> The SF Bay Area remains by far the largest share of all tech employees in the U.S., with 49% of all Big Tech engineers and 27% of startup engineers, data from SignalFire’s Beacon platform shows.
Not mentioned: with 10% of total US software engineers.
When discussing startups maybe that's not relevant, but the article says "tech employees", not "big tech and startup employees". A lot of people forget that most companies who employee tech workers are neither big tech nor startups, which in turn means that most tech employees are at neither. This is likely increasingly true with the end of free money.
Tech in this context means the tech sector of the economy. Yes there are software engineers working at a bank or government office, but they aren't tech [company] employees, hence not counted in this statistic.
I don’t even understand what the term "tech sector" really means. It seems to be exclusively companies that sell or provide a software (platform) as their main product, plus chip/electronics manufacturers, but excludes defense contractors, aerospace (minus spacex maybe), automotive (minus Tesla maybe), biotech/pharma, and finance (aside from "fintech" startups).
So, if I'm understanding what you're saying: The article is referring to a sector of the economy that is essentially undefinable and using statistics they somehow derived about that undefinable sector to argue that San Francisco is the center of said undefinable sector.
Do I have that right?
(If so, this is not reassuring me that their cited statistics are in any way meaningful.)
You can use any definition you want and argue semantics all day long. The conclusion is still going to be that Silicon Valley is the center of the global tech industry and where most talent is concentrated and where most new innovation is happening.
If you create special definitions for "global tech industry" and "talent" and "innovation" specifically in order to arrive at that result, absolutely!
Meanwhile, those of us in the 90% of US developers and 99% of worldwide developers will keep on innovating and building new stuff regardless of the semantic games you want to play to keep your Bay-centric worldview.
It’s just ties back to silicon valley. Does the sector inherently require a processor/transistor?
Cars no
Aircraft no
Pills no
Banks no
Self-driving car yes
Software yes
Fintech yes
Tablet yes
Sure modern cars use lots of processors, but the Model T didn’t. It may seem a little vague around where the line between industries is, but at the extreme things line up quite well.
I work at a company whose only product is software, but it's about twenty years old and has a few hundred employees. It's a tech company that isn't a startup and isn't "big tech".
Obviously, they the article misrepresents the proportions of tech employees, and thus them, and fails to mention that 80%+ of the tech economy is outside of SF.
I think a lot of these types of articles make the mistake of overemphasizing the particular over the general.
Here's a general way of putting it:
Today, yes even in 2024, areas with concentrations of talent in [insert field] outperform those without those talent concentrations, despite higher costs.
If you disagree, it's best to disagree with this thesis. If you don't disagree with the thesis, then it just becomes a matter of establishing 'does this area really have a concentration'.
Example: media, NYC.
Another example: AI startups, SF.
I'll also mention that SF isn't fully standalone here. It's strength is largely due to the strength of the Bay Area as a whole and the companies with HQs there (Google, Meta, Apple, etc).
Tech companies are already working slightly to solve this, but the high cost of living will be a huge drag on future agglomerative effects.
Tech must stop accepting the NIMBY environment which has existed in California for 40-50 years and shift it to a YIMBY environment for housing, if the cost of living is ever going to get under control.
Ironically, the local NIMBYs have been blaming tech for the mismatch between cost of living and wages (for those outside of the tech sector), but one only need look south to LA to see a place with even greater cost-of-living vs. wage mismatch.
The days of working out of a garage to get a startup going are disappearing, because so few own garages, and so many garages are already converted to decrepit living spaces.
Biotech is particularly at risk in the SF Bay area, due to generally lower salaries than tech, and longer riskier payoffs from startups.
If Harris wins, I hope to see sweeping changes, as the NIMBY democrats in the area hopefully lose both influence locally, and are subject to some national policies to improve the housing situation.
1) For the first time ever, national level Democratic politicians are speaking publicly about housing supply and adopting YIMBY language
2) Harris adopting YIMBY policies will have great influence over both the faux-progressive SF faction and the centrist-to-right-wing Peninsula NIMBY democrats. Their choice will be to defy a hugely popular national politician that originated in the Bay Area, or break from the Democratic infrastructure and lose influence.
