In recent months, a growing number of tech leaders have been flirting with the idea of leaving Silicon Valley. Some cite the exorbitant cost of living in San Francisco and its suburbs, where even a million-dollar salary can feel middle class. Others complain about local criticism of the tech industry and a left-wing echo chamber that stifles opposing views. And yet others feel that better innovation is happening elsewhere.
“I’m a little over San Francisco,” said Patrick McKenna, the founder of High Ridge Venture Partners who was also on the bus tour. “It’s so expensive, it’s so congested, and frankly, you also see opportunities in other places.”
This isn’t a full-blown exodus yet. But in the last three months of 2017, San Francisco lost more residents to outward migration than any other city in the country, according to data from Redfin, the real estate website. A recent survey by Edelman, the public relations firm, found that 49 percent of Bay Area residents, and 58 percent of Bay Area millennials, were considering moving away. And a sharp increase in people moving out of the Bay Area has led to a shortage of moving vans. (According to local news reports, renting a U-Haul for a one-way trip from San Jose to Las Vegas now costs roughly $2,000, compared with just $100 for a truck going the other direction.)
When you invest in a San Francisco start-up, “you’re basically paying landlords, Twilio, and Amazon Web Services,” said Ms. Bannister of Founders Fund, referring to the companies that provide start-ups with messaging services and data hosting.
That means you should:
Be a landlord in SF
Buy Twilio stocks
Buy boatload of amazon stocks because it’s paid twice.
When you moved to SV, your company probably paid for relocation so you moved in style with moving company. But on your way out, well, you are on your own.
Makes perfect sense. Foreigners (skilled and/or wealthy) are moving into the Bay Area, displacing locals. This article is only telling one side of the story. It failed to take into account the other side. That’s why Bay Area population has record increases even though so many people are moving out/getting displaced.
The futuristic start up can be in any metropolitan. Look at the age of these VCs in the photo. Their means($) can be reduced than before. Too much money have pumped in redundant technology of similar ideas. Even give the track record of ipo the angel investors will gave up or get out of some non-profitable public companies. Is 10 year of negative profit on income statement enough to prove these companies will disappear in a recession?
I have seen many multi-millionaires, resigning their job once stock skyrockets, and going for start-up funding. Whoever made money with tech stocks, in their young age, turned themselves VC now.
Bay Area does have its advantages (costal, good climate, people magnate), but some other cities also possess the same (LA, for example). So I think it just boils down to a coincidence of first mover advantage. Because the first silicon chip maker chose Bay Area, just like the first filmaker chose LA, and the first financial institution chose New York.
Most founders don’t just drop out of college to found a hot new startup. They most likely work at big tech companies like Google and Apple for a while. So after they have a family in the Bay and may even have a house, would they pack up and move to Arizona to start their new gig? Of course not. They will do their startup here.
And we have the whole ecosystem set up here. The money is here. The colleges are here. The talents are here. Once the flywheel is set in motion it’s very hard to stop, and very hard for other places to replicate. That’s the very definition of network effect.
San Francisco was the center of California commerce until after WW2…LA grew with unrestricted zoning and planning…SF would have a population of 14m if not for the natural barriers and government restrictions…People would rather live in the BA than LA
SF is limited by its geography. The bay is in the way and locale is too hilly. Therefore limiting the number of people who can settle here. Also, LA is closer to Mexico so is easier for Mexicans to settle there.
It is truth…