
Sam Altman: Bay Area is no longer the obvious place for startups - everbody
https://twitter.com/sama/status/1096822724217827328
======
vincentmarle
> I still expect a significant % of the $10B+ startups will get created here,
> so it makes sense for investors to still focus here. But I bet a lot of the
> ~$100M startups will happen elsewhere.

> There are still some things—e.g great startup executive talent, particular
> kinds of engineering talent—that are much harder to find outside the bay
> area.

This is spot on and it becomes a real bottle neck if you want to scale your
startup beyond $500MM valuation.

Obviously you often can’t choose if you want to be a $100M startup or a
billion dollar startup, and by the time you’ve passed the $100M mark it can be
too late to refocus on the Bay Area and you might lose momentum by dealing
with all kinds of things that shouldn’t matter.

We’ve run into serious talent recruiting issues when we reached this stage and
we “solved” it by opening offices in SF and Mtn View. But it was not ideal and
a huge waste of money/time.

~~~
sytelus
Why doesn’t your employees move out of Bay Area with you? Assuming if you keep
offering same comp, this would cut down mortgage expenses to half and even
gain much better housing in better school areas. It should be no brainer to
move out if comp remains same. So you can come in to shop for talent, have
them work remotely until they are ready. No need to open expensive offices in
Bay Area.

~~~
baddox
Why would the assumption be that most people would want to move away from
their homes because their current employer wants to save money?

Sure, many tech employees probably moved to the Bay Area primarily to find
employment, but even if they don’t enjoy other aspects of the area, a place
you live in for a while will become your home, and abandoning your home is not
an easy or obvious decision to make.

~~~
myspy
Yey, living in SF where junkies shoot on the street and everything is littered
with excrements because fuck you good social security system.

Let‘s live there!

Plus, everything really expensive to live there. And if I work at Google I
drive two hours with a bus there.

I don‘t know but reading about that place it‘s insanity.

And the output is Hit and miss. I know of no startup in the last ten years
that‘s any substantial or enhancing live tremendously.

~~~
dmode
Only a small portion of SF is matches the dystopian vision you claim. Even
those portions are not any worse than other urban areas. There is a reason why
housing here is extremely expensive. People want to live here.

~~~
inferiorhuman
> Only a small portion of SF is matches the dystopian vision you claim. Even
> those portions are not any worse than other urban areas.

If you believe that you either live an extremely sheltered existence in SF or
you've not visited recently.

San Francisco is pretty bad no matter where you go (except, perhaps, for the
affluent areas like Sea Cliff and St Francis Woods). Out in the Outer Sunset I
saw what looked like someone shat out a tapeworm over the course of three
blocks the other day (if you'd like pictures, I'd be happy to oblige).

I went down to Rainbow Grocery last week and sat outside munching on some
popcorn. It only took a few minutes before I was approached by a guy asking
for some. Sharing food is something I've done before and will do again, but
finger foods? No thanks. So the guy walks away, picks up his walking stick,
gives me the crazy eyes, and then starts swinging the stick at me while
muttering incoherently. This is also a part of town where you never know which
side of the street you'll have to avoid due to the massive encampments (side
effect of the super bowl bullshit really). Meanwhile I walked away as quickly
as I could only to get hit with the stench of human shit. Turns out someone
had dropped a steaming five inch mound of fresh shit nearby. The 311 ticket
got closed out because they couldn't be bothered to figure out which corner if
the intersection the smell was coming from (despite there being GPS
coordinates in the damn picture).

I took BART last weekend to the Oakland Museum of California (the Eames
exhibit was fun). I managed to get stuck on the periphery of no less than two
fights on the damn trains. Last time I took BART late at night I hadn't quite
realized what an open air drug market it had become. And, of course, Civic
Center station has never been great but I've been seeing folks shooting up on
the steps during the day. Something I never saw when I was working in that
neighborhood years ago.

Backing up to earlier last week I sat next to a well traveled woman a few
years younger than myself on my flight to SFO. She's from Harlem and visits SF
annually. The thing that struck her most about SF vs NY was that drug use is
far more open than in New York and so is homelessness. That jives with my
experiences as well — San Francisco is demonstrably worse than other urban
areas I've visited.

For fun search youtube for videos on sideshows. How many other urban areas get
their major roads (e.g. the bay bridge, I-880) shutdown to make way for people
hooning their cars? Let's not spend too much time talking about the condition
of the roads out here either. They put Newark to shame. And we don't even have
the excuse of extreme weather like they do in Jersey.

> There is a reason why housing here is extremely expensive. People want to
> live here.

That is a large part of the reason, but San Francisco is also seeing the
Vancouver-like thing of rich folks parking their money in housing.

Don't forget that people often have entirely irrational reasons for wanting to
live in San Francisco. Some of them have been deported from other states
(thanks Las Vegas!), some of them still have a very romanticized view of San
Francisco (it's not the summer of love anymore but there are plenty of kids
that migrate out here in pursuit of that dream).

