
Why startups are leaving Silicon Valley - nopinsight
https://www.economist.com/leaders/2018/08/30/why-startups-are-leaving-silicon-valley
======
salimmadjd
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.

~~~
dionidium
For all I know, Belarus is an amazing place to live, but there are real
economic factors. The GDP of Belarus is ~$47 billion ($4,989 per capita).
That's about the same total economic output as Albuquerque, NM or Knoxville,
TN (each of which achieve their numbers with about 10 times fewer people than
Belarus (meaning, of course, that the per capita GDP in those cities is also
about 10x)).

Americans wildly underestimate the economic power of the United States. There
are dozens of "small" U.S. metros that match the productivity of Belarus.

And those are the small metros. There are dozens more totally ignored "flyover
dumps" \-- think Cleveland, St. Louis, Kansas City, Columbus, etc -- with GDPs
3 or 4 or 5 times that of Belarus.

And only then do you get to an "irrelevant, dying" place like Detroit, whose
GDP is ~$280 billion (about 6x that of Belarus).

Most of these comparisons shouldn't ever leave the gate.

~~~
scottlocklin
I hate comparisons like this; purchasing power parity GDP is much different
and much more useful for comparisons than raw GDP. "National purchasing power
parity income" is the old timey comparison that actually measures what you
want to measure. Otherwise you're mostly just comparing how cheap the rent is
in Belarus.

~~~
dionidium
I agree with you. I grabbed a crude, available measure. But my argument stands
by most ways of measuring (and the one I chose, while crude, doesn’t tell us
_nothing_ , despite what some of the commenters here suggest).

It's more difficult to find PPP data for cities than it is states, but here's
the latter:

[https://en.wikipedia.org/wiki/Comparison_between_U.S._states...](https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_\(PPP\))

And for Belarus:

[https://tradingeconomics.com/belarus/gdp-per-capita-
ppp](https://tradingeconomics.com/belarus/gdp-per-capita-ppp)

You're right to notice that it's a better measure, but it still favors the
spirit of my argument.

------
liftbigweights
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.

~~~
tim333
Reminds me of "Nobody goes there anymore. It’s too crowded."

> 46% of respondents say they plan to leave the Bay Area in the next few years

But they are not leaving empty houses - they are selling them for millions as
the world's would be movers and shakers move in.

~~~
wgerard
> But they are not leaving empty houses - they are selling them for millions
> as the world's would be movers and shakers move in.

Er, not necessarily:

> Last year more Americans left the county of San Francisco than arrived.

Now, granted, that could be a very specific piece of datum and either of the
following could still be true:

1) When you include more than just "Americans" the net influx is still
positive

2) Even if they're moving out of SF county, maybe they're just moving to, say,
Alameda county

But nonetheless that is an interesting tidbit.

------
downandout
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.

~~~
dhnsmakala
Salaries high in SV. Talent goes to SV for high salary. Companies go to SV to
seek talent.

~~~
downandout
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.

------
circles_for-day
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

~~~
JumpCrisscross
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
Interesting. Can u elaborate further? What will be end result??

~~~
bitexploder
Probably a moderate recession. SV will still be the place for startups, but
it's costs have reached a rather high and probably unsustainable level.

------
wrecursion
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.

~~~
mbesto
> 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
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
Maybe they ARE the landlords!!?!?! :P

------
lafay
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
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.

------
api
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?

~~~
rahimnathwani
"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
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/sa...](https://www.rentcafe.com/average-rent-market-
trends/us/ca/san-francisco/)

~~~
rahimnathwani
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
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.

~~~
rahimnathwani
"Also, even with a >$200k salary, buying a decent home without a brutal
commute can be hard."

If you're a software your aim is to buy a decent home in $US_CITY at some
point, the easiest way to come up with large downpayment is to work in the Bay
Area for a few years. You don't have to live in the Bay Area forever.

~~~
awucs
You can do that. But to a large extent you are giving things up for that
money. Being close to your family, or cultivating friendships have value. So
does many other things. I get why people do it, especially since alternatives
hard to come by, but it is still a bit of a tragedy. Or at least not ideal.

