Tag: money

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Living The Techy Life

Mug for the camera. Microsoft wants to see where their money went...I went to a mixer last night which is sort of like an all you can eat buffet for techies and in talking with a few people I started to understand how people with a tech background survive in the City.

First off you have to get invited to lots of mixers or meet ups. They’re free, offer food and lots of free booze. They run from 4pm to around midnight depending upon the day of the week. The food and booze is sponsored by large tech companies or at least partially underwritten to make it less expensive to the attendees. So let’s see what I got last night.

I walked in and was handed two free drink tickets. These were pretty much good for anything from a coke to a long island ice tea. I’ve just saved potentially $20. After walking in the door and before I could get a drink the food servers got me. I was offered [not in order of appearance] crab cakes, mushroom duxelles on toast, smoked salmon on toast, kobe beef styled sliders with grilled onions, grilled polenta dusted with parmesan, sweet potato fries with a habanero aioli to name what I can remember. I stayed a little over an hour and I have to say I left overly stuffed. When I got home I could barely keep my eyes open from the food coma I was in and had one of the best nights sleep I’ve had in a long time. Getting seconds and thirds of the food wasn’t uncalled for, but expected that evening and I probably got an extra 2000 calories to add to my diet that day. Total cost for the evening? $2 muni fare round trip because I was able to transfer back home in under the hour and a half time frame.

As I was walking down Montgomery street to the location I noticed something about downtown that I hadn’t in awhile because I don’t go there very often. Most of the people were in a severely dressed down state. I could count the number of button down shirts on one had and most of those were worn by the doormen at the various clubs along the way. Most of the people looked like they bought their clothes at a Goodwill and aimed for the lower end stuff. Passing by 111 Minna there were an large number of hipsters all with bike messenger bags yet there wasn’t a single bike to be found. 111 Minna has a low entry fee and cheap beer so if you’ve got a few extra bucks it’s a good place to end an evening or start one if you’re not hungry.

Now let’s relate this to the techy life. San Francisco we all know is an expensive town to live in. If you work here it’s almost as if no matter how much they pay you, it’s never enough. The ways you make ends meet is by attending the meet ups and mixers. They have them for breakfast, lunch and dinner so if you swing it right you never need to have food in your house. You can supplement those with the perks your business offers you such as chips and cookies before you run home to your your apartment that other people would call a closet. While I’m not as into the tech field as many other people I could still eat out on someone else’s dime for about three nights a week.

To get the techy look you have to buy used clothing or just have not bought clothes since Web 1.0. You very rarely need a button down shirt so you only need to own one that you can keep in your closet and pull it out once a year when you have to dress up or attend a funeral. The bike messenger bag is for carrying all your laptop/tablet and to stuff swag that you get at the meet ups, or stuff food into for a late night snack.

I never had to live this lifestyle since before I got my house the rent was way cheaper and I wasn’t spending upwards of $40k/year just on rent. While I can’t fully relate to it, I do have to say that I admire the way they get by. Now if you’ll excuse me I have to go pull the kobe beef sliders and smoked salmon out of my jacket from last night.

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Triangle vs. Square

So I’m sure you all know by now that I hate PayPal, I hate them a lot. Yesterday they unveiled their new product for mobile merchants: Triangle umm PayPal Here. I’m not buying into it for a number of reasons and yes, I’m about to pretty much tell you all of them.

First thing that was kind of funny to me was that they’re undercutting Square by .05%. What that means is that if you charge someone $100 you’ll be giving Square 5¢ more of your money. 5¢ out of $100 isn’t going to hurt me too much.

Second, the PayPal app looks like it was a complete reverse engineer of the Square app. The only difference between the two is that you have to enter the CVV number after swiping the card which you don’t have to do with Square.

People are talking about the 2.7% fee vs. the 2.75% fee of Square and then following it up with, but you get a free debit card that any money you charge someone is immediately available on the card which gives you 1% cash back making the effective rate 1.7%. While I’m good at math I’m not so good at bait and switch economics and something just didn’t sit right with me on this one until I saw a comment made by someone using the name SounderJunkie on The Verge that said:

Umm, the 2.7% is charged to the merchant, the 1% cash back goes to the customer using the card. The only way this becomes an effective rate of 1.7% is if you are charging your own card. Interestingly, this is classified under US law as money laundering.

Money laundering? Interesting idea. So they give you a debit card that accumulates your charges without the need for a bank account. As a freelancer I’ve run into times where I have to prove to a company that I was employed by showing them bank statements verifying PayPal or Square deposits to my bank. From what they’ve said so far they won’t be issuing bank statements for you and I can only suppose that they will show up on your PayPal account which looks more and more like a bank statement every time I have to look at one and at one time in the past they were acting like a bank encouraging you to keep your money in your PayPal account and earning interest on it through their Market Rate program or spend it with your PayPal debit card [something that when they got that started years ago I applied for, but never got.]

