Toronto, Ontario (population over 2,500,000). Internet and telecommunications infrastructure sucked there. Bell seems to have little motivation to upgrade lines, meaning DSL outside of certain major downtown areas could not reliably offer high speeds, either for businesses or residences. Not only that, but Bell's throttling of third-party connections was a nightmare, not just for home-user torrents, but for SSL-tunnelled connections to/from my workplace when telecommuting.

Rogers was the local cableco provided and I'd heard of similar issues with them: poor service, bad cabling, and weird issues due to throttling. I know of at least one business that bounced between Bell, Rogers, and a third-party (DSL, so unbeknownst to them still going through Bell) provider trying to get reliable connectivity.

Local tech shops had more deals and cool small items. Things like monitors or PC's/laptops weren't much of a deal though, and customer service STANK. Got a new LCD with dead pixels out of the box, and a fairly major local retailer (yes, I'm looking at you Canada Computers) refused to exchanged it. I know for a fact my local shop in the previous city would have done so.

Now I'm in back in a smaller city/town of around populatimainon 30,000. No long commutes to work. Internet via cable is fast. There's a local wifi provider who gets rather impressive speeds to all sorts of weird areas around town, and they're continuously improving service. Rent and property costs are a lot lower.

I was just musing whether it would be possible to setup a datacentre downtown. There are quite a number of buildings with space that might fit a small DC as long as the power requirements were met, though I've yet to investigate what the local providers offer for large commercial trunks.

Big cities are overrated. When I moved to Toronto I expected to find myself able to do all sorts of things, but the reality was with the longer commutes, extra work hours, and almost universally crappy service. Here, people tend to be more honest (in a smaller city you can't get away with as much without it becoming known eventually), and the quality of life is better. There may not be a huge glass-covered shopping multiplex within 10 minutes drive, but for that sort of thing a bigger city is still within driving range, and really the local stores aren't that bad except when it comes to stuff like furniture etc, and my iPhone only gets 2G service (until next year).

Screw big cities.Businesses should invest in local communities at smaller locations. Power and rent are cheaper here. Connectivity seems in many cases better. There will be likely be less location-related expenses, and I've found that there are still plenty of tech-savvy citizens available to work there, and even a good share of front-line grunts for phone support etc.

I saw it happen in the early 90's (5, Interesting)

localroger (258128) | more than 4 years ago | (#28117269)

A manufacturer we represent whose business center and plant was in rural Minnesota bought a competitor whose business was located in San Francisco. They decided who they wanted from the eated company and offered them jobs. Most of the SFicans were appalled at the idea of moving to the great frozen flyover wasteland, but the eater company paid for all of them to come visit for a couple of weeks. In that time they learned that they could own acres of land with three thousand square foot homes for what they had been paying for a walk-up condo, that they could commute in minutes and leave their doors unlocked without worry, and nearly all of them ended up moving to Minnesota. And most of them are still there today, even though their company eventually got eated by a European company and you now hear a lot of British accents around the place.

Re:I saw it happen in the early 90's (4, Interesting)

Tiro (19535) | more than 4 years ago | (#28117415)

Reminiscent of Wells Fargo, the bold SF bank that got eated by the very cautious Minnesota-based Norwest Corporation in 1998. Regarding your story, this is a fundamental aspect of capitalism: the dislocation of production from established areas to lower cost areas. That can mean Ohio to China, or San Francisco to Ohio. It is rather interesting to me that places like Gary, IN* don't rejuvenate on their own. There is definitely some cultural preference to other places, which is why there is more to the story than pure economic cost/infrastructure advantage. * Interesting that much new growth in the US Midwest comes from Mexican immigrants, for whom there is less bias against these 'boring' towns.

Re:I saw it happen in the early 90's (3, Insightful)

superdana (1211758) | more than 4 years ago | (#28117641)

I think Gary is a special case. It has an appalling crime rate, for one: they've only recently managed to get themselves off the list of top ten crime-ridden places in the United States. I also suspect that an element of racism (not necessarily overt, but racism nonetheless) prevents companies from even considering places like Gary, which is overwhelmingly populated by African Americans. Kalamazoo and Toledo are, by comparison, lily white.

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28120813)

I can't say for certain whether it's the case today, but in the 90s my family and I would occasionally take trips that required going through Gary. It had a horrible stench I've never smelled any place else; part of Milwaukee had a fermentation stench and Green Bay had a sausage smoking stench, but both of those were completely forgivable compared with Gary's smell. Gary was also the only place I've ever seen a smokestack where the smoky emissions were set aflame outside the stack, like you see in "Blade Runner".