3) The Biden administration has, in the past two months, really switched focus to hyping up YIMBY policies, with several announced policy changes on their blog. I believe this is the administration finally realizing that housing costs are the last big segment of inflation that has not been tamped down. With Harris' & Obama's & Walz's much more strident YIMBYism than Biden, I think this will increase, with lots more national level policy pushing local zoning decisions and code decisions towards more housing.
4) If Harris does lose, local politicians can blame her YIMBY policies in contrast to Trump's strident NIMBYism and anti-apartment politics. Generally, the voting populace in local elections is majority YIMBY, and the small number of hyper-motivated folks that organize and decide local elections are NIMBY, and the NIMBY faction will be paying attention to this loss.
Overall, YIMBYism has crossed the party lines up until now. In highly Republican areas, like San Diego or Utah, Republican elected officials embrace YIMBYism. In Democratic strongholds, Democtratic elected officials embrace YIMBYism. There's a problem that with the Harris/Trump political split on YIMBY/NIMBY, this divide might get pushed towards the local level. In which case, blue cities will tend towards more YIMBYism, and redder cities (like San Diego) may go more NIMBY. Up until now, within California, I'd say that San Diego and Oakland have been the most YIMBY, with Berkeley starting to catch up. We will see what happens after the November election!
> areas with concentrations of talent in [insert field] outperform
Outperform in terms of company performance? Company performance per person?
I'd be curious to hear from someone on the hiring side, how hard is it to get someone talented to move out from the SF Bay Area assuming you match compensation?
To run a,startup, you need to run into co-founders, early employees with startup experience or with a right mindset and risk appetite, and into potential investors.
This all works better with face-to-face meetings, weak personal connections that allow to reach the right-looking person you won't otherwise discover, and even serendipitous meetings in environments that tend to attract birds of a feather.
SF, with all its bitter and needless shortcomings as a municipality, is still an excellent place to meet the right people for a startup. Even with the extreme ease of video calling these days, physical proximity has a certain edge.
Yep. It's really, really hard to meet other technical and entrepreneurial people virtually. The density in SV is a billion times more than tiny nowhere towns. What sucks about it is few people can afford to live there unless they work for MAANG or have $uccessfully exited one or more ventures.
Basically – the advantages of the Silicon Valley ecosystem that companies have enjoyed over the last 50+ years continue to be advantages. Covid didn't change the landscape as much as people think.
It's also worth pointing out that the literal landscape in the SFBAY remains quite amazing, and lots of people do indeed live here because of it. Nearly flawless weather and easy access to nature is not something that's taken for granted.
I'd continue to live here even if I didn't work in tech.
Everything else being the same, it used to be the case that someone based on or close to SF would have an advantage – more so if your product is geared towards developers. SF and the Bay Area in general used to set worldwide trends, and I think that's still the case.
However, after COVID we aren't back to the same level of conferences and other forms of gatherings that used to exist. I don't know if it still makes sense in the short term.
The article says run a startup in San Francisco, yet it uses stats for the entire bay area. In one example, a founder says, “So I’m back full time-ish to the SF Bay Area. As, often quietly, are so many leaders and execs I’ve known for years.”
So are they actually moving to SF city, or just some place in the bay area?
As someone who lives in the deep south bay, communing to SF is out of the question as it would take an hour+ to do one-way. I also just don't like SF in general.
> So are they actually moving to SF city, or just some place in the bay area?
Your question is completely valid and misses what the bay is.
It's not SF or San Jose, or Oakland or the North or East bay... its all of it.
Depending on your politics you will hear SF is either gritty or beautiful. The reality is that is has always been both... Zodiac Killer, Patty Hearst, Jim Jones... LSD culture... The founding of the valley (hardware) and software (BSD, Ingress(all the work of stone breaker), Burning man, The first dot com Bubble... the resurgence of tech while the mortgage market burned.
Move to the bay, move around the bay, at some point you will find a place to call home, and people to be your "tribe".
It's too bad SF is a terrible place to live, especially with kids. RTO can be a useful crutch for companies with little vision or product leadership, but is certainly being pushed beyond its utility by those with a vested interest in Bay Area and/or commercial real estate.
