In a few months, I plan to leave San Francisco for good, and I may very well rent out my apartment. In fact, given the recent surge in rent prices, I would be a fool not to.

So when I put it up for rent this Fall, I expect I will get some qualified applicants. But, let us say, for the sake of argument, that I only get these two:

Wanda is a quiet but friendly woman in her late 50s. She has spent the last decade working for UCSF in their accounting department doing bookkeeping. She makes a nice salary, and will receive a good pension when she retires in a few years. She doesn’t smoke, owns no pets, and basically keeps to herself. Wanda has great credit and can easily afford the down payment.

Kyle is a charismatic software designer in his mid 20s. He works at a popular startup, and makes a lot of money. He is originally from Boston, and may eventually move back there. Kyle owns no pets, and he insists that he can keep the home clean. He has great credit and can easily afford the down payment.

Now, in a free-market scenario in which the government does not meddle, then I would probably offer the apartment to Wanda. In fact, it would be a no-brainer. While Kyle may seem like a nice guy, there is no way to know for sure. What if he throws parties every weekend? What if his frat brothers come over and blow lines off my counters, while performing makeshift UFC in the kitchen? Nobody is allowed on our rooftop, but I doubt that he will obey that rule.

So, my gut would always lean towards giving the apartment to Wanda.

But thanks to government meddling — and the barbaric practice of “rent control” — I may be economically obligated to offer the space to Kyle.

In fairness, it isn’t because I like Kyle. As mentioned, I would prefer to have Wanda. But as a landlord, I have to fear the specter of Wanda hanging out for 30 more years. Rents have increased 30 percent in the last two years — and they may increase another 30 percent over the coming years.

Am I supposed to miss out on all that appreciation and income potential?

What happens if it is the year 2020, and rents have increased 100 percent in the last seven years? Am I supposed to be okay with Wanda still paying me a hair above her original rent?

The problem with a tenant like Wanda is that she has a high propensity to hang around forever. Kyle, in contrast, will eventually get hitched, have a couple kids, and decide that he wants to move to a bigger (and more trendy) part of town. Maybe he will return to New England, since those East Coasters rarely stay in Cali forever.

Wanda? She is less likely to leave with each passing year.

Now, of course, anything can happen. Maybe Kyle stays a bachelor for life and never leaves, while Wanda makes millions in the lottery and goes to Pac Heights. But the statistics are what they are. Rent control forces a landlord to go with Kyle.

So, here are a few reactions that you might have to this story: “Bryan, such discrimination is illegal.”

Yup. And this is all hypothetical.

“Fine, even if rent discrimination is hard to prove, it is wrong. You are evil.”

Am I being evil? Is it wrong to try and maximize the value of one’s assets? Remember that I am going to have to pay for my kids to go to college one day. Losing out on thousands of dollars per year could limit my own retirement. And with all due respect to Wanda, her life is her life. It’s not my job to prioritize her retirement ahead of my own.

“If you raise rent, and Wanda leaves, where will she go?”

To a cheaper part of San Francisco. If she can currently afford to live in Russian Hill, then maybe one day she will have to live in Lower Nob Hill or some place slightly cheaper. In a worst case scenario, she can move to a nice suburb in the East Bay. Perhaps it is not ideal, but this is far from sending her to Siberia.

The truth is that rent control hurts everybody. That is why 93 percent of Economists — even liberal, progressive, Wall Street-hating economists — oppose it.

In a San Francisco that did not have rent control, Wanda would be everybody’s first choice to have as a tenant. She would have no problem getting a home within her budget. Sure, she might have to move every once in a great while, but so what? Instead, the best apartments are going to Kyle, because he won’t hang around for that long.

Also, I would be far more inclined to buy another home in SF as an investment if it weren’t for rent control. As it is, though, I would never do such a thing. I’m only leasing out my apartment, because I am moving towns. Building homes as a source of income is a great idea… just not in San Francisco. That’s why our housing stock is basically flat.

Anyhow, Silicon Valley’s rent control problem is everyone’s problem. It did not affect me until recently — but now it does. And it just hammers home how idiotic it is.

Anybody who supports rent control is either (a) uneducated, or (b) benefiting from it. And, unfortunately for our future, (a) + (b) > 50 percent.

[Image via

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

During the last five years, many of the most successful content sites have been associated with — or pejoratively accused of employing — search engine optimization (SEO).

The term itself is as common as it is murky. The gist is that most people find content they want using Google, and so if your website’s content is appealing to Google, then you will attract more visitors. In the last year, sites like BuzzFeed have succeeded with “Social Optimization,” basically the same concept, only for Facebook instead of Google.

Still, the premise for all successful media sites continues to be that they have “cracked the code” on how to get Google and/or Facebook traffic. And given that those two sites are basically the highway on-ramps to the Internet, it is accurate to say that visitor growth depends highly upon them.

And, yet, those who attract a lot of search or social traffic tend to incur the wrath of “real journalists” (regardless of whether such haters are actually real journalists).

Famed sports blogger Will Leitch recently said, “We’re mad not because Bleacher Report is inherently terrible, but because it always felt like they were cheating. They got huge and popular through internet tricks…”

Will Leitch is completely wrong, but that is nonetheless the image of SEO.

Those who have not succeeded in attracting lots of search traffic perceive SEO as some sort of Voodoo-like mix of cheap tricks and time-tested secret methods. There have always been rumors that the key to SEO is rooted in HTML tags, headline keywords, and a bunch of other tactics.

But that’s entirely incorrect.

The Google search algorithm is so sophisticated, and the number of sites that stack keywords in their headlines is so great, that such methods would never trick Google. Not even a tiny bit.

And, so my good reader, let me tell you what the real “secret” of SEO is. Let me tell you exactly how to reach millions of readers — a method that, if replicated, may lead to you building the next Huffington Post…

[Drumroll, please.]

The secret of SEO is to… create content that people want to read. That’s it. That is the deep, dark secret.