We never set foot off the interstate there and never knew the racial make-up of the town -- we just rolled up the window, put the air system on recirculate, and drove through there as quick as we could -- and yet I would swear Gary was the most hellish pit I'd ever seen in the U.S.A. Maybe it's changed -- you used to be able to set the water on fire in Cleveland and now it's turned into a yuppie mall-city -- but from the sounds of it, it's probably still pretty close to the cesspool of a dilapidated manufacturing town that we saw from the interstate as we tried our best to get away. I've seen a lot of bad neighborhoods since those days but none of them were as utterly oppressing as what I saw driving through the most public parts of Gary.

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28121281)

Yes, it's "racism" that companies don't want to move their offices to dirty ghettos where even the police advise you run red lights to prevent getting carjacked. Moron.

Re:I saw it happen in the early 90's (0)

ishobo (160209) | more than 4 years ago | (#28117871)

Reminiscent of Wells Fargo, the bold SF bank that got eated by the very cautious Minnesota-based Norwest Corporation in 1998.

Eated? Is stupidity that infectious?

It is not reminiscent at all. After the merger, the acquiring company (Norwest) moved its headquarters from Minneapolis to San Fransisco, the existing home of Wells Fargo.

Re:I saw it happen in the early 90's (1)

Tiro (19535) | more than 4 years ago | (#28118005)

Why can't I have fun with a stupid word like the parent poster?

Plus... (5, Insightful)

maz2331 (1104901) | more than 4 years ago | (#28117485)

I wouldn't move from Pittsburgh to anywhere in California for any amount of money.

Re:Plus... (1)

evil_aar0n (1001515) | more than 4 years ago | (#28118875)

When I quit Big Medical Co. in NYC back in March and had to hit the pavement, again, I noticed a lot of postings on Craigslist for Pittsburgh. I actually went back to Big Medical Co., but I'm still keeping an eye on Pittsburgh, since it's three hours closer to home. I'm a weekly commuter, so less time on the road is a plus.

What's PGH's claim to fame, lately? Yeah, sure, the Steelers won #6, but that can't have a whole lot to do with it.

Re:Plus... (0)

Anonymous Coward | more than 4 years ago | (#28119611)

good. stay put, we don't want you!

Re:I saw it happen in the early 90's (5, Insightful)

Technician (215283) | more than 4 years ago | (#28117599)

What we see on a state by state basis to attract jobs while at the same time we try to make the evil multinational corporations pay (Obama and taxes) we may start to see many start ups simply avoid the US.

Intel has been accused many times of avoiding paying taxes for the massive tax breaks they get to have a location in the Portland Oregon area, but most people don't realize they not only pay salaries taxed by the state, they also are taxed for their property. Nike also in the area has a much lower inventory tax because they don't have a fab full of multi million dollar manufacturing tools. To attract Intel, the city of Hillsboro had to adjust for this.

Failure to do this would let them have a larger piece of nothing, With no concessions for the value of the factory equipment Intel would have built elsewhere. The clean water and moderate electricity rates are what attracted them. High local tax areas could soon erase the advantages.

I am afraid that Obama's economic plan will drive the rest of large manufacturing overseas. The Union obligations are already having a severe toll on the auto industry without the help of taxes driving them out of business.

Tax the rich simply is to send them elsewhere in a global market where conditions are better.

Re:I saw it happen in the early 90's (2, Interesting)

timeOday (582209) | more than 4 years ago | (#28118481)

I don't know what Obama policies you are referring to, unless it is closing offshore tax loopholes. Personally I am fine with that one; if they think they can operate better by physically relocating to Bermuda, let them try.

Show me a business that never loses a customer or employee to the competition, and I will show you a business that charges customers too little and pays employees too much. State giveaways to business are the same. I'd rather live in a state that grows slower but is financially better off because only the companies with a reasonable business case to be there (other than govt handouts) are there. Hosting a business requires investment in infrastructure, from water pipes to police stations. Don't roll out the welcome mat for companies that just want a free ride.

Loopholes VS location (1)

phorm (591458) | more than 4 years ago | (#28118941)

Yes, for a lot of them it seems it's not so much about physical locations are monetary ones.

The fact is that a lot of the offshore locations are finding that they get shafted just as easily (or worse) by companies pinching pennies, and then companies execs themselves often find it harder to keep a thumb on operations that are half a world away.

I'm not sure that the companies who worm through tax laws and others by setting up off-base tax havens are the types you'd want around right now anyhow, as they seem to be even more likely than the local scummy corps to screw Joe taxpayer and anyone else not on the board of directors or investors.

Re:I saw it happen in the early 90's (2, Insightful)

Technician (215283) | more than 4 years ago | (#28119143)

I don't know what Obama policies you are referring to, unless it is closing offshore tax loopholes.

This thinking is prevalent. The value a multinational corporation makes or is worth is often up for debate. Often the tax rates are based on the company bottom line regardless of how much of the work is done where.

