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Is there a good article that describes how / why / when the startup scene moved from the South Bay to San Francisco? I'm not too familiar with the startup scen

Is there a good article that describes how / why / when the startup scene moved from the South Bay to San Francisco? I'm not too familiar with the startup scene before 2010. But from what I know, it was mostly established in its current form before the Dot Com boom. It seems like HP, Cisco, Intel, Apple, Oracle, Sun, Adobe, Intuit, & Yahoo! where part of one movement. eBay, PayPal, Google, Facebook & Netflix obviously added to that. But now all the newer companies are coming from SF - SalesForce, Twitter, Uber, Lyft, AirBNB, Yelp, Splunk, Dropbox, Square, Instagram (originally), Slack, StichFix, Postmates, Instacart, GitHub, Robinhood, Coinbase, etc. The only recent, pretty big startups in the South Bay I can think of are LinkedIn and Quora. YouTube - from San Bruno - is kind of in the middle. The rest are subsidiaries. I mean, the OG companies like Apple and Google and Facebook are so big that they dwarf the rest of the startups in the Bay by themselves. So in a sense, the Silicon Valley still feels like the Peninsula. But the startup scene definitely seems to have shifted.

clpm4j 5y ago
A seemingly significant part of it is because the young talent wants to live in SF and not commute 1+ hours to an office park in the South Bay. I think SF also offered incentives for tech companies to set up shop in the city in the 2009-2012 time range... https://www.wired.com/story/no-more-deals-san-francisco-considers-raising-taxes-tech/ https://www.wired.com/story/no-more-deals-san-francisco-cons...
- ghaff 5y ago
  It also generally became trendy for that demographic to live in (certain) cities after they graduate. My company set up an office in the Seaport (partially) for that reason because our main location an hour west of Boston was a deal-killer for some people.
  - clpm4j 5y ago
    That's certainly true. A career in tech became widely popular and trendy for millenials and now zoomers (I believe CS is now the most popular undergraduate major across US colleges?). Basically once people realized you can make more money in tech than on Wall St, a percentage of new grads who would have moved to NYC diverted for SF.
    - ghaff 5y ago
      >I believe CS is now the most popular undergraduate major across US colleges I saw that in one Google search and it seems incredibly unlikely. This seems much more probable (even if you assign some of the engineering degrees to CS): https://www.niche.com/blog/the-most-popular-college-majors/ https://www.niche.com/blog/the-most-popular-college-majors/
notsureaboutpg 5y ago
Young people want to slum it up in SF, supposedly.
rogerbinns 5y ago
I've seen several commentators blame AWS! Before AWS, startups needed to budget for web servers and similar hardware, and a place to put them. That meant bigger offices with more floor space, plus power and similar services. Once AWS came (2007) startups could be anywhere, with the city tending to be more attractive to younger folk.
- abalone 5y ago
  Not a good theory. Before AWS startups would colocate. On premise was rare.
  - rogerbinns 5y ago
    You did still want on premise at the beginning, while going through the earlier phases of startup development. For example you need source code control, build servers, bug tracking, test setups, file servers, as well as developer workstations.
    - abalone 5y ago
      Not a significant space issue at the beginning. Still not a good theory.
- jdsully 5y ago
  Very few people were putting them directly in their offices, and they certainly weren't buying bigger spaces to fit them. Datacenters are the natural home for this stuff and the price was never exorborant if you're not insisting on a tier 1 facility.
  - rogerbinns 5y ago
    Imagine it is 2003 and you are doing a startup. You aren't deploying anything yet. You need a source code control server, a bug tracker, build servers, testing systems (so many versions of Windows), developer workstations, a file server, and various other bits of infrastructure (plus backups). This easily results in multiple systems per developer. Internet connectivity was slow and expensive which is why this kind of stuff was in the office, not at a colo. So your office needed proportionally more space per person.
Apocryphon 5y ago
Zoom is based in downtown San Jose.
- foobiekr 5y ago
  They were over by Great America for a long, long time. Eric was used to Milpitas @ Cisco.
rm_-rf_slash 5y ago
Short answer: early Silicon Valley needed space for fabricators, the dotcom era needed space for data centers, then around 2010ish there were enough cloud providers and internet connections you could start a company anywhere but you already had plenty of talent in the bay and San Francisco is fun. Long answer could be a phd thesis but “people needed lots of space until they didnt” kind of suffices.
