Does Your Startup Need To Be In San Francisco?
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- Опубликовано: 7 июн 2024
- Should you and your startup live in San Francisco? Y Combinator Partners, Michael Seibel and Dalton Caldwell, debate their different opinions on whether startups are more likely to succeed in the Golden City or elsewhere. Where do they find common ground? Watch to find out.
Apply to Y Combinator: yc.link/DandM-apply
Work at a Startup: yc.link/DandM-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Intro
00:29 - Dalton's Preference
02:39 - Michael's Preference
05:02 - The Bay Area
05:50 - Follow The .001%
08:23 - The Network Effect
11:01 - Aim For Greatness
12:34 - Odds Of Success
14:42 - Outro 
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Where is your startup based?
ABQ, NM
Yangon, Myanmar
Yerevan Armenia
San Francisco! I live in Nob Hill and absolutely love it here. In my opinion, San Francisco is the best city in the world. Happy here, no plans to move.
Paris for now but i’m dying to move it to SF, which kind of makes sense, our target market is mostly North America.
Here is an extensible answer: Start up where the best network effects are for your model. For example, Gov-tech should startup in DC. A space tech startup will benefit from the incredible aerospace talent pool in Long Beach, California, which is why Relativity Space, SpinLaunch, Rocket Lab, and many others are there. Greenwood App launched in Atlanta, Georgia. If it had launched in SF the motives would have been questioned and it would have the nickname "Greedwood". For our startup we chose a city that had the best network effects for our PBC model, which SF lacked. That said, VC money is still a "network effect" that is centered in the Bay Area, so if money is your only metric, then go there. If however you have a greater mission that also makes money, like the Greenwood app, or a space startup, or a PBC model, etc, start up where your network effects are strongest.
i totally agree
I wonder if expertise or the character of the people in the area is more important.
There are many tech hubs across the world, but Silicon Valley still seems to churn out the hits. I think it's the spirit of the people there. 🤔
It's funny that american minds can't imagine some place east of Washington d.c. or west of SF
@@michaellahr4243 we were actually considering starting up operations in Dubai or London and were very close to executing an agreement, but it just didn’t work out in terms of operating costs and the support structure we needed which we found in the US. Say what you will about “American Minds” but lots of folks who I work with in the startup scene here are very aware of internationally based operation possibilities and are more than capable of thinking of such advantages and approaches. As an Asian myself I love that Southeast Asia has been really conducive to startup environments in the past decade and I’m hearing promising things about Europe as well.
May I know where for the healthcare startup? I notice a lot of big Pharma are in NY but I don't see why it'd be better than in the area where many prominent hospitals located like in Baltimore or California.
While SF is a great place in many ways, the first night I parked my car there this year it got broken into (with NOTHING visible btw), and I got victim blamed. I also got chased by a guy screaming gibberish at the top of his lungs, and watched someone slump over (possibly overdose?) right near city hall. This is stuff that only people in SF would consider “normal”, but is absurd in every aspect. I’ve never had my car broken into in LA, or NYC, or anywhere else. SF, get some help.
Wannabe entrepreneurs outside US: "we're fucked"
I clicked really hoping that this would be a meaningful debate about the pros and cons of living and starting a company outside of the bay area, you know somewhere else on the face of the entire planet. I hoped to learn something meaningful about some of the major cities around the world that are entrepreneur friendly and that are attracting great talent. I expected that if anyone would be objective about this conversation, it would me Michael and Dalton. Unfortunately, I was sorely disappointed to see it basically be a superficial debate about downtown SF vs 20 minutes away. This is the one thing I absolutely hate the most about Silicon Valley, the arrogance and the fake exclusivity; pretending that the rest of the planet is basically inconsequential.
Sorry guys, been a very very long time fan, but this one just didn't sit right.
I was expecting the same but that's what they live. It's hard to get a comprehensive opinion on all other places they haven't been because of their belief that "San Francisco is the best place for startups ever".