Examples are Nike where most labor is overseas and Intel where the US fabs produce the chips that are packaged overseas. The completed product is made in 2 countries. If both countries try to tax for the total income, the company will most likely shut down operations in the expensive place.

It is true that a few tax havens exist where the corp headquarters is just a seal in a box somewhere in the Cayman Islands and this is a problem.

On the other hand, how much of the value of a completed microprocessor is manufactured in the USA and how much is manufactured in China.
http://www.eetimes.com/showArticle.jhtml?articleID=198000380 [eetimes.com] Some corporations have manufacturing in many places. Often the government will look at any overseas operation as a tax loophole. Closing these tax loopholes may mean the corporation may close operations altogether in the business unfriendly countries. The result is loss of jobs and a trade deficit as that country now has to rely more and more on foreign imports like the US. The US is rapidly becoming a service industry nation writing software and providing medical services, but most goods are imported. Try it, Visit Wal * Mart and look to see where the products are made. Notice an abundance of American brands?

Sony, Toshiba, Mitsubishi, Hitachi, Samsung, Panasonic, Pioneer, HP, Asus, Lexmark, Philips, Visio, RCA, Olevia, Viore, Sanyo, AOC, Wenzel, Coleman, Rubbermaid, Kalisto, etc.. Some of the above are built in the US. Many US brands are now just importers who re-brand.

Re:I saw it happen in the early 90's (1)

twostix (1277166) | more than 4 years ago | (#28118571)

Yeah do like Ireland did! Whoring themselves out to multinationals has worked out *perfectly* for them.

They're doing really well now, now that all those multi-nationals that they sold themelves out out to have run back to their own countries where all those 'high' tax rates and corporate regulations offer a little bit of protection to them...

If all you have to offer is low tax rates to attract big businesses, then you've got nothing.

Re:I saw it happen in the early 90's (1)

Technician (215283) | more than 4 years ago | (#28118631)

Point well taken. Yeah do like Ireland did! Whoring themselves out to multinationals has worked out *perfectly* for them.

Multinational corporations are quick to use the competitive advantages to use as a bargaining chip. As in my earlier example, Intel.

http://www.intel.com/community/ireland/index.htm [intel.com] Intel does have a manufacturing plant there.

Along those lines, many people missed the Redmond giant is building a new headquarters.. If taxes get bad, they are not locked into the US tax the evil corporations.
http://www.highbeam.com/doc/1G1-132007757.html [highbeam.com] They also see the lets get the evil corporations and their overseas tax havens. I hope the current administration gets a clue before world economic reality hits them in the forehead after they close the US operations.

Oops wrong link. (1)

Technician (215283) | more than 4 years ago | (#28118705)

Use this one.http://news.bbc.co.uk/2/hi/uk_news/scotland/edinburgh_and_east/7725221.stm Microsoft has a new headquarters in Edinburgh Ireland.

Re:Oops wrong link. (1)

stevey (64018) | more than 4 years ago | (#28119553)

Ummm .. Edinburgh is in Scotland.

Scotland and Ireland are very different places!

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28120563)

Uh, Motorola isn't Microsoft...

Re:I saw it happen in the early 90's (2, Funny)

Golddess (1361003) | more than 4 years ago | (#28117619)

they could commute in minutes and leave their doors unlocked without worry

And what town did you say this was? >.>

Re:I saw it happen in the early 90's (1)

guruevi (827432) | more than 4 years ago | (#28118955)

Just about any town in rural America. PA, MN, OH, NY all have these towns where you can just walk into anyone's house without a problem. Criminality is low because a) a neighbor or somebody else might see you b) any scoping out before a job is impractical as a stranger in a neighborhood where everybody knows each other c) it's even more impractical to follow the habits of a 3 generation household in a house that stands by itself without anything around for miles d) there is a high chance of getting shot (those people are very acquainted with the second amendment) if somebody is home or even a neighbor will protect somebody else's home e) most of those people don't have very high value electronics or jewelry in their houses. There's also the problem that some of those communities are very far away from the city if you need to fence what you stole.

Re:I saw it happen in the early 90's (1, Interesting)

bladesjester (774793) | more than 4 years ago | (#28119901)

Just about any town in rural America. PA, MN, OH, NY all have these towns where you can just walk into anyone's house without a problem.

I can't speak for PA, MN, or NY, but I grew up in small rural towns in Ohio. I can assure you that people certainly *did* lock their doors and that crime, while not *insanely* rampant, was far from rare. I am, however, told that people were less likely to lock their doors when my father was a kid.

I knew a number of people whose homes were broken into while I was growing up and the thefts have only gotten worse in the last year or two as crime rates have risen due to the poor economy.

