Science and technology companies “out of Silicon Valley”


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By Du Chen
Source: guixingren123
The divided silicon valley is only a microcosm of the Divided America
From Stanford University to Hewlett Packard and Fairchild Semiconductor, to today’s large and small technology companies all over San Francisco, the peninsula, and even the whole bay area – since the 1950s, Silicon Valley has become the capital of science and technology in the United States and even the world, and the headquarters of the world’s most famous technology companies.
However, fast forward to 2020, a large number of technology companies are leaving Silicon Valley: the first generation of Silicon Valley enterprises represented by HP, as well as Oracle, Tesla and other well-known companies, have announced to move their headquarters to Texas – more specifically, to Austin, the brightest blue (liberal) city in red (conservative) Texas.
According to the Austin chamber of Commerce, 39 Internet, manufacturing, retail and investment companies moved to Austin in last November alone.
The collective departure of Silicon Valley companies is even called “tech exodus” by many people. In addition to Texas, there are Florida, Colorado, Nevada and so on
In addition to California’s housing prices, taxes and regulatory environment, there are also some deeper things that cause this phenomenon: Silicon Valley is also splitting, just like the systemic division of the United States in the past few years.
Who’s gone? Who stayed? From the comparison of these companies, you may also be able to observe the cultural and ideological divisions that different Silicon Valley companies (especially their founders and managers) have shown. This kind of split, accompanied by Trump’s taking office four years ago and the increasingly serious tearing of American society as a whole since then, has long emerged.
The left and the left
From Oracle to Tesla, it is not difficult to find that these leading companies have one thing in common: they are at a loss about California’s long-standing liberal culture, the growing anti tycoon and anti-monopoly trend in Silicon Valley, and the popular support for liberal ideas; they are at a loss about California’s emphasis on political correctness, protection of vulnerable groups, and promotion of gender and gender equality Many policies of ethnic diversity are not popular either.
Four or five years ago, only some people left because they were not compatible with the culture advocated by the company. Today, some top companies no longer hide their opposition to the liberal ideology prevailing in Silicon Valley and decide to move away.
Palantir is a case in point. Because of unreservedly cooperating with the U.S. government on military, immigration and monitoring projects, this big data company has been the target of public criticism in Silicon Valley. Now its headquarters has moved from Palo Alto to Colorado.
In addition to Peter Thiel, the founder and chairman, who has always supported trump, alantir CEO Alex Karp has alienated Silicon Valley since the company was founded and worked remotely from his home in New Hampshire, which is closer to the political core of the United States. In an interview with Axios on HBO last year, he accused Silicon Valley of having a single culture and a lack of tolerance for dissidents.
For example, Palantir’s employees once found him protesting because of the service contract signed between the company and ice, and some of the most senior and excellent employees even resigned. Karp believes that these people are still too young, and he doesn’t think it’s a mistake to provide services to the infamous ice.
In contrast, Google employees have collectively opposed the company’s participation in the U.S. Department of Defense’s artificial intelligence program. More than 3100 people signed an open letter asking Google to withdraw from the U.S. Department of defense project maven, saying they didn’t want the technology they developed to be used in war.
In the end, Google pulled out of the project, and it was Palantir who took over the big order from the Ministry of defense.
Musk is one of the most famous escapees. Not only did he move to Texas, but Tesla also built a branch in Austin.
His conflict with Silicon Valley seems to be more direct: during the new epidemic last year, the county government of Alameda announced a home isolation and shutdown order, but musk ignored the order, forced the Tesla factory in Alameda to resume work, and even put a cruel word on Twitter: “arrest me if you have seed.”.
This behavior attracted a lot of criticism at that time. Many people think that Musk’s action is to ignore the health and safety of employees. Musk even tweeted that “it’s stupid to panic about the new coronavirus”, and he predicted that by the end of April 2020, the new cases of new coronavirus in the United States “may be close to zero.”.