kens 5y ago
> the OG companies like Apple and Google and Facebook History time. It's kind of amusing to see these companies referred to as OG, when there were many generations of Silicon Valley startups before them. The real OG was probably Hewlett-Packard, founded in Palo Alto in 1939. Another key company was Shockley Semiconductor, founded in Mountain View in 1956. Eight key employees left Shockley in 1957 and formed Fairchild Semiconductor, gaining the name the "Traitorous Eight". Fairchild led to over 126 startups, sometimes called the Fairchildren, including AMD, Altera, LSI Logic, National Semiconductor, and SanDisk. Two of the Traitorous Eight, Gordon Moore and Robert Noyce, left Fairchild in 1968, founding Intel in Mountain View. Later key Silicon Valley companies were Oracle (1977), Sun Microsystems (1982), and Cisco (1984). Although Apple started in 1976, it wasn't a dominant company until years later. Google (1998) and Facebook (2004) are relative newcomers. Information on Fairchild's influence: https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...
- onlyrealcuzzo 5y ago
  Thanks! This is super cool! Question - when did the VC model really come into play? Were the Fairchildren like AMD VC funded? A lot of others have mentioned that space plays a role in this a lot. Companies needed fabricators and data centers, which took up space, so it was too expensive to be in the city. Is this really all there was to it? Back in these times - there was White Flight from the cities, right? Did most people (even college grads) prefer to work in the suburbs then? Was this even a factor at all?
  - clpm4j 5y ago
    You would enjoy the documentary 'Something Ventured'. http://www.somethingventuredthemovie.com/ http://www.somethingventuredthemovie.com/
  - astrange 5y ago
    If you're asking why Silicon Valley is in California at all, the answer is that the state bans all non-compete agreements and won't enforce ones made in other states. This is probably why it's not in Cambridge, though it doesn't explain anything more specific than that.
cobookman 5y ago
Robinhood was in in Menlo Park / Palo Alto. Here's a list of startups in Palo Alto: https://angel.co/location/palo-alto https://angel.co/location/palo-alto Here's a list of startups in Menlo Park: https://angel.co/location/menlo-park https://angel.co/location/menlo-park I'm sure if you have crunchbase pro you'd be able to do more analysis. But Silicon Valley is still pumping out a lot of startups, and high-tech firms.
nostrademons 5y ago
It was largely driven by Millenials, who wanted to work in cities whether they're founding or working for a startup. YCombinator (itself based in Mountain View) found that most of their startups preferred to locate in SF, oftentimes many of them in one building. At one point there was the "YScraper", the Crystal Tower building in North Beach that was home to Justin.TV (parent of Twitch/SocialCam/Cruise), Xobni, Weebly, and Scribd. Also your list of South Bay startups is pretty incomplete - there's also WhatsApp (Mountain View), Box (Redwood City), Coursera (Mountain View), Khan Academy (Mountain View), Tesla (Palo Alto, with manufacturing in Fremont), the Signal Foundation (Mountain View), RobinHood (headquarters is Menlo Park, not SF), Zoom (San Jose), GoFundMe (Redwood City), Carbon3D (Redwood City), WealthFront (Palo Alto), Impossible Foods (Redwood City), Roblox (San Mateo), and GoPro (San Mateo). I do agree that the center of gravity of the valley moved northwards in the 2010s though. Prior to then, it was debatable whether SF was even really part of the valley, while since then it's been a major tech hotspot.
abalone 5y ago
Quite simply crime rates in SF came down around 2010. It was high in the 90s but even then the first dot com boom had some startups in SF and some in SV. Notably Salesforce. But by the second Web 2.0 boom (as it was called) SF was a very attractive place for young workers. The earliest SV companies wanted to be physically located near Stanford and Moffett for the govt subsidies/contracts. Still happens (read The Entrepreneurial State) but physical location is not as important in the internet age. Frankly I would not give this Sf.citi lobbyist piece much credence. “Migration” could simply be a temporary effect of the pandemic. We may very well see young people come rushing back into SF for the same reasons as before. And crime? You wouldn’t know it from HN threads but SF violent crime is again at all time lows.[1] [1] https://www.macrotrends.net/cities/us/ca/san-francisco/crime-rate-statistics https://www.macrotrends.net/cities/us/ca/san-francisco/crime...
- astrange 5y ago
  I thought the move into SF was actually caused by a specific tax incentive around 2010, but don't remember the details.