Add to this the fact that there is a prevailing sentiment in a lot of the smaller rural communities here that the entire world should be Christian (and they are willing to trample the civil rights of others to that end), that anyone less conservative than W is causing the ruin of this country, that all Muslims are evil and want to destroy America (I kid you not. Actual comments from the local paper), and, frankly, that if you're not a white, "God fearing", good ol' boy that you should just get out.

Sadly, I'm not kidding and I'm not exaggerating. I will readily admit that there are many good people in this area, but there are also a very large number of people who display the behaviors and prejudices that I have listed above (as well as more than a few others). It's enough to give you a headache purely from trying to not scream in frustration.

Don't try to idolize the small towns as bastions of everything good in the country, because it's just not true.

Re:I saw it happen in the early 90's (1)

paganizer (566360) | more than 4 years ago | (#28120795)

OK, I don't understand, what exactly is your problem with this?

In case you are wondering, note the sig.

Re:I saw it happen in the early 90's (1)

grepya (67436) | more than 4 years ago | (#28117725)

They decided who they wanted from the eated company

...most of them are still there today, even though their company eventually got eated by a European company...

Will I have to surrender my usage and grammar books at the border if I move to Minnesota ? (sorry for being a language nazi, but the second and third repetition of "eated" really grated..)

Re:I saw it happen in the early 90's (1)

GaryOlson (737642) | more than 4 years ago | (#28118179)

Will I have to surrender my usage and grammar books at the border if I move to Minnesota ?

No, but you will have to learn how to talk and fish at the same time.

Re:I saw it happen in the early 90's (1)

ishobo (160209) | more than 4 years ago | (#28117793)

They decided who they wanted from the eated company...

I think you are looking for the word acquired. I recommend some remedial classes.

...they could own acres of land with three thousand square foot homes...

Ah yes, what America needs, more sprawl.

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28118551)

as opposed to people packed in tight places burning all sorts of gas in traffic jam...

Re:I saw it happen in the early 90's (0)

twostix (1277166) | more than 4 years ago | (#28118361)

Have I woken up in some sort of parallel world where "eated" is even a word?!!

Who are you people?!

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28118463)

This should be modded down for the idiotic use of a made up word, eated

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28118799)

that they could [...] leave their doors unlocked without worry

I don't suppose you could share some addresses? It'd be great to pay them a visit.

Re:I saw it happen in the early 90's (0)

Anonymous Coward | more than 4 years ago | (#28119305)

eated
eater
eated

I think the phrase you're looking for it "bought out"...

Its definitely the exception, and a rare one (5, Insightful)

Anonymous Coward | more than 4 years ago | (#28117291)

My wife & I left silicon valley about 5 years ago at the tail-end of the dot-com bust. I had a GREAT time there, aside from the worthless options and 80-hour work weeks. We thought it was time to start a family, and wanted a bigger, less-expensive house, no traffic, slower quality of life. We were willing to trade a premium salary for it.

WHAT A HUGE MISTAKE.

Turns out that when you're in a smaller town, you have NO OTHER employment options. What happens if you don't like your little tech company? uh, you're screwed. In Silicon Valley you always had a network three deep that could get you a fun, interesting job in a little bit. You had options. A backup plan. In smaller towns you're running without a safety net. If you leave the relocated tech-company, you've got the small-town mindset and businesses. I see plenty of craigslist ads that read, "must have 5 years networking experience, cisco preferred. Be able to build and administer our 50-person network. References required. $10/hr, contract only." I'm seriously NOT kidding.

I wish I could completely rewind my experience and still be in silicon valley. Higher rents, more traffic, silly housing prices and all.

Re:Its definitely the exception, and a rare one (1)

megaditto (982598) | more than 4 years ago | (#28118027)

"must have 5 years networking experience, cisco preferred. Be able to build and administer our 50-person network. References required. $10/hr, contract only." I'm seriously NOT kidding.

Is that really unreasonable? Except for an occasional hands-on network lag testing (quake, UT, half-life), your scripts should be able to run the whole thing. Am I right?

pop. 600,000 (and up) (1, Insightful)

Anonymous Coward | more than 4 years ago | (#28118073)

Turns out that when you're in a smaller town, you have NO OTHER employment options. What happens if you don't like your little tech company? uh, you're screwed.

It depends on the size of community you're in.

I would think sticking with places (giving US examples) like Atlanta, Chicago, Philadelphia, Portland, Seattle, Boston, etc., would help people avoid some of the headaches of Silicon Valley, but still give you decent options.

I'm sure somewhere like Erie, PA is nice place (pop. 103,650), but your options techie choices will be limited. Stick with 600,000 and up, and you'll probably have a decent amount of variety:

http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

I'm curious to know if there are any statistics or studies on population and technological need. Presumably the more mid-sized (200+ employees) there are in an area, the more need there is for IT professionals.