The first two examples are founders who moved from Europe to San Francisco. Given the entrepreneurial ecosystem in most mid-to-large U.S. cities and more favorable ways of working, I would imagine that you could get a win by moving to any U.S. geography with >1M people versus being a software entrepreneur in a EU regulatory environment. San Francisco is one of the examples... but Chicago probably is, too.
And if you're a founder, there are all sorts of things you need for your business beyond software engineers. You need access to capital, and most VCs are based in the Bay Area and would prefer you be there too. You need access to talented advisors, and later on, experienced hires. Those are also often in SF. It's not impossible to do elsewhere, just more challenging.
Neither of those examples make the case that it's better to hire your engineering team in SF, or that your rank-and-file employees should be there. Yet the article jumps to imply that's the case.
I recently started a new company focused on personal (non-cloud) AI computing. I’m located in Denmark, living standards are perfect and all that, but I miss the vibe of building around similar minded people - the “dynamism” to paraphrase a16z. Is it worth moving to SF for, I wonder?
Someone (Y-Combinator?) should rent some of SF's spare office/living space (expensify?) and host far-flung company tech teams for 2-week work vacations where they collaborate with local companies.
This would work particularly well for collaboration between customer-facing AI companies and infrastructure AI companies, or for coordinating infrastructure bits.
A step below could be having an organized way to set up meeting points, - like designated cafes, lobbies, and co-working spaces where there's a good chance of meeting likeminded people, investors and others interested in expanding their network overseas.
My plan right now, is to travel to the west coast in October, but I don't really want to fill up my time with 1-2-1 meetings, as it is serendipity and broad "exposure" I'm longing for.
Applying for YC is obviously a way to get that, but three months away from my kids is holding that back.
“Running a startup” means trying to mingle with potential clients and investors in official and unofficial settings. It’s hard to visit an after-party over Zoom. So that makes sense. As a worker though that’s a totally different story.
I can see the appeal of working for SF startups while living like a college student for a few years in your early 20s, or making a career out of doing it remotely. I don't get how the in-person startup talent pool has any staying power. A 3/2 in a decent school district with a commute under an hour would be an insane splurge even for someone with liquid Big Tech TC.
It's really all about the money. The only ones who can compete at those obscene amounts of money are saudis or sth. If they decided to build a liberal utopia for people who want to be rich, they would have end up with the best universities and the best tech talent. But nobody wants to be rich just to be stuck in a repressive hellhole.
it's not liberal enough, it doesn't have that much money, and the justice system can't be trusted. Maybe singapore with trillions of money would be a better candidate
The key point is not the share of overall tech workers, or emerging talent, or capitalists, but finding those who are willing and able to sort through the uncertainties of new technologies and markets to realize their promise.
Since time to market (i.e., time to engagement with the real problems) is the key factor in success in these businesses, introducing delays by spending more time seeking collaborators can be a strategic mistake.
To me, the real problem is that deciders make the converse mistake: of quickly choosing those they know over those they have to learn about. It's less work and less emotionally risky, but it's a trap that leads you to defer issues about how you're trying to build teams until you have conflicts - particularly if people avoid conflict. Starting when you don't really know each other makes it easier to scale past the point where everyone really doesn't know each other.
the 'data' used is pretty suspicious in this article
obviously, international founders moving to america will have a better time raising money
and if you're selling B2B SaaS and 90% of your customers are physically headquartered in SF, you're handicapping yourself living elsewhere.. at some level people will just ignore your sales motion if they don't see a san francisco headquarters on the website
i've lived in both SF and NYC and worked on my own startup in both
NYC has a pretty vibrant startup ecosystem but doesn't compare with SF, except for some reason there's way more healthcare founders in NYC (prob bc bay area healthcare scene is dominated by large hospital systems that are impossible to sell to)
but SF is such a disgusting city overrun with homeless people and crime
NYC isn't exactly the prettiest either but pick your poison i guess
i personally prefer south bay over SF
hope SF gets its act together since I don't feel safe living there
Resourcely is 100% remote and we're crushing it. We have more access to tech talent than companies that only hire in the Bay Area. This is a puff piece designed to get outrage clicks and nothing more.