After forced return to work, musk became a hero who opposed the quarantine order and thought the epidemic was a fraud. The biggest supporter of this behavior is trump. In the morning, trump tweeted: “California should get Tesla and @ elonmusk back to work now, which can be done quickly and safely!”
Although the Alameda County government finally compromised with Tesla and approved its resumption of work, musk, who is gradually away from Silicon Valley, has decided to leave. Tesla is also planning to build a new super factory near Austin. If one day Tesla will move its headquarters to Austin, or any other place, it will not be surprising.
Another firm to leave is Oracle, which is moving its headquarters from Silicon Valley to Austin. But people are not surprised that Oracle left.

In the mainstream voice of supporting the Democratic Party in Silicon Valley, Oracle founder Larry Ellison is a strong supporter of trump. He even organized fund-raising activities for trump in his mansion, which caused dissatisfaction among employees. Hundreds of employees later went on strike to protest that Allison’s behavior was contrary to the company’s core values. Safra Catz, Oracle’s CEO, was also the only senior executive of a large technology company who joined the Executive Committee of Trump’s transition team and donated more than $130000 to support Trump’s re-election.
The company that the wild child left behind has been strengthening its own culture. For example, twitter, Google, airbnb, LYFT, etc.
Twitter has always given people the impression that it is one of the companies most advocating Silicon Valley culture. At the beginning of the new crown epidemic, twitter was one of the first companies to issue home office orders for employees, and its practice was more radical and forward-looking than other companies. Later, it also announced that it would support employees’ home office indefinitely in the future, because the epidemic has completely changed the way of work.
In the bay area, liberal supporters with higher education level are in the majority. They also accept the opinions of medical professionals and are willing to cooperate with the epidemic prevention policy. So as soon as the twitter policy came out, it won a lot of praise. As a company with great influence on the Internet and the whole American society, Twitter’s active cooperation with the epidemic prevention policy of the health department, even more advanced than that of the government, has also played an exemplary role.
The ideology of Twitter as a company has something to do with its co-founder and CEO, Jack Dorsey
Dorsey is a rare Silicon Valley tycoon who dares to fight against the alternative / extreme right-wing groups led by trump. More than once, as an individual and as the CEO of twitter, Dorsey expresses his dissatisfaction with the false information and the social tearing caused by it. Of all the Internet companies, Twitter is the first to take the initiative to take action against false information.
Twitter’s radical censorship of such information is based on the fact that such information not only pollutes the Internet, but also poses a substantial threat to social and personal safety. It has indeed aroused the dissatisfaction of conservative supporters and some network neutralists.
From a commercial point of view, many companies seem to have good reasons to leave.
As younger companies, airbnb and LYFT have also been hit by the tougher regulatory environment of the city of San Francisco and California.
Airbnb has been questioned and sanctioned by the regulatory authorities in important markets such as San Francisco, which has affected the normal operation of its core business model, and even endangered the maintenance of the most critical homeowner user groups. Especially during last year’s epidemic, California’s epidemic prevention policy had a serious impact on the tourism and hotel industry, which really made airbnb very difficult.
The same is true for taxi Hailing services such as LYFT and Uber. As local enterprises in Northern California, they suffered a blow in the early stage of rapid growth. Until last year’s election, they were still worried about the severe impact of prop 22 on their performance.
Not to mention, Google has repeatedly changed its business decisions because of the appeals and objections of its employees, such as the “project Maven” incident mentioned above.
So why didn’t twitter, airbnb, LYFT and google leave California for a place with lower taxes and more friendly regulatory policies, as other companies mentioned earlier?
As long as it is a for-profit company, it will consider the cost. But there are still some things, such as the cultural identity of Silicon Valley, that are more important to these companies.
It can be seen that there has been a deep gap of disagreement between the companies that left, their incubator Silicon Valley and the companies that left behind – just like the deep gap that has emerged in all classes, groups and regions of the United States in the past few years.
Why Austin
Another question is, why do these runaway companies choose Austin one after another?