Re:pop. 600,000 (and up) (1)

SunFireSpaz (1326671) | more than 4 years ago | (#28118779)

I would not look at just a cities population, but rather look at Metropolitan Statistical Areas (MSA).
See <http://en.wikipedia.org/wiki/Table_of_United_States_Metropolitan_Statistical_Areas>. I think that gives a better representation of potential jobs.

Note that Kalamazoo's MSA is rated 148 if sorted by population (323,264). Ann Arbor's is 141 a mere 26,739 more (350,003).

Within a hour's drive there is also Grand Rapids (66th by pop. - 776,742), Lansing/East Lansing (106th - 456,440), South Bend, IN (149th - 316,639), Holland/Grand Haven (171th - 259,206), Niles/Benton Harbor (251th - 159,589), and Battle Creek (293th - 136,615). So within about an hour's drive you have a population of about 2.5 million. Not bad. This puts this area between to Orlando-Deltona-Daytona Beach, FL CAS (2,693,552), Pittsburgh-New Castle, PA CSA (2,446,703).

Re:pop. 600,000 (and up) (1)

evil_aar0n (1001515) | more than 4 years ago | (#28118925)

Re: Erie. Aside from the Peach St. exit off of I-90, it's kind of "rugged." The Peach St. area, however, is going bonkers with all kinds of retail. I like Cleveland much better, even though it's two hours further away from me.

Re:Its definitely the exception, and a rare one (1, Insightful)

Anonymous Coward | more than 4 years ago | (#28118137)

If you qualify for an above-average salary for a location, you're usually going to be better off working in a high-wage high-expense city due to the larger margin involved. Do that while living well below your means and it's not difficult to find yourself in your thirties with a wad of cash (not counting retirement funds) that can sustain you for ten years in a smaller and cheaper location, and your options in life open up tremendously.

I followed that plan into my late twenties and ended up with enough cash where I could have bought my parents' house for them. I decided to stop earlier than I expected, but only for the sake of trying my hand at entrepreneurship; if I find things not working out as I like, I'll be back to working for someone else in the big city for a few more years and then I'll probably "retire" in my mid-to-late-thirties and work on my own projects from then on. I've found that one of the keys is not to get caught up in the spending habits of those around you, who probably make similar money and tend to spend a fair chunk of it mindlessly on fleeting moments they won't remember in a month.

Re:Its definitely the exception, and a rare one (1)

evil_aar0n (1001515) | more than 4 years ago | (#28118939)

Well said. It also helps if you don't have children or a spouse. Though a spouse can definitely help if she's also working and making good money.

Re:Its definitely the exception, and a rare one (3, Interesting)

fuzzyfuzzyfungus (1223518) | more than 4 years ago | (#28118209)

Sounds like you've just identified a major perk for companies that move out into the sticks...

Sooner or later, they'll just start paying in scrip, redeemable at the company store, and it'll be the good old days all over again.

Re:Its definitely the exception, and a rare one (2, Insightful)

bigbird (40392) | more than 4 years ago | (#28118227)

With house prices crashing in Silicon Valley (well, everywhere in the US it seems), perhaps it is time to head back there?

Re:Its definitely the exception, and a rare one (0)

Anonymous Coward | more than 4 years ago | (#28118365)

We've considered it, but its impractical. My wife has a very good job (god help us if she loses it). My in-laws moved here to be near the grandchildren. I really do like the big house and no traffic thing. I'm fundamentally very happy--except for my career being trashed. We're also somewhat locked-in due to the mortgage we have and the current housing situation.

So, the only one that's being screwed is me. I can wait it out and do my best, since everyone else around me is in a good groove. However, if something else minor changes, that's probably what we'd do.

To create a self-sustaining hi-tech center ... (1)

Ungrounded Lightning (62228) | more than 4 years ago | (#28118893)

What happens if you don't like your little tech company? uh, you're screwed. In Silicon Valley you always had a network three deep that could get you a fun, interesting job in a little bit. ... In smaller towns you're running without a safety net. If you leave the relocated tech-company, you've got the small-town mindset and businesses.

To create a hi-tech center you need to create the whole structure. You can't just attract a single hi-tech company for the cheap labor, for the reasons given above. You need job mobility - which means both a LOT of companies (along with other infrastructure such as universities) and (most importantly) the ability for the workers to move out and start their own new operation. That last is the key to CREATING, EXPANDING, and MAINTAINING the rich mix of companies and further opportunities.

Lots of states have excellent universities, trained personnel, low taxes, fine social and recreational opportunities, etc. But they're missing a key element that led to the creation of Silicon Valley in Califonia: A little piece of Intellectual Property law.

In California there is a state law that overrides employment law for a "pressing state interest". You'll find it quoted on one of the appendix pages of any California knowledge-worker employment contract: If the employee makes an invention that is not in the company's current or expected immediate future business line, and does so without using company facilities and materials, it belongs to the EMPLOYEE. He can move across the street, rent a garage, bing in a few of his buddies, and found a new startup to develop it.