Will keywords and HTML tags give you an edge? Probably not. Because everyone else uses them too.

The difference between a site that attracts 1,000 search visitors per day and one that attracts 1,000,000 search visitors per day is that the latter will create content that people actually want to read, and the former will create content that people do not want to read.

“But Bryan,” you may be asking, “my website creates content that people should want to read. How come I get so little search traffic?”

Are you sure that your site creates content that people want to read?

It took Bleacher Report many years to understand what sports fans truly wanted to read. And once we did figure out what sports fans wanted to read, a veritable litany of “real journalists” decried our success at it. Why? Because they were angry at the American public for having tastes and preferences for stories that they didn’t want to write.

Traditional journalists picked their story topics by holding a finger in the air and guessing at what a reader should want to read about. Or they simply disregarded what a reader may want to read. If a writer determined that the best story to write was a profile about Cambodian youth baseball leagues, then he simply wrote a story about Cambodian youth baseball leagues. Even if nobody was going to read it.

In contrast, Bleacher Report employed facts and statistics to better understand what resonated with our own readers (which were basically the American public at large). And we found that very few Americans wanted to read about Cambodian youth baseball leagues.

Not every story was determined based on data. But many were. And, that is the way it should be. Because, the truth is, everything else has always worked that way.

Do you really think that Hollywood greenlights a $100 million summer blockbuster without doing extensive research into the potential audience and the film’s appeal? Do you think that real estate moguls build shopping malls in towns before doing extensive data analysis on the local market? Do you think that VCs invest in hot startups without scrutinizing the TAM (total addressable market)?

Sites like Bleacher Report and Huffington Post simply did the same exact thing that any professional would do. They made informed decisions on a very large scale. How did Huffington Post know what Americans wanted to read? Well, that is their secret. But you wouldn’t expect John Doerr to tell you how he is able to figure out markets so presciently.

Never mind that film studios, book publishers, and music studios have been doing this for decades, it was evidently earth-shattering when a few digital publishers applied it to politics or sports coverage.

Why? I have no idea.

But I can tell you what is so earth-shattering about it from a business standpoint. It was the micro-attention to detail. Film studios create relatively few movies, and so they can afford to research a project before committing $100 million to its production. The same is true with book publishers. But business people had always (incorrectly) assumed that to do so for a tiny newspaper article was overkill.

Wrong.

You can perform market research before producing a $100 million film, and you can perform market research before producing a 1,000 word article on Barack Obama. In the past, news publishers were simply unable to even try.

So, if you or your loved ones want to master SEO, then I advise you to quit stuffing keywords into your content, and start trying to figure out what stories your potential audience of one billion English-speaking readers want to discover.

It should only take you five or six years, so long as you have dozens of editors. And, that, ladies and gentlemen… is the deep dark secret of SEO.

[Image Credit: jinterwas]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

Venture Capitalists tend to ask a lot of questions. And when they are looking at media deals — which are intimidating in their unpredictability — they ask a ton of questions. But they can save themselves a lot of time, because there is one question that is so important that it should really be the first one they ask.

I’m talking about traffic, right?

A great VC can make up his or her mind within moments of looking at a website by opening Quantcast or Comscore and looking at unique visitor growth…right?

Wrong.

While very important, unique visitors is a much more relative metric than venture investors realize. But here’s a metric that is important every single time: Demographic concentration.

What is this metric? How is it measured? Well, it is best demonstrated by using a great example. And there is no example more illustrative that Refinery29 vs Upworthy.

A quick visit to Quantcast will tell you that Refinery29.com enjoys about two million unique visitors per month, ranking it No. 1,270 amongst all websites in America. Those are strong numbers, but probably not enough to get any VC to jump out of bed or fly across the country to win a deal. Compare that to a red-hot site like Upworthy.com, which has fifteen million visitors and a #106 ranking.

Surely, Upworthy is a hotter investment than Refinery29, right? That’s just simple arithmetic, right?

Wrong.

Compare these two charts, and you will see why Refinery29 has eye-popping revenue numbers, and why Upworthy — while very impressive — is going to have a much harder time earning brand dollars:

Refinery29 makes a ton of money for reasons that are immediately obvious when you look at their demographic concentration.

When Revlon needs to spend $500,000 to launch a new mascara product, do you think that they want to reach a single man? No. And while they may spread that budget across two or three sites, they would be fools to omit Refinery29 from any advertising buy.

Simply stated — even though its traffic numbers are nothing to write home about, Refinery 29 will be a “must buy” in the eyes of any major advertising agency. If they grow their traffic, their revenue will continue to surge.

In the case of Upworthy, they don’t reach anybody in particular. Fairly even split of men and women. Fairly even split amongst people 18 – 54 in age. Some are married, some aren’t.

The only way that Upworthy can win a $500,000 advertising buy is by doing one of two things. Either they can (a) keep growing until they are so damn huge that an advertiser can do a “scale” buy with them, probably at a reduced CPM, or (b) they can create an advertising product so innovative and original that it stuns the world with its brilliance. (Note: A bunch of cheesy adtech companies will argue that they can assuage the situation with gimmicky “audience targeting” tools, but the real money is in the premium placements — homepage takeovers, OPA pushdowns, sweepstakes, custom editorial, etc. — and those require custom implementation.)

It appears that Upworthy understands this and is shooting for Option B, given this description on their website:

Well, first of all, we don’t make much [money] yet. But our model is to connect readers with non-profits and other organizations who are looking to grow their memberships via the sign-up boxes you might have noticed on your way into the site. The infographic in our privacy policy explains it visually.

Well, that is certainly new and different. But it also means that they are reinventing the wheel. Does anybody remember how well Foursquare and Tumblr did in their attempts to reinvent the wheel? Not so well. Advertising is not a wheel that you want to reinvent.

Refinery29 does not need to invent a new path towards riches. They sell brand advertising the same way Vogue has for 120 years. Now, they are replacing Vogue. You can guess which company I would bet on.