clpm4j 5y ago

A seemingly significant part of it is because the young talent wants to live in SF and not commute 1+ hours to an office park in the South Bay. I think SF also offered incentives for tech companies to set up shop in the city in the 2009-2012 time range... https://www.wired.com/story/no-more-deals-san-francisco-considers-raising-taxes-tech/ https://www.wired.com/story/no-more-deals-san-francisco-cons...

ghaff 5y ago
It also generally became trendy for that demographic to live in (certain) cities after they graduate. My company set up an office in the Seaport (partially) for that reason because our main location an hour west of Boston was a deal-killer for some people.
- clpm4j 5y ago
  That's certainly true. A career in tech became widely popular and trendy for millenials and now zoomers (I believe CS is now the most popular undergraduate major across US colleges?). Basically once people realized you can make more money in tech than on Wall St, a percentage of new grads who would have moved to NYC diverted for SF.
  - ghaff 5y ago
    >I believe CS is now the most popular undergraduate major across US colleges I saw that in one Google search and it seems incredibly unlikely. This seems much more probable (even if you assign some of the engineering degrees to CS): https://www.niche.com/blog/the-most-popular-college-majors/ https://www.niche.com/blog/the-most-popular-college-majors/

notsureaboutpg 5y ago

Young people want to slum it up in SF, supposedly.

rogerbinns 5y ago

I've seen several commentators blame AWS! Before AWS, startups needed to budget for web servers and similar hardware, and a place to put them. That meant bigger offices with more floor space, plus power and similar services. Once AWS came (2007) startups could be anywhere, with the city tending to be more attractive to younger folk.

abalone 5y ago
Not a good theory. Before AWS startups would colocate. On premise was rare.
- rogerbinns 5y ago
  You did still want on premise at the beginning, while going through the earlier phases of startup development. For example you need source code control, build servers, bug tracking, test setups, file servers, as well as developer workstations.
  - abalone 5y ago
    Not a significant space issue at the beginning. Still not a good theory.
jdsully 5y ago
Very few people were putting them directly in their offices, and they certainly weren't buying bigger spaces to fit them. Datacenters are the natural home for this stuff and the price was never exorborant if you're not insisting on a tier 1 facility.
- rogerbinns 5y ago
  Imagine it is 2003 and you are doing a startup. You aren't deploying anything yet. You need a source code control server, a bug tracker, build servers, testing systems (so many versions of Windows), developer workstations, a file server, and various other bits of infrastructure (plus backups). This easily results in multiple systems per developer. Internet connectivity was slow and expensive which is why this kind of stuff was in the office, not at a colo. So your office needed proportionally more space per person.

Apocryphon 5y ago

Zoom is based in downtown San Jose.

foobiekr 5y ago
They were over by Great America for a long, long time. Eric was used to Milpitas @ Cisco.

rm_-rf_slash 5y ago

Short answer: early Silicon Valley needed space for fabricators, the dotcom era needed space for data centers, then around 2010ish there were enough cloud providers and internet connections you could start a company anywhere but you already had plenty of talent in the bay and San Francisco is fun. Long answer could be a phd thesis but “people needed lots of space until they didnt” kind of suffices.

