Why Are Startups Flocking To SF? There’s No More Room In Silicon Valley

http://techcrunch.com/2012/06/23/title-why-are-startups-flocking-to-sf-theres-no-more-room-in-silicon-valleys-inn/

by flavio87 • 14 years ago

39 69 14 years ago

techcrunch.com

stephengillie• 14 years ago

Think outside the valley.

maybird• 14 years ago

East bay? Santa Cruz? Marin?

Apocryphon2• 14 years ago

Santa Cruz would be amazing, but SR 17 would make a daunting commute.

joshu2• 14 years ago

Please. It's just a shitty article. There's tons of space around.

greglindahl• 14 years ago

Two words: Redwood Shores.

SiVal• 14 years ago

Please don't tell anyone about Redwood Shores until I get my office space!

cjensen4• 14 years ago

What nonsense. East Menlo Park near Facebook has vacancy, and it's just a ten minute drive away from Palo Alto. Or drive across the bridge an extra 10 minutes from there and there is infinite room in Fremont and Newark.

A minor inconvenience could lead to a lot less burn rate spent on rent.

joshu2• 14 years ago

Palo Alto != Silicon Valley. There's a TON of space out here. Millions of unleased square footage north of 101. Bah.

Also, Palo Alto sucks.

dsl• 14 years ago

Silicon Valley is: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale

http://en.wikipedia.org/wiki/Silicon_Valley

kapitalx• 14 years ago

It is extremely difficult to hire talent that is willing to move or commute to Fremont/Newark.

cjensen4• 14 years ago

Quite true; people on the Peninsula side really hate the idea of commuting across a bridge. It's purely emotional though as the Facebook to West Fremont commute really is just 10 minutes of easy, scenic driving.

joshAg5• 14 years ago

My coworker commutes from fremont to sunnyvale. It is quite a bit longer than you make it seem, especially when there is any sort of accident.

cjensen4• 14 years ago

True, but that is because 101 is jammed from Palo Alto to Sunnyvale. I commute across the Dumbarton every day, and it's just not a problem.

Also, I was talking about renting in Fremont, which means you would be commuting on the Dumbarton in the anti-commute direction.

pbreit• 14 years ago

I'm surprised Palantir wouldn't consolidate somewhere. I know Peter has discussed how communication breaks down even just being on different floors.

I also find the article unconvincing that companies are moving to San Francisco because they can't find real estate elsewhere. There are a lot of desirable ares in the peninsula other than downtown palo alto. And the fact is, San francisco is a very good place to locate right now.

dannyr• 14 years ago

What about Facebook's former office in Palo Alto (near Page Mill)? That should still be open.

cluda01• 14 years ago

My company (not a startup but a software company) is moving from Sunnyvale near Moffett field to Palo Alto on Page Mill road. We are doing this because google is eating up all the real-estate in mountain view and sunnyvale.

We used to be located near google right on Crittenden near LinkedIn but had to move because google came into the market and theres no way we could match their bids. Now we have to move again because again google is coming into the market.

But still, we're looking at probably leasing the old facebook office space (speculation as my company hasnt formally disclosed anything other than that we're moving to palo alto)

pg• 14 years ago

Every startup I know of that moved to SF did it because they thought it would be easier to recruit hackers there.

baddox• 14 years ago

And hackers move there for better hiring opportunities.

raldi2• 14 years ago

The SF hackers I know moved there for lifestyle and quality of life.

akavi• 14 years ago

And there succinctly described lies the economics of agglomeration.

dredmorbius3• 14 years ago

Quality of life has a lot more to do with it.

There are gigs on the Penninsula. Might as well be living in LA though. You drive to everything. Traffic is nuts. Biking puts your life and sanity at constant risk. Few areas have any charm to them, and none of those are remotely affordable. San Jose / Santa Clara proper are, apologies, pits.

San Francisco is walkable, has street life, functioning transit (well, for low values of "functioning"), is not strictly a tech ghetto in the way the Penninsula / South Bay are, and beats the heat in the summer (temps ~15-27C rather than 27 - 41C). You can walk to bars, clubs, museums, talks, art shows, or a gym after work, or reach it quickly on transit. When Muni breaks down, you can reasonably walk home.