~~~
dmode
I work near Civic center and go there everyday. You know, like, Chicago has
500 murders a year. Nothing in SF and Oakland even comes close to that.
Oakland used to be the crime capital in the US. People can actually live in
West Oakland now. Oakland hill homes now run at $2mn. Drug use in SF has been
prevalent since, what like 60s. I have been living in SF since well before the
boom. Mid market and Tenderloin used to be way more troubling. I am
continually amazed that they actually managed to our Uber, Twitter, and Dolby
HQ there. Did you ever go to 9th and market prior to the tech boom ?

~~~
tptacek
What's your point, regarding Chicago? Chicago is _much larger_ than San
Francisco; it's 5 times larger by area and over 3 times as many people.
Chicago isn't one of the country's top cities by murder rate. Further, Chicago
murders are largely confined to west and south sides of the city, a result of
redlining, and most people in the city (even fewer professionals) don't live
in those areas.

It's true, San Francisco used to have sketchy areas (I lived in Bayview in the
late 1990s) and now basically doesn't, since the worst apartment in Bayview
probably costs more than my house in Chicago does. Ok, you win. But the
comment you're responding to is about quality of life in San Francisco. Nobody
in Chicago is going to ask for your popcorn and swing a stick at you if you
don't comply. We don't have tent cities on our main-drag sidewalks. The CTA
goes pretty much everywhere and isn't an open-air drug market. We manage this
despite being a larger city, with our own real pressures, and having nothing
resembling the tax base San Francisco has.

San Francisco is broken. I'm sure it's fixable, but people probably need to
stop pretending things are OK first.

~~~
pcwalton
> The CTA goes pretty much everywhere and isn't an open-air drug market.

To be fair, the antisocial behavior I witnessed on the CTA {Green Line|Red
Line south of Roosevelt} and the Muni is comparable. I've never been verbally
accosted by passengers on CTA like I have on Muni, but I did witness blatant
pickpocketing and a drugged passenger break the bus door on CTA, which I've
never seen on Muni.

