Tag Archives: Silicon Valley

Bay Area IPO’s Coming to Raise Your Rent

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The San Francisco Bay Area seems to be on a housing treadmill. Just as housing inventory started to grow and prices responded accordingly in some areas, tech companies are planning to go public. Airbnb, Lyft, Pintrest, Slack Technologies, and Uber are expected to issue initial public offerings in 2019. This will mean an infusion of cash into the pockets of the many tech workers who own their company’s stock. The logical thing to expect these workers to do is to use the cash to purchase a home. No more growing housing inventory and possible growing housing prices.

IPOs and Housing Prices

Doubt the correlation between IPOs and housing prices? Market Watch has a good article on the subject.

Zillow examined the link between Facebook’s IPO in 2012 and rising home prices across the Bay Area and found that home values rose more quickly in neighborhoods with higher concentrations of Facebook employees after the social network became a publicly-traded company.

Specifically, every 10 Facebook employees living in a given U.S. Census tract at the time of the IPO were associated with an extra 1.6-percentage-points increase in home values over the following year, the report said.

In dollar figures, the median value home in a neighborhood with a high concentration of Facebook workers rose by an extra $20,800 between May 2012 and May 2013.

Business Clusters 

In the Bay Area, companies highly valued by market standards, as well as startups hoping to join the value crowd at some point, are concentrated in close proximity to one another.  They comprise the world-famous Silicon Valley hub. This concentration affords the most return on investment for the companies, for their host government jurisdiction, and for homeowners in the community.

Clusters and cluster strategies cannot be seen as the answer to every economic challenge faced by a community or region. However, they do represent a valuable tool that economic development stakeholders should have at their disposal. A cluster approach may be most useful in helping officials and practitioners to see a community’s economy in a new way—not as a collection of individual firms, but as a system in which interventions can assist companies, industries, and the entire community.  Cluster-Based Economic Development Strategies, International City/County Management Association, March 29, 2012

Business clusters are the in thing, and the Bay Area has jumped on the bandwagon with two feet. But, when cluster advocates say clusters benefit “the entire community,” are they including those folks in the community’s lower and middle-income brackets who rent their homes? Those community residents might be employed by fast-food restaurant, or might be the people educating your kids in neighborhood schools or caring for your toddlers. Chances are they will never get their hands on IPOs, do not own a home, and never will own a home in the Bay Area.  But as prices increase due to the IPO infusion of cash, their rents will go up.  And forget about rent control, since everybody pays for that by way of taxes or prices.

Is There a Line of Defense?

The Bay Area has chosen to engage in an endless tug of war between developers and slow-growth advocates, high-income workers and lower-income workers, landlords and renters, YIMBYs and NYMBYs.  Meanwhile, housing costs are transforming the Bay Area into a poster child for unaffordability.  Maybe it is time for all sectors to give in a little by balancing housing and business spaces in every community.

The Great Social Media Purge of 2018!

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Vulture 8Media users that do not follow today’s prescribed line of thinking are feeling the pain. Outliers big and small are squawking loudly and persistently about curtailed “reach” of posts, invisible tweets, and shadow banning. Seems that The Powers that Be have devised a most effective way to help silence any differing views.

The Decline of America

Such media efforts are only the latest developments aiding in the nation’s covert decline – a decline evidenced by a gargantuan and growing national debt, decimation of our manufacturing base, rise of the 1% accompanied by decline of the middle class and explosive growth of the dependent class.

Why would this media tantrum rank right up there with the biggies, such as the tax-and-spend mentality that led to the gargantuan debt, that led to the need for near-zero interest rates to enable debt payments, that led to easy borrowing, that led to breezy acquisitions on borrowed money, that led to monopolies.

The reason is that the media tantrum is 1) the result of powerful monopolies, and 2) monopolies demand obedience.

Obedience creates an echo chamber into which we plebeians must fit. Inhabitants of echo chambers do not think; they regurgitate. They do not create; they copy. They do not question; they accept. They are good at following orders.