Yes, housing cost per square foot is higher than elsewhere. That's what density means.

pc• 14 years ago

That's a lot of it. But even if we'd wanted to stay, the real estate situation would have made it pretty hard.

tonyjwang• 14 years ago

Hackers also like living and working near other hackers in a hacker-supportive community.

Also, if you're a Berkeley or Stanford grad, you probably prefer living in an exciting city like San Francisco instead of staying in suburbia. And even if you personally don't, your friends will, which means SF is still the place to be.

bound008• 14 years ago

The same companies that overpay for real estate over pay for talent which has ruined the rental market for residential housing in these areas. Many who want to stay in this area as residents face the same problems of low vacancy and high rates which in my opinion has led a lot of talent not employed by these companies to SF. Not "quality of life" but more a "quality of life" per dollar.

brianbreslin2• 14 years ago

What's the scene like in Santa Cruz?

necubi2• 14 years ago

It's pretty quiet. There were several large tech companies that set up here in the 90s but most left after the bubble imploded. There is, however, a surprisingly vibrant indie gaming scene, and a few start-ups here and there.

I've long found this situation surprising, because there are quite a lot of engineers here, many of whom would likely take a pay-cut not to have to commute over 17 every day.

redwood2• 14 years ago

Seagate's still in Scott's Valley right?

brianbreslin2• 14 years ago

I figured with ucsc you could recruit decent talent and save money while having warmer weather than 20 miles north in sf. Always surprised me to never hear much about the area from tech perspective (I'm in Miami)

wickedchicken3• 14 years ago

There's also the lack of soul-crushing suburban sprawl of the south bay, and the fact that you can legitimately live without a car.

Still no late-night coffee (with wifi!) but that has a higher chance of springing up in the city than in Santa Clara.

Apocryphon2• 14 years ago

There's some 24-hour food joints in SF, but no all-night cafes?

wickedchicken3• 14 years ago

Sparky's is open 24hrs but doesn't have wifi (I believe intentionally).

I'm a little spoiled having lived in NYC directly across the street from a 24/7 Dunkin' Donuts.

HalibetLector• 14 years ago

There's a happy donuts at 3rd and King st, near the ballpark. It's open 24/7 and serves coffee.

tesseract• 14 years ago

Happy Donuts (multiple locations on the Peninsula) has (mediocre) coffee 24 hours. It's not Philz but it's a place to go. There's also Heidi's Pies in San Mateo but that's a 30 minute plus drive from the south bay.

Coming from the east (Michigan) I have been a bit disappointed by the dearth of 24 hour anything in the bay area. Particularly things like grocery stores and Target. This is complete speculation but I wonder if it has to do with the fact that a lot of places in the northeast (NYC included) have a history of round the clock shift work in manufacturing.

hkarthik• 14 years ago

Housing sucks in the valley too. Too expensive and car driven to appeal to the young hackers.

Singles enjoy the city life and those with families get more value in the East Bay with SF just being a BART ride away.

bcantrill• 14 years ago

Yes, exactly. My career started in Silicon Valley (Sun's Menlo Park campus -- now Facebook), but when we went to start a startup within Sun (Fishworks), we demanded that Sun lease space in the City for it. This had nothing to do with vacancy rates, and everything to do with the fact that all of us lived in the City and -- despite our love for CalTrain -- we wanted to be done with the Peninsula commute. (That we wanted space in the City was a huge emotional sticking point with Sun's executive management; Scott was exasperated that we refused to work in his million square feet of vacant office space in Santa Clara.)

A couple of kids later, I live in the East Bay and with casual carpool to the City, the commute's a breeze; at this point, I would only consider a job on the Peninsula (or, God forbid, the South Bay) if there were no alternative in the City. And to be honest, if I were looking for space now, I might give Oakland a serious look: with the expansion of Silicon Valley into San Francisco, Oakland is no longer the remote outpost it was -- and rents are cheap cheap cheap...

BadassFractal3• 14 years ago

Recommendations for good areas in Oakland and also East Bay in general, with nice access to the city through BART?

allantyoung2• 14 years ago

I feel the same way about Oakland. It's a few minutes from a major university in Berkeley that cranks out research, technology, and talent. Bryan, if you're ever near the Oakland Tribune Tower, let me buy you coffee or beer.

carterschonwald• 14 years ago

Isn't it just a flat out better quality of life choice to live & work in a city? Traffic and a commute etc, and the lack of local food alternatives... that just sounds terrible!

