11 ms·

Why startups are leaving Silicon Valley

145 points by nopinsight 8y ago

the_watcher 8y ago
> Phoenix and Pittsburgh have become hubs for autonomous vehicles Aren't the main players in those cities just AV offices of Bay Area headquartered companies?
api 8y ago
From the conversations I've had and from my own experience I think the ludicrous real estate cost is a larger factor than this article implies. It's tolerable if you're a just out of college bachelor/ette, but if you want to have a bit more space (let alone a family) you pretty much have to leave unless you've gotten rich. Even for young people if you do the math your big Bay Area salary actually doesn't get you ahead as much as a slightly lower salary in a much lower cost of living city. Your whole paycheck goes to the landlord. A secondary factor caused by real estate hyperinflation is that all the stuff that once made the SF Bay Area so interesting has been priced out. I remember the Bay Area in the 1990s. It was a hub not just of tech but of art, music, and culture. It was a magical in a way that's hard to explain today, and I say this as someone who only visited. My main experience of it was from the culture and "vibe" it exported. All that is gone now. It's a glorified office park. Why spend so much to live there if it's no different from any other city?
- JumpCrisscross 8y ago
  > * ludicrous real estate cost is a larger factor than this article implies* California's housing problem, particularly the Bay Area's, is a symptom of its political dysfunction. The Bay Area's elite consistently optimize for the short term.
  - api 8y ago
    The housing policy of the entire state seems geared toward boomers who bought property here in the 60s-90s cashing out on the backs of the young and newcomers.
    - wolco 8y ago
      In fairness that group is highly represented in the likely to vote block.
    - jessaustin 8y ago
      "Elite" doesn't overlap much with "young and newcomers".
- rahimnathwani 8y ago
  "Even for young people if you do the math your big Bay Area salary actually doesn't get you ahead as much as a slightly lower salary in a much lower cost of living city." But that's the point: the difference in rent is much smaller than the difference in market salaries. "Your whole paycheck goes to the landlord." If you're an engineer with a $150k salary, which is at the low end for most companies you've heard of that have offices in the Bay Area, then it's very unlikely you spend anything close to your whole paycheck on rent.
  - CaptainZapp 8y ago
    Average rent in SF is $3,442. If you want it a bit fancier we're talking about $4,377 for a two bedroom appartment. [1] In your 150k example you're using 1/3rd of your salary just for rent (assuming you get 150k, net). [1] https://www.rentcafe.com/average-rent-market-trends/us/ca/san-francisco/ https://www.rentcafe.com/average-rent-market-trends/us/ca/sa...
    - rahimnathwani 8y ago
      So let's assume you can reduce your rent from $50k/year to $20k/year. That's a saving of $30k/year, or maybe $40k/year before tax. From what I understand from reading comments here, salaries in places with lower cost of living are not just $40k/year less, but much much less. And for those earning more than $150k, the math works out even more in favour of the Bay Area, as the % drop in salary goes up with salary, whereas the $40k rent difference doesn't.
      - CuriouslyC 8y ago
        Rent is just the tip of the iceberg, you also have higher taxes, higher entertainment costs, etc. Also, even with a >$200k salary, buying a decent home without a brutal commute can be hard. If you don't mind living in a rented room or commuting >1hr a day and shop exclusively at amazon and costco, the bay area is a great opportunity to save money.
        8y ago
- selimthegrim 8y ago
  There’s a magical place like that today - it’s called Montréal.
  - g4nt1 8y ago
    I agree for the vibe. But it's not even close to the number of startups or VC funding.
    - selimthegrim 8y ago
      SO maybe there's a few game companies and some AI research. But the math and science base in Montreal, Sherbrooke, UdeM, McGill, CRM is nothing to sneeze at.
- 60654 8y ago
  > A secondary factor caused by real estate hyperinflation is that all the stuff that once made the SF Bay Area so interesting has been priced out. I remember the Bay Area in the 1990s. It was a hub not just of tech but of art, music, and culture. It was a magical in a way that's hard to explain today, and I say this as someone who only visited. My main experience of it was from the culture and "vibe" it exported. All that is gone now. That recapitulates my experience as well from living in SF. There was a feel of the city that has since disappeared. For me the breaking point was in the early 2010s, when I noticed all my nontech friends disappearing - they were getting priced out and moving, mostly out of state. And the conversations in tech changed too, from doing interesting and weird and exploratory things, to conversations about money, getting vc funding, and working on things that will make even more money. The vibe was turning into a 90s wall street, and not the old city where everybody was a misfit and did their own weird thing. That's probably the part I miss the most.
JumpCrisscross 8y ago
The number one thing Silicon Valley had and lost is the narrative thrust of playing the good guy. The inequality, sexism, racial monoculture, NIMBYism, political indifference, disregard for civil liberties and shift from technological exuberance to something much shallower has large fractions of the country and world hoping some smug faces smack hard into the mud. That's not healthy, and out of all the possible solutions, diluting away the Valley's power seems like the best outcome.
- village-idiot 8y ago
  SV is starting to become a pejorative.
- gowld 8y ago
  None of that is unique to SV, it's what money looks like everywhere. All this means that financil success makes people ugly, just as it did for finance, law, and big business in all industries.
- selimthegrim 8y ago
  What racial monoculture?
  - ethbro 8y ago
    Duoculture might be more accurate. It's pretty white + Asian there in tech. https://diversity.google/annual-report/ https://diversity.google/annual-report/ "In terms of race and ethnicity (U.S. data only) 2.5% of Google’s workforce is Black; 3.6% is Hispanic/Latinx; 36.3% is Asian; 4.2% is multiracial (two or more races); 0.3% are Native American,Alaska Native, Native Hawaiian or Pacific Islander; and, 53.1% is White."
    - lotsofpulp 8y ago
      What is the reasoning behind considering Chinese/Indians/Japenese/Vietnamese/Filipino/Indonesian/Pakistani/Bangladeshi/Thai/Korea/etc as one culture? I wouldn't even categorize "white" as one culture, nor Indian nor Chinese. Perhaps it would more accurate to group people by socioeconomic status or education status?
ur-whale 8y ago
An article on startups leaving the Valley, and not a single mention of California having one of the highest income tax rate and highest real estate priced market in the US? I think they're missing the point.
- JumpCrisscross 8y ago
  > not a single mention of California having one of the highest income tax rate and highest real estate priced market in the US? From the article: "The reasons for this shift are manifold, but chief among them is the sheer expense of the Valley...the cost of living is among the highest in the world..."
  - buboard 8y ago
    > among the highest in the world but its not in the top 10 https://www.economist.com/graphic-detail/2018/03/15/asian-and-european-cities-compete-for-the-title-of-most-expensive-city https://www.economist.com/graphic-detail/2018/03/15/asian-an...
    - c0nfused 8y ago
      That's a bit like arguing the second brightest kid in your middle school class could be smarter. Technically correct, but mostly a falsehood. There are a whole lot of cities out there, few of them are more expensive than the bay area.
    - hn_throwaway_99 8y ago
      2 things with that survey: 1. It said American cities had fallen because of dollar weakness, which means it sounds like they're comparing based on exchange rates instead of purchasing power parity. Obviously for people paid in dollars in those cities, a weaker dollar doesn't make anything cheaper. 2. A lot of those expensive cities, especially in Europe, have much better social services. So Oslo may be very expensive and taxes sky high, but families there aren't worried about how to put their kids through college or how to pay for medical expenses.