For what it's worth, my sense is that the issues that SF has Chicago doesn't--
homelessness, untreated mental illness--largely stem from cost of living
differences, particularly housing prices. Everything from opening shelters to
operating mental health facilities to avoiding homelessness in the first place
is easier when real estate is more affordable. (To give an example, my
hometown of College Station, Texas--hardly a bastion of liberalism!--had a
quite effective program for preventing homelessness in the '90s and the
aughts: straight-up building enough houses to house virtually all the needy
and pricing them far below market rate. This worked because of the combination
of a rich suburban tax base and rock-bottom real estate prices, which would
not work in Chicago or anywhere in California.) That doesn't excuse SF and the
state of California from failing to better address the problems, of course.

~~~
inferiorhuman
_For what it 's worth, my sense is that the issues that SF has Chicago doesn't
--homelessness, untreated mental illness--largely stem from cost of living
differences, particularly housing prices. _

My experience is that Muni itself is generally OK (yes even the 8/9, 14, and
38), but that BART has gotten really bad over the past couple years. For a
while Muni stopped running the (then new) hybrid buses in the Bayview because
people would hit the external kill switches when the bus was stopped.

There are a couple of California-specific and SF-specific issues at play as
well. SFPD simply doesn't ride Muni, although I believe they're contractually
obligated to. Meanwhile BART PD is spread very thin (around four officers at
any given time for their SF stations).

At the state level, California makes it very difficult to force someone to
stay on psychiatric medication or keep them in an institution. I don't believe
this is as much of an issue in Illinois.

------
pm90
I think it’s important for anyone getting to this page to read his whole
thread, which is more nuanced than suggested by the sensational title. The
point he seems to be making is that it’s better for startups that aren’t
looking at being unicorns to look at other locations where they might have a
better chance of success.

~~~
zavi
What's the point of being a startup not looking at being a unicorn? I
genuinely do not understand how somebody can cap off their ambitions like so.

~~~
freddie_mercury
Some friends created a startup a few years ago. It is now profitable and never
took VC.

The two founders pull down $1,000,000 a year and they give staff $50,000+
annual bonuses from profit sharing.

They also work four day weeks and spent every night and weekend with their
kids.

What's the upside of trying to make it into a unicorn?

~~~
mv4
what type of business/service, if you don't mind sharing?

I've always found "no VC" stories incredibly inspiring.

~~~
pm90
"no VC" is the majority of businesses in the US (and possibly the world)

------
smallgovt
Totally agree. From my experience, operating out of the bay area means you pay
more for rent, employee salaries, and employee retention (higher turnover).
All up, it costs somewhere around ~$50K/year more per employee.

If you run a modest team of 10, you're paying an additional $500K/year to be
in the bay area. That's huge for a large fraction of startups.

~~~
icelancer
> All up, it costs somewhere around ~$50K/year more per employee.

I'd guess this is significantly under-representing the additional cost
compared to most cities in America (exceptions might be NYC, LA, and Seattle).
I bet it's quite a bit more than that for someone from, say, Portland.

------
abrichr
Last paragraph:

> _This is particularly true in Silicon Valley, where a recent think tank
> report estimates that 17 percent of workers in “highly technical
> occupations” are native Californians, with 40 percent hailing from India or
> China and 29 percent from other non-U.S. countries._

And I thought Toronto was multicultural (~51% born outside of Canada)! I
wonder what is the rate regardless of occupation?

Edit to answer my own question:

> _More than a third of city residents (35.6%) were born outside the United
> States._

[https://en.wikipedia.org/wiki/Demographics_of_San_Francisco](https://en.wikipedia.org/wiki/Demographics_of_San_Francisco)

~~~
titanomachy
San Francisco != Silicon Valley.

~~~
kordlessagain
"Silicon Valley" has come to have two definitions: a geographic one, referring
to Santa Clara County, and a metonymical one, referring to all high-tech
businesses in the Bay Area.

------
temp1928384
I suspect the VC industry itself will be disrupted at some point (the irony of
the VC industry is that the biz model has remained basically the same for 50
years when everything else has changed).

It will become incrementally easier to raise money from non-traditional
sources at better terms as "accredited investor" laws are relaxed e.g. through
a Security Token Offering.

~~~
Cyclone_
I'm not sure I see the general public wanting to invest in startups, the
success rate is just too low.

~~~
sytelus
What if YC or 500startups were allowed to go public and people can buy their
stock? Returns on YC model far exceeds S&P. I think pg has created an
incredible framework which can be further evolved in open markets. I can
absolutely see S&P index dominated by company-aggregators as opposed to
individual companies. That seems to be the natural evolution.

~~~
nojvek
YC should IPO. They can make a much bigger impact with bigger funding

------
ulfw
One of the biggest reasons so many startups moved (or started) in the Bay Area
was because VCs didn't bother traveling and funded mostly local companies. Has
that changed?