Rise of the Monopolists

Conversely, monopolists do not follow, but lead. Take for example, Peter Thiel, co-founder of PayPal and early investor in Facebook. There is no question that Mr. Thiel’s innovations in several industrial and financial sectors have greatly benefited people. Most of us have made good use of PayPal or aspire to own an electric car, and businesses benefit from the data integration provided by Palantir. However, in spite of his obvious intellect, Mr. Thiel’s view of monopolies seems self serving. Here is an excerpt from an article discussing Peter Thiel’s book Three Cheers for Creative Monopolies.

PayPal co-founder Peter Thiel advocates the benefits of creative monopoly. That’s a company that is “so good at what it does that no other firm can offer a close substitute.” They give customers more choices “by adding entirely new categories of abundance to the world.

He goes on to say, “All happy companies are different: Each one earns a monopoly by solving a unique problem. All failed companies are the same: They failed to escape competition.” He suggests entrepreneurs focus on “What valuable company is nobody building?”  The Balance, May 2018

A monopoly is a monopoly, creative or not, since causes and effects are the same no matter what one calls a monopoly. Today, the cause is barrels full of cash generated by cheap borrowing that enable vertical and horizontal acquisitions. The effect is concentration of products and services in a few gigantic companies, regulated or unregulated.

Sure the giants in their field offer consumers “choices,” as Peter Thiel says. But to what extent? You don’t like the way Facebook is treating you? Go to the competition! Oh wait, there isn’t any.

There Once Was the Model T

Ford Model T 2 - CopyOne might say that when Henry Ford perfected the assembly lines that produced the Model T, a car that dominated the market for its relative affordability and simplicity, his company earned the distinction of being so good that no other firm offered a close substitute. With the mass-produced Model T, the company also added an entirely new category of abundance to the world.

However, like today’s media giants, the Ford Motor Company had a strange way of offering consumer choices. Henry Ford famously said,

Any customer can have a car painted any color that he wants so long as it is black.

So, General Motors, who up until then catered to the moneyed class, started to make affordable cars that were not black, and had bells and whistles that the utilitarian Model T eschewed.

Good lesson on how to thwart a company’s dominance in a market!

It’s Their House

Private companies, including those that provide media services, should be free to run their businesses as they see fit. It’s their house.

It is up to consumers to do their due diligence so they understand what they are purchasing and how they are paying in one form or another for the products and services they buy. The cost might be a tacit agreement to tow the prescribed line of thinking. Or the cost might be sharing all your needs, wants, preferences, and ideals so you can be efficiently placed in the appropriate marketing and cultural category.

It is also up to consumers, as well as voters, to make choices. Some consumers now suffering from the whims of media might be tempted to clamor for government regulation, thereby exchanging one master for another.

Miracles do happen, and perhaps once enough consumers of media, especially social media, complain about their dissenting opinions being scrubbed from view, media companies will see the error of their ways and be inclusive (a favorite term of progressives). But if that miracle does not happen….

Be Creative!

Must you settle for being dependent on media, especially social media? How about creating your own mailing lists, reaching out to like-minded people and groups, supporting the endeavors of like-minded people in exchange for their support?

Might participating in the rise of creative alternative means of communication be a better choice than continuing to send out invisible tweets and posts?

Housing Affordability & Smart Cities

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A little conspiracy theory is good for helping us question the status quo.  The greater the number of people telling us something is so great, the faster we should start asking  who, what, why, and who benefits.  Compact, supposedly “sustainable” cities are being promoted by planners not only as wonderful places in which we all want to live, but also solutions to astronomically expensive housing.  If such dense cities are also “smart cities,” all the better.  We invite you to ask, “Really?”

….more and more it’s becoming apparent that to be modern, to be contemporary, to be cutting edge, buying and owning things is a bug not a feature. Buying and owning things prevents you from monetizing tomorrow, let alone optimizing today.  Ben Pring, Leasing the Future, Huffington Post.