Upworthy is a terrific company that is run by some very smart people. Their growth speaks for itself, and they have achieved large scale faster than just about anyone. They have attracted great investors for a reason. But they have a long battle ahead of them.

In fairness to Upworthy, a site’s demographics should even out as it reaches more and more people. Yahoo reaches most Americans each month, so it cannot possibly concentrate on any one segment of the population. But a few rare websites can achieve both scale and demographic concentration, and those are the ones with nine-figure exits…

Let’s take a look at Bleacher Report’s traffic on Quantcast. The site reaches nearly 30 million people each month, and is ranked No. 54 in America. So it is roughly double the size of Upworthy. But look at the demographics:

To reach 30 million people — and still maintain a 90 percent male user base — is absolutely stunning from a statistical standpoint. It is basically a mathematical anomaly. If you were the advertising agency representing Old Spice or Ford Trucks, you would take about four seconds in order to decide that this was a site on which you wanted to appear.

How many other options would you even have? How about zero. Even ESPN reaches a more even mix of men and women. A media site can earn leverage against its advertisers when it becomes a “must buy” site, and the only way to become a “must buy” is by having demographic concentration.

When Time Warner paid a hefty nine-figure sum to buy Bleacher Report, a lot of media commentators wondered why. The answer is contained entirely in the chart located above.

A lot of VCs avoid media deals altogether. The world of New York advertising agencies is a crazy one that is both physically and culturally foreign to Silicon Valley semiconductor types. But you don’t need a PhD in electrical engineering to understand simple math.

Reaching a lot of readers is a good thing — but reaching a lot of homogenous readers is an amazing thing.

Advertising is the one business where diversity is bad.

[Note: I am no longer an employee of Time Warner or Bleacher Report, and I have no financial interest in either company’s go-forward earnings.]

[Image courtesy Fran Simó]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

With unemployment for young people still at elevated levels, and so many career paths basically obsolete, the “college debate” is in full force.

Tom Friedman recently entered the fray. But his article turned into a puff piece for his daughter’s friend’s company, and besides, who really cares what a career journalist thinks about hiring people? When was the last time a newspaper hired anyone?

I’ve personally hired over a hundred people — most of them in their 20s. And their collegiate backgrounds are highly diverse. I’ve hired Ivy League graduates, and I’ve hired people who didn’t go to college at all.

Here’s what you need to know about college degrees and getting jobs:

1. Does it matter where I go to college?

Yes.

If you are going to go to college, and take on a bunch of debt, and sit in classes for four years not making money… then for the love of God, go to a good one.

As I’ve written before, we have way too many people who went to college “just because” and got a Spanish or Psychology degree from a random state school.

That’s probably not the best investment of time and money. One can just as easily move to a city and make a decent living working at Nordstrom, where a smart person can earn two promotions in the four years it takes to get that degree.

There is nothing wrong with Spanish or Psychology per se — but you can probably learn the former by working/teaching in Spain or Mexico for a year. And nobody is stopping you from buying a Psychology textbook and reading it during breakfast before your Nordstrom shift begins at noon.

While a bunch of smug idealists may speak about the merits of an “educated society,” I don’t think those same idealists are willing to pay the $300,000 all-in cost (including forgone income) to educate a young person.

College degrees are the most expensive thing that you will ever buy, other than maybe your house — do not write that check without thinking long and hard about it first… the college will still be there even if you take a year to work and think about it.

2. What if I can’t get into an Ivy League school?

When I was in high school, waiting the two weeks for SAT scores was treated with the same seriousness as biopsy results.  And when my mom handed me a “thin envelope” in April of my senior year, it was as though she was delivering my death warrant.

It should not be that big of a deal.

How important is it that you go to Harvard vs. Emory? It’s not important in the slightest. It will have no bearing on your success in life. Could you argue that one thousand graduates of Harvard might outperform one thousand graduates from Emory? I guess. But you aren’t going to live twice, let alone a thousand times, so that is moot.

When I review the resume of a job applicant, I give them a small bonus if they went to a good school. Do I really care if it is Princeton or UC Berkeley? No way. A good school is a good school. Your alma mater is already such a small consideration in the hiring equation, that I am not going to split hairs over a US News ranking.

In fact, I haven’t even looked at the US News rankings since I was in college myself, so if your school jumped nine spots last year, I don’t give a shit.

Oh, and don’t forget that for every year out of college, the value of your degree decreases. The half-life is about three years. Once a decade has passed, your fancy degree better be the exclamation mark at the end of an amazing resume. Otherwise it just makes you look like a burnout. There are few things more awkward than a Yale degree at the end of a crappy resume. Prospective employers will literally walk into the interview wondering, “What the hell went wrong with this guy?”

3. What if I don’t get a degree at all?

I’ve hired people without college degrees — I still do.

In fact, two of the first three people I hired for my new company made the decision not to get a college degree, and in both cases, it was the correct decision to make. If you talk to either of them, you will quickly realize that they are more intelligent and intellectual than 99 percent of the “degree holding” population. They read more books than most college graduates I know.

Their head shots are prominently displayed on the “Our Team” page of my venture pitch, and I have yet to have a single investor ask, “Where did that guy to go school?” Investors prefer to ask, “What company did you steal them from?”

What’s more, skipping college puts pressure on young people to actually learn real skills and deliver real value — and that is a good thing. Young people need a little more fire under their ass, so the specter of ending up at Taco Bell is great incentive for them to figure out how to be valuable.

I do concede that skipping college works better for technical fields (engineering, design, product, etc.) and service jobs than it does for financial careers, but how long will that continue?

Are coders and startup founders quitting their jobs to land spots at Goldman Sachs? No, it’s the other way around. And I am seeing a lot of MBA graduates who now make fun of themselves or wonder “Why the hell did I do this?” That’s a trend that may very well continue one rung down the ladder to college students.

In short, skipping college is not really a barrier to the jobs that are hot right now — after all, the only reason those jobs are ‘hot’ is because they are necessary and scarce. I would call this “capitalism at work,” but it’s such a beat-you-over-the-head simple concept, that I don’t want to insult economists by pretending this is even the slightest bit complex.