(I like dense urban locals)

rdl3• 14 years ago

I like some big cities (Seattle, NY, Amsterdam, Berlin, Tokyo) , but hate SF. I love PA and MV.

gruseom• 14 years ago

Why do you hate SF?

haberman• 14 years ago

Totally agree. One of the things I love about Seattle is that I can live and work in the city. No 45-minute commute required.

BadassFractal3• 14 years ago

Seattle is definitely quite nice from that point of view. The whole Cap Hill / Lake Union area is dense with activity and places where to have it.

joshAg5• 14 years ago

rents are annoyingly high, even compared to the bay area, and it is very hard to find a room/apartment if you don't want to live by yourself and don't have a roommate(s) already (so you can just lease a 2br+ apartment instead of trying to find a sublease on a room).

lhnn4• 14 years ago

There are benefits to sprawl...

I do wish there were more shopping center/apartment complex combos, which would make for a nice place to live, play and drink without driving. OTOH, I like low rent, low taxes, fresh air, and small(er) government.

apaitch• 14 years ago

Are SF and Silicon Valley really that different? Isn't Palo Alto like a 30 minute drive from SF? I know of people who bike the distance as a daily commute. Sure, there are advantages and disadvantages to living in and outside the big city (SF), but "why SF and not Palo Alto" seems to me like a rather unimpressive and, perhaps, not terribly important question. Something like "Why Silicon Valley?" may spur a far more interesting discussion :)

mikeklaas• 14 years ago

By that logic, New Jersey and Manhattan aren't that different.

lhnn4• 14 years ago

Y'all talk about all these different cities as if the distance is that big a deal. Help me understand. In Texas, everything is 10-20 miles from everything else.

In other words, y'all phrase it as if these cities are very distinct and unique. All of Palo Alto, MV, Sunnyvale and Santa Clara can fit in the northern half of San Antonio.

SF vs. Silicon Valley is one thing.. but Palo Alto vs. Mountain view sounds like complaining about one side of the street vs. another.

jroll• 14 years ago

With the traffic out here, driving from Mountain View to SF takes anywhere from 45-90 minutes. The other reason is that socially, all of these communities are vastly different.

BadassFractal3• 14 years ago

Even driving from one side of the city to the other can get real interesting at times. I don't know what I'd do without the BART.

wickedchicken3• 14 years ago

> Palo Alto vs. Mountain view sounds like complaining about one side of the street vs. another.

Here is a fun word: 'microclimate.'

"Due to [SF]'s varied topography and influence from the prevailing summer marine layer, weather conditions can vary by as much as 9°F (5°C) from block to block." http://en.wikipedia.org/wiki/Microclimate

chao-• 14 years ago

I agree to an extent, in that people from the Bay Area are funny about distances (as are people in the Northeast). But at the same time, I have to add a data point against: I live in the Montrose neighborhood in Houston. If you live here, and people ask where you live, you say "I live in Houston." I grew up in a suburb called Sugar Land (so idyllic that it's creepy, incidentally. Not recommended). Yet while traveling, and asked where you lived, someone from Sugar Land would say "I live in Houston."

The cultures, mentalities and lifestyles separating the two places could not be more different, yet they all would say they live in Houston. Tiny geographic distances can translate into massive cultural distances. The difference with the Bay Area is that they take the little names of their sub-regions and stick to them. I guess because they assume that people will know who they are or care?

That's the best I can figure. Every once in a while I run into someone talking about sub-regions of SF as if I really, truly have committed every last one of them to memory: "So we moved our company out to a house in Milpitas."

joshAg5• 14 years ago

it's not the distance, it's the time it takes to get from A to B (during rush hour) and the distinct cultures.

The cities all have enough of a distinct vibrant culture that locals can differentiate between cities. In another world, these town might just have been different districts in a super city (there is literally no separation between cities; buildings and suburbia go right up to the town borders), but each of the cities used to be separated by miles of orchards and farmlands before the tech boom, so each town had a chance to develop a slightly unique culture (if you think of the finches Darwin discovered in the galapogos islands, it's bout the same).