Every digital click, swipe, “like”, buy, comment and search produces a unique virtual identity – something we call a Code Halo™. While Code Halos are important to each of us, they are becoming increasingly vital to the success of every business. A new book from our Center for the Future of Work reveals how organizations can catalyze business with Code Halo thinking.  Cognizant Technologies

We all have a personal responsibility to adapt to changing housing markets. For some, this will require adjusting our savings and spending patterns, our expectations regarding home size, access to ground/yards and distance from work or school. For others, it may require adapting expectations regarding the evolution of our neighborhood character, or the personal equity gains derived from the housing market.  10 Common Ground Principles for Affordable Housing, Smart Cities Dive

To what extent have businesses today bought into the theory that in order to survive in today’s market, they need to track everybody’s every move? Businesses could be content with convincing health-conscious consumers to wear a fitness tracker at all times, or businesses could amass enough political donation power to change the way cities are built in order to facilitate maximum interconnectivity.

For example, California’s Bay Area Silicon Valley is home to technology giants, as well as sophisticated business-led public policy advocacy organizations that aggressively support dense housing in limited spaces. California has taken to heart draconian policies that limits land use, establishes vast protected areas off limits to development, and invests taxpayer money in dense subsidized housing located in “transit corridors.” Also, California, especially the San Francisco Bay Area, experiences a housing market that is totally unaffordable. Therefore, it would seem that land use policies such as Plan Bay Area beg the questions,

* Does limited space on which to build result in higher housing prices, and calls for government-subsidized and government-preferred development?

* Is there a relationship between government-preferred development and political support from dominant technology giants?

* Does proximity facilitate interconnectivity, supposedly so crucial to business success?

* Does the current generation truly see ownership as a “bug not a feature,” or is the generation being sold a bill of goods?

So, just in case voters perceive even a remote relationship between efforts such as Code Halo and how much they are paying for housing, what to do? Simply remember that there is a choice whether to wear a fitness bracelet, vote for “affordable housing” bonds to support narrow housing corridors, or re-elect anyone who has specialized in proposing legislation that removes your control of where or how you live.

Smart Cities: Your Life in a Fish Bowl

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Amazon-Dash-Image-Tide 2Smart Cities are a national, state and county goal, for whatever reason anyone can come up with. Here is the reason offered by the U.S. Department of Transportation,

In December 2015, we launched our Smart City Challenge, asking mid-sized cities across America to develop ideas for an integrated, first-of-its-kind smart transportation system that would use data, applications, and technology to help people and goods move more quickly, cheaply, and efficiently.

Sensors Are at the Heart of Smart Cities

* Builders are developing ways to use smart concrete to make bridges, highways, and buildings laced with carbon fibers able to respond to stress and monitor activity.

This new invention allows construction of smart concrete structures, able to detect even minute changes in the amount of stress inside. This new composite material is able to self-monitor for signs of cracks or stress.

In addition, smart concrete is expected to be used for building facility management, i.e. to weigh each room of a building to monitor the room occupancy in real time, thereby saving money and energy by allowing the lighting, heating, cooling and ventilation of the room to be controlled according to the occupancy level.

* Manufacturers are making smart appliances.

…select Whirlpool® smart appliances now support the Google Assistant and Amazon Alexa, allowing families to control their appliances from anywhere in the house with simple voice commands. So whether in the other room helping with homework or cooking dinner with messy hands, families can care for their loved ones better, faster and smarter.

Technology Companies Are Leading the Way

Facebook, Google, LinkedIn, and Microsoft are the natural candidates in the building of smart cities. They already thrive on collecting and evaluating data. Microsoft is building the city of Belmont in the state  of Arizona.

Belmont (as the town will be called) will feature 80,000 residential units, public schools, and commercial buildings. Everything in the 25,000-acre property will be built around a flexible infrastructure model, which is why many are calling the proposed town a smart city. In many ways, Belmont will be a location where the latest technologies and innovative designs can be tested on a actual community, creating a real-life blueprint for how cities of the future could be run.

The Internet of Things

Thus, in a smart city we reach the pinnacle of The Internet of Things, where all is connected, watched and evaluated.

The Internet of Things really comes together with the connection of sensors and machines. That is to say, the real value that the Internet of Things creates is at the intersection of gathering data and leveraging it. All the information gathered by all the sensors in the world isn’t worth very much if there isn’t an infrastructure in place to analyze it in real time.