4. Aside from the degree, is the education itself worth anything?

Yes, but it is overpriced. Way, way, way overpriced.

The reason college costs so much to attend is because the schools do such a horrible job of keeping their budgets under control. That is their mistake, and it ends up being your problem when you get saddled with $150,000 in debt.

Is it nice that a college campus is meticulously groomed, has Disney castle buildings, libraries that speak Klingon, cafeterias from which you steal dishware, nine traveling acappella teams, and large empty theaters for slam poetry jams?

Yeah, those things are great… until you realize how many hours you have to work at Bennigans to pay for it all.

And, even if you are a spoiled brat like me, do you really want your parents to subsidize that crap? Wouldn’t you rather just inherit more money? Once you move to New York and realize how damn expensive it is, you will wish that your parents were just a little bit richer.

Your gilded 19th century dorm castle will seem an ever-distant prospect when you actually live in Prospect Heights.

[Illustration by Hallie Bateman]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

I remember a story from four years ago, when UberCab was the newest thing. That was before it had a massive valuation, before Travis Kalanick was CEO, and before it changed its name to escape one of its countless legal brouhahas.

I was riding in an airport taxi — it was the first time in weeks that I had taken one. The driver, a hefty bearded man in his 50s, asked me if I had downloaded the TaxiMagic app yet.

“No,” I said, “the only taxi app that I use is UberCab.”

“Ha, you won’t be using that for much longer. We’re taking care of those guys.”

“What do you mean?” I got a little bit nervous — remember, this was before Uber was big and powerful and able to fight back.

“They claim to be taxis, but they’re not fooling anybody. They are just a bunch of towncar drivers trying to get fares. It’s not safe. It’s not legal. And we’re about to shut ‘em down.”

“Who is we?”

“All of us. The cab drivers association, the taxi commissioner.”

“And why do you guys prefer TaxiMagic?”

“Because, it plays by the rules and works with the system.”

That was four years ago. Some people may still use TaxiMagic. In the meantime, Uber is much more alive than that grizzled old taxi driver would have had us believe.

Uber does offer a taxi-dispatching service option, but I have only used it once out of the 500+ Uber rides that I have enjoyed in the last two years.

The one time that an Uber-dispatched taxi cab picked me up, the car smelled like vomit. Not a little bit — the cab literally reeked, as though it had been forged of vomit-infused steel from the fiery furnace of Mount Puke. It made me want to vomit. If I weren’t late for a VC pitch, I would have told him to pull over and gotten out of the car.

The other 499 rides have been either Uber or UberX. And I am proud that in each of those cases it meant that a San Francisco taxi driver was being denied a fare that he might have received from me in the pre-iPhone era.

Because, you see, I want to put San Francisco taxi drivers out of business. That’s one of the reasons I use Uber. That may not be Uber’s goal — but it is mine.

Why? Because taxi drivers don’t value the comfort and convenience of their passengers, and they view the taxi system as a livelihood for themselves rather than a mutually-beneficial service for the people of San Francisco.

I’m stereotyping, right?

No, actually, I’m not. It’s right here in the SFMTA’s official survey of taxi drivers:

The surveys of taxi users found that passengers want [credit card payment] capabilities. A majority of drivers surveyed (53%) do not agree with requiring units that have this capability. A lesser number (35%) agree with the requirement. Driver support would improve if it can be shown that net customer tipping rises with good

implementation (37% of drivers believe that credit card users are poor tippers), and if drivers could count on being paid their credit card charges at the end of their shift, instead of waiting a sometimes lengthy period for company processing…

That’s right — only a small minority of taxi drivers is in support of the credit card systems in the back of their cabs.

Why? Because they don’t want to be inconvenienced. They don’t like the idea that they will have to wait to get their money… Evidently, these cab drivers do not realize that the rest of us have to wait two weeks to get our hard-earned money each payday, regardless of how much or how little we make. They also don’t seem to care about our convenience.

If they did care about our convenience, then they wouldn’t ask us our destination before agreeing to pick us up. They wouldn’t talk on their phones the entire ride, which is both obnoxious and unsafe. They wouldn’t ignore the dispatcher when he sends them to our house. They wouldn’t constantly rant about politics. They wouldn’t insist that we give them cash, even when their credit card machine is working fine.

These problems are getting worse, not better — there was a 13 percent increase in passenger complaints last year according to SFMTA.

Are the taxi drivers working hard to improve the situation? Do they think that better customer service could improve taxi demand? No. When the MTA asked drivers to describe their greatest concern:

The most common response heard from drivers was their dissatisfaction with the SFMTA’s regulatory and enforcement activities in relation to…shared ride services.

Taxi drivers spend their days griping about how Government can’t stifle innovation and bring back the glory days of artificially-suppressed competition. Why attract satisfied customers when you can destroy popular competitors? That’s how they view the world.

For years, we San Franciscans clamored for more taxis, but at this point, I can’t think of a single friend who cares about the issue anymore.

Because none of my friends ride in taxis.

There are plenty of Ubers and Lyfts to go around, and we are helping solve our generation’s own underemployment problem by letting our friends (who drive for Lyft) pick us up in their cars and make money doing it. (This compares to the taxi system, which uses an archaic 15-year waiting list  to force young people out of the industry.)

Uber and Lyft — no unions, no crazy regulations, no bullshit. And when I occasionally leave my phone or wallet in an Uber, I actually get it back.

There has been a lot of talk lately about whether Silicon Valley actually solves real problems. Fine publications and crappy tabloids alike beg the question — are we building the next Genentech, or are we simply creating fun toys for rich kids to play with? Most would point to Uber as an example of a toy — it brings nothing more than convenience to a select group of “haves” who can afford the premium service.

I view Uber and Lyft as much more than that.