Third, PayPal is an established online payment juggernaut. They are virtually the only form of online payment that online businesses will accept. I just happened to check their site and noticed that they’re previous fee of 2.5% + 15¢ transaction fee has now been raised to 2.9% + 30¢ transaction fee. So in order to offset the extra .05% they’re giving you to undercut Square they now have to raise their rates for normal online PayPal exchanges unless you can get approved as a non-profit or make more than $3000/month. They also have some policies that are a very draconian in nature. They’re already telling book sellers that if they want to sell ebooks and accept PayPal payments they cannot sell erotica. Yet there is on eBay an ahem Adults only section where you can buy also sorts of erotica as well as some other rather bizarre sexually fueled devices and pay with PayPal and that’s OK because, well eBay owns PayPal and they love their monopoly status.

If you make a mistake and accept a payment for something they they don’t like you to sell [online raffles are a big one that people get hit with] they will suspend your account and hold all funds for 180 days and not even let you refund any payments. At the end of 180 days you can remove the money, but your account while still existing cannot be used because you have been banned for life. As a matter of fact anyone living at your address is also banned for life. If you sell your house and someone moves in that uses your old address they may end up being banned for life as well [in a call to PayPal that one caught them off guard, but they did say it could possibly happen].

 

Now Square, a San Francisco based start up that has been getting rave reviews since it’s beginning has also become pretty well established for mobile payments. Most of the food trucks around the Bay Area use Square. Small coffee shops and bakeries are using it. Sure there are a few other options around, but they usually charge more to process credit cards than Square does and the .05% lower rate for PayPal Here won’t help them overcome PayPal’s hatred by those who have used it in the past. I don’t think Jack Dorsey at Square will be quaking in his boots anytime soon.

If you want to get away from PayPal for online payments that don’t require a card swipe I suggest you check out Venmo. There are no fees associated with it unless you’re making a lot of money through it which in the future they say they will be instating fees for businesses to use it, but keep it free for individuals.

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The Second California Gold Rush Hits San Francisco

Back in the 1800’s when James Marshall found a chunk of gold at Sutter’s Mill California it started a wave of people who wanted to get rich quick flooding into the state to make their millions. Sound a bit familiar?

San Francisco was the landing place for a lot of the people who were heading out to get rich during the Gold Rush. We were a big port that had lots of food and supplies for the get rich quick people and because the demand was so high we could raise the price. San Franciscan’s back then didn’t have to head to the hills to get rich. They could do it by sitting on their butts selling goods to the newcomers at inflated rates.

Well since then things haven’t changed too much. I realized this while talking to a friend of mine who came here about 18 years ago from Italy following another gold rush — the gold rush of Silicon Valley. This time the gold rush was a little different. He was a computer programmer and was lured here by an offer of big money. Sure, you had to work long hours to get it, but it was big money and he was single like many of the original people to gold rush. There difference was that he was coming here to be handed the money. It was guaranteed up front for at least a significant amount of time all due to venture capital.

Like many of the gold rush people of the 1800’s he came to San Francisco first and then he slowly moved on to parts outside the city. Luckily he didn’t have to go far up into the Northern hills, but only had to move a little bit south to Brisbane. Brisbane is nice town. It has an old city feel to it which is a funny contrast to the eastern side of town which is all high rise office buildings gleaming in the sunlight. These campuses [or should that be campi?] bring in tech workers from all over the San Francisco Bay Area. You  notice that we call it the San Francisco Bay Area right? While not the most populous city in the Bay Area, it’s the best known. I know people who live in Alameda, or San Bruno who tell people they live in San Francisco because it’s easier for people to identify the location if they don’t live here.

San Francisco has many tech companies such as Adobe, Yelp, Square and Twitter that help keep us on the tech map. The problem is how to keep them here. Our minimum wage is higher which isn’t too much of a problem for tech workers, but our costs are higher. Rent is high here and the City of San Francisco is one of the few cities that tax employers. Things like this make the people who come from San Francisco leave San Francisco if they want to start a company. This is also another reason why housing rental is so high. We have a high turnover rate in rentals which gives the owners incentive to raise rates when people leave. Remember what I said earlier about how we sold goods at an inflated price during the first gold rush? The same is true today. We’ll still keep people coming, but we may not keep them here for more than a few years unless we take a look at how we deal with the people and the businesses in our city.

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