blakesterz 8y ago
The article says three things: "The reasons for this shift are manifold, but chief among them is the sheer expense of the Valley. The cost of living is among the highest in the world.... The problem is that the wider playing-field for innovation is also being levelled down. One issue is the dominance of the tech giants." And third, government policies on immigration and education.
circles_for-day 8y ago
People love to point out the problems in that area and say SV will evaporate. I just moved from sf to a city that’s in the top 3 for venture capital. The job opportunities, talent, networks, and standards of code here are so much lower I wouldn’t have believed it if somebody had told me. Maybe some startups are leaving but I’d move back if I had a startup. It’s a lot of small ponds out here
- hamburglar1 8y ago
  What city? How are you measuring standards of code?
  - circles_for-day 8y ago
    The city is mentioned in the above list. It’s much more livable. I’m measuring code quality by asking questions to interview candidates for a variety of positions. I ask about how their current and past jobs work, what they’d change, and how they’d architect X. My coworkers’ opinions and previous code are another indicator. Disclaimers- I’m not any kind of prodigy or in the upper echelons of engineering, but the standards here are so low even I can tell. This is also a fairly high profile company for the area.
- JumpCrisscross 8y ago
  Power structures shift in recessions. The political and economic seeds of a shift are being planted, by outgoing migration, investment and political support. These things have a habit of slowly drifting before coming to a loud succession of socioeconomic bangs within the months following a recession.
  - joering2 8y ago
    Interesting. Can u elaborate further? What will be end result??
    - bitexploder 8y ago
vfc1 8y ago
There is not one single mention in the article of one of the probable causes, which is the rise of remote work. And much of the technical cloud infrastructure that allows companies to operate remotely has been built in Silicon Valley itself, so in a sense, they are one of the main contributors to solving the problem of urban overpopulation, in the Valley or elsewhere.
raverbashing 8y ago
Because people "in the forefront of technology" realized they don't need to be all cramped in the same overcrowded area?
wrecursion 8y ago
The real question is why haven't they been leaving sooner? With the power of telecommunications and the cost of doing business/living there.... it just doesn't make sense to me for a startup to try and grow there.
- westpfelia 8y ago
  They have. A ton of start ups started going to Austin and Denver/Boulder. Plus start up communities are happening in every major city.
- mbesto 8y ago
  > it just doesn't make sense to me for a startup to try and grow there. When you have access to limitless amounts of capital that prefers to deploy that capital in it's backyard, then yes it does make sense.
  - sanderjd 8y ago
    That's the part I'm always surprised by: the capital seems to continue preferring to pour a bunch of excess money into landlords' pockets rather than open little offices in other cities, fly to meetings a bit more often, or do more business by video conference.
    - wrecursion 8y ago
      Maybe they ARE the landlords!!?!?! :P
  - wrecursion 8y ago
    Ah... limitless amounts of capital. Yes.. this is definitely something I have no grasp of. :)
codingdave 8y ago
Although not mentioned, I'm also seeing a split between startups as defined by YC: VC-funded fast-growth vs. startups who are comfortable with a slower, smaller path resulting in a bootstrapped lifestyle company. If you don't want VC money, then the downsides of SV simply aren't worth the trouble.
- ghaff 8y ago
  It also depends on your definition of "tech." SV tends to self-referentially define tech as "what we do a lot of in SV" (i.e. web/social/mobile--plus infrastructure tech that comes out of that). There are a lot of other areas like biotech, fintech and even automotive (Tesla, Waymo notwithstanding) that are concentrated elsewhere.
rimher 8y ago
The reason they didn't leave sooner? The "Beehive Effect". Paul Graham said it in one of his essays, Steve Jobs in an interview. Essay: http://www.paulgraham.com/siliconvalley.html http://www.paulgraham.com/siliconvalley.html Interview: https://youtu.be/PinOL79U2bg https://youtu.be/PinOL79U2bg
liftbigweights 8y ago
Since at least the early 2000s, every few years, we get the "why companies are leaving SV" or "SV is dying" or "tech center is moving to X, Y, Z". Northern virginia was supposed to depose a while ago. Then it was Austin. And yet, SV is still SV. And the same reasons are given. High cost of living, income tax, etc as if SV hasn't been expensive for a while now and they recently boosted taxes. You can almost set your clock to SV's downfall and of course the monthly "collapse of china" stories. As long as tech's most valuable asset is human capital and as long as stanford and the universities in california, oregon, washington, etc produce top talent, SV doesn't have much to worry about. As long as california and its natural wonders and the magnificent pacific ocean is around, it'll keep drawing top talent from around the country.
- ghaff 8y ago
  I don't especially see it as declining or it necessarily being a big "cause for concern" in spite of a lot of the dysfunction. As you say, northern California is attractive for a lot of reasons only some of which have to do with the concentration of VC money and companies flowing from it. That said, I actually think it's healthy that there's an increasing dispersion of tech whether new startups or outposts of existing large tech companies. Even if you don't believe in remote work, once a company gets past a certain level of scale it really doesn't matter if the group focused on X is colocated with the rest of the company. Speaking personally, I'll also say that among people I know I've never run across so many who have left, are leaving, or are thinking of leaving the Bay area as I have over the past year or so.
  - rhplus 8y ago
    I'll also say that among people I know I've never run across so many who have left, are leaving, or are thinking of leaving the Bay area as I have over the past year or so. You’ve also never before been the age you are now. Your peer/acquaintence group is growing in number and age, and naturally will expose you to more people who are ready to move on.
    - ghaff 8y ago
j45 8y ago
Perhaps, as startups begin to solve average business problems in the current startup landgrab, those businesses exist everywhere and such startups can exist regionally.
danhilltech 8y ago
Recently left Airbnb to start a new company in Washington DC. I'm reminded of my previous experience starting a company in London. As soon as we had success (exit) we moved to SF. All that's changed for me is that the $ threshold has gone up, but the principle is probably still true.
rakman 8y ago
I'm curious if the cost of living is starting to take its toll on the risk taking that SV is famous for. IE: I can't quit my high paid FB job to start a new venture due to mortgage/rent etc.
- dasil003 8y ago
  No because of FU money and steady influx of young blood. More likely reason is salary costs are just too high for a lot of potentially viable businesses, but VC masks/distorts that.
salimmadjd 8y ago