Even so, I wish I could be there
The funniest part for me was the ending, where they say it’s a “easy” thing to do, completely ignoring the fact that there are 7.5 billion people who were born outside of the US and hence need a visa (which are super hard to get) to move in there.
@@abner_horn Yeah, I'm hunting for that visa to start a company there lol.
It's either you're so good at what you do they can't find an American to do the same job as you, so they sponsor you as an employer.
Or you're a genius.
Or you're already a millionaire.
Easy peasy.
@@abner_horn But then again, doing easy things isn’t fun
The numbers speak for themselves. In 2022 (a down year) startups based in SF/SV raised nearly $80Bn in VC funding or about as much as the rest of the world combined. Companies based in Austin and Miami (the next Silicon Valleys) raised $4.3bn and $5.1Bn respectively.
I'm currently based in Switzerland where startups raised a paltry $2.3bn in 2022. Startups based in Berlin raised about $4.9bn, while in London they raised $19Bn. *All of these numbers are from PitchBook.
Getting to San Francisco from outside the US is not easy, for many it's probably near impossible. You gotta play with the cards your dealt, reality can be harsh.
I'm currently in the process of moving to San Francisco from Switzerland for a startup that I founded 2 years ago. Fortunately I'm an American and originally from the Bay Area, so moving there will be relatively straight forward, though quite expensive.
We would meet in SF with our VC, the last 4 visits my car was broken into. Now we meet in Sam Mateo and at our shop in Concord.
Always a great pleasure to watch you
Best duo please don't stop! so valuable stuff
Wish they shared some more stats around success rates in SF vs another.
International founders face a tradeoff: Stay in their home region to extend runway or relocate to Silicon Valley for better access to investors and talent. Choosing between survival and opportunity isn't easy, so the question is how do you weigh up decision? e.g. Do you move to SF when you have an idea, or co-founder, or early customers or a seed round etc?
Also moving to SF isn't 'easy' as they say in the video for those who are international because of Visa requirements.
I'd gladly not live in crime ridden SF even if it means my start up ends up making 20% less over its lifetime (which likely isn't even the case).
@@genericdeveloper3966they are talking about Bay Area, not necessarily SF. The Bay Area is quite big.
@@genericdeveloper3966 Not about that. Its about increasing the chance your startup is successful or not.
@@Lightrunnerr I mean, is it proven that startups in the Bay Area have a higher success rate?
Even many of the Y Combinator batch goes out of business after years.
@@ThinkWithSteven I didn't use empirical analysis, just common sense
Strangely I love this show, was waiting for this!!
Always pick up the easy wins first.This advice is so priceless in startup world.
New found respect for Michael! Loving him more and more each interview I watch
Great episode gentlemen! Thank you ✨😉👍
Looking at the reflection in Michael's glasses (and head 😅) to figure out how they lit this scene so well. That's got to be the softest dang light I've seen. Not only great advice but great production. Thanks guys!
I wish YC offices were located in Silicon Valley. Until the situation in San Francisco with the open air drugs market, criminals stealing property, and the sad homeless crisis gets resolved, it’s challenging to think about going there since the safety of neighborhoods and the overall health of the city creates the opposite effect to attract talent. It’s truly a sad thing to watch, yet fixable with political will.
The only issue I have with the city vs. suburban analysis is that they're not necessarily mutually exclusive. Plenty of people commute to cities, stay there after work to go to restaurants/bars etc. and then either drive or take commuter trains home (such as in Chicago/NYC).
At one point in history Nevada County California had a thriving tech community. At this point it seems hard to believe, but the buildings that housed the Grass Valley Company and others are still standing and available at a small fraction of the cost to do business in the Bay Area.
It also happens to be the halfway point between San Francisco and Lake Tahoe. It’s a little over an hour from the state capital, and it’s still possible to get to San Francisco or the Valley for a meeting and still make it home in time for bed.
Dalton telling me he’s living in Los Altos Hills without telling me he’s living in Los Altos Hills
Just wanted to say Thank You for all the indirect help to us. Just wanted to remind you that you actually make an impact in our lives and I wanted to be grateful and keep working hard/smart to become part of the 0.001 and help other achieve that. Love from Colombia
I don't like cities, too urban, but I moved to SF in the Presidio and I love it, it's beautiful here.