kens 5y ago

> the OG companies like Apple and Google and Facebook History time. It's kind of amusing to see these companies referred to as OG, when there were many generations of Silicon Valley startups before them. The real OG was probably Hewlett-Packard, founded in Palo Alto in 1939. Another key company was Shockley Semiconductor, founded in Mountain View in 1956. Eight key employees left Shockley in 1957 and formed Fairchild Semiconductor, gaining the name the "Traitorous Eight". Fairchild led to over 126 startups, sometimes called the Fairchildren, including AMD, Altera, LSI Logic, National Semiconductor, and SanDisk. Two of the Traitorous Eight, Gordon Moore and Robert Noyce, left Fairchild in 1968, founding Intel in Mountain View. Later key Silicon Valley companies were Oracle (1977), Sun Microsystems (1982), and Cisco (1984). Although Apple started in 1976, it wasn't a dominant company until years later. Google (1998) and Facebook (2004) are relative newcomers. Information on Fairchild's influence: https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...

onlyrealcuzzo 5y ago
Thanks! This is super cool! Question - when did the VC model really come into play? Were the Fairchildren like AMD VC funded? A lot of others have mentioned that space plays a role in this a lot. Companies needed fabricators and data centers, which took up space, so it was too expensive to be in the city. Is this really all there was to it? Back in these times - there was White Flight from the cities, right? Did most people (even college grads) prefer to work in the suburbs then? Was this even a factor at all?
- clpm4j 5y ago
  You would enjoy the documentary 'Something Ventured'. http://www.somethingventuredthemovie.com/ http://www.somethingventuredthemovie.com/
- astrange 5y ago
  If you're asking why Silicon Valley is in California at all, the answer is that the state bans all non-compete agreements and won't enforce ones made in other states. This is probably why it's not in Cambridge, though it doesn't explain anything more specific than that.

cobookman 5y ago

Robinhood was in in Menlo Park / Palo Alto. Here's a list of startups in Palo Alto: https://angel.co/location/palo-alto https://angel.co/location/palo-alto Here's a list of startups in Menlo Park: https://angel.co/location/menlo-park https://angel.co/location/menlo-park I'm sure if you have crunchbase pro you'd be able to do more analysis. But Silicon Valley is still pumping out a lot of startups, and high-tech firms.

nostrademons 5y ago

It was largely driven by Millenials, who wanted to work in cities whether they're founding or working for a startup. YCombinator (itself based in Mountain View) found that most of their startups preferred to locate in SF, oftentimes many of them in one building. At one point there was the "YScraper", the Crystal Tower building in North Beach that was home to Justin.TV (parent of Twitch/SocialCam/Cruise), Xobni, Weebly, and Scribd. Also your list of South Bay startups is pretty incomplete - there's also WhatsApp (Mountain View), Box (Redwood City), Coursera (Mountain View), Khan Academy (Mountain View), Tesla (Palo Alto, with manufacturing in Fremont), the Signal Foundation (Mountain View), RobinHood (headquarters is Menlo Park, not SF), Zoom (San Jose), GoFundMe (Redwood City), Carbon3D (Redwood City), WealthFront (Palo Alto), Impossible Foods (Redwood City), Roblox (San Mateo), and GoPro (San Mateo). I do agree that the center of gravity of the valley moved northwards in the 2010s though. Prior to then, it was debatable whether SF was even really part of the valley, while since then it's been a major tech hotspot.

abalone 5y ago

Quite simply crime rates in SF came down around 2010. It was high in the 90s but even then the first dot com boom had some startups in SF and some in SV. Notably Salesforce. But by the second Web 2.0 boom (as it was called) SF was a very attractive place for young workers. The earliest SV companies wanted to be physically located near Stanford and Moffett for the govt subsidies/contracts. Still happens (read The Entrepreneurial State) but physical location is not as important in the internet age. Frankly I would not give this Sf.citi lobbyist piece much credence. “Migration” could simply be a temporary effect of the pandemic. We may very well see young people come rushing back into SF for the same reasons as before. And crime? You wouldn’t know it from HN threads but SF violent crime is again at all time lows.[1] [1] https://www.macrotrends.net/cities/us/ca/san-francisco/crime-rate-statistics https://www.macrotrends.net/cities/us/ca/san-francisco/crime...

astrange 5y ago
I thought the move into SF was actually caused by a specific tax incentive around 2010, but don't remember the details.