~~~
nemonemo
If the VCs are that lazy, and assuming they still seek for the most profit,
wouldn't VCs move to the bay area to find the unicorns? Wouldn't it create a
virtuous (or vicious depending on the perspective) cycle of formibg a cluster
of the companies and VCs in the area?

Eventually too much of such cycle would give way to the increased cost of
living. But I see a tendency of more moderation in employee compensation by
big companies, which would favor small startups again around the area.

~~~
zemo
agglomeration is not unique to VC and it's not simply a matter of people being
lazy.
[https://en.wikipedia.org/wiki/Economies_of_agglomeration](https://en.wikipedia.org/wiki/Economies_of_agglomeration)

------
dmode
One thing to note. Since the time Bay Area became “expensive”, contrary to
expectations it is actually crushing other geographies (exception being China)
when it comes to massive fund raising for startups. Just this week Flexport
raised $1bn and DoorDash raised $400mn. A few weeks back Nuro raised $1bn and
Juul got $12bn. There is an excellent Crunchbase article on this
[https://news.crunchbase.com/news/how-northern-californias-
re...](https://news.crunchbase.com/news/how-northern-californias-reality-
distortion-field-is-reflected-in-startup-funding/)

Clearly the lesson is that if you want to scale, you are better of being here

~~~
austincheney
I would consider fundraising and local cost of living to be completely
orthogonal. Fundraising is easier when there is a cluster of potential donors
in a central geography. Other important factors are regulatory environment,
taxes, potential employees, transportation, and so forth.

~~~
dmode
I mentioned fundraising as a proxy for health of the startup sector in the Bay
Area. The expectation was that with high cost of living and relentless FAANG
hiring, startups will move en masse to other locations. But fundraising data
suggests otherwise.

------
temp1928384
And 50% of people living in SF want to leave
[https://sf.curbed.com/2019/2/20/18233498/poll-2019-leaving-s...](https://sf.curbed.com/2019/2/20/18233498/poll-2019-leaving-
san-francisco-oakland-silicon-valley)

~~~
eanzenberg
Then why dont they? Or are there 2 people willing to take the place of every
person leaving?

~~~
enra
I think for many people it comes down to go exactly where and do exactly what
there. Once lived in Bay Area for while, you have certain expectations on
compensation, services, things to do, career growth etc.

If you are used to a city like SF and enjoy the level of things in there, in
the world and US there only few cities similar. Like nyc, la, London, Tokyo
etc. Portland, Seattle, Austin, Berlin are all good but not the same.

Most of these places are almost as expensive or in similar category as SF but
all of them have lower tech salaries than SF, by little or by a lot.

In addition, if you live decently and your salary doesn’t only go to rent,
then any decrease in rent is always less than decrease in your salary. Say
your rent is $3000 in sf and you make $300k+ per year in total comp. Say
moving to Austin your rent would be $1500 but your salary would be $200k. You
are only saving $18k year in rent but your salary dropped $100k. Go to Berlin
and you maybe pay $1000 for apartment but your salary is $60k.

Lastly, as messed up lot of startups and companies are in Bay Area, there is
still a lot of experience and drive to build succesful companies. Go anywhere
else in the world and you will encounter more clueless people with absolutely
no networks, who have no ambition, and are just trying to do some local play
of a global company. I know it sounds harsh but I think for many people
thinking about moving to London and working in some consultancy or bank
doesn’t sound very exciting or a growth opportunity.

So I think lot of people want to move, but cannot find good or exciting
reasons to do that financially, growth or general job happiness. Quality of
living and housing yes for sure.

I think options are: 1) start your company and build the culture and company
you want whenever or in a distributed way

2) Decide to retire to the countryside and work on your own projects

3) Find a fulfilling, not exactly high tech job or position, but more like a
foundation / helping governments with socially responsible software etc.
Essentially financially retire, but work on meaningful things

I think Bay Area is still great for singles or couples without kids, that you
can get dual high income and share housing costs. Also the career and company
options in tech are unparaller.

Starting companies needing massive engineering force, less so.

