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Silicon Valley learned a hard lesson from Amazon.com’s HQ2: Talk is cheap

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As much as the tech industry and Silicon Valley would like to forget what happened in Austin, Texas, on Monday, it is instructive to remember the fate of other tech upstarts who came close to getting Amazon’s attention at pivotal moments.

When Amazon.com on Thursday publicly announced plans to create 500 high-paying jobs at a new division in New York’s Queens, it referenced the “congested streets” and other local roadblocks that had held back its desire to build a headquarters here.

But this doesn’t make sense. Amazon has repeatedly said it isn’t trying to pick the best locale for its new headquarters. It wants to pick just one place. The problem is, Amazon was close to picking another city — though far from a finalist — and it almost got snubbed by the City of Angels. Here is how all this unfolded:

On Jan. 16, Amazon CEO Jeff Bezos and California Governor Jerry Brown met in Sacramento, the state capital. The topic of the meeting was whether California could provide enough startup capital for Amazon to hire tens of thousands of new employees. The leaders of both states talked up a possible collaboration that could eventually provide as much as $7 billion in cash to Amazon.

The Sacramento Bee got wind of the meeting and began reporting on an Oregon hub strategy, which would split Amazon’s hiring between the two states and were highly specific about whom Amazon would hire and where.

The story, by journalist Mike Monteiro, helped put pressure on California’s governor to publicly endorse Amazon’s idea of using a combination of Bay Area and Inland Empire hub places. Brown told the Bee: “I don’t have a problem with in-building hubs.” He promised: “We’ll help you figure it out.” He added that “California is a big part of the Amazon story,” and that Amazon’s leadership “hasn’t been talking about the Inland Empire.”

While Brown was in Sacramento talking about hubs and hubs, Amazon’s top official in New York was privately talking with Long Island City officials about helping to build the giant air pad that could serve as the new headquarters’ location.

The Los Angeles Times reported on Jan. 23 that an Amazon executive was “eager to quickly break ground” on a New York headquarters. The executive said Amazon would make a decision within weeks. Amazon did not comment.

As California was waging for its share of the Amazon pie, Amazon was trying to pick among the Inland Empire — essentially, L.A.’s suburban suburbs. Unlike Sacramento and L.A., Long Island City is almost at capacity, and its residents want Amazon. The L.A. Daily News, which regularly reports on Amazon news, included the Long Island City news in a Feb. 11 story about other cities bidding for Amazon’s headquarters. The story said that Long Island City was “gaining traction” with Amazon as a site for the Seattle-based tech company.

Long Island City residents heard that on Feb. 14, when they were told a potpourri of announcements were coming, including that Amazon was picking Long Island City as the site of the new headquarters. That was a day before Amazon made its public announcement about the Queens site.

Amazon said Thursday it was forced to announce the HQ2 location before the end of this year because it wants to announce that location before the 2018 holidays. (That’s a reminder that maybe the Inland Empire should have been more skeptical of Amazon’s deal-making skills.) Amazon and California officials have said they are still talking, but the Inland Empire is not any closer to landing Amazon headquarters than it was a week ago.

The lesson for tech officials hoping to get the attention of Amazon and other employers: Just talk.

The risk for Silicon Valley is that it is now stuck talking to itself about Amazon. Plus, even if Amazon is eager to complete HQ2 here, if Californians don’t see the scope of Amazon’s ambitious plans for the state, that would only get even more complicated.

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