In my opinion, they are doing a great service for the world: proving that the corrupt, broken systems of yesteryear will not survive in this new era. If you treat people like crap, no government agency will save you. No bribe or manipulation will get you out of your own self-created mess. We won’t confront you — we will find an efficient way around you.

For those of us who spent years putting up with the bullshit of the San Francisco Taxi drivers, dispatchers, and regulators, the rise of car sharing has given us the power to boycott. Together, we can put the medallion-wielding taxi drivers out of business for good.

And they will deserve it.

Some people may look at Uber and see a bunch of rich kids riding in style. That’s fine. I see it as accomplishing a much greater mission — destroying corrupt civic institutions. There is no mission more worthwhile.

[Image credit: atomicshark on Flickr]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

The Atlantic recently published a quintessential “puff piece” about Governor Jerry Brown that talks in depth about the man and offers a primer about the state itself. Because it is a long article, I will summarize it here:

First, the state of California is unwieldy due to several deeply-ingrained political peculiarities, such as (a) direct democracy, (b) a weak legislature, and (c) a widespread defeatist sense that the state is ungovernable.

Second, the state suffers two fiscal issues which are (a) limits on property tax and (b) extreme public sector union expenses. The author more or less ignores these problems in favor of discussing the issues enumerated above.

Third, the Governor is such a seasoned and self-cultivated statesman, that he has used pragmatism and deep understanding of the state’s politics to delicately navigate the situation — ultimately culminating in a positive annual budget.

Fourth, the Governor is totally awesome and super mature. He’s kind of Zen too.

But here’s the real TL;DR version of the article, if we must sum it up quickly and eloquently: “California is a hopeless shithole, and a master politician is now spraying some Febreeze on it.”

Along the way, the author concedes that the Febreeze is weak… a lot of the “comeback” is due to a nationally improving economy and spending cuts, though what exactly has been cut is unclear. Certainly nothing of substance. Much of the fiscal improvement is from Proposition 30, a massive tax hike that sniped out entrepreneurs that I have written about many times before (including in my article where I cite Proposition 30 as a reason for me leaving California, a process that is well underway… and which I couldn’t be happier about).

But this article is not about the tragedy of Proposition 30. It’s about how an Atlantic puff piece that generally gushes over Jerry Brown and seems to paint the state with a brush of optimism is actually…downright depressing.

Because what the article really conveys is a defeatist message. And, even worse… The author is absolutely correct.

As usual, with the state of California, he points to the “good” and the “bad.”

The good: innovation, a welcoming attitude towards immigrants, a culture of risk taking, and breathtaking natural beauty with abundant natural resources. The bad: dysfunctional government, awful schools, busted roads, and a prison system so despicable that the Supreme Court considers it unconstitutional.

Now — what do we notice about the “good” and the “bad”?

Perhaps we could ask a child who has graduated from one of California’s horrifically bad elementary schools to look carefully at those two lists and observe a pattern…

Hmmm… let’s see here. Ah! There it is! Everything on the “bad” list is managed by California’s state government. Everything on the “good” list has absolutely nothing to do with the government.

Sure, a few of the blind, pro-California wishful types will argue that we have great universities, totally oblivious to the fact that even this one rare gem of civic achievement is in a downward spiral. UC Berkeley is a testament to the achievement of men and women long dead.

But other than a few UCs, the state of California offers nothing to its people. Nothing worth paying for, that is — and certainly nothing worth paying 13.3 percent of your income towards.

That’s right, I said 13.3 percent.

Immediately after reading the article, I got brunch with my cousin and his girlfriend who live in Seattle. And I asked them what was so terrible about their state. After all, the state of Washington has zero income tax, so something must be missing. They must be deprived of something with so little state revenue.

“Well, we really hate the rain,” my collegiate relative explained, to which his girlfriend added, “and the nightlife could be more exciting.”

No complaints about their excellent university or their roads. No moaning about homeless problems. One of them went to a local Seattle public high school, and appears to be doing just fine. As for the weather? Nothing the Governor can do about that, though I suppose that they have budgeted for the harsh impacts of perpetually inclement weather… even without taking cash from Jeff Bezos’ or Bill Gates’ pockets.

Washington provides much and takes little. How does California differ? Well, according to The Atlantic, the state’s goal is to provide the absolute minimum in terms of fostering its private citizens’ success:

Still, California’s challenge is America’s: how to manage public business competently enough—collecting taxes, covering costs, educating children, fostering research, protecting the environment, maintaining order—to allow the creative carnival of its private activities to go on. And this is where Jerry Brown’s accomplishment seems most impressive.

It is not the role of government to merely “get out of the way” of small businesses. It is the role of government to provide those “pure public” services that no corporation can offer — military protection, roads, emergency services, and (debatably) schools.

And because the federal government handles a lot of the above, one would think that the state could get its act together.

The California government of the middle 20th century gave us all those things and more, at a time when population growth was three to five times faster than it is now.

The last (and only) time that I ever called 911, the man on the other line recommended that I take a taxi to the ER to save money. It was a good suggestion, since that trip would have cost me $2,000 (on top of the hundreds of thousands of dollars that I paid in taxes to the state).

As a person who has started his new company outside of California, and who now spends a minority of his time there, a lot of these problems don’t impact me anymore. I am opting out — and while some people would say that I am “running away” from the problem, I don’t see any reason why I am obligated to hang around and fix it.

But here’s what does impact me: The city of New York.

I love the fact that I can take a subway from Brooklyn to Manhattan in a matter of minutes, the “L” line runs like clockwork. I like how the fire department showed up to my office’s front door last week to do a routine inspection of the premises for safety purposes. (Can’t put all your trust in landlords these days.) I like how I can walk around Manhattan at any hour and feel safe. I like how Williamsburg is so much cleaner than the Mission.

And the combined state and city taxes in New York, while high, will be much lower than if I keep living in San Francisco.

There are cheaper places in America, to be sure, but in New York you get what you pay for — in California, your tax dollar goes nowhere, except maybe a smoldering hellish dark pit somewhere. (Yes, that was a subtle jab at the prison guard union.)