Many of us from early on argued that SV had no vision. Yes, there are a lot of people who think they are some kind of "visionaries", and perhaps on some narrow areas of focus they are. But, if it had a real vision it would have foreseen the growth problems and it would have united to solve it. There is a lot of money sitting at Apple, Google, and the rest. They could have easily use their weight, reach and influence to envision and build an entire tech city community. It's not that hard. If a few lobbyist in DC can send the country into all kinds of wars, why can't SV companies use their weight to do something that can resolve this problem. It makes perfect business sense to me. Instead, we get apartments build adjacent to CalTrain to act as sound insulation or they would not get approved. This is ridiculous. To have a habitable area with a decent quality of life, you need all types of workforce. Teachers, restaurant workers, gardeners, etc. Where are these people going to live? When you see some houses filled with 7-8 occupant because they can't afford rent, you know this is not sustainable. I've lived in the Bay Area since 1991. These days, for my work, I spend a lot of time working with our remote team in Minsk, Belarus. The thought of coming back each time to SV is distressful if it wasn't for the loved ones back home. There are many tech guys here in Belarus who dream of coming to SV. I remind them their quality of life is far far better than what they would get in SV. So unless we get some true leadership in SV, that has a vision of making the Bay Are more habitable instead of trying to think about how to colonize Mars, this is going to get worse. The once almost utopian Bay Area is becoming rather dystopian.
- mathattack 8y ago
  They could have easily use their weight, reach and influence to envision and build an entire tech city community. It's not that hard. It’s actually very hard. Most available land has already been built up. Cities are very strict about zoning and not allowing additional development. Tech companies can’t just steamroll the local governments. It’s very much a poor governance situation. I agree with your conclusion, I just don’t believe Big Tech can fix it so easily.
  - rednerrus 8y ago
    Local governments are typically very easy to influence. Especially when you are the largest tax provider.
dustingetz 8y ago
We need a killer app for collaboration. I think VR tech could solve this by building a shared IDE-space for pair programming.
- strig 8y ago
  And wear VR goggles all day at work?
- wilsonnb3 8y ago
  VR might provide more communication bandwidth than a phone call or a video chat, but it's still nowhere near close enough to actually collaborating in person.
- ghaff 8y ago
  The far more relevant collaboration problem is being together with other people in a room and sketch out ideas, etc. on a whiteboard, have interactive conversations, read body language, etc. There have been so many attempts to solve this over the years and there's never been close to a "killer app." I do believe that remote work can work in many cases but it needs to be complemented with a decent dose of F2F to complement our only somewhat successful video conferencing systems, chat, shared documents and other tools that exist today. I suspect at the end of the day we'll just keep iterating on the various tools we have and they'll get better but still will lag everyone being in the same room.
- cardiffspaceman 8y ago
  There is a no-true-Scotsman position here. If you extrapolate from science fiction, there is a level of VR implementation that we can imagine, if not implement, that would enable distant collaboration with out the defects that are mentioned in the siblings of this comment. I feel that VR today cannot deliver enough to resemble Holodeck fidelity, more like .1 H, and maybe at least .5 H is needed. Maybe pair programming needs less to be fluid enough to be beneficial.
  - dustingetz 8y ago
    It actually doesn't need to be, like, flashy 3D game stuff! It can just be a 360-degree screen-space that lets me have every file in the system open at once. The problem with pairing in 2D is there is only one cursor, and even if there were two cursors like google docs, there is not nearly enough screen real estate for us both to work at the same time. These are mostly 2D problems, but VR still solves them.
cletus 8y ago
In the last few months I've come to appreciate Amazon's vision here. Amazon, as I'm sure we all know, is conducting a search for their HQ2 location. I, like many others, suspect they always knew where they wanted to put it but they're playing this game to see what concessions and tax breaks they can extract from state and local governments. Perhaps an offer other than their intended location will be so good they'll change their mind but honestly I'd be surprised. I've come to realize this is genius for two reasons: 1. Amazon is pitting governments against each other. This sort of thing is a well-known and well-trodden path so it's nothing new but the real genius part is: 2. Once Amazon has two headquarters they're no longer at the mercy of the city of Seattle and the state of Washington. Let me elaborate: take Google, which is heavily invested in Mountain View. Essentially the Mountain View City Council has them where they want them. Google wants to stay in MTV (and, more importantly, expand in MTV) so whatever taxes and conditions the council wants to put on them, well they kind of have to suck it up. The latest of these is MTV forbidding free food in new campuses because it hurts local business. Now Google has obviously expanded well beyond MTV at this point (Redwood City, San Antonio Boulevard, Sunnyvale, San Jose, San Francisco). But these are less than ideal solutions. Move a team from MTV to Sunnyvale and you've added 10-20 minutes to the commute of everyone living in SF. Getting around "campus" requires a transit system all of its own. Compare this to Amazon's future position: if Seattle decides to put an onerous (from Amazon's position) tax or set of conditions on them they can simply say "we'll expand our other campus instead". So they're not beholden to one town or city like the SV giants are (specifically Mountain View, Cupertino and Menlo Park). I really wish the SV giants would take this approach. Also, as others have mentioned, the cost of living for those not fortunate enough to be in tech is horrendous in SV. You can blame small-minded NIMBYist towns and voters for this if you like but (IMHO) that's shortsighted. By continuing to exist there and expand there the giants are supporting those anti-progressive positions. At some point you're either part of the solution or part of the problem and (IMHO) continuing to expand in SV makes you part of the problem.
- seanmcdirmid 8y ago
  The contrast is Redmond. Microsoft has a great relationship with the city, and so tend to concentrate its development there and a few nearby satallites.
jaequery 8y ago
also dont forget that startups have started embracing remote development culture
wgerard 8y ago
I think the "shift" that's most interesting is this one: > Alphabet and Facebook pay their employees so generously that startups can struggle to attract talent I've heard anecdotally from quite a few people that this has made hiring incredibly difficult - as those comp packages continue to increase the math just doesn't work out for a startup employee even if there's a generous exit for the employees. Not that the comp at FAANG was ever bad, just that it's gotten so much better over the past few years (undoubtedly helped by a huge bull market) that golden handcuffs have really put a drain on the startup hiring scene - mostly in cities where those companies have large offices or are growing considerably. Further, supposedly anyway, as those companies become larger and larger and need more people it's become less difficult to get in the door there.
- vonmoltke 8y ago
  FANG can only hire, what, 10% of all currently-employed engineers. Additionally, their hiring processes are notoriously capricious. Unless startups are exclusively targeting the same 10%, I don't see how that has a significant impact.
  - wgerard 8y ago
    > FANG can only hire, what, 10% of all currently-employed engineers That number is probably growing over time (as the article alludes to). I mean, just take a look at how many positions Netflix alone is hiring for: https://jobs.netflix.com/teams/engineering https://jobs.netflix.com/teams/engineering > Additionally, their hiring processes are notoriously capricious. Supposedly, this is also changing as their demands are growing and they've had to "lower the bar", so-to-speak.
    - vonmoltke 8y ago