Would you recommend the same thing to startups building a product targeting non-US customers?
One of the better uploads here! Love the topic but especially the filter-off, honest commentary.
Chapters (Powered by ChapterMe) -
00:00 - Intro
00:13 - Does your startup need to be in San Francisco?
00:29 - Dalton's Preference: Startup does not have to be in San Francisco
02:39 - Michael's Preference: City is a better place for young startup founder
05:02 - Startup Outside Bay Area
05:50 - Certain Cities Are Just Better: Follow The .001%
08:23 - Smartest Founder Look At The Network Effect
11:01 - Aiming For Greatness: Being In the Game vs Winning The Game
12:34 - Increasing Your Odds Of Success
14:42 - Outro: Room For Both Of Us.
I think this is so true even for the employees, even if we work remotely moving closer to the office so you can visit every then & now would oddly increase your chances of success.
I am with Michael on living in urban area aka city (I live in Chicago) but with Dalton on that you need to be able to walk around and your environment should be stable but also inspiring. I was born in the big city, relatively (Belgrade) and this is what I like, to be able to walk places. I do have kids and it costs us way more then others to get them to decent school etc.
About 8 years ago, I moved to LA. Part of the reason was to pursue comedy at a higher level than I was in the city I lived in at the time. The moment I got here, everything clicked: while there are plenty of stories of people "making it" in cities outside of New York or LA, the industry is out here and they're going to look in their own backyard. In order to best increase the chances of getting seen, go to their backyard!
Previously, I didn't have interest in moving to SF. Now that my focus is to launch an idea I have for a platform, this video connected everything I've seen in LA's entertainment world to tech and is actually making me strongly consider it. I want the best chance!
I love how simply you guys have put it!
To me, it seems like you guys are saying moving to San Francisco is an easy win because you’re surrounding yourself with people that are all incredibly interested in startups and being in the .001%, so if you want to build a startup you essentially have to live in the Bay Area. I don’t disagree with that being the culture of SF, but I’m confused by SF is the only place that is capable of having that. I’m sure you can find plenty of people in NYC, Austin, Chicago, Miami that are also highly motivated and passionate about startups. Idk some of the examples used like friends moving back to SF and stuff like that makes me think this isn’t as black and white of a concept as is being presented
They never said SF is the only place. It's just the best place.
@@bobics So a 1.2% chance of success instead of 1.1%? I'd take the slightly lower odds of great success to live in a place I like better.
people from around the world are accessing this video - clearly shows that physical location doesn't matter anymore. we can stay anywhere and build a startup as digitally you can get all the right contacts and network effects
How about Boston? Any startup success odds comparison stats between SF and Boston?
Are you only talking to people currently living in the US or does this applies to the whole world?
For me it's not impossible but would be super hard and expensive to just get to SF. Then on top of all uncertainty of startups, I'd be worrying about the uncertainty of being able to continue living there (legal stuff).
What would you say to someone in my position?
P.S. I'm from Iran but currently living in Stockholm.
No, we're in Pittsburgh and LOVE IT!!
I can do my startup literally forever from the DFW area. I'll be immensely depressed, my kids won't get the services they need, and we have zero support system in the Bay Area.
We lived there 3 years.
For my circumstance, living outside the Bay area makes sense. If you are young without kids, Bay Area might make sense... But honestly I'd still choose NYC over Bay Area.
I don't see how being depressed can help you build a startup
I will move to the Bay Area, it seems the best thing to do to increase chances of success with my startup. But it would be great to have some real world statistic of success rates in different cities. If anyone has anything like that, please share.
They provide lots of great advice, however personally, I believe where your startup is located varies based on what you're offering as a company.
Then after should everything else be considered.
Also, I believe you should be near a larger City. Generally big cities attracts nearby great talent that's not willing to go all the way to San Fran, lot of people.