So we can let publications like The Atlantic cheerlead a “comeback” that even it admits is possibly a façade. We can pretend that Jerry Brown has solved the problems even a little bit. We can act like California is on its way up. And we can celebrate “qualified victories” that are “maybe kind of a small start.”

But we all know what two times zero equals.

At best, California is reaching for mediocrity, and with the perfect alignment of political stars, maybe it will come within reach of it.

But once we come to terms with its incompetent political system, then that’s still pretty good. Right? If we all just agree to lower our standards significantly, then we can feel good about these tiny victories? Correct?

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Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

(Below, our illustrator Hallie Bateman envisions what I missed)

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

When we launched Bleacher Report, we did not pay our writers. This was out of necessity as well as principle.

From a necessity standpoint, we simply did not have the money to pay writers. We were operating on a shoe-string budget, and we had (correctly) chosen to invest our seed capital into building a platform. That platform continued to improve, and allowed the company to do some very innovative things for years to come.

From a principal standpoint, we felt that the writers did not need to be paid. It wasn’t because they deserved to make nothing. Rather, we (correctly) anticipated that there were thousands of passionate sports fans out there who wanted to share their opinions and had no other practical means of doing so. We were spending our time and money building the tools to let them. They weren’t asking us for money. Nor were we monetizing at that point. We had plenty of critics, but we didn’t agree with them. We saw ourselves as the Tumblr of sports.

As time elapsed, however, the company made the decision to start paying writers. Our initial budget for paying writers was substantial — well into the seven figures. That budget continued to increase significantly.

It was an outstanding investment. And a Yahoo-controlled Tumblr could learn something from our experiences. Why did our editorial leadership push for this sudden change? There were several reasons:

First, the quality of the content on Bleacher Report was not where it needed to be. We had a lot of critics, and we continued to hear one complaint in particular — people grumbled that there were talented contributors on Bleacher Report, but they were being drowned-out by a ton of weaker writers. We responded by eliminating the vast majority of contributors and paying the best of those who remained.

Second, we were finding that churn was expensive. The overhead cost of constantly finding new writers to replace the ones who left had become a real expense. Plus, we felt that a lot of these writers had developed their skills on Bleacher Report, and that it was a neglected investment for us to let them walk away so easily. Paying them solved the problem quite easily.

Third, we found that advertising injected a new moral imperative into the mix. After all, if we were charging clients large fees to advertise, shouldn’t the writers who created that content get a piece of the action? Also, shouldn’t our clients get the best content possible to support their campaigns? This was a classic “rising tide” scenario for us and our writers.

Fourth, we found that most of our writers had other jobs anyhow, and that our payments were often what “put them over the hump,” in terms of focusing on their writing. Our writers lived in all parts of the country, and many of them were able to pay their rent (in its entirety) from the payments we made to them. The rest of the week, they worked the type of jobs that most young University of Cincinnati graduates expected to find with an English degree and 15 percent unemployment. Some of our best writers had jobs at places like Home Depot or Sears. But getting a check from us allowed them to avoid overtime, second jobs, or all of the other things that might have kept them from writing each evening.

Fifth, we wanted to have relationships with our writers. We wanted them to develop expertise about their teams, and we wanted to be on the phone with them as we planned our coverage. It’s one thing to let somebody write for your site. It’s another to call them on the phone three times per week. As we tightened our relationship with writers, paying them became a logical next step.

There were many other reasons why we did it. Those are simply five major ones that stick out.

Today, some people still think of Bleacher Report as “that site that doesn’t pay its writers,” which just goes to show how long a reputation can stick with a company. There are very few sports publications that pay writers more than Bleacher Report  — not on a per capita basis, but on an overall basis.

Making a living as a writer is hard, and it’s going to keep getting harder. New media properties like Bleacher Report and Huffington Post are not going to accelerate or ameliorate those pains.

But they are proving that the business of content is incredibly complex and evolving so quickly that the economics are still being sorted out. It’s not just about how much a writer gets paid, but also what they get paid to do each day. Bleacher Report has created hundreds of editorial jobs in the United States, but a great many of them are in curation, as they power the immensely popular TeamStream aggregation app.

Ten years ago, I’m not sure there was such thing as an “aggregation editor.”

But that’s the essence of what’s going on at the largest and most successful new media companies. They are constantly assessing and re-assessing the rules for editorial. This could mean an increase in writer compensation. It could mean a major change in the day-to-day job of editors. It could mean constant changes in focus between creation, aggregation, and distribution.

Ultimately, the decision to pay writers proved to be more of a financial issue than an ethical one. It was a positive step in an evolution that continues. It advanced the business. But, in so doing, it improved the product, created jobs, and helped to make publishing a more sustainable enterprise. And those things were good for both consumers and contributors.

Yahoo’s recent purchase of Tumblr may force an examination of these concepts. The company got negative press when they eliminated their paid-writer Storyboard concept a few weeks ago. Industry pundits have also questioned whether the Tumblr contributors will tolerate advertising on their content.

I predict that Tumblr will find itself struggling mightily with everything that has been described above. It may not need its “bottom 90 percent” of blogs. Rather, it may find that the best bloggers welcome advertising with open-arms, so long as they get a piece of the action. That would still represent billions of page views, enough to make a titanic profit.

As for my future endeavors, the plan is simple — pay writers on day one. And never stop.

[Image courtesy gilles chiroleu]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

Everyone is allowed to have pet peeves, and here is one of mine: When people talk about generations.

There is nothing more annoying and dilettantish than when a faux-intellectual tries to explain the mindset or behaviors of a particular generation. “The thing about Millennials is…” That kind of stupid crap.

Recently, I was treated to a horrific article located here in which some old lady wantrepreneur named Penelope Trunk rambles about how much she dislikes “Generation Y.”

Like so many articles about generational stereotyping, hers is not worthy of response. Rather, I would like to discuss my generation. Some might call me a “Millennial” or “Generation Y” — either way, this article is about people in their 20s.