      > That number is probably growing over time (as the article alludes to). I don't see them growing that fast, nor do I see all that growth being in the US. Companies can only grow so fast or they end up hurting themselves. Additionally, I have been seeing an increasing nber of online anecdotes about Google and Facebook rejecting candidates who passed the interviews because there was no head count at their level. > I mean, just take a look at how many positions Netflix alone is hiring for: 112 is less than a rounding error when there are well over a million people currently employed in some sort of software development position. > Supposedly, this is also changing as their demands are growing and they've had to "lower the bar", so-to-speak. I haven't personally seen any evidence of this, and every time their processes come up for discussion here there seems to be no end of defenders of these practices.
meanmartine 8y ago
Well, this is isn't surprising to be honest.
jandrewrogers 8y ago
The reality on the ground is more nuanced then this, and one should be careful not to treat either tech or startups as uniform categories. I would frame the situation as some broad classes of both tech and startups have migrated to other cities and established critical masses elsewhere, but not tech and startups as a whole. If you work in one of those areas of tech, the action may not be in Silicon Valley. A prominent example of this is Seattle and cloud tech. Other areas of tech, like AI, are regionally diffuse currently. I do think the gravity of Silicon Valley, while immense, has weakened over time but being expensive is a marginal factor. Most of the oft-touted alternatives like Seattle are also expensive. As the scale of the tech industry has increased, random concentrations in the distribution of tech development has simply created critical masses in other cities in some key domains, giving them a sustained competitive advantage. These are not engineered outcomes but the organic confluence of conditions and events. No one planned to turn Seattle into Cloud City but it happened anyway, and you can see this dynamic becoming more prominent in the US tech scene at large. Most stuff still happens in Silicon Valley but the likelihood of diverse tech randomly achieving critical mass elsewhere has increased.
lafay 8y ago
The long-standing prohibition of non-compete agreements in California is really the X factor in why it continues to be the innovation juggernaut. So many startups here are the result of founders capitalizing on some element of their experience at prior employers. And the ability to hire top talent away from direct competitors also provides a significant advantage for rising startups. Even if other states pass legislation to end non-competes (as MA has tried to do a few times), it will take time for regional business culture to adapt. I've worked for a few East coast tech firms where company loyalty is taken very seriously, and defectors were semi-publicly shamed even if not outright sued for violating a non-compete.
- Eire_Banshee 8y ago
  I dont buy this. Nobody Ive ever met gives a shit about non-competes. They aren't really enforceable unless you blatantly steal or copy work.
- raverbashing 8y ago
  Still, California is big, people don't have to keep to SV
commandlinefan 8y ago
Come on down to Texas! We have no state taxes, a business-friendly government, and we even have an ocean (well, a gulf anyway).
- thrav 8y ago
  But it’s hot as fuck... I grew up there. Every single person I’m blood related to lives there. I could never move back. If I ever leave SF, it’ll only be to go somewhere equally temperate.
the_watcher 8y ago
I live in the Bay Area, so maybe it's only outside that it's used, but I have never heard anything like the term "Off Silicon Valleying". Googling it only turns up results about TJ Miller leaving the HBO show. Has anyone ever heard it?
the_watcher 8y ago
Am I missing something, or does this article entirely lack any substantiation of the claim made by its title beyond noting that Miami is ranked first in startup activity and Peter Thiel is moving to LA? The only stat about anything actually leaving the Valley is a survey about people intending to move out of the Bay Area that doesn't elaborate on the demographics of the respondents (are they tech workers or non-tech workers trying to escape costs?). I think the thesis is roughly accurate - tech companies are less dependent on being in SV for success than any time in a reasonably long time, I just don't see much hard evidence backing it up in this particular piece.
luddaite 8y ago
If we assume that the premise here is correct (there is some amount of exodus of technical talent from SV), isn't it still a good thing? My impression is that the result of having all the major tech companies located in one region is the development of a tech cultural bubble. The current tech industry has a hard time understanding and relating to the rest of the country/world. Wouldn't we all be better off if they spread out a bit such that they could better represent the entirety of the world?
downandout 8y ago
I have always found it ironic that many of the very people who created the modern Internet, and have sold the world on the transformational possibilities of connecting with each other through it, also believe that one must physically be in Silicon Valley to succeed in their own industry. A founder’s desire to start a company that could reasonably be run from anywhere in one of the world’s most expensive areas should turn off investors, not attract them - and this is happening with more frequency as Bay Area costs escalate. If those within the Valley bubble want to remain relevant to the startup scene in the coming decades, they would be wise to leverage some of their own tools to provide those outside the bubble with greater access to the resources within it.
- dman 8y ago
  Do you have any specific people in mind?
  - downandout 8y ago
    I was referring to the general sentiment that if you're a serious tech startup, you should be in SV. You can see this sentiment throughout this comment thread, in an essay someone linked to below written by Paul Graham, and in any number of articles extolling the virtues of the Valley. As for specific people, I’d start with Mark Zuckerberg - a champion of connecting the world through technology - who seems to have believed that a SV presence was necessary for Facebook to succeed. He had to believe that, or he wouldn’t have moved the company there as soon as he had the funding to do it.
- dhnsmakala 8y ago
  Salaries high in SV. Talent goes to SV for high salary. Companies go to SV to seek talent.
  - downandout 8y ago
    When cost of living for a quality of life that is equivalent to almost any other area (e.g. not having 8 roommates on a $150k salary) is taken into consideration, SV salaries actually pale in comparison to those in other areas.
sixdimensional 8y ago
I know of a large, well established corporation that just decided to open an office in Silicon Valley. I was shocked and could not fathom why they would go to that expense to do so, when they could have just as easily done this in one of their established metropolitan or other less expensive areas. Silicon Valley is special without a doubt, but does anyone here think it still makes sense to do such a thing? These days people with the skills needed are much more distributed and many are willing to move from Silicon Valley or other places for the right job and quality of life, at least what I have seen. I suspect that company is going to spend a fortune for not much benefit.
mnm1 8y ago
Who cares outside of the valley? The average tech worker can find a good job in just about any city in the world nowadays. Startups are some of the worst places to work but tech penetration is so deep, established companies that need tech work and have decent working conditions are everywhere. Why pay the insane costs in the valley when so many other options are available? As far as innovation, that's just a small percentage of companies and often it happens at established companies. Given the cost of living (sky high) and quality of life (mediocre at best) in the valley, I'd say it's one of the worst places to be a tech worker. It is a good place to start one's career for a few years as it really makes one appreciate working at a decent company rather than the startup insanity culture in the valley. There are decent companies in the area, but they are hard to find due to the sheer number of mismanaged startups and scams. The valley falling out of prominence is great news for the rest of the country and the rest of the world, if it's true.
onemoresoop 8y ago
I think the title should be "Why aren't more startups leaving Silicon Valley"