I'm very pro remote work as an employee but as someone starting a company here is something I think about:
By making RTO required for my startup, am I introducing a filter that will filter out many employees I wouldn't want anyway?
There are real benefits to working side by side in office, just like for the business and employee there are real benefits to remote work. Hiring is so difficult already, having a filter that will get rid of the applicants not willing to put 100% into the startup seems like a good trade.
Ok, with that said, now is the time I am destroyed by the work life balance mob.
Pay me enough to live, and save, give me a giant cut (not the meager equity of the last 25 years) and a place to show up to 3-4 days a week.
The whole point of a startup, of putting in that work is that you're making a bet. A bet on the idea, and the team, the team is making that bet too. The table stakes for startups have changed, and you're going to need a much more egalitarian distribution for your first 10-50 hires now if you want to attract talent.
I love working from home :)
But if I was doing the “give 100% to a startup” thing - as an employee or a founder - there’s no way I could stomach being 100% remote. No remote tools can replace having people in the same room working through a problem.
I've actually found the opposite to be true. My business has been 100% remote for most of its 10 years, buy I had an office in Sacramento and now I opened one in the SOMA neighborhood of SF.
I must say, I still work a hybrid schedule, much from home (I live in the neighborhood too). I also must day that opening a physical location in SF has been one of the best investments I have ever made in my business.
I now have people, target customers I used yo have to work hard to find and get time with, introducing themselves to ne coming by to day hello daily. Same thing with startups and VCs, there are a dozen or more VCs in walking distance to my office.
It's like being a diamond cutter in the diamond district.
I also want to note that opening an office somewhere does not necessarily tie to remote work or not. I work remotely often and it's a huge part of my quality of life, I also have an office in SF. I don't see either changing, and they are not tied.
> It's like being a diamond cutter in the diamond district.
This is a good analogy. The old wisdom is that it's better go to go a restaurant surrounded by other restaurants than one that is off by itself; perhaps an implicit acknowledgment of the effects of competition and talent-pooling.
How much this still applies in today's remote-everything world, that is an interesting question indeed.
Despite the popularity and economy of remote work, having an office, even a small one, in an appropriate business district, is still a signal that "this isn't just my hobby."
I design hardware, so there will always be a physical component to what I do. Rather than be a should I buy two birds or one type thing, it's really more of a two birds one stone situation.
I've been thinking of it like more of a music studio.
I have a bunch of equipment, all setup and ready to use, and then when I, or a group (clients) need to get our work done we show up and do it, when we can do our work elsewhere we do. The point is the studio is here when we need it.
In addition to 3d printers, CNC machines, CAD computers and similar engineering stuff I also have it setup with fancy cameras, video switchers and microphones so it's like a livestream studio. That allows me to give fancy looking "webinar" type zoom calls and client videos so that people can feel like they're working right in the studio with me.
I had been calling it my "Design Lab", maybe I need to change it to "Design Studio"?
Gladly. I do most marketing that most other businesses do:
- Google Maps/Yelp - set it up and look professional
- Hired folks to send out targeted advertising postcards to potential clients in the area
- Linkedin, etc. marketing (there are folks that can help you with this)
- Organic marketing, I 3d print trinkets, bought stickers, etc. and hand them out, etc.
- Being here when people email/call
- Applicable trade shows (I go to medical device conferences in the spaces I work in, investor conferences I went to OpenSauce, it was great!)
I run a hardware design firm, I design hardware (mostly medical devices). So there is always going to need to be a physical component to my business due to the fact we make physical objects.
It's not about resource location, it is about attracting talent.
India is seeing a similar trend in many founders moving their startups to Bangalore despite higher costs and (often) lower quality of life than their starting cities, just because it has the largest talent pool of developers.
Not mentioned: with 10% of total US software engineers.
When discussing startups maybe that's not relevant, but the article says "tech employees", not "big tech and startup employees". A lot of people forget that most companies who employee tech workers are neither big tech nor startups, which in turn means that most tech employees are at neither. This is likely increasingly true with the end of free money.