------
wgerard
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
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
> 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
> 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.

~~~
wgerard
> 112 is less than a rounding error when there are well over a million people
> currently employed in some sort of software development position.

But there aren't over a million people employed in software development in the
bay area (where those jobs are located) - that number is closer to 60-90K [1].
Not to mention that those are 112 job postings, not positions. It's likely
that many of those roles have more than 1 headcount allocated (e.g. "Senior
Video Engineer").

Regardless, ultimately the question isn't "what % of software jobs are at
FAANG companies?" it's "For every 100 software developer hires in the bay
area, what % are at FAANG companies and is that % increasing over time?"

It may be true that the answer to the first question is "a minority", but it
can also be true that the answer to the second question is "yes, at an
appreciable rate".

> 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.

As a minor-but-concrete example: I've heard that Google is starting to de-
emphasize whiteboards and giving candidates Chromebooks to code on instead.

As a more gossip-y example: I've definitely heard that a few of the larger
tech companies, as they've started to acquire more and more, have allowed the
acquired teams to maintain control of their hiring process with some token
changes. The result I've heard is that the interview process with some of
these acquired teams is... less rigorous, and largely ignored by the parent
company (even if they say otherwise).

I'm hesitant to draw a trend from some anecdotes, but I can say for certain
that I interviewed for a position with one of those acquired companies a
couple years back and the interview process was much easier than I anticipated
(though I ultimately didn't take the position).

1: [https://www.quora.com/How-many-software-engineers-work-in-
Si...](https://www.quora.com/How-many-software-engineers-work-in-Silicon-
Valley-and-NYC)

~~~
robmaister
Google does give you the option of using a Chromebook with a really basic text
editor on it, but it's the same whiteboard problems they want you to solve.
There just isn't the friction of having to hand write code on a whiteboard.

From my experience, they only care that you can recall individual lectures
from a sophomore-level college class. More rigorous, yes, but I'm not sure
about harder. You can memorize CTCI and ace the interview, because that's the
only thing they do during the onsite.

------
rimher
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)

------
cletus
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
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.

~~~
xaranke
Right, but that's because Microsoft hasn't seen the kind of explosive growth
that Amazon has so it's easier to plan. Also they've been around a lot longer.

~~~
seanmcdirmid
Microsoft has seen explosive growth beyond amazon, its Redmond campus keeps
growing and is a small suburban city by now. But they did it (a) over a decade
or two and (b) without much other competition in the area.

~~~
xaranke
You seem to be contradicting yourself: how is growth over 2 decades
"explosive"?

~~~
seanmcdirmid
Really, even a town growing to that size over two decades would be considered
explosive. And it hasn’t stopped, at all.

The difference between 1998 and 2008 alone is incredible.

------
the_watcher
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.

------
blakesterz
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.

------
luddaite
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?

------
JumpCrisscross
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.

~~~
selimthegrim
What racial monoculture?

~~~
lucozade
I hope they aren't suggesting that it's all white.

It's not unusual, particularly when discussing race in the US, for people of
Indian, Chinese or Korean descent to, somehow, not count. I used to consider
it borderline racist. I've since removed the borderline bit.

~~~
selimthegrim
As a Pakistani-American, that’s what I was driving at, yes.

------
codingdave
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
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.

------
ur-whale
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
> _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
> among the highest in the world

but its not in the top 10

[https://www.economist.com/graphic-detail/2018/03/15/asian-
an...](https://www.economist.com/graphic-detail/2018/03/15/asian-and-european-
cities-compete-for-the-title-of-most-expensive-city)

~~~
hn_throwaway_99
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.

~~~
village-idiot
You really have to compare cost over the entire life cycle, the effect of
social services, financial regulations, tax rates, etc. will vastly differ
between the very young and the very old.

------
jandrewrogers
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.

------
mnm1
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.

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

------
vfc1
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.

------
commandlinefan
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
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
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?

------
sixdimensional
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.

------
rakman
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.

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dasil003
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.

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danhilltech
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.

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

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j45
Perhaps, as startups begin to solve average business problems in the current
startup landgrab, those businesses exist everywhere and such startups can
exist regionally.

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the_watcher
> 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?

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

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cardiffspaceman
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.

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dustingetz
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.

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

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jaequery
also dont forget that startups have started embracing remote development
culture

