On Mar 24, 2007, at 6:12 AM, Maddog wrote:
All that is good but by many standards those with money from the
single family market won't become VC investors.
I didn't (mean to) imply that they would.
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.
So you're predicting 2020 before we're back to last year's prices?
Real estate overall is a safe bet. Over time the investment gains
in value.
Yes, but this isn't the question. The question is relative
performance .vs other investments, and the relative risk profiles of
each.
Does home ownership beat the Dow? The NASDAQ? Are you better
served by having a smaller house, and putting the balance of what you
would have spent in house payments in the market?
VC investing is much riskier.
Yes, and the potential rewards are higher.
I think tax breaks and a concentration on turning out quality
software engineers will go a lot farther to help build an industry.
This is so 'Hawaii'. 'The state will fix it.'
Have we checked that the CS programs at UH and elsewhere are
'full'? While we're at it, which CS 'world view' do we want taught
to the students:
The conservative view: Computer programs have become too large and
complex to encompass in a human mind. Therefore, the job of computer
science education is to teach people how to discipline their work in
such a way that 500 mediocre programmers can join together and
produce a program that correctly meets its specification.
The radical view: Computer programs have become too large and complex
to encompass in a human mind. Therefore, the job of computer science
education is to teach people how to expand their minds so that the
programs can fit, by learning to think in a vocabulary of larger,
more powerful, more flexible ideas than the obvious ones. Each unit
of programming thought must have a big payoff in the capabilities of
the program.
Of course nobody would admit to endorsing the first approach as I've
described it, yet many introductory programming courses seem to spend
half their time on obscure rules of the programming language
(semicolons go between the instructions in Pascal, but after each
instruction in C) and the other half on stylistic commandments (thou
shalt comment each procedure with its preconditions and
postconditions; thou shalt not use goto).
In an article that was not intended as a caricature, Edsger Dijkstra
argued that beginning computer science students should not be allowed
to use computers, lest they learn to debug their programs
interactively instead of writing programs that can be proven correct
by formal methods before testing. [``On the Cruelty of Really
Teaching Computer Science,'' Communications of the ACM, vol. 32, no.
12, December, 1989.]
The radical view is symbolic processing, but thats not taught in CS
courses any longer (at least its not a core requirement at UH, or
HCC, as far as I can tell.)
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.
All these areas have strong VC markets as well.
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?
My view is that success breeds interest. A few small, successful,
Hawaii-based startups will attract the right kinds of attention and
capital needed to fund others.
I do agree with you that discourse (on-list or elsewhere) is a
necessary first step.
jim
MD
----- Original Message ----- From: "Jim Thompson" <[EMAIL PROTECTED]>
To: "LUAU" <luau@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" <[EMAIL PROTECTED]>
To: "LUAU" <luau@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" <[EMAIL PROTECTED]>
To: "LUAU" <luau@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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