~~~
randomacct3847
It’s not just cost of living but taxes. Living in a state with no income tax
is an automatic 10-12% bump in take home pay.

Agree though if you’re single your living situation is more flexible and you
can find a place for less than market rate here pretty easily. It’s once you
get married and want kids that SF makes no sense for most people.

Someone making 200k in Austin has a much much better quality of life than
someone making 300k in SF. No question.

~~~
burlesona
As someone from Austin living in SF I disagree. Austin has better housing
affordability and less severe homelessness. To me, just about everything else
is nicer in SF. But more to the point, everyone is different and you really
can’t generalize about what place is better or worse, because people’s tastes,
interests, and logistics vary so widely.

~~~
randomacct3847
Define nicer. To me housing affordability is a massive lever that drives
quality of life. You can find a place for 300k in Austin (renovated) what
would cost 1.5m in SF.

~~~
burlesona
There isn’t a neighborhood in the entirde Austin metro where you can walk to
all your daily needs. The summer heat is brutal and the winters are
surprisingly chilly given how hot the summer is. You don’t have anything like
the natural beauty of California at your doorstep.

For me though the walkability is the biggest thing. There’s not a single
neighborhood in Austin that can compare to the quality of life in my “middle
of the road” SF neighborhood. Miles of beautiful archictecture all around. My
kids can and do walk everywhere.

It’s just a completely different experience, being in an actual pre-car city,
and unfortunately there’s nothing like it in Texas.

~~~
b3b0p
Just left Austin for this exact reason. All the companies, except a few
startups and exceptions are not in downtown. They are out in the boonies. Live
downtown and you are looking at 2-3 hours of commute every day and traffic is
gloriously terrible. The transportation system in Austin is none to speak of.
The other thing that bugs me is none of these companies are actually in
Austin. It's more like Round Rock. So, when people say Austin is a tech hub,
it seems like play on marketing.

This is why I left for Minneapolis, I actually bought a condo in central
downtown. I can walk and bike everywhere. I can take a train or bus at any
given moment to everything I would ever need and there is something to be said
when you are easily and casually attend any of the major 6 sporting leagues at
a drop.

As for the tech and pay. I find it pays the same or actually more in my
experience. Finding a job is easy. Most companies don't play that Leetcode
game, some do, but most don't it seems. Tons of huge fortune companies that
use modern tech and have interesting problems, including places like Target,
big banks and tons of healthcare. There are hidden startups, if you look,
hard, but many haven't even take VC are only 2-5 people right now and are
bootstrapped and highly profitable.

If I ever decide to take that job at a big tech in SF I'll rent out my condo
in central downtown, pack up my backup and take the light rail to the airport
with my one way ticket.

------
jameslk
I see a bright future for products and services focused on remote team
management

~~~
dbish
I agree, but quite a few people get lonely working remotely and not having a
proper office to go into, and software won't solve that (at least not until VR
presence or something of the sort is really good). I've managed great
engineers who have complained about this and I haven't seen a good solution.

~~~
di4na
Uhm just a random thing here, but people should look at how online gaming
communities work. They solved that problem nearly 15 years ago...

~~~
robgibbons
Can you elaborate? Curious as to what aspect of online gaming you're referring
to.

~~~
di4na
Sure. Have a look at Eve online as an example. You have communities of
thousands of people (up to 20k). And the environment is quite close to the one
of the current market for corporations. They also face spying, people not
doing their fair share, etc.

They work together in a scarce and hostile environment and still build an
inclusive culture that make people feel at home. To the point that your
alliance is in a lot of way your family, at least as much as all these
companies want.

The way they do that is through multiple channels, and the game itself helps
ofc. But the main tool they use is _always on vocal server_. Teamspeak and
Mumble are the incumbent there, with Discord being the new entrant.

