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Location: Watching half my country turn into Gilead
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Originally Posted by Mezter
Good read that makes Philly seem like a good contender! But I do just feel the need to point this out...
How is this even true when Denver is one of the only cities in the US where you can fly to anywhere in 4hrs or less? Under 7.5hrs if you include Hawaii. It's definitely inconvenient for flying out of the country, but you'd think Seattle is the main place Amazon would need to be within reasonable distance to .
I think the author means inconvenient in the sense that the airport is like 25 miles or so from the city center, and is quite a hike to get to. Though there is a new rail option to get there, so that aspect is mitigated, somewhat. Still, Denver's airport is notorious for being massive, beautiful and in the middle of nowhere when compared to other city airports.
Another factor that will push Amazon towards the talent rich cities is the fact that the median tenure for amazon professional staff is aprox. 1 year. They will need that talent pipeline flowing at max capacity to fuel their growth plans.
Another reason why this really is pointing towards being a talent driven move.
This.
I think people are way overthinking this. At the end of the day, Amazon, like any other profit-making corporation, is risk averse and will opt for a safe location that they know will:
a) attract new talent
b) retain existing talent
c) provide a big enough talent pool to feed the high turnover rate in the tech sector
"Business friendly tax-breaks", "low real estate costs" are great, but you can't sustain and grow a business as large as Amazon on tax-breaks. Growth - whether organic innovation or growth through acquisitions - are done by people: lots and lots of talented people who are constantly looking to jump ship to their next big gig (a friend of mine quit and returned to Amazon 3 times over the course of 5 years working as a programmer). That's the nature of the tech sector and many other professional services sectors.
Given Amazon and other tech giants' relatively mediocre pay, wherever they build their HQ2, they have to brace for an initial recruiting tsunami and later on years of sustained high turnover. That alone will eliminate a dozen smaller and mid-sized cities with limited human capital.
At the end of the day, I won't be surprised at all if Amazon sticks to the "safe" choices: NYC, Chicago, Boston, SF, LA, and maybe Toronto, DC, and Philly.
Good read that makes Philly seem like a good contender! But I do just feel the need to point this out...
How is this even true when Denver is one of the only cities in the US where you can fly to anywhere in 4hrs or less? Under 7.5hrs if you include Hawaii. It's definitely inconvenient for flying out of the country, but you'd think Seattle is the main place Amazon would need to be within reasonable distance to .
I think she meant the location of the airport, relative to the city core.
With that said though, an east coast presence might make more sense than Denver/the South/the Midwest.
Having HQ2 on the east coast allows easy access to Europe.
Seattle - easy access to Asia and the West half of the US and Canada.
Philadelphia or Boston or DC - easy access to Europe and the East half of the US and Canada.
Denver's airport is kind of out in the boonies but takes less time to get from the Central Business District than it takes to get to LaGuardia from Midtown Manhattan. I'm in the Northeast part of Denver, where the original airport used to be, and it's about 20 minutes for me.
In terms of where Amazon (or other businesses) might choose to locate, they can pick a point that is midway between downtown and the airport - esp. if they want a larger and more sprawling campus, there isn't all the much available land right in downtown anyway so it sounds like the responses to the RFP are going to be mostly outside the central area.
Amazon is looking for a place like Seattle but in a different geographical location. Amazon wants a similar sort of workforce and tech environment. Choices such as the San Francisco Bay Area, Boston, Austin, Denver, and even San Diego make a lot of sense for that since their tech industries and talent pools more closely resemble that of Seattle's. Portland can be ruled out because its 180 miles from HQ1 but otherwise would have been a strong contender as well. Techies in general live similar enough lives in most of these cities; low murder rate, an outdoorsy culture, that REI culture, the vegan thing, a creative economy, major talent pool from the large enrollment universities -- all of which have an incredible emphasis on their computer science and engineering programs, and generally the type of places that people have been and will continue gravitating to. The left side of the brain type of cities, if you will.