Might I add, many people with big ideas go to San Fran who expec to become leaders however there aren't many people who move to San Fran who are okay with joining an idea and scrapping their idea because they're married to it (and having a founder title).
Great points💯
Build a startup where you have access to right talent.
Another question: Does your startup need to be in USA to be successful?? Thanks
Space X be like: Does your startup need to be on Earth to be successful??
@kevinschmidt2210 😂😅😂
No? Plenty of successful startups in say, London
Your startup needs to be wherever your target market is
7th time is the charm) fingers crossed for the interview
if i want to start a startup in san franscisco and thus live in san francisco (or at least bay area), how can i affort this crazy rent fee when i decided to be fully commited to my startup (i.e., not having other full-time jobs)? what should i do?
Anyone knows best preference for healthcare startup? I notice a lot of big Pharma are in NY but I don't see why it'd be better than in the area where many prominent hospitals located like in Baltimore or California. Genuine question.
We need tips on how can we move there from outside of US
Here's a counterargument. Network effects can be made online these days so access isn't physically restricted. Another reason to avoid SF is if living in a warzone keeps you up at night. Sure if you have enough money you can mitigate this problem, but for startup founders that have to walk or take public transit, maybe their life isn't worth the trade off.
Brian chesky recalls a story of how he had dinner with michael Seibel and he introduce him to Paul graham. He encouraged him to apply and that was the start of something called Air BNB. Imagine being brian being from Kentucky and eventually shutting down air bnb. If I could move to san Fran I would but not everyone is so lucky .
Oh Dalton and Michael! YOU SLAY ME!
Should a FinTech be in New York or San Francisco?
this is interesting because i was in sf from 2004 to 2013 when i had a kid and moved to berkeley. i hated it. in 2018 my daughter was on the way so we moved to the pacific northwest and are now in portland. i worke remotely for cruise. i miss my dense urban walkable city and good weather but portland has a similar culture and is radically more well run, green, affordable, etc. i'd prefer to live in barcelona or amsterdam but...here we are.
In our post Covid world, why would you want to be based anywhere, other than in the cloud?
You can be around anyone in the world when you are online.
In person teams are better for startups. Established corporations are different. The people are interchangeable/replaceable at most levels. In a startup everyone is essential.
@@houseofvenusMD I don't live in San Francisco or the Silicon Valley. There are not enough qualified people living where I live to organize an in person team. Therefore, in my situation, I think it would be better to organize online remotely and asynchronistically.
@@kevinschmidt2210 I hear you but the fact remains: If you somehow made the sacrifice to get to SF, your startup would grow exponentially faster than if you stayed in your town. The gains would be so great that they would overshadow any growth you can currently achieve. However 95% of startups fail so you could effectively bottom out and end right back at square one. That's the level of risk in this game. Like birds, many startups die jumping out of the nest but those that don't grow to soar high above the plains, like all of those birds who made it out before them. It's a scary reality but that's just how it is. Either way best of luck in your enterprise regardless of whether it becomes a unicorn or not I pray you find fulfillment in your work and have loved ones who support you. Stay visionary. Perhaps one day I'll see you in SF 😉❤️
Honestly the only thing stopping me is safety concerns in SF, maybe I’m just being misled by what I see online? But coming from Europe I do see that Americans are desensitised to some things and they consider it normal, when it really isn’t.
SF Bay Area is huge. Plenty of very safe regions, even within the city. There’s something for everyone here.
Dalton is from Texas, Michael is from Jersey and I'm from Kitchener-Waterloo!
I believe You can run startup everywhere even under ground ,just you need to realize what is pain ? It is really simple.
im looking to do a startup for south america but it would not make sense to go to California let along San Fransisco so we can serve people on another continent. The only good reason would be to raise money or find talented devs. But there are talented devs everywhere. There is definitely more money in for startups in California tho.
Maybe cost is one of the main reason why people dont move there. Between taxes and rent, it's a lot of extra money just to live there. In top of that, add homelessness and the spike in crime.
your environment is your destiny
Some great points. Except you forget Boston.
