“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.”
The Wired piece cites the “billboards on highway 101 between San Francisco and Silicon Valley touting startups no one has heard of” which also struck me, as did similar ads on Caltrain.
Timothy Lee argues the problem is housing. He has a point: San Jose and parts of the Peninsula seem ripe for higher-density development.
But I think Lee misses something when he refers back to the original Wired piece’s formulation — that “the natural resources of the startup world” are “people, real estate, and support services”. Isn’t capital one of those “natural resources”? And isn’t it possible that what Hartz (the VC profiled in the Wired piece) means is an overabundance of capital? Can the VC market allocate resources efficiently when there’s an overabundance of those resources?