Boston is also where Alexa, Amazon's Artificial Intelligence unit is being developed. Austin and Denver (along with Madrid) are some of Amazon's most important sales and marketing hubs.
This report was published July 25th, 2017, so basically a month and a half before Amazon announced its decision to expand with a second headquarters. It is telling, I suspect the cities that end up on Amazon's shortlist will be among these, or New York.
I think Atlanta, Chicago, Dallas, and Washington D.C. are strong contenders in the sense that they meet the criteria and are uber successful cities at luring headquarters, their reputations and track records with doing such precedes itself. Not just this decade but the last 40 years in general. Whether it is Jacobs Engineering (Dallas), Mercedes-Benz (Atlanta), ConAgra (Chicago), Northrop Gruman (Washington D.C.), Toyota Motors (Dallas), Caterpillar (Chicago), Hilton America (Washington D.C.) and even more basic headquarters for more basic service level companies such as Nestle (Washington D.C.), Pei Wei (Dallas), or Jamba Juice (Dallas) these places have been incredibly successful at corporate headquarter relocations.
For the reasons that they meet majority, if not all of the stated criteria they cannot be discounted and the fact that they are so good at luring headquarters makes them true competition but I don't think Amazon is landing in these places. Amazon is different, they are not going after a corporate relocation, they are doing the rare deed of establishing a dual headquarters. So all the theories of where the CEO wants to live and the biggest tax breaks and all that diminish given that Jeff Bezos will still be operating out of Seattle, Amazon doesn't need the money but wants it as a gesture of good faith and commitment, and wants to divide its operations between two locations to decentralize the company as it continues to grow immensely.
There may be other options too but I think it will ultimately come down to somewhere that is most like Seattle both by tech and by lifestyle and appeal, and somewhere that has the talent pool and tech scene already in place. I think it will be one of the places that you see in the image above in my post IMO.
To me, Boston is the frontrunner. Not just because Bloomberg said so but because it seems to be where Amazon is investing the most of its operations for the future. Alexa is Bezos' big thing, aside from Blue Origin, Alexa is his true passion and what he wants to develop the most. He said as such in a public interview that I just watched a few hours ago from last year.
Boston is an offering Amazon any tax incentives. They are not the frontrunner. It also isn't the only city where they're working on Alexa.
Boston is an offering Amazon any tax incentives. They are not the frontrunner. It also isn't the only city where they're working on Alexa.
Companies don't grow because of some local tax incentives or short term tax breaks. Amazon also isn't some startup who's quarterly survival depends on a few tax breaks and government grants to prop them up.
Companies like Amazon are in for the long haul - and that means ready access to a large, mobile, and readily available talent pool that will sustain its huge recruiting needs for years and years to come, not short term tax breaks that would save them a few bucks here and there. Even with spiraling real estate costs and higher-than average corporate taxes, Google and Apple still choose to remain in California. Sure they may save a few bucks moving to Texas or Georgia, but the longer term cost on their human capital is far greater than short term tax savings. They all understand that if they lose their human capital - they will eventually lose their market competitiveness and their ability to innovate organically.
The tax breaks will just serve as a gesture of goodwill and commitment. To a major corporation like Amazon, they don't need the money nor do they need to be doing this the way they are. They are doing it so publicly and blatantly to canvass the market and see what is out there. To see if they may have missed anything.
If you look at Amazon's history in Greater Seattle, you'll see that they've been in a symbiotic relationship with city and state lawmakers to get incentives and deals from the beginning. Not because they need it but from their point of view they want to see a city demonstrate how far they are willing to go to please the corporation and nurture the corporation. It's commitment and to an extent trust building. That being said, the incentives will only take you so far. Amazon has essentially turned corporate expansion and/or relocation into the corporate iteration of NBA Free Agency.