145 points by nopinsight 8y ago

> Phoenix and Pittsburgh have become hubs for autonomous vehicles Aren't the main players in those cities just AV offices of Bay Area headquartered companies?

api 8y ago

From the conversations I've had and from my own experience I think the ludicrous real estate cost is a larger factor than this article implies. It's tolerable if you're a just out of college bachelor/ette, but if you want to have a bit more space (let alone a family) you pretty much have to leave unless you've gotten rich. Even for young people if you do the math your big Bay Area salary actually doesn't get you ahead as much as a slightly lower salary in a much lower cost of living city. Your whole paycheck goes to the landlord. A secondary factor caused by real estate hyperinflation is that all the stuff that once made the SF Bay Area so interesting has been priced out. I remember the Bay Area in the 1990s. It was a hub not just of tech but of art, music, and culture. It was a magical in a way that's hard to explain today, and I say this as someone who only visited. My main experience of it was from the culture and "vibe" it exported. All that is gone now. It's a glorified office park. Why spend so much to live there if it's no different from any other city?

JumpCrisscross 8y ago
> * ludicrous real estate cost is a larger factor than this article implies* California's housing problem, particularly the Bay Area's, is a symptom of its political dysfunction. The Bay Area's elite consistently optimize for the short term.
- api 8y ago
  The housing policy of the entire state seems geared toward boomers who bought property here in the 60s-90s cashing out on the backs of the young and newcomers.
  - wolco 8y ago
    In fairness that group is highly represented in the likely to vote block.
  - jessaustin 8y ago
    "Elite" doesn't overlap much with "young and newcomers".
rahimnathwani 8y ago
"Even for young people if you do the math your big Bay Area salary actually doesn't get you ahead as much as a slightly lower salary in a much lower cost of living city." But that's the point: the difference in rent is much smaller than the difference in market salaries. "Your whole paycheck goes to the landlord." If you're an engineer with a $150k salary, which is at the low end for most companies you've heard of that have offices in the Bay Area, then it's very unlikely you spend anything close to your whole paycheck on rent.
- CaptainZapp 8y ago
  Average rent in SF is $3,442. If you want it a bit fancier we're talking about $4,377 for a two bedroom appartment. [1] In your 150k example you're using 1/3rd of your salary just for rent (assuming you get 150k, net). [1] https://www.rentcafe.com/average-rent-market-trends/us/ca/san-francisco/ https://www.rentcafe.com/average-rent-market-trends/us/ca/sa...
  - rahimnathwani 8y ago
    So let's assume you can reduce your rent from $50k/year to $20k/year. That's a saving of $30k/year, or maybe $40k/year before tax. From what I understand from reading comments here, salaries in places with lower cost of living are not just $40k/year less, but much much less. And for those earning more than $150k, the math works out even more in favour of the Bay Area, as the % drop in salary goes up with salary, whereas the $40k rent difference doesn't.
    - CuriouslyC 8y ago
      Rent is just the tip of the iceberg, you also have higher taxes, higher entertainment costs, etc. Also, even with a >$200k salary, buying a decent home without a brutal commute can be hard. If you don't mind living in a rented room or commuting >1hr a day and shop exclusively at amazon and costco, the bay area is a great opportunity to save money.
      - 8y ago
selimthegrim 8y ago
There’s a magical place like that today - it’s called Montréal.
- g4nt1 8y ago
  I agree for the vibe. But it's not even close to the number of startups or VC funding.
  - selimthegrim 8y ago
    SO maybe there's a few game companies and some AI research. But the math and science base in Montreal, Sherbrooke, UdeM, McGill, CRM is nothing to sneeze at.
60654 8y ago
> A secondary factor caused by real estate hyperinflation is that all the stuff that once made the SF Bay Area so interesting has been priced out. I remember the Bay Area in the 1990s. It was a hub not just of tech but of art, music, and culture. It was a magical in a way that's hard to explain today, and I say this as someone who only visited. My main experience of it was from the culture and "vibe" it exported. All that is gone now. That recapitulates my experience as well from living in SF. There was a feel of the city that has since disappeared. For me the breaking point was in the early 2010s, when I noticed all my nontech friends disappearing - they were getting priced out and moving, mostly out of state. And the conversations in tech changed too, from doing interesting and weird and exploratory things, to conversations about money, getting vc funding, and working on things that will make even more money. The vibe was turning into a 90s wall street, and not the old city where everybody was a misfit and did their own weird thing. That's probably the part I miss the most.

JumpCrisscross 8y ago

The number one thing Silicon Valley had and lost is the narrative thrust of playing the good guy. The inequality, sexism, racial monoculture, NIMBYism, political indifference, disregard for civil liberties and shift from technological exuberance to something much shallower has large fractions of the country and world hoping some smug faces smack hard into the mud. That's not healthy, and out of all the possible solutions, diluting away the Valley's power seems like the best outcome.

village-idiot 8y ago
SV is starting to become a pejorative.
gowld 8y ago
None of that is unique to SV, it's what money looks like everywhere. All this means that financil success makes people ugly, just as it did for finance, law, and big business in all industries.
selimthegrim 8y ago
What racial monoculture?
- ethbro 8y ago
  Duoculture might be more accurate. It's pretty white + Asian there in tech. https://diversity.google/annual-report/ https://diversity.google/annual-report/ "In terms of race and ethnicity (U.S. data only) 2.5% of Google’s workforce is Black; 3.6% is Hispanic/Latinx; 36.3% is Asian; 4.2% is multiracial (two or more races); 0.3% are Native American,Alaska Native, Native Hawaiian or Pacific Islander; and, 53.1% is White."
  - lotsofpulp 8y ago
    What is the reasoning behind considering Chinese/Indians/Japenese/Vietnamese/Filipino/Indonesian/Pakistani/Bangladeshi/Thai/Korea/etc as one culture? I wouldn't even categorize "white" as one culture, nor Indian nor Chinese. Perhaps it would more accurate to group people by socioeconomic status or education status?

ur-whale 8y ago

An article on startups leaving the Valley, and not a single mention of California having one of the highest income tax rate and highest real estate priced market in the US? I think they're missing the point.