This "budding off" mechanism, like yeast, is what created Silicon Valley's rich culture of diverse companies and employment opportunities.

If any other state wants to replicate the success of Silicon Valley, rather than providing a site for a US-internal equivalent of third-world offshoreing for a hi-tech firm, the FIRST thing they need to do is clone this bit of employment law.

Re:To create a self-sustaining hi-tech center ... (0)

Anonymous Coward | more than 4 years ago | (#28119567)

*MOD PARENT UP INSIGHTFUL*

All those funny names can only mean one thing... (0)

Anonymous Coward | more than 4 years ago | (#28117321)

Bugs Bunny is behind this! Albuquerque and Walla-walla must be next!

Online Economy (4, Insightful)

alain94040 (785132) | more than 4 years ago | (#28117351)

The economy is moving online. Soon, it won't matter anymore where you live and who you work with.

And I'm not talking about the scams such as "make $100K working from home". I mean real, legitimate, value-added work (like programming), that you do wherever you want, whenever you want, as long as you deliver a good product.

Re:Online Economy (1)

stbill79 (1227700) | more than 4 years ago | (#28117935)

Isn't this a problem for all of us in this field, then? Yesterday San Francisco, today Minnesota, and tomorrow Bangalore. While many jobs can be offshored, those industries that have absolutely no artificial barriers to entry backing them up, for example the AMA for doctors, Bar Association for lawyers, unions for teachers, cops, and firemen, etc. will be most easily shipped to lower cost workplaces. It is a race to the bottom, and places like Minnesota and Wisconson are simply short stops along the way.

Re:Online Economy (2, Insightful)

colinrichardday (768814) | more than 4 years ago | (#28118455)

Can you outsource doctors, lawyers, teachers, cops, firemen, etc. even in the absence of "artificial barriers"? Medical tourism is possible, and some legal research could be done from overseas, but it would be difficult for Bangalore firemen to respond to a blaze in Peoria. Some things just can't be outsourced.

Re:Online Economy (0)

Anonymous Coward | more than 4 years ago | (#28119703)

Every profession can be outsourced, EASILY. Simply start paying $hit to qualified people while overworking them to death. Pretty soon, people start leaving, first the best, then the good and so on. At this point, declare "labor shortage" and import workers from overseas for peanuts. Been done to software development just fine. Your Bangalore fireman will get a work visa and be able to respond to the fire just fine. Americans need not apply.

Re:Online Economy (4, Insightful)

xant (99438) | more than 4 years ago | (#28118149)

Uh, that's been possible for, like, 10 years now. When's that going to happen?

Re:Online Economy (3, Insightful)

Eil (82413) | more than 4 years ago | (#28119347)

Uh, that's been possible for, like, 10 years now. When's that going to happen?

It already did. In India.

Re:Online Economy (1)

Aceticon (140883) | more than 4 years ago | (#28120697)

It's happened already: most pure software development jobs moved to India.

The great "software development is a portable skill that can be practiced remotely from anywhere" discovery didn't end up in "rich nation nationals, living in far away, cheap and exotic locations, being paid rich nation salaries" instead it ended up as "nationals in far way, cheap and exotic locations, being paid local (cheap) salaries".

With hindsight it's all a pretty obvious outcome.

What about marriages? (4, Insightful)

aafiske (243836) | more than 4 years ago | (#28117377)

Problem is, and all jokes about single engineers aside, that means the spouse has to find something viable in that location as well. Some professions are pretty portable, others aren't. But it's not just about where you can lure a single person.

Plus, if you lose your job, suddenly you're in Toledo where there's not that many other companies. At least in the Bay Area, you know you have multiple options to switch to should you want to. Without having to sell your house which no one wants or needs to buy. (Admittedly this is a chicken-and-egg problem; if enough companies move to Toledo or wherever, this goes away.)

Re:What about marriages? (1)

Anonymous Coward | more than 4 years ago | (#28118781)

I can support a wife and a kid on $38k a year around the Kalamazoo MI area mentioned in the article.

Did it ever occur to you that maybe your wife just won't have to work if you weren't paying so much for stuff?

Re:What about marriages? (0)

Anonymous Coward | more than 4 years ago | (#28120987)

Did it ever occur to YOU that not every female of the species wants to be a housewife? Seriously, this isn't the 1950s. (Oh wait, you're in Kalamazoo, so maybe it is there...)

The GP made a perfectly valid point: if your partner also has a career, relocating anywhere is a challenge.

I'm with Paul Graham on this: it won't work. (4, Informative)

bADlOGIN (133391) | more than 4 years ago | (#28117391)

Check out How to Be Silicon valley (http://www.paulgraham.com/siliconvalley.html).