The truth is that my generation is perfectly awesome. We are simply the subject of nonsensically bad press. And because our parents’ generation managed to destroy the entire publishing industry, not many young people get a chance to defend themselves in print.

But that’s what I plan to do right now. Here are some of the ridiculous criticisms that old people level at young people…

“Millennials still live off their parents until late in life…”

This is one of the most unreasonable charges against Millennials, because it’s part of a natural, multi-generational trend.

The United States life expectancy has grown by 15 years since many of our parents were born. Did they expect that all 15 of those years would simply be tacked on to the end of our mortal timelines? No. What’s more logical is that every phase of one’s life is elongated by about 20 – 25 percent.

Thus, the phase where we receive education — which two generations ago usually ended at age 16 or 18 — is now ending in our mid-twenties. And the period of life after graduation and before marriage is also longer. There are many reasons for this (women have careers; birth control exists; too many divorced parents, etc.). But the net result is that we don’t get married at age 24 anymore. We get married closer to 30.

The hope would be that our retirements last longer too. Statistically speaking, we don’t retire at age 65 and die at age 70, which was the most common outcome for people born two generations ago. Some of us hope to work into our late-60s and enjoy many years of retirement.

And so we Millenials don’t leave the nest anymore at age 18. Many of us are not self-sufficient at age 21. But, guess what? Our great-grandparents were expected to make a living as teenagers. And their fathers worked in factories at age 12. Should we look to that as some sort of model?

People live longer, and they expand the phases of their life. This has happened for centuries. To set some sort of arbitrary ‘line in the sand’ at which point a young person is supposed to be self-sufficient… that is the ultimate fallacy.

“Millennials don’t know what to do with their careers…”

This is another common and ridiculous claim.

Are there a lot of Millennials who get graduate degrees in god-knows-what with no eye towards their future career prospects? Sure. It happens all the time. More than it probably should.

But trying to forge a career in the year 2013 is not easy, and “Generation X” parents should get a clue about what it’s like to seek employment today. For those young people who have taken the time to speak with their elders about various career options, here is the summary takeaway:

Every career path sucks.

Want to pursue a career in medicine? A gaggle of doctors from the “Baby Boomer Generation” and “Generation X” will tell you why that’s a bad idea. In their day, a doctor made millions. Today’s doctors get sued all the time and get screwed by insurance companies.

What about law? That is the least-advised career path of all, according to adults who currently practice the profession. Getting a legal job is next to impossible right now, and they have even opened “lawyer sweat shops” to get cheap labor out of the glut of JD graduates.

Oh — wait — did I say that law was the worst career path? Well, that’s only amongst the career paths that still exist. There is a veritable graveyard of non-existent jobs that disappeared some time in the last decade… like journalism.

In truth, the best jobs to get right now are in manual labor. We could use a lot more plumbers, steam-fitters, and HVAC technicians. But I’m sure that grand-parents in the “Baby Boomer Generation” and parents from “Generation X” would be thrilled with that, right? I’m sure that if a young woman in her early 20s told Lawyer Daddy and Doctor Mommy that she wanted to be an HVAC technician that her parents would even know what the hell that is. Right?

Wrong.

And anybody over the age of 50 who works in medicine, law, journalism, advertising, education, or banking has absolutely no right to bitch at their children for being indecisive about their careers. If such career paths were similarly perilous 30 years ago, they would have been equally indecisive about what the hell to do with their lives.

“Everybody In the Millennial generation wants a trophy…” 

Has our generation been coddled? Do we suffer from a little too much “self esteem”? In the words of Penelope Trunk, too many of us “were in soccer leagues where everyone gets a trophy.”

Perhaps there’s some truth to it.

But our over-abundance of self-esteem is a small dose of “bad” that comes with a great deal of “good.”

Rather than bitch about our generation, maybe Penelope Trunk should take a look at this graph, which shows the violent crime rate in the United States. Beginning in the mid-90s, when the first Millennials were entering their teenage years, the crime rate started to drop. And it kept on dropping. And it is still dropping.

Today, there are one-third as many violent crimes as there were when “Baby Boomers” and “Generation X” were our age. Ever wonder why people live in major cities again? My parents and aunts and uncles were forced to flee cities like New York, because most cities were so violent and disgusting in the 1980s.

Millennials commit far fewer crimes than any generation before them. And theorists have pinned this decrease on everything from abortions to leaded gasoline. But plenty of it can also be explained by a simple concept — decency. From parents who love their gay kids. From teachers who celebrate Black History Month in a classroom that is mostly white. From coaches who look for signs of abuse in their players’ behavior. From schools that are equipped to accommodate autistic children. The world is a much kinder and mushier place than it was 30 years ago. We are all softer because of it.

…but, as a result, we get to live in safe cities and walk around freely at night. Those of us lucky enough to live in Manhattan have an incredible quality of life, and those on a tighter budget can live in Brooklyn or even parts of Harlem. This was unimaginable two decades ago.

It’s a completely worthwhile trade-off.

“Millennials start companies because they don’t want real jobs…” 

If there is anybody who should sympathize with this criticism, it’s me. Every month, I take 10 or 12 meetings with young people who are starting companies. Most of those companies suck. And most of those companies have no chance to succeed.

(Note: most people thought that Bleacher Report was a terrible business idea when we first came up with it.)

But you will never see me criticize a person for taking a chance at entrepreneurship, regardless of how bad their idea may be. Very rarely will I snipe other founders.

Because the experience of starting a company — if taken seriously — is a valuable one that teaches any person a great deal about life and their careers. It also teaches people some real skills. And Darwinism dictates that bad startups fail pretty quickly, and those who can’t cut it move on to the next thing a year or two later. Think of it as a cheaper Master’s degree.

Do some young people start companies even when they don’t have a fully-formed idea? Yes. Do some young people pursue entrepreneurship just for the heck of it? Absolutely.