JumpCrisscross 8y ago
> not a single mention of California having one of the highest income tax rate and highest real estate priced market in the US? From the article: "The reasons for this shift are manifold, but chief among them is the sheer expense of the Valley...the cost of living is among the highest in the world..."
- buboard 8y ago
  > among the highest in the world but its not in the top 10 https://www.economist.com/graphic-detail/2018/03/15/asian-and-european-cities-compete-for-the-title-of-most-expensive-city https://www.economist.com/graphic-detail/2018/03/15/asian-an...
  - c0nfused 8y ago
    That's a bit like arguing the second brightest kid in your middle school class could be smarter. Technically correct, but mostly a falsehood. There are a whole lot of cities out there, few of them are more expensive than the bay area.
  - hn_throwaway_99 8y ago
    2 things with that survey: 1. It said American cities had fallen because of dollar weakness, which means it sounds like they're comparing based on exchange rates instead of purchasing power parity. Obviously for people paid in dollars in those cities, a weaker dollar doesn't make anything cheaper. 2. A lot of those expensive cities, especially in Europe, have much better social services. So Oslo may be very expensive and taxes sky high, but families there aren't worried about how to put their kids through college or how to pay for medical expenses.

blakesterz 8y ago

The article says three things: "The reasons for this shift are manifold, but chief among them is the sheer expense of the Valley. The cost of living is among the highest in the world.... The problem is that the wider playing-field for innovation is also being levelled down. One issue is the dominance of the tech giants." And third, government policies on immigration and education.

circles_for-day 8y ago

People love to point out the problems in that area and say SV will evaporate. I just moved from sf to a city that’s in the top 3 for venture capital. The job opportunities, talent, networks, and standards of code here are so much lower I wouldn’t have believed it if somebody had told me. Maybe some startups are leaving but I’d move back if I had a startup. It’s a lot of small ponds out here

hamburglar1 8y ago
What city? How are you measuring standards of code?
- circles_for-day 8y ago
  The city is mentioned in the above list. It’s much more livable. I’m measuring code quality by asking questions to interview candidates for a variety of positions. I ask about how their current and past jobs work, what they’d change, and how they’d architect X. My coworkers’ opinions and previous code are another indicator. Disclaimers- I’m not any kind of prodigy or in the upper echelons of engineering, but the standards here are so low even I can tell. This is also a fairly high profile company for the area.
JumpCrisscross 8y ago
Power structures shift in recessions. The political and economic seeds of a shift are being planted, by outgoing migration, investment and political support. These things have a habit of slowly drifting before coming to a loud succession of socioeconomic bangs within the months following a recession.
- joering2 8y ago
  Interesting. Can u elaborate further? What will be end result??
  - bitexploder 8y ago

vfc1 8y ago

There is not one single mention in the article of one of the probable causes, which is the rise of remote work. And much of the technical cloud infrastructure that allows companies to operate remotely has been built in Silicon Valley itself, so in a sense, they are one of the main contributors to solving the problem of urban overpopulation, in the Valley or elsewhere.

raverbashing 8y ago

Because people "in the forefront of technology" realized they don't need to be all cramped in the same overcrowded area?

wrecursion 8y ago

The real question is why haven't they been leaving sooner? With the power of telecommunications and the cost of doing business/living there.... it just doesn't make sense to me for a startup to try and grow there.

westpfelia 8y ago
They have. A ton of start ups started going to Austin and Denver/Boulder. Plus start up communities are happening in every major city.
mbesto 8y ago
> it just doesn't make sense to me for a startup to try and grow there. When you have access to limitless amounts of capital that prefers to deploy that capital in it's backyard, then yes it does make sense.
- sanderjd 8y ago
  That's the part I'm always surprised by: the capital seems to continue preferring to pour a bunch of excess money into landlords' pockets rather than open little offices in other cities, fly to meetings a bit more often, or do more business by video conference.
  - wrecursion 8y ago
    Maybe they ARE the landlords!!?!?! :P
- wrecursion 8y ago
  Ah... limitless amounts of capital. Yes.. this is definitely something I have no grasp of. :)

codingdave 8y ago

Although not mentioned, I'm also seeing a split between startups as defined by YC: VC-funded fast-growth vs. startups who are comfortable with a slower, smaller path resulting in a bootstrapped lifestyle company. If you don't want VC money, then the downsides of SV simply aren't worth the trouble.

ghaff 8y ago
It also depends on your definition of "tech." SV tends to self-referentially define tech as "what we do a lot of in SV" (i.e. web/social/mobile--plus infrastructure tech that comes out of that). There are a lot of other areas like biotech, fintech and even automotive (Tesla, Waymo notwithstanding) that are concentrated elsewhere.

rimher 8y ago

The reason they didn't leave sooner? The "Beehive Effect". Paul Graham said it in one of his essays, Steve Jobs in an interview. Essay: http://www.paulgraham.com/siliconvalley.html http://www.paulgraham.com/siliconvalley.html Interview: https://youtu.be/PinOL79U2bg https://youtu.be/PinOL79U2bg

liftbigweights 8y ago

Since at least the early 2000s, every few years, we get the "why companies are leaving SV" or "SV is dying" or "tech center is moving to X, Y, Z". Northern virginia was supposed to depose a while ago. Then it was Austin. And yet, SV is still SV. And the same reasons are given. High cost of living, income tax, etc as if SV hasn't been expensive for a while now and they recently boosted taxes. You can almost set your clock to SV's downfall and of course the monthly "collapse of china" stories. As long as tech's most valuable asset is human capital and as long as stanford and the universities in california, oregon, washington, etc produce top talent, SV doesn't have much to worry about. As long as california and its natural wonders and the magnificent pacific ocean is around, it'll keep drawing top talent from around the country.

ghaff 8y ago
I don't especially see it as declining or it necessarily being a big "cause for concern" in spite of a lot of the dysfunction. As you say, northern California is attractive for a lot of reasons only some of which have to do with the concentration of VC money and companies flowing from it. That said, I actually think it's healthy that there's an increasing dispersion of tech whether new startups or outposts of existing large tech companies. Even if you don't believe in remote work, once a company gets past a certain level of scale it really doesn't matter if the group focused on X is colocated with the rest of the company. Speaking personally, I'll also say that among people I know I've never run across so many who have left, are leaving, or are thinking of leaving the Bay area as I have over the past year or so.
- rhplus 8y ago
  I'll also say that among people I know I've never run across so many who have left, are leaving, or are thinking of leaving the Bay area as I have over the past year or so. You’ve also never before been the age you are now. Your peer/acquaintence group is growing in number and age, and naturally will expose you to more people who are ready to move on.
  - ghaff 8y ago

j45 8y ago

Perhaps, as startups begin to solve average business problems in the current startup landgrab, those businesses exist everywhere and such startups can exist regionally.

danhilltech 8y ago

Recently left Airbnb to start a new company in Washington DC. I'm reminded of my previous experience starting a company in London. As soon as we had success (exit) we moved to SF. All that's changed for me is that the $ threshold has gone up, but the principle is probably still true.

rakman 8y ago

I'm curious if the cost of living is starting to take its toll on the risk taking that SV is famous for. IE: I can't quit my high paid FB job to start a new venture due to mortgage/rent etc.

dasil003 8y ago
No because of FU money and steady influx of young blood. More likely reason is salary costs are just too high for a lot of potentially viable businesses, but VC masks/distorts that.