Although the runaway companies have expressed disgust with California’s liberal culture, ironically, it is Austin, a blue gem on the red Texas crown, that attracts these runaway companies. One of the reasons Austin is famous is its unique hippie style throughout Texas.
Another co-founder of Palantir, Joe Lonsdale, moved his venture capital firm 8vc headquarters to Austin. “It’s a good idea to be surrounded by a bunch of left-wing hippies. You can enjoy good culture, music and food,” he tweeted. Just hope they don’t run the state. ”
If you’ve been to Austin long enough, you should feel it’s inclusive – there’s no contradiction that a rock music and an authentic BBQ rib can’t solve. Because Austin is in the center of a red state, the long-term existence and development of liberalism and conservatism can coexist in Austin and the surrounding areas.
Similar to Silicon Valley, Austin has high-quality local education resources, and has become a city of technology industry concentration in Texas. Because it is close to the starting point of hilly terrain in Texas, Austin got the name of “Silicon hill” (some people call it “Silicon Ranch” because of the developed agriculture in Texas).
Before this round of mass exodus of Silicon Valley companies, technology companies including Amazon, AMD, Google and Apple had set up offices or factories with a large number of employees in Austin. And just as the employees of California’s big technology companies left their jobs to start Silicon Valley, part of the credit for Austin’s local technology boom can also be attributed to these big companies.

The most direct example is Dell, which is headquartered in the greater Austin area. The employees who became millionaires through Dell were humorously called “dellionaire” by local people. They made the first pot of money, left Dell, started a second business, and turned Austin into a tech city in Texas.
Similar to San Francisco, Austin attracts technology practitioners because of its strong artistic atmosphere.
Before becoming a technology center, Austin was already the cultural center of Texas. In the 1980s, someone opened the New York Music Festival here, referring to Hitchcock’s film north by Northwest. It later evolved into the annual music and Film Festival of the United States, “south by South”, or Sxsw for short.
At the end of last century, Sxsw added a multimedia board to music and film. With the development of the local science and technology industry, the conference has attracted the attention of technology companies in the United States and even around the world. The content diversity of this section has gradually increased, including a large number of categories such as digital media, Internet technology and games. Later, it was renamed “Sxsw interactive”.
Today’s south by Southwest conference, with professional content and even more authoritative guest lineup than CES, is basically held at the same time with other cultural sectors. In addition, local art and entertainment activities emerge in an endless stream at the same time, which has become a half “burning Festival” for the participants On the whole, it has become an annual meeting for digital practitioners in the United States.
Google’s interactive exhibition in Austin at the same time of Sxsw
With an open culture similar to that of Silicon Valley, and the liberal atmosphere of Texas’s conservative stronghold rushing to Silicon Valley, Austin is simply too interested in these runaway companies. Not to mention the low tax and low cost business environment.
According to The overall cost of living in San Francisco is 2.3 times that of Austin, and the cost of housing is 3.7 times that of Austin. Zillow, a real estate agency platform, shows that the typical real estate value in Austin is about $440000, which is slightly higher than $260000 in the United States, but far less than the exaggerated level of $1.38 million in San Francisco.
This means that the ultimate labor cost for tech companies in Austin is much lower than in the bay area.
In 2020, home office has become a new normal. Many companies even announce permanent support for home office, and many employees have moved to cheaper places. After all, Texas does not levy personal income tax; for commercial companies, the proportion of “franchise tax” is also very low. For companies with annual revenue of less than 1.18 million US dollars, there is no tax. For companies with annual revenue of more than 10 million US dollars, only 1% of the taxable part is collected – in practice, it will not exceed 1%, and it may reach 0.5%, or even lower.
Perhaps in the eyes of technology companies and practitioners fleeing Silicon Valley, Austin is like a more ideal Silicon Valley. But no one knows that Austin will not be the next Silicon Valley in the era of division, or what it will be transformed into by the influx of technology companies.
(statement: This article only represents the author’s point of view, not Sina’s position.)