Based on the description of the right environment, we're not talking Kalamazoo or Toledo by
a long shot. Besides, didn't people try this crap en-mass before the dot.com bust?

Re:I'm with Paul Graham on this: it won't work. (4, Interesting)

OrangeTide (124937) | more than 4 years ago | (#28117457)

I've heard so many of these stories about how XXX will be the new place for tech. I don't see any reason to start believing it now. If you want to relocate away from Silicon Valley or one of the other tech areas of the US, you might as well relocate to India or east Asia or somewhere that is even cheaper than Kalamazoo.

Re:I'm with Paul Graham on this: it won't work. (2, Funny)

Viperpete (1261530) | more than 4 years ago | (#28118733)

I've heard so many of these stories about how XXX will be the new place for tech.

Sweet! I've been waiting for some high tech porn.

Look At Pittsburgh, Though (2, Interesting)

maz2331 (1104901) | more than 4 years ago | (#28117467)

It's only become one of the top places in medicine on the planet. That's pretty good for an old steel town.

It is possible to build out the educational and corporate infrastructure in a "cheaper" place.

Re:Look At Pittsburgh, Though (1, Insightful)

Anonymous Coward | more than 4 years ago | (#28117517)

Pittsburgh has Carnegie-Mellon. Kalamazoo doesn't.

Re:Look At Pittsburgh, Though (0)

Anonymous Coward | more than 4 years ago | (#28117693)

Of course not. The University of Michigan is just down the road, though.

Re:Look At Pittsburgh, Though (2, Interesting)

zaffir (546764) | more than 4 years ago | (#28117881)

No, the University of Michigan is 2-3 hours away in Ann Arbor. And people who like Ann Arbor will stay in/near Ann Arbor. People who don't like Ann Arbor sure as hell won't like Kalamazoo. The cost of living is not that much more in AA (unless you want to live on main street, and even then we're not talking Bay-area housing prices) and it's a much nicer city.

FYI, Kalamazoo has Western Michigan University.

Re:Look At Pittsburgh, Though (-1)

Anonymous Coward | more than 4 years ago | (#28117945)

Less than two hours from Kalamazoo to Ann Arbor (exits 75 and 171, IIRC -- less than a hundred miles). That's like SF to Palo Alto, particularly if you go anywhere off the main highways (like most of SF).

WMU is still decidedly second-rate. K College is much better. In any event, neither of these is a research powerhouse.

AA is *much* more expensive than Kalamazoo. Were I to move my biotech company, I'd go to Kzoo before AA. Really.

tradeoffs (0)

Anonymous Coward | more than 4 years ago | (#28117799)

Kalamazoo is not that far a drive at all to decent summer sand beaches. With plenty of friendly, curvy bouncy corn fed girls hanging around.

  (*)(*)

Pittsburgh has old rusty factories and mills you can go hang out in the parking lots at after you sweep the broken beer bottle glass out of the way. And be sure to wear your body armor. ;)

Re:Look At Pittsburgh, Though (1)

patrickcharleshayes (1563827) | more than 4 years ago | (#28118351)

Maybe just as or more importantly, Pittsburgh has the University of Pittsburgh and it's massive medical and hospital operations.

Re:Look At Pittsburgh, Though (1)

Samrobb (12731) | more than 4 years ago | (#28118451)

Not to mention robotics, file systems and a few other areas - seems to be a nice intersection of hardware + software expertise in the area.

Re:I'm with Paul Graham on this: it won't work. (1, Informative)

Anonymous Coward | more than 4 years ago | (#28117537)

The angle on Kalamazoo is is not high tech, but biotech. It is the (former) headquarters of the Upjohn company before it was acquired by Pharmacia and then Pfizer. Around it is a very good infrastructure for pharma/biotech; many small companies were started when Pfizer gutted the old Upjohn. It is not comparable to the Big Three locations (SF Bay area, San Diego and Boston) but there is much more there than you would expect. Particularly for the size of the community.

Warning! You Can't Spell Wisconsin (1, Funny)

Anonymous Coward | more than 4 years ago | (#28117509)

Without cons and sin.

I grew up in Wisconsin... (0)

Anonymous Coward | more than 4 years ago | (#28119721)

When I was a kid, the tourism folks used to distribute bumper stickers that simply said "ESCAPE TO WISCONSIN". It was common to see people who had done some splicing to spell the (much more accurate) message "ESCAPE WISCONSIN"

I guess at some point they got sick of people making fun of their slogan so they started a new sticker campaign with the motto "Wisconsin: you're among friends". Of course, every teenager with a razor blade shortened this to "sin: you're among friends"

alamazoo has substantial ex pharmaceutical labor (0)

Anonymous Coward | more than 4 years ago | (#28117941)

Kalamazoo does have a bunch of old pharmaceutical buildings left over from when Pfizer bought up Pharmacia for the patents and moved on after firing most employees a few years ago. The skilled technicians are simply repurposing and starting other biotech ventures

Kalamazoo Promise (0)

Anonymous Coward | more than 4 years ago | (#28118499)

Another incentive...If your kid goes to school in Kalamazoo he/she will get free tuition to any university in Michigan. The amount is dependent on how many years they have attended K-12 in Kalamazoo.