The way it usually works is that people are always logged in these server the
moment they are online. They stay online but go in an "AFK" channel if they
went away for a break. Otherwise they will be in a shared "quiet" channel. Or
in a "general" channel which is about talking with each other and having a
shared space.

If you go do something, like play another game, organize a squad to do
something specific, have a meeting, etc. Then you create a dedicated channel.

What happens is that you get people to share the space and feel a community
mostly through the vocal channel.

You also usually have a forum for longer run things and "out of band" fun. And
in general you also add a slack equivalent. Historically Jabber or Discord
these days.

The only thing missing is a good whiteboarding experience, but i have high
hope for VR there.

So yeah anyway, always on vocal is the thing most people miss that create that
feeling of belonging.

------
newman8r
I've been interested in the idea of semi-off-grid live/work communities for
remote workers and startups. It's inexpensive and not a bad lifestyle.

~~~
jaggederest
I've been working on the logistics of this and it's pretty tough.

If everyone at your "semi off grid" live/work community works in tech, you
have plenty of money but little free time, and end up bringing in most of the
maintenance of the environment, which is expensive and alienating. It's much
the same kind of way that it's unaffordable to live in SF if you're a janitor.

If you have some residents working in tech and the rest maintaining the built
environment, it's uncomfortably landed-gentry-and-underclass-of-serfs, with
people toiling the land.

The best model I've found is something like the East Wind Community, but you
need a business model that is highly accessible to all potential residents,
and an extremely high level of social cohesion, and I don't think tech fits
the bill. You also have to live somewhere extremely remote in order to be able
to afford the land to be self-sustaining in any significant degree.
[https://www.eastwindblog.co/](https://www.eastwindblog.co/)

I'm interested to hear what other people think though. I think that the fact
that we have so much of the space in cities set aside for office space is a
little ludicrous.

~~~
newman8r
I'd probably go the opposite direction of East Wind: not require people to buy
into a philosophy or make any community commitments. My biggest goal would be
to use group buying power to buy good land and put in a sizeable well, some
very minimal facilities (shower/ restrooms/septic), etc. Maybe a few RV pads.

I've actually got some land in the desert and spent some time working out of a
camper. If anyone's ever interested in chatting about future plans, I'm always
down to collaborate. Kind of a long term thing that's always on my mind.

~~~
jaggederest
I mean that already exists, it's basically just an RV park, right? Without the
philosophical bent and off-grid aspects, you can already find those things. I
spent a big chunk of my childhood bumming around the country on vacation in an
RV, and I think that's ultimately the source of my wanderlust, but it doesn't
really build a community for the longer term.

~~~
newman8r
There are similarities. It would be more spread out and have far fewer
residents than an RV park. People could build what they want (tiny homes,
earthbag houses, etc). It would also be more of a co-op compared to a
commercial RV park. RV parks cost millions to build, this would be more than
an order of magnitude cheaper.

I've spent time in RV parks too, I like them. Even the crappiest ones are
~$450/mo in California though.

I bought my 5 acres for a few thousand dollars. If you're able to pull it off,
you can live insanely cheap. It's more about hacking cost-of-living than
creating a cohesive community. My biggest issue with living in the desert was
going it alone - if I had a group of 10 people who had a vested interest in
the project, it would have been more enjoyable.

These are all just random thoughts though - maybe at some point I'll look into
it more seriously.

~~~
jaggederest
I'm chuckling because you're right on the same path I was, though I never
bought any land.

I think you're dead on when you say "a group of 10 people", and that's where
you have to get into building community dynamics, even for a group of hermits
:)

~~~
newman8r
you're probably right about that being a number where things start getting
more complicated. Starting with 5 people might make even more sense, and add
members later to raise additional funds.