I grew up in South San Francisco it's the best of both worlds. Just 10 miles from the city
How come it's still the best startup ecosystem when it's so expensive for tech workers, and there are other very strong cities not half as expensive, like Berlin for example?
Startup - SF.
Business - anywhere outside Bay Area.
If I didn't live in SF….
It would’ve been harder to be an early employee at startups.
It would’ve been harder to find my co-founder with a startup background.
It would’ve been harder to meet VCs and raise money.
It would’ve been harder to get into YC.
So why make it harder if you have a choice?
If there ever will be a Standup Comedy series on Startups. Michael and Dalton should do it.
The Startup Roast 😂
@@BrianMPrime 😂😂
Closest thing we have is the TV show silicon valley
Since no actual stats were provided showing that bay area startups have a greater chance of success, this just amounts to opinion and supposition. There will be advantages and disadvantages of relocating to the bay area. The jury’s out on how those stack up until there are some reliable statistics.
So much talk about odds and numbers and no data was shown 😂
Who else is moving to San Francisco after watching this?
Great points on the hidden interactions. Exactly what I needed to hear. Thank you.
Was about to write the same comment but you're spot on.
I have been wavering a lot on moving to SF because of the rampant homelessness, crime, & drug use I see on Twitter every day but there are just so many subtle benefits you won't notice before you move there, it seems.
Certainly me here, this video confirmed it all for me. I was 50/50. Saw a lot of the bad news, yeah I get them, but the burning itch of succeeding with my startup is way beyond that. I doubt you don't have good people in San Francisco, it can't be that bad really.
@@mimi21746 I think we will all regret not moving and giving it a proper go
@@TheMrKofiX Heard similar thoughts from multiple top vcs they all say to go to the bay area. Maybe I'll see you there haha
where is the data?
So you mean that all the news and videos of SF being an apocalyptic hellhole with crazy high crime and drug users deambulating in the streets like an episode of the walking dead are misleading?
What about all the malls and business that closed down in recent history? I guess you could shield yourself from all those realities by living in ultra-rich neighborhoods but is it a viable solution for a startup that still have to be careful with their spending?
There are startups outside SF?!?
Thoughts on NYC startup culture 👇
I realize this is a channel for startup founders, but Michael and Dalton's conclusions are emblematic of the larger socio-economic problems going on in most of the world: the Bay Area is a great place for founders, and a terrible place for engineers. Very, very, very few engineers make it big with IPO stock or E9 positions. The vast majority are just normal workers with regular looking careers. And despite their ostensibly high salaries, they can't afford a home.
We're no longer in 2012; we're in 2023. The era of hacker houses and Stanford-only focus is behind us. Now, it's time for remote work, tech bootcamps, and living wherever you want. Moreover, San Francisco has become a city with exorbitant costs and has lost its innovative spirit as it has become boringly mainstream (and also incredibly dangerous). It no longer makes sense to live there and launch startups.
The startups of the future will be born on beaches and in woods, in small towns with a human scale where the quality of life is high, and where I can step outside without fearing being robbed.
DC Metro area. 5 or 6 million people, great public transportation, top flight tech companies, entertainment, parks, lakes, bike lanes, a mountain range not too far away, city or suburban living, people with advanced degrees, biotech, defense, space, IT,...
Too much traffic. Too many attorneys per capita. Too expensive.
@@kevinschmidt2210 If you take the Metro this is no traffic (every once in a while a Metro train does stop for a short while :) It is too expensive. A month's rent will pay for a year's rent overseas. And there's that 10% tax.
bay area is amazing, love it here. i didn't realize how different it is that every time i get on the freeway next to my house i pass by workday, snowflake, 10x genomics, and all these huge companies.
Moved back from the Bay Area to Toronto to pursue my startup full time (can’t do it there rn). But the moment I have a chance to go back, I fully intend on moving back. The mindset and mentality of people there is just on another level
Now when I think about it, I guess nobody wants to come over,,, which I can't blame them for.
