Startup talent is something that is very hard to come across. Especially when it comes down to building engineering teams.
I have seen in Silicon Valley and Silicon Alley companies going around this hurdle by bringing folks from foreign countries by giving them J1 visas, H1B visas, etc.
One thing that has become apparent with Donald Trump in the US, is that visas, as well as green cards, are becoming harder to obtain for employees and the thresholds to meet the criteria are increased.
One clear example for this is how the salary of an employee to qualify for an h1B is now raised to $150K or so which for a startup at an early stage could be a bit steep.
My question is more with regards to the future. Given the circumstances that we are facing, do you think as a result companies will start setting up foreign branches to build up their operations? How would this impact the US economy and the startup ecosystem?
I think that many of you are looking at the word "star-ups" and thinking tech start-ups only. Many small businesses in the US are started by immigrants who worked at low paying jobs to accumulate the capital to open a restaurant or other retail or manufacturing company. They often hire people from their own immigrant community who will also work for less than a second or third generation American. A restrictive immigration policy is untenable without a large amount of cheap, domestic labor. Let's look at where we are in the world of commerce. An iPhone is developed by high cost Silicon Valley engineers, but manufactured overseas by cheap labor and the profits not repatriated to the US to be spent or taxed. Restrictive immigration policies make this worse, not better. And let's get real, the travel ban makes no one in the US safer.
speaking specifically to TECH startups: An immigration ban involving the 7 countries currently on Trumps list won't have a significant impact on tech startups. These countries currently don't product nor does the US currently admit enough CS engineers from these countries to make a noticeable impact. It's Trumps proclivity to curb all immigration that worries me most and specifically the H1-b program. The US does not currently graduate enough engineers to meet demand and by a long shot for CS engineers. I wholeheartedly disagree with Mr. Stein's premise that "There are plenty of people in the US that can handle the jobs that need to be done. It is not about the lack of talent, it is about the lack of talent who will work cheap." This simply is not supported by the realities in the field. Demand for CS engineers/programmers in the US far outstrips supply. the US BLS (bureau of labor stats) is forecasting 1.4 million CS job openings by 2020 (just 3 years out) and the US currently produces about 400,000. In WA current demand is 27 X the state CS graduation rate. The University of WA graduated 391 CS engineers last year - Amazon alone will suck up 400 engineers in a month. If we can't produce enough qualified engineers in the US we need to allow them in from other countries as we have done for decades. I have hired lots of programmers, dev manages and IT project managers over the years and when i look at a list of qualified candidates between 8 and 9 out of 10 will be foreign born - either here on a visa or green card or recently granted citizenship. The H1-b program gets abused, but the current rules already require that the visa holder be paid "prevailing wage" so this idea that tech companies bring people in on H1-b visas for "cheap" is BS. Even if a visa holder wants to work for a startup for a equity plus a less than market wage they can't legally.
The US is the #1 economy in the world because we are the most innovative - we invent stuff and commercialize it and employ a lot of skilled people (think integrated circuits, computers, software, telecom, PCs, mobile phones, the internet). The 3 main pillars of our success are our patent system to our universities and immigration. We've already backed way off in funding our research universities. The best minds in the world like to study in US universities and now we want to ban them and/or send them home. Stupid at best. Now mr. Trump is talking about cutting the immigration of tech talent. Bad idea. We attract the best and the brightest from around the world who start or join companies that grow our economy and employ lots of people. Keep this talent out and we all suffer.
I think that the re-set will be in the idea that start-ups can bootstrap rather than get funded enough to pay the salaries they need to pay. There are plenty of people in the US that can handle the jobs that need to be done. It is not about the lack of talent, it is about the lack of talent who will work cheap.
Abhinandan, Mr. Stein makes a very good point. There are reasons for the current state of affairs. As with so many situations, there is the short term adjustment and longer term solution. Over time, no doubt the re-set will happen whether or not local people adjust. The reality is that other locations have been developing over several years and although they have not achieved the eminence of Silicon Valley or Alley, there will be a redistribution. Speaking from Canada, there are options available which will now be accelerated. Since the US and Canada are each others' largest trading partners, the adjustment in the US will have consequences for Canada.
Personally, it would seem that people need to start taking a globalised economy more seriously and be more creative than has been the situation till now.
This discussion will be an ongoing one and is unlikely to be resolved with an overnight decision. Such discussions are welcome at least here in Toronto which has already experienced a surge in demand which coincides with planned growth.
Moot point at the moment as Silicon Valley isn't exactly hiring talent from the seven countries on the list anyway. I actually think the US *should* make it harder to get visas, and that's coming from someone who would love nothing more than to move to the US.
I think that larger impact will be if the Trump administration is successful on implementing an America first policy in a broad sense. Not to mix words but this means a white Christian America. America has always been known for being friendly and inviting to immigrants especially in the hi-tech arena as well as research and in college. If the Trump administration is successful in pursuing the America first agenda, then the diverse talent in the hi-tech arena will go elsewhere and it will be very difficult for America to gain back the reputation as welcoming people from diverse countries and backgrounds.
"do you think as a result companies will start setting up foreign branches to build up their operations?"
I think this is a quite probable scenario in the mid term.
Since almost all startups are digital, it is not as big a hurdle to co-work remotely
It won't impact it at all. People who legitimately migrate are still able to do so. This entire line of questioning follow a false hysteria produced by tech CEO's who are cheating the system and the media.
Longer term. More remote-working/non SV branches (there are places in the USA, where living costs are much lower, thus remote workers can take a lower salary,yet still be close in timezone) more out-of state branches of developers,more flexible working (that increases your talent pool) ,more training of workers who have most of the skills but not all, more outsourcing/foreign branches
More SaaS, offloading. If you have SaaS to run payroll, you don't need a payroll, manager,etc. |Same for sales taxes,payment, development.