------
jorblumesea
At least from the talent side, everything I see seems to say the opposite. I
see startups in Philly and other cities struggle to retain any kind of
talented employee, losing engineers to the west coast companies and business
side to everywhere else. We even had a senior marketing employer leave for a
brewery because apparently even a local brewery is more competitive compared
to VC funding.

I like the contrarian attitude and I believe it's somewhat true, but hard to
reconcile what I see on the ground.

The VCs love the cheap talent narrative but it rings hollow.

------
rb808
Its interesting that he mentions short job tenures. I always thought it was
weird how common job hopping is in the Bay Area, I thought job-hopping
employees was perhaps a good thing rather than a problem. It does mean its
easier to build a team.

------
diogenescynic
I don’t even see how it’s a realistic place to start out as a new college grad
anymore either. If you don’t have a friend in a rent-controlled multi-bedroom
house who can let you move into an open room, you’re unlikely to find rent for
a decent price. A crappy house costs about a million here. If you have that
kind of money, why not just buy something in cash somewhere else or just move
to another city like Seattle or Denver or Austin where you can make 80% of the
income for a fraction of the cost of living and taxes? I don’t think the
differential income really makes up for the cost of living, taxes, or quality
of life.

We absolutely have to be approaching or beyond the breaking point where it
stops making sense for a lot of new college grads to want to move here. I have
a friend who just started at Google but lives 3+ hours away... that’s crazy.
Once workers stop wanting to live in the Bay Area, tech companies will have to
shift hiring (even more) than they already have. I know at the company I work
for they have been pushing more new hires to Austin.

------
xemdetia
I wish he shared more reasoning in why he decided in 2017 being the pivotal
year. I mostly agree with 2017 being a bad year for the bay area startup as
that was the period where a lot of the top startups like airbnb, uber, and
theranos were getting significant negative outlooks, and probably some others
that I have forgotten about.

~~~
temp1928384
I think it basically became the year when the "norm" for talent in SF Bay Area
was 1) work at a FAANG or 2) work at a late stage private co (like Uber).

Working at an early stage startup was already risky, but the opportunity cost
sort of peaked around then and remains high.

Unless the opportunity cost noticeably drops (i.e. a massive recession that
causes a 50%+ drop in public stock market) I think smaller startups will
thrive in places like NYC more so than SF.

~~~
ummonk
Larger companies have an inherent sales and marketing advantage due to brand
size. If 20 engineers at a small startup develop a product and 20 engineers at
some big co develop a similar product the latter will generally outsell the
former. The big can consequently also pay its engineers more since it is able
to make more money from the fruits of their labor.

------
halbritt
This conversation seems to take place toward the end of every "wave of
innovation" I've seen in the bay area and I'm sure it took place long before I
got here in '97\. There's nothing to suggest to me that things are any
different this time around. I'll be looking forward to the next one.

------
sova
Here's a crazy idea: go where your customers are.

------
strict9
Though the point it more about funding and founders, seems like a salient
point for developers too.

You can learn a lot, really fast, and with very long odds maybe get a nice
reward in the Bay Area.

Or you can choose a slightly more boring path with a startup almost anywhere
else with a normal 9-5 schedule, pretty good pay, and a low cost of living.

Quality of life is likely better in most other cities as well, the only
downside being concentrated tech talent in Bay Area.

Unless you're working at one of the mega companies, how much of a benefit is
it really for developers to live there?

~~~
welder
Already answered here:
[https://news.ycombinator.com/item?id=19231986](https://news.ycombinator.com/item?id=19231986)

------
alexnewman
Actually it’s simple. the people who come to san francisco now vs when i came
here is totally different. i’m happy to have all these pretty people but their
ability to network into opportunities is the major reason why none of those
opportunities fail.

------
ykevinator
He's a little late.

------
Qub3d
Thread link for better readability:
[https://threader.app/thread/1096822724217827328](https://threader.app/thread/1096822724217827328)

------
axaxs
I see that myself. And I mean this as absolutely no offense to anyone in the
area. I've met incredibly intelligent people there, among the best. Though, I
believe the very best are distributed throughout the world, and command the
ability not to move.

All that said, first, well, the silicon part is all but gone. I find the
signal to noise ratio pretty low. For every 10x developer, there are 50 people
who did a bootcamp and/or moved for the easy jobs. Salaries are high because
the cost of living is on the breaking point. People complain about the area
because of high taxes, high cost of living, and of course the homeless
epidemic. And to top it off, everyone who can seems to leave the area when
they get the chance.

Again, I mean no offense, I think it's a nice area on the whole. But if I were
in need of a lot of good engineers today, I'd first offer remote only. If I
needed collaboration or a lot of people in one area, I'd look to New York or
Northern Virginia before the bay area.