Shocking news for these guys: There's allegedly a world outside America. With some 190-odd countries, with fifteen times the history America does. Some of those ancient cities still exist as thriving cities, and they've been doing "startups" forever. "San Francisco" my foot.
D&M are the best
Unfortunately yes
With remote work it shouldn't matter
I wish I could live in the bay area... I guess Toronto is good enough 😢
Love the Brexit shade. Also, I don't think it's an easy win to move to the bay area for internationals at all.
*Mars >>>> San Francisco*
Elon Musk, is that you?
@5:00
I live in one of the "worst" areas of SF city because the rents are cheaper and its so central to everything. I will say that the fear mongering is overblown. Sure its not very pleasant to see the misery with the homeless people but they are rarely ever violent. They do fentanyl, which is a massive downer, so even if they wanted to anything violent - they can't.
The best things about living in a central spot in SF is that everything is
I moved to Bay Area in 2008. It has been the best decision of my life. The people who live here are truly unique. You cannot find them anywhere else
I left the Bay Area in October 1989 I think (9 days before the earthquake). There was a whole lotta shakin goin on, starting that summer and continuing into October. Leaving was one of the worst decisions I made.
This is incredibly obvious to those of us from outside the US looking in. I guess within the US it's harder to see the forest for the trees
If you can’t do it I. Your home town you won’t be able to make it in Silicon Valley either.
Grass are greener in the other side.
San Francisco is a dump. No one with right mind will sacrifice his life to come here to be an entrepreneur. 99.99% will fail. And those who succeed move out as soon as they find a chance. You don’t see them publicizing their decision.
San Francisco sounds like a never ending hackathon
Imagine living in Mexico City, where 90% of people are corrupt, closed-minded, and unfamiliar with startups, and it's just a 5-hour flight from San Francisco.
Michael (in new "stop innovating" vid): "Founders who ONLY will launch a startup if it's in a certain city are obviously putting themselves first & not their customer."
Also Michael (in this vid): "If you aren't in SF when you launch, you will crash & burn."
What about San Diego?
No it's Singapore, Shenzen or Borneo.
Borneo. For the new capital?
@@SportsIncorporated Yes, Kota Kinabalu & Nusantara.
eh as a long islander theres no fuckin way im ever living in california...thats like the only place i can think of thats worse than new york.
What about Silicon Slopes in Utah?
Tech Hotbed for sure
Dalton looks like he lives in the Suburbs
Yeah I disagree very strongly, the best football player can be from a high school with 100 people. In todays day and age, you do not have to live in a location to have a network affect.
New York is the future until San Francisco fixes it's zoning
Doubt it. New York is sh*t too. The Heartland is where it's at, the Silicon Prairie.
No it's Singapore, Shenzen or Borneo.
@@_orangutan The heartland is a cultural desert. The Silicon Prairie is inhabited by mostly gophers.
Well, ok then...... Anyone in these comments looking for a roommate in sf?
If your startup aims to clean feces off sidewalks, you DEFINITELY need to live in San Francisco
whoever goes to san fran due to scaling or creating of a startup in these years is totally lost and also holds a death wish, silicon valley is not what it was and you can have access to the funds and networking by other means and places....
Agreed, to get just one average dev is a 140k cost
@@kevinjomes5753 upwork will eventually kill that issue, sooner than what we think
@@kevinjomes5753 Not in Bay Area. I would assume it's higher.
even thou yall are right about the bay area, haters gonna hate
Let’s just not ignore the fact that 7.5 billion people were born outside of the US and hence need a visa to move in there, and “easy” is definitely not the best word to define that.
what if you're not even in America? Say, Nigeria.
You have to focus on providing scalable value to that area
No offense, but for all the talk you guys do about not looking for "conformists" to work with, the Bay Area is about as conformist and PC as it gets.
The "getting to the City" argument is actually a big argument against SF per se, since even California has a much bigger and much more serious city. And imagine moving from SF to, say, Tokyo -- people in SF who think they're in The City (and I was one of them!) need to get out more.