Learned a lot about his way of thinking and who he is as a person and what direction he wants his personal and private ventures to go in. Listen carefully to when he talks about Blue Origin, in particular, he says that his mission is to provide the infrastructure as cost effectively and sustainably as possible. He says that while reflecting back to how Amazon started off in the first place. Bezos didn't have to create a logistics network because the USPS, UPS, and FedEx had already laid out the infrastructure for him and Amazon to grow like wildfire, he simply used the infrastructure that was already in place for his venture and it paid dividends. He wants to extract as much success as he can from as little money as possible in a place that has the necessary tools and infrastructure for his company to grow already set in place.
It's become entirely clear to me that Bezos already has an idea of where he wants to take Amazon next. I think that if he wants a large market where the talent is easier to find and retain then he will go after markets like New York, Chicago, Toronto, Boston, San Francisco, Washington D.C., and maybe Los Angeles. Toronto in particular would appeal to Bezos because of the lingering issues with immigration and visa workers in the U.S. right now and Amazon reportedly already had discussions about moving to Toronto a while back. There is a reason why Amazon went out of its way to state all of North America and not just the U.S. specifically. On the other hand, if Amazon wants to set up shop in a specialized tech market, not too different from the Seattle set-up and where the talent is both fostered and driven then smaller places like Austin, Denver, Pittsburgh, and maybe even Raleigh are options as well.
I don't see him going anywhere else. Will other places try? Sure. Will other places get a look? Sure, I guess, but I don't think so. I think among the large markets that Boston is the frontrunner and Austin of the smaller markets. Makes sense, that Bloomberg article that edwardszurphands posted said essentially the same thing; the executives of Amazon want it to be Boston whereas the associates, employees, and contacts want it to be Austin. That says a lot. I could also see this thing being in New York, what better market to grow a company than the Global Center of Commerce itself?
Then again, I'm not Jeff Bezos, so I don't know what goes on in that head of his and could be entirely off altogether. If I had a leaning to anything, it is that they already have a short list compiled and ready to start scanning. This thing will probably play out well into next year.
If cost of living and the required criteria must strictly be met then I see this as a Chicago win. It is a world class city, the fourth largest market in North America behind New York-Mexico City-Los Angeles, has two world class universities and pulls from even more universities and colleges in the broader region. Has cost of living on par with the likes of Atlanta or Dallas -- in the same general range pretty much. Has the infrastructure. Has arguably one of the top two best infrastructural layouts in America with regard to highways, transit, bike lanes, pedestrian zones, and the like. Despite its massive size, Chicago has less congestion and traffic issues than several American cities that are either bigger or smaller. Has one of the top airports in the world with regard to service destinations and frequency of options. Has the stature of a truly revered global city. Has lots of capital infusion and has a broad and diverse economy -- enough to draw the creme of the crop tech talent. Is a desirable city that can sell itself to executives and employees to draw even more talent outside the region -- Chicago is frequently featured in majority of the world's top city assessments. Most importantly, over the years and decades, Chicago has demonstrated that it can and will lure corporate headquarter relocations and talent -- it does it so often that it has been tried and tested as successful in that regard. The city is first class in that regard (as are Atlanta, Dallas, and Washington D.C. too for that matter).
Has everything working for it.
That being said, I still think it will be one of these four but have Chicago next after them: Boston, New York, Austin, or Denver just because all four are more tech centric cities than Chicago overall IMO. With Toronto having a legit chance as well because of the Trump Administrations (potential) immigration policies which will affect the H1B1 visa holders and cripple the tech industry's ability to lure talented labor for cost effective payrolls. That's just from my perspective IMO. They either go with a medium sized market with similar tech industry and aspects to Seattle (Austin/Denver) or they just go with the most logical big market and depending on whether they want the talent pool (Boston), market reach (New York), or cost of living (Chicago) they can go any of three ways on it.
Anyone know when they announce their decision? Will they thin the herd and narrow their short list as time goes on?
Last edited by Trafalgar Law; 09-13-2017 at 06:04 PM..
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