That’s human nature — human see, human do. If one 23-year-old boy sees his older brother launch a successful iPhone app, he will want to do the same. Is this a new story? Are old people supposed to be surprised by this behavior? If so, they are completely full of crap.

Half the reason my friends and I started Bleacher Report was because we saw my cousin and his friends sell CollegeHumor for millions of dollars. We wanted to do the same damn thing. And we did.

So a bunch of people in their 20s are quitting their “real jobs” as corporate cogs in order to follow their dreams of starting a company…

At least they aren’t like the “Baby Boomers” who avoided jobs altogether, grew their hair long, moved to San Francisco, disavowed showering, smoked all day, bitched about a world they were too high to change, started working when they were 30, voted for Ronald Reagan, pillaged Social Security and Medicare, spent massively, passed a bunch of tax laws to screw over future generations, inflated economic bubbles, and then bequeathed all of their problems to the Millennial generation…

…just because their friends were doing it.

Oh, wait, was that an obnoxious generational stereotype?

[Image Credit: Theo Gosselin]

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.

Disclosure #1 — I am an LP in 500 Startups. 

Disclosure #2 — If I were a wealthier man, I would put more money into 500 Startups.

The world gives us very few risk takers.

But it does give us a lot of people who think that they are risk takers.

For every entrepreneur… there are nine people who show up at parties, networking events, and demo days talking about their great app idea, and how they are almost ready to quit their job at Google or Goldman Sachs to pursue it.

For every investor… there are nine “venture capitalists” who never offer term sheets until somebody else does first, and they don’t touch any deal that their associate can’t comp against something just like it.

For every writer… there are nine would-be “thought leaders” who publish the occasional gelded article that takes no strong position whatsoever, and gingerly waltzes from one uncontroversial hackneyed point to another.

Sometimes I am the “one,” and sometimes I am the “nine”.

Two months ago, I wrote an article about gender. It was a pretty good article that got a fair amount of traffic. It wasn’t my best article, and far from my most popular. It was a topic that I wanted to write about, but I was terrified of saying the wrong thing or stating something improperly. Sarah helped me revise it eight times, until finally telling me to publish the damn thing. I was still pissing my pants as it entered print.

Dave McClure wrote a better article about gender. It’s located here, and you should read it.

His article was better, because he is always the “one”, never the “nine”.

Right now, Dave McClure is getting a lot of negative press, because he called a female audience member a “lying bitch”.

He’s getting negative press, because he deserves to get negative press. That’s what happens sometimes when you say stupid things. I got negative attention earlier this week when I stupidly phrased my opinion about engineering degrees.

But, that’s what real risk takers do. They do stupid things. They start bad companies. They invest in bad companies. They write bad articles or say stupid things on stage. Most people are too wussy to get on a stage, so they never say stupid things on one.

But Dave McClure does a lot of stupid shit.

One stupid, insane startup he invested in was MakerBot; the idea made no sense at all, which is why very few big investors participated in the angel round. My cousin Jake, who does equally crazy things, was the first person to put his money into MakerBot, and he told my family about it. But the idea seemed too absurd. Honestly, the Goldberg money seemed better invested on the “23” square of a Roulette table. MakerBot’s product was some robot kit that you assemble to print 3D versions of stupid shit that nobody needs… blah, blah, blah.

In other words, it was no ‘Daily Deals’ or ‘Casual Gaming’ company!

The round wasn’t lead by Sequoia Capital or Ron Conway. It was lead by a woman named Shana Fisher who nobody had ever heard of — in fact, few people still have — despite the fact that she is, by every objective metric, the most successful angel investor on the planet.

And when Dave McClure isn’t degrading women (and men), or investing alongside women like Shana, he’s putting money into their companies.

One company that Dave McClure invested in was TheMuse.

The woman who founded the company, Kathryn Minshew, looks like a VC’s dream come true. She’s a regular on all those “Top Young People” and “Top Women” lists, Forbes, BusinessInsider, Bloomberg, Inc Magazine, etc. She has a top degree, is a McKinsey alum, and her website is doing extremely well. She graduated from Y-Combinator. She works her ass off. She’s supposed to be the type of person that you invest in.

But in the beginning, not very many people did. You can read about it here.

Dave McClure didn’t wait for SV Angel, First Round, and True Ventures to get the deal and then sneak onto the cap table in the final hour.

He put his money where his dirty mouth is.

And now he is glad that he did, because the company is growing fast, and it has a genuinely ingenious approach to connecting smart people with great jobs — the type of company that could well become the next Monster.com.

According to Kathryn: “500 Startups’ portfolio has come the closest to representing the diversity of the startup community as any I have seen. Dave McClure really ‘gets it’. He and Paul Singh [another 500 startups founder] took a bet on us long before our seed round became oversubscribed.”

For those of us who have actually started companies, the first person to say “yes” is your real investor. They don’t make any more money than the last person who gets into the round… but you’re damn thankful for them. And you tell other founders about them.

But today, the people of Silicon Valley aren’t talking about Dave’s investments or his demonstrated support for women.

They are talking about how Dave McClure’s gastroenterologist is still busy extracting the investor’s foot from the deep corners of his stomach.

And if those ‘90%er’ VC’s — who sit around and kibitz about Dave McClure’s stage antics while not making very many investments themselves — suddenly retired tomorrow, would any of us real entrepreneurs give a shit?

Wouldn’t some cardboard associate who worked at Morgan Stanley, before transitioning to private equity, and ultimately VC, just step in and take up the mantle of an inflated “partner” title?

Probably.

But people pay attention to Dave McClure, because he is worth paying attention to — and, as far as my money is concerned, he is worth investing in…

… because he is going to keep doing stupid shit.

Final Disclosure — Dave McClure doesn’t know that I am writing this, and I don’t really give a crap about his reaction to it. 

Bryan Goldberg

Bryan is an entrepreneur in San Francisco. He founded Bleacher Report, and currently advises several startups. Previously, he was a failed investment banker. You can follow him on Twitter.