~~~
rapsey
That is only one aspect and I think a minor one. What made silicon valley is
access to capital, proximity to stanford and a feedback loop of successful
entrepreneurs using their experience to create the next generation of
successful entrepreneurs

~~~
JauntTrooper
I wonder why Boston hasn't risen further, with Harvard and MIT both at their
doorstep along with a lot of other really great universities and good
companies.

~~~
jjav
MA allows non-compete restrictions on employees which severely stifles the
startup economy.

Silicon Valley is what it is largely in thanks to the continuous cross-
pollination of talent which is possible due to the lack of non-compete issues.

~~~
XenophileJKO
Just saw you said the same thing I did. I think people under attribute just
how much oppressive non-competes destroy the market.

------
jppope
I wonder if Y/C will relocate? Y/C HQ2?

~~~
wycs
Ideally a state without zoning laws or noncompetes. I can’t think of one.

~~~
tehlike
austin looks like a good candidate to me. not sure about noncompetes, though.

~~~
burlesona
Austin rent has gone through the roof, and they’ve got a strong nimby and
zoning problem just like SF so it’s just going to get worse. It’s on the exact
same track, just ten or so years behind.

~~~
onlyrealcuzzo
Austin doesn't have Prop 13, and Texas imposes reasonable property taxes.
Unless those things change, it's HIGHLY unlikely real estate in Austin will
approach The Bay area in terms of prices.

~~~
tehlike
It wont. you can also appeal assesments.

------
solarkraft
So that I don't only spread negativity I'd like to noten that I find this
submission's title very fittingly chosen.

------
CedarMills
I think it’s a great place to raise money and make connections but for my
startup, I’m not going to be expanding it in SF.

------
st3fan
It never was. It is an outdated idea that innovation can only happen in a
specific place.

~~~
eloff
There's a lot more to it than that. Innovation can happen anywhere. But the
combination of human and financial capital, there is probably no where better.

If you start a company outside the Bay area, you're at a disadvantage there.
You'd better find enough other advantages and leverage them to get on a level
with that. If your company needs venture funding, you'd probably be crazy to
start it anywhere else still. Most don't.

------
ricokatayama
where then? Austin? Seattle? NY?

Since a healthy startup environment needs resources, money, networking and so
on, what would be another good place to raise your business?

~~~
moorhosj
Chicago, Atlanta, Denver, Boston.

------
eanzenberg
Evidence?

------
ancorevard
Peter Thiel.

------
cbHXBY1D
Sam just realizing this in 2019 is a testament to how insulated the
millionaire VC class is from the everyday struggles of the of the middle and
lower classes.

This is something everyone in my circles have been talking about for 5+ years,
it's not a particularly novel take in 2019.

~~~
neonate
He's talking specifically about startups.

~~~
cbHXBY1D
His whole point is that the individuals that make up a startup don't want to
live in the Bay Area anymore because of cost of living and other factors.

------
minikites
I just spent the week in San Jose and I marveled at the ocean of vacant office
space. I find it hard to believe that Sam is only now coming to this
conclusion.

~~~
QML
That’s weird: what disincentives offset the cheaper cost of commercial space?

~~~
minikites
Is it cheaper? Do landowners have any incentive to lower rent prices?