Because the entire area is suburbia, this leads to interesting transit situations. Ignoring public transit for a minute, estimating time to go from A to B becomes less of a function of distance, and more a function of how close each endpoint is to an arterial route. Sometimes,

let me throw some numbers at you, to help explain the situation.

I work in sunnyvale near highway 101 and maude. I am in the process of moving from Campbell (union and campbell ave, if you want to google map it) to cupertino (homestead and de anza). This reduces my commute from about 14 miles down to about 6 miles.

Geographically, I'm going from driving through 5 separate towns (campbell->san jo->sc->cupertino->sunnyvale), to literally just driving across sunnyvale (ok, and a 1/4 mile into cupertino as my car drives not as the crow flies).

From the campbell apartment to work with no traffic takes about 20 minutes if you tend to drive at the speed of traffic instead of the posted limit. If I were to commute during rush hour, this would be closer to a half hour or 40 minutes (i've only done it like twice because it is so horrid). From my new apartment to work will take about 10 to 20 minutes without traffic (slower roads, more stop lights, &c.). So despite cutting my commute distance by a factor of roughly 3, I only reduced my time spent commuting by about 0-50%.

For reference, going from my campbell apartment to my company's sf hq (soma) will take about 80 minutes when commuting during rush hour on public transit (door to door via the caltrain from tamien to sf).

And we haven't even talked about the differences in weather, yet, which due to microclimates can be 10 to 20 degrees different in the space of a few miles.

lhnn4• 14 years ago

Interesting. In Texas, location matters in transit (arteries and such) in a similar manner, esp. in San Antonio. That's why I choose to live a mile from work, so my commute is 10 minutes on a really bad day.

But ya, Texan neighborhoods might have their own style and some unique places, but not a totally distinct culture.

BTW, I'm in San Francisco for the first time this week, and it's an amazing city.

tete• 14 years ago

I think there should be more major cities like SF.

The reason is that this will cause infrastructure to be built. While I am (still) living in Europe and have very good infrastructure as someone interested into technology I fear that such developments could cause infrastructure to mainly be built at certain cities making everyone else living in some kind of desert, which could cause places to be underdeveloped, which leads to inequality, which then leads to unused potential, which is generally a problem that people see way too seldom these days. If you have people that are poor and stuff this means you loose potential, which means you waste the chance of someone bringing everyone forward, which maybe causes the next Einstein (just to make a point) to become a criminal instead of solving problems and creating amazing technologies.

One could see it as evolution. If the first humans had have bad luck, because of being at a bad spot, where intelligence wouldn't have helped at all, there was a drought period or just a predator or a virus, maybe even a meteorite they could have just gone extinct and could have exterminated a race that now can be considered dominant.

You could also see this with genes, like the one that causes western people to be able to drink milk. If the first individuals had back luck we probably wouldn't have that option now.

So every time you prevent someone from having the right infrastructure, eduction, society, life and if it's just the money you potentially prevent someone from solving the biggest problems.

Yes, one can argue that someone smart could make his life everywhere, but people need to learn this first. No matter how smart you are, if you just don't know you can do it that way, because you have no examples and no parents that tell you to make something out of yourself and instead society just reinforces you to do something different or bad you won't become a scientist, even if you'd have the potential for a Nobel Prize, unless something causes you to find it out, have self-esteem, etc.

So, it's okay to build nice technology cities and invest money in certain areas and places, but it would not only be bad, but also dumb if this makes you forget about the rest.

redwood2• 14 years ago

SV is not full at all... even Palo Alto, out of downtown, has countless vacant office parks. They're not accessible to mass transit though, which makes them not accessible to San Francisco folks which I think is a big part of it and which makes Downtown Palo Alto more attractive.

stewie2• 14 years ago

I think Davis is a good place to run a startup. The only downside is that it's too hot in summer.

phamilton• 14 years ago

I'm married with a kid, live in Mountain View and work in Downtown Palo Alto. Aside from rents I love it. The only reason I'd want to work anywhere else would be to save money. SF has zero appeal.

Codhisattva• 14 years ago

Every time I hear about Palantir I expect Gandalf to way against looking into it.

Why Are Startups Flocking To SF? There’s No More Room In Silicon Valley

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