Watch for the Downside

Since Biblical times knowing where you live is understanding who you are.

I know thy works, and where thou dwellest (Revelation 2.13)

Now imagine not only knowing where you live, but also where you are at all times via your phone, your appliances, your city. Imagine not only knowing where you are, but also what are you doing or buying. Or do you for a moment think that the information gathered about you is not inventoried, catalogued, evaluated, and used?

Not everyone is happy with smart cities. Critics are concerned about the rise of the tech oligarchy.

The tech oligarchs who already dominate our culture and commerce, manipulate our moods, and shape the behaviors of our children while accumulating capital at a rate unprecedented in at least a century want to fashion our urban future in a way that dramatically extends the reach of the surveillance state already evident in airports and on our phones.

The drive to redesign our cities, however, is not really the end of the agenda of those who Aldous Huxley described as the top of the “scientific caste system.” The oligarchy has also worked to make our homes, our personal space, “connected” to their monitoring and money machines.

Your Life, Your Choice

Do you want maximum convenience because you are so pressed for time? Do you want to keep up with your peers and have the latest tech gadget on the market? Is your desire to help stop climate change high enough for you to actively support housing-dense villages filled with sensors that constantly monitor your use of energy?

If so, then you need to accept your life in a virtual fish bowl, where your actions can be relayed to a cloud server and analyzed for purposes beyond your control. You need to accept the possibility that the information gathered from you might be about you in particular, not just about what everyone does in the aggregate. And you need to accept the risk that in a future you do not at present foresee, someone possessing considerable power may not like what they see in the data gathered from you.

Just Vote No If Big Data Does not Appeal to You

Technology, the Internet, smart phones have increased our productivity, enriched our lives and given us power as individuals to express our thoughts and share our discoveries.  Therefore, it behooves us to ensure that the positive blessings of technology remain friendly towards us.

However, it appears that Big Data might be developing in ways akin to Big Pharma.  Regulation has been suggested for both biggies, but can one really regulate away people’s natural profit motives or the market’s unforgiving forces?  Probably not, or at least not without ushering in tyranny.  If the free and open market demands smart cities, great! However, if they are foisted on an unsuspecting public by interested parties, that’s not so great.

If you are not a supporter of Big Data, you might consider choosing leaders who do not use your tax dollars to subsidize developers of smart cities.  Find out if your city or county leaders are falling all over one another rushing to give technology companies tax breaks, while your small business has none.  Be aware of who wants to change things in your neighborhood, and just vote no on tax proposals sure to be on your ballot to support such changes.

How is a Police State Created?

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Silicon Valley SurveillanceCalifornia is ground zero for an incipient Police State, so say recent news stories in several publications, including California Political News and Views and Reason.com. View the short video on Reason.com. Understand how a Police State grows in increments.

Today, those increments are most prevalent in technology hubs like Silicon Valley. Technology has afforded us unparalleled conveniences. It also has created unmatched surveillance. DHS, NSA, CIA, FBI, TSA and other three-letter agencies claim to keep us safe through technology. Such technology relies on massive data gathering – your purchases online, your birthday wishes to your grandkids on Facebook, your wedding pictures on Instagram, your rant about lousy government schools on Reddit, and your biometrics captured by cameras pretty much anywhere.

The articles mentioned above focus on Palantir Technologies, a data crunching company that happens to believe that helping government make sense of data gathered from citizens guards civil liberties.

As an aside, Palantir is also the magic seeing stone from J.R.R. Tolkien’s fantasy legendarium. Fantasy is what we get from those who assure us that data gathering from ordinary citizens serves to keep us safe, or that helping government parse data into categories of the snooped protects civil liberties.

Track record is best evidence. What has technology done with cookies – simply ensure you can successfully navigate from page to page on a website? No, cookies cling to your navigation, recording every website you visit, ready to serve as witness when you suddenly become persona non grata.  How about the Berlin Wall, the physical example offered in the Reason video. The Wall did not just pop up, but developed as papers were required of everyone crossing the border, checkpoints became formalized, folks became accustomed to being tracked. Then came the Wall.