salimmadjd 8y ago

Many of us from early on argued that SV had no vision. Yes, there are a lot of people who think they are some kind of "visionaries", and perhaps on some narrow areas of focus they are. But, if it had a real vision it would have foreseen the growth problems and it would have united to solve it. There is a lot of money sitting at Apple, Google, and the rest. They could have easily use their weight, reach and influence to envision and build an entire tech city community. It's not that hard. If a few lobbyist in DC can send the country into all kinds of wars, why can't SV companies use their weight to do something that can resolve this problem. It makes perfect business sense to me. Instead, we get apartments build adjacent to CalTrain to act as sound insulation or they would not get approved. This is ridiculous. To have a habitable area with a decent quality of life, you need all types of workforce. Teachers, restaurant workers, gardeners, etc. Where are these people going to live? When you see some houses filled with 7-8 occupant because they can't afford rent, you know this is not sustainable. I've lived in the Bay Area since 1991. These days, for my work, I spend a lot of time working with our remote team in Minsk, Belarus. The thought of coming back each time to SV is distressful if it wasn't for the loved ones back home. There are many tech guys here in Belarus who dream of coming to SV. I remind them their quality of life is far far better than what they would get in SV. So unless we get some true leadership in SV, that has a vision of making the Bay Are more habitable instead of trying to think about how to colonize Mars, this is going to get worse. The once almost utopian Bay Area is becoming rather dystopian.

mathattack 8y ago
They could have easily use their weight, reach and influence to envision and build an entire tech city community. It's not that hard. It’s actually very hard. Most available land has already been built up. Cities are very strict about zoning and not allowing additional development. Tech companies can’t just steamroll the local governments. It’s very much a poor governance situation. I agree with your conclusion, I just don’t believe Big Tech can fix it so easily.
- rednerrus 8y ago
  Local governments are typically very easy to influence. Especially when you are the largest tax provider.

dustingetz 8y ago

We need a killer app for collaboration. I think VR tech could solve this by building a shared IDE-space for pair programming.

strig 8y ago
And wear VR goggles all day at work?
wilsonnb3 8y ago
VR might provide more communication bandwidth than a phone call or a video chat, but it's still nowhere near close enough to actually collaborating in person.
ghaff 8y ago
The far more relevant collaboration problem is being together with other people in a room and sketch out ideas, etc. on a whiteboard, have interactive conversations, read body language, etc. There have been so many attempts to solve this over the years and there's never been close to a "killer app." I do believe that remote work can work in many cases but it needs to be complemented with a decent dose of F2F to complement our only somewhat successful video conferencing systems, chat, shared documents and other tools that exist today. I suspect at the end of the day we'll just keep iterating on the various tools we have and they'll get better but still will lag everyone being in the same room.
cardiffspaceman 8y ago
There is a no-true-Scotsman position here. If you extrapolate from science fiction, there is a level of VR implementation that we can imagine, if not implement, that would enable distant collaboration with out the defects that are mentioned in the siblings of this comment. I feel that VR today cannot deliver enough to resemble Holodeck fidelity, more like .1 H, and maybe at least .5 H is needed. Maybe pair programming needs less to be fluid enough to be beneficial.
- dustingetz 8y ago
  It actually doesn't need to be, like, flashy 3D game stuff! It can just be a 360-degree screen-space that lets me have every file in the system open at once. The problem with pairing in 2D is there is only one cursor, and even if there were two cursors like google docs, there is not nearly enough screen real estate for us both to work at the same time. These are mostly 2D problems, but VR still solves them.

cletus 8y ago

In the last few months I've come to appreciate Amazon's vision here. Amazon, as I'm sure we all know, is conducting a search for their HQ2 location. I, like many others, suspect they always knew where they wanted to put it but they're playing this game to see what concessions and tax breaks they can extract from state and local governments. Perhaps an offer other than their intended location will be so good they'll change their mind but honestly I'd be surprised. I've come to realize this is genius for two reasons: 1. Amazon is pitting governments against each other. This sort of thing is a well-known and well-trodden path so it's nothing new but the real genius part is: 2. Once Amazon has two headquarters they're no longer at the mercy of the city of Seattle and the state of Washington. Let me elaborate: take Google, which is heavily invested in Mountain View. Essentially the Mountain View City Council has them where they want them. Google wants to stay in MTV (and, more importantly, expand in MTV) so whatever taxes and conditions the council wants to put on them, well they kind of have to suck it up. The latest of these is MTV forbidding free food in new campuses because it hurts local business. Now Google has obviously expanded well beyond MTV at this point (Redwood City, San Antonio Boulevard, Sunnyvale, San Jose, San Francisco). But these are less than ideal solutions. Move a team from MTV to Sunnyvale and you've added 10-20 minutes to the commute of everyone living in SF. Getting around "campus" requires a transit system all of its own. Compare this to Amazon's future position: if Seattle decides to put an onerous (from Amazon's position) tax or set of conditions on them they can simply say "we'll expand our other campus instead". So they're not beholden to one town or city like the SV giants are (specifically Mountain View, Cupertino and Menlo Park). I really wish the SV giants would take this approach. Also, as others have mentioned, the cost of living for those not fortunate enough to be in tech is horrendous in SV. You can blame small-minded NIMBYist towns and voters for this if you like but (IMHO) that's shortsighted. By continuing to exist there and expand there the giants are supporting those anti-progressive positions. At some point you're either part of the solution or part of the problem and (IMHO) continuing to expand in SV makes you part of the problem.

seanmcdirmid 8y ago
The contrast is Redmond. Microsoft has a great relationship with the city, and so tend to concentrate its development there and a few nearby satallites.

jaequery 8y ago

also dont forget that startups have started embracing remote development culture

wgerard 8y ago

I think the "shift" that's most interesting is this one: > Alphabet and Facebook pay their employees so generously that startups can struggle to attract talent I've heard anecdotally from quite a few people that this has made hiring incredibly difficult - as those comp packages continue to increase the math just doesn't work out for a startup employee even if there's a generous exit for the employees. Not that the comp at FAANG was ever bad, just that it's gotten so much better over the past few years (undoubtedly helped by a huge bull market) that golden handcuffs have really put a drain on the startup hiring scene - mostly in cities where those companies have large offices or are growing considerably. Further, supposedly anyway, as those companies become larger and larger and need more people it's become less difficult to get in the door there.