Re:Kalamazoo Promise (2, Interesting)

SunFireSpaz (1326671) | more than 4 years ago | (#28118907)

Kalamazoo Promise Details [kalamazoopromise.com] - no need to worry about college tuition raising faster than your 401K or inflation. And the poster above saying that 38K is enough for a family should have added that it is also enough to send the kids to college with the Promise.

Re:Kalamazoo Promise (2, Interesting)

jshackney (99735) | more than 4 years ago | (#28119065)

When I moved back to Michigan two years ago I seriously considered moving to Kalamazoo for the reason you state. However, it's not a strong enough reason to go there. There has to be work. And my industry is only seeing cuts, cuts, and more cuts. In fact, Pfizer canceled their shuttle about six months after I moved here. Duncan aviation has axed much of their productivity in Battle Creek, charter operators are struggling. The college (last I heard anyway) had laid off some flight instructors. It would be nice to see some solid tech. companies move in, but that is only a good start. Not a permanent fix. Michigan has a tenacious problem with no long-term solution.

By Neruos (0)

Anonymous Coward | more than 4 years ago | (#28119123)

Cheapier taxes, lower crime, lower travel & traffic. Wow, who knew...

What next, off-shoring?

Will Silicon Valley survive? (2, Interesting)

Animats (122034) | more than 4 years ago | (#28119451)

Silicon Valley is definitely in decline. The current recession is hurting, but that's not the real problem. Part of the problem is that manufacturing moved out. Venture capital isn't doing well. Venture funds as a group are losing money, and have been for several years now. There was one tech IPO in 2008 before the crash.

Worse, there's an idea shortage. Here's a list of companies looking for venture funding this month. [launchsiliconvalley.org] "Short dial codes" "Timeshare lead generation". "People powered search" (yes, that again). Yawn. There's nothing in the pipe that looks like a big win even if it succeeds.

More on Relocation (1)

tengu1sd (797240) | more than 4 years ago | (#28119467)

I was part of a company in San Diego that was acquired by a group in Overland Park Kansas. They had a habit making offers to move to Kansas with no relocation package. You can take a tax break. State of Kansas or state of unemployment deals. After 3 to 6 months of cross training the immigrants from California were laid off. Repeat with the remaining body count. I turned down several of these deals, it was an attractive deal, but unemployment 10 minutes from the beach is better than unemployment in the middle of Jesus County. I wound up doing some fast and dirty consulting work after my layoff which turned into a nice little group with some of my comrades from the original team. Seems the new company won't do any custom work, every customer has to use the same package build. We can't build on their code, but we can customize around the data and extend functionality.

Go4t (-1, Troll)

Anonymous Coward | more than 4 years ago | (#28120177)

fun to be again. sa7es and so on, coming a piis = 1400 NetBSD erosion of user

I'd go to Detroit. Seriously. (3, Interesting)

Qbertino (265505) | more than 4 years ago | (#28120583)

People seem to forget that Shockley went to death valley because there was absolutely nothing there and you could get all the basics dirt cheap. The nutcases that started the silicon revolution did that in barns and garages and of those in the cheapest they could find. The shockley five went to start Intel in the neighbourhood and thus Silicon Valley was born.

If I where building a startup in the US today, I'd seriously consider Detroit. You can buy houses for 500$ right now in Detroit and infrastructure is just good enough to live. You could spent years there on the most minimal VC and since Detroit is so super-boring now the team actually would have a personal interest in concentrating on the thing their building.

Revolutions very often start in extremely unspectacular places, where the artists and crazies move in because they have other things to worry about than finding the best way to rake in cash. It's only a few decades later that these places become the hippest areas on the planet. Notting Hill in London, Schanzenviertel and Hafenstraße in Hamburg, etc. etc. - all the same story.

Re:I'd go to Detroit. Seriously. (1)

realinvalidname (529939) | more than 4 years ago | (#28121329)

I admire your pluck, but Detroit itself may be unrealistic. There's infrastructure, yes, but the police department is borderline non-functional [freep.com] . Startups still need civil order, and that may not be something you can count on in Detroit anymore.

Still, I'm over in Grand Rapids, MI. I've been independent and working from home for years, and decided I'd rather live here, closer to family, than in Atlanta, which admittedly is much more of a tech and VC hub. Not counting on much tech popping up here (GR is a loser when it comes to VC [mlive.com] ), but I think I can find enough remote work to keep myself going.

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