Friday, April 15, 2016

A spot for Spotify - or for any company (rent, taxes, and the talent pool)

There's a reason why this Spotify post isn't going into my Empoprise-MU music blog - because this goes well beyond Spotify.

But we'll start with Spotify, whose founders have penned an open letter to Sweden's government. Because my Swedish language skills are non-existent, I am relying on Quartz's account. Basically, Spotify has three issues:

[CEO Daniel Ek and chairman Martin Lorentzon] say their employees are having a hard time finding apartments and are being charged inordinately high taxes on their stock options, and that the pipeline of programmers coming out of Sweden’s schools is not large enough.

Let's ignore the third point for now, because after all, how can you get more programmers out of Sweden's schools if you don't raise taxes? And we'll also ignore the second one about high taxation for the moment.

So we're left with the first issue - The rent is too damn high.

How does Spotify propose to alleviate this?

By moving to New York.


As the Quartz article notes, there may be a flaw in that logic.

Mans Ulvestam, founder of Acast, which produces analytics and inserts ads in podcasts, has offices in New York, London, and Stockholm. “The cost of living in New York is way higher than Stockholm,” he says. “It’s certainly cheaper to buy an apartment in Stockholm than San Francisco, New York, or London. If Spotify had said they were moving to Idaho–that would have been a valid argument.”

But the difficulty, as Silicon Valley companies well know, is that you need to go where the talent is. And no matter how much I protest, there are not a whole lot of bleeding edge technical personnel in Ontario, California. And when the talent is outside of tech centers, it migrates to tech centers, despite the high personal costs. Talia Jane (who worked at Yelp until she was fired for talking about her struggles) wasn't the only Yelp employee trying to make ends meet.

Every single one of my coworkers is struggling. They’re taking side jobs, they’re living at home. One of them started a GoFundMe because she couldn’t pay her rent. She ended up leaving the company and moving east, somewhere the minimum wage could double as a living wage. Another wrote on those neat whiteboards we’ve got on every floor begging for help because he was bound to be homeless in two weeks. Fortunately, someone helped him out. At least, I think they did. I actually haven’t seen him in the past few months. Do you think he’s okay? Another guy who got hired, and ultimately let go, was undoubtedly homeless. He brought a big bag with him and stocked up on all those snacks you make sure are on every floor (except on the weekends when the customer support team is working, because we’re what makes Eat24 24-hours, 7 days a week but the team who comes to stock up those snacks in the early hours during my shift are only there Mondays through Fridays, excluding holidays. They get holidays and weekends off! Can you imagine?).

Theoretically, you could live anywhere - even Idaho - and work for a Stockholm or New York or Silicon Valley company, but the theory doesn't always work out - again, despite my protests.

So how does a company get access to a huge pool of tech people, yet do so in a way that the tech people can afford to live without giving most of their money away for rent, taxes, and ten pound bags of rice?
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