vonmoltke 8y ago
FANG can only hire, what, 10% of all currently-employed engineers. Additionally, their hiring processes are notoriously capricious. Unless startups are exclusively targeting the same 10%, I don't see how that has a significant impact.
- wgerard 8y ago
  > FANG can only hire, what, 10% of all currently-employed engineers That number is probably growing over time (as the article alludes to). I mean, just take a look at how many positions Netflix alone is hiring for: https://jobs.netflix.com/teams/engineering https://jobs.netflix.com/teams/engineering > Additionally, their hiring processes are notoriously capricious. Supposedly, this is also changing as their demands are growing and they've had to "lower the bar", so-to-speak.
  - vonmoltke 8y ago
    > That number is probably growing over time (as the article alludes to). I don't see them growing that fast, nor do I see all that growth being in the US. Companies can only grow so fast or they end up hurting themselves. Additionally, I have been seeing an increasing nber of online anecdotes about Google and Facebook rejecting candidates who passed the interviews because there was no head count at their level. > I mean, just take a look at how many positions Netflix alone is hiring for: 112 is less than a rounding error when there are well over a million people currently employed in some sort of software development position. > Supposedly, this is also changing as their demands are growing and they've had to "lower the bar", so-to-speak. I haven't personally seen any evidence of this, and every time their processes come up for discussion here there seems to be no end of defenders of these practices.

meanmartine 8y ago

Well, this is isn't surprising to be honest.

jandrewrogers 8y ago

The reality on the ground is more nuanced then this, and one should be careful not to treat either tech or startups as uniform categories. I would frame the situation as some broad classes of both tech and startups have migrated to other cities and established critical masses elsewhere, but not tech and startups as a whole. If you work in one of those areas of tech, the action may not be in Silicon Valley. A prominent example of this is Seattle and cloud tech. Other areas of tech, like AI, are regionally diffuse currently. I do think the gravity of Silicon Valley, while immense, has weakened over time but being expensive is a marginal factor. Most of the oft-touted alternatives like Seattle are also expensive. As the scale of the tech industry has increased, random concentrations in the distribution of tech development has simply created critical masses in other cities in some key domains, giving them a sustained competitive advantage. These are not engineered outcomes but the organic confluence of conditions and events. No one planned to turn Seattle into Cloud City but it happened anyway, and you can see this dynamic becoming more prominent in the US tech scene at large. Most stuff still happens in Silicon Valley but the likelihood of diverse tech randomly achieving critical mass elsewhere has increased.

lafay 8y ago

The long-standing prohibition of non-compete agreements in California is really the X factor in why it continues to be the innovation juggernaut. So many startups here are the result of founders capitalizing on some element of their experience at prior employers. And the ability to hire top talent away from direct competitors also provides a significant advantage for rising startups. Even if other states pass legislation to end non-competes (as MA has tried to do a few times), it will take time for regional business culture to adapt. I've worked for a few East coast tech firms where company loyalty is taken very seriously, and defectors were semi-publicly shamed even if not outright sued for violating a non-compete.

Eire_Banshee 8y ago
I dont buy this. Nobody Ive ever met gives a shit about non-competes. They aren't really enforceable unless you blatantly steal or copy work.
raverbashing 8y ago
Still, California is big, people don't have to keep to SV

commandlinefan 8y ago

Come on down to Texas! We have no state taxes, a business-friendly government, and we even have an ocean (well, a gulf anyway).

thrav 8y ago
But it’s hot as fuck... I grew up there. Every single person I’m blood related to lives there. I could never move back. If I ever leave SF, it’ll only be to go somewhere equally temperate.

the_watcher 8y ago

I live in the Bay Area, so maybe it's only outside that it's used, but I have never heard anything like the term "Off Silicon Valleying". Googling it only turns up results about TJ Miller leaving the HBO show. Has anyone ever heard it?

the_watcher 8y ago

Am I missing something, or does this article entirely lack any substantiation of the claim made by its title beyond noting that Miami is ranked first in startup activity and Peter Thiel is moving to LA? The only stat about anything actually leaving the Valley is a survey about people intending to move out of the Bay Area that doesn't elaborate on the demographics of the respondents (are they tech workers or non-tech workers trying to escape costs?). I think the thesis is roughly accurate - tech companies are less dependent on being in SV for success than any time in a reasonably long time, I just don't see much hard evidence backing it up in this particular piece.

luddaite 8y ago

If we assume that the premise here is correct (there is some amount of exodus of technical talent from SV), isn't it still a good thing? My impression is that the result of having all the major tech companies located in one region is the development of a tech cultural bubble. The current tech industry has a hard time understanding and relating to the rest of the country/world. Wouldn't we all be better off if they spread out a bit such that they could better represent the entirety of the world?

downandout 8y ago

I have always found it ironic that many of the very people who created the modern Internet, and have sold the world on the transformational possibilities of connecting with each other through it, also believe that one must physically be in Silicon Valley to succeed in their own industry. A founder’s desire to start a company that could reasonably be run from anywhere in one of the world’s most expensive areas should turn off investors, not attract them - and this is happening with more frequency as Bay Area costs escalate. If those within the Valley bubble want to remain relevant to the startup scene in the coming decades, they would be wise to leverage some of their own tools to provide those outside the bubble with greater access to the resources within it.

dman 8y ago
Do you have any specific people in mind?
- downandout 8y ago
  I was referring to the general sentiment that if you're a serious tech startup, you should be in SV. You can see this sentiment throughout this comment thread, in an essay someone linked to below written by Paul Graham, and in any number of articles extolling the virtues of the Valley. As for specific people, I’d start with Mark Zuckerberg - a champion of connecting the world through technology - who seems to have believed that a SV presence was necessary for Facebook to succeed. He had to believe that, or he wouldn’t have moved the company there as soon as he had the funding to do it.
dhnsmakala 8y ago
Salaries high in SV. Talent goes to SV for high salary. Companies go to SV to seek talent.
- downandout 8y ago
  When cost of living for a quality of life that is equivalent to almost any other area (e.g. not having 8 roommates on a $150k salary) is taken into consideration, SV salaries actually pale in comparison to those in other areas.

sixdimensional 8y ago

I know of a large, well established corporation that just decided to open an office in Silicon Valley. I was shocked and could not fathom why they would go to that expense to do so, when they could have just as easily done this in one of their established metropolitan or other less expensive areas. Silicon Valley is special without a doubt, but does anyone here think it still makes sense to do such a thing? These days people with the skills needed are much more distributed and many are willing to move from Silicon Valley or other places for the right job and quality of life, at least what I have seen. I suspect that company is going to spend a fortune for not much benefit.

mnm1 8y ago

Who cares outside of the valley? The average tech worker can find a good job in just about any city in the world nowadays. Startups are some of the worst places to work but tech penetration is so deep, established companies that need tech work and have decent working conditions are everywhere. Why pay the insane costs in the valley when so many other options are available? As far as innovation, that's just a small percentage of companies and often it happens at established companies. Given the cost of living (sky high) and quality of life (mediocre at best) in the valley, I'd say it's one of the worst places to be a tech worker. It is a good place to start one's career for a few years as it really makes one appreciate working at a decent company rather than the startup insanity culture in the valley. There are decent companies in the area, but they are hard to find due to the sheer number of mismanaged startups and scams. The valley falling out of prominence is great news for the rest of the country and the rest of the world, if it's true.

onemoresoop 8y ago

I think the title should be "Why aren't more startups leaving Silicon Valley"