[onlyrealcuzzo]

Is there a good article that describes how / why / when the startup scene moved from the South Bay to San Francisco?

I'm not too familiar with the startup scene before 2010. But from what I know, it was mostly established in its current form before the Dot Com boom.

It seems like HP, Cisco, Intel, Apple, Oracle, Sun, Adobe, Intuit, & Yahoo! where part of one movement.

eBay, PayPal, Google, Facebook & Netflix obviously added to that.

But now all the newer companies are coming from SF - SalesForce, Twitter, Uber, Lyft, AirBNB, Yelp, Splunk, Dropbox, Square, Instagram (originally), Slack, StichFix, Postmates, Instacart, GitHub, Robinhood, Coinbase, etc.

The only recent, pretty big startups in the South Bay I can think of are LinkedIn and Quora. YouTube - from San Bruno - is kind of in the middle. The rest are subsidiaries.

I mean, the OG companies like Apple and Google and Facebook are so big that they dwarf the rest of the startups in the Bay by themselves. So in a sense, the Silicon Valley still feels like the Peninsula. But the startup scene definitely seems to have shifted.

[kens]

> the OG companies like Apple and Google and Facebook

History time. It's kind of amusing to see these companies referred to as OG, when there were many generations of Silicon Valley startups before them. The real OG was probably Hewlett-Packard, founded in Palo Alto in 1939. Another key company was Shockley Semiconductor, founded in Mountain View in 1956. Eight key employees left Shockley in 1957 and formed Fairchild Semiconductor, gaining the name the "Traitorous Eight". Fairchild led to over 126 startups, sometimes called the Fairchildren, including AMD, Altera, LSI Logic, National Semiconductor, and SanDisk.

Two of the Traitorous Eight, Gordon Moore and Robert Noyce, left Fairchild in 1968, founding Intel in Mountain View. Later key Silicon Valley companies were Oracle (1977), Sun Microsystems (1982), and Cisco (1984). Although Apple started in 1976, it wasn't a dominant company until years later. Google (1998) and Facebook (2004) are relative newcomers.

Information on Fairchild's influence: https://computerhistory.org/blog/fairchild-and-the-fairchild...

[onlyrealcuzzo]

Thanks! This is super cool!

Question - when did the VC model really come into play? Were the Fairchildren like AMD VC funded?

A lot of others have mentioned that space plays a role in this a lot. Companies needed fabricators and data centers, which took up space, so it was too expensive to be in the city.

Is this really all there was to it? Back in these times - there was White Flight from the cities, right? Did most people (even college grads) prefer to work in the suburbs then? Was this even a factor at all?

[astrange]

If you're asking why Silicon Valley is in California at all, the answer is that the state bans all non-compete agreements and won't enforce ones made in other states. This is probably why it's not in Cambridge, though it doesn't explain anything more specific than that.

[nostrademons]

Don't forget the importance of Shockley's mom being in Palo Alto. His stated reason for moving to the west coast was to be closer to her. Given that pretty much all the "silicon" companies in Silicon Valley are descendants of Shockley Semiconductor, that chance occurrence is probably enough to explain it.

[ghaff]

I honestly think non-competes are overstated. I've worked in MA most of my life, once signed one, and it was very specific. I now work for a company that even lets me contribute to competing open source projects. Do all non-CA companies let you do that? I'm aware of one or two consulting firms that have very draconian non-compete clauses but not sure it's very common and MA, specifically, defanged them a while ago.

Personally, I think it was more of a conservative East Coast mentality vs. an anything is possible West Coast Mentality.

Stephen Levy's Hackers is probably a good start (but skip the Stallman The Last Hacker part).

[paxys]

Non-competes are absolutely not overstated. Microsoft would frequently sue employees in WA for violating non-compete agreements when they bounced to work for Google, Facebook or other tech companies who were starting to open up offices in Seattle.

Amazon recently sued an exec for moving to Google cloud (also in WA) – https://www.cnbc.com/2020/06/11/aws-case-against-worker-who-...).

Here's an IBM one from New York – https://www.lexology.com/library/detail.aspx?g=84252db4-ccc3....

A quick search yielded a ton of results for large tech companies suing employees and each other over non-competes, and – surprise – none of them are in California.

[astrange]

I'm not sure how often it comes up, but SV started with Fairchild Semiconductor being founded by everyone leaving Shockley's company - so it would've been important right at the start.

[onlyrealcuzzo]

Honestly - isn't it most likely to be random luck?

[ghaff]

Possibly.

To the degree that you believe Shockley was an important catalyst, that does seem to have been largely happenstance. There are arguments to be made that the next phase after the minicomputer would logically be somewhere other than the Northeast. On the other hand, a great deal of computer tech prior to the minicomputer was concentrated on the northern part of the East Coast, so why a shift? Finally, given Compaq, Dell, and TI, why not a more robust Silicon Prairie earlier?

[ghaff]

Companies generally preferred to be located in the suburbs because it was generally cheaper. But employees (notably including execs) also preferred to live there. Manufacturing facilities had absolutely been in cities in the past. Teradyne was in Boston. Gillette was in Boston. There are big pharma facilities in Kendall Square today. So it was at least in part access to workers that moved companies out of cities.

[abalone]

Silicon Valley happened because of proximity to Stanford University and Moffett Field and the copious amounts of government / military funding and contracts that came through them (DARPA, etc).

This is a very basic fact of the history of SV that many in the VC scene are reluctant to acknowledge.

[clpm4j]

You would enjoy the documentary 'Something Ventured'. http://www.somethingventuredthemovie.com/

[ghaff]

Apple wasn't terribly interesting until maybe the mid-2000s. OK they were interesting in the Apple religion sense but it really took some combination of OS X, the 4G iPod, and eventually the iPhone taking off to put them in their current category. One could argue that Apple wasn't "a force to be reckoned with" until the late 2000s.

[astrange]

They were pretty good before the 90s when they invented the personal computer, there was just a "beleaguered" era.

[ghaff]

They were an interesting hobbyist thing early-on. Although there were also the S-100 bus systems, etc. I actually used Apple IIs at work in the early 80s and then an Apple III. But they were somewhat of a sideshow until the mid/late 2000s.

[Dracophoenix]

So what were the more common systems that you or your coworkers worked on between the 80s and the mid-2000s? VAX machines, NeXtboxes, SUN systems?

[BashiBazouk]

Even though it's not headquartered in Silicon Valley, IBM's Cottle road site belongs in the early history as well. They invented the hard drive in Building 025...

[clpm4j]

A seemingly significant part of it is because the young talent wants to live in SF and not commute 1+ hours to an office park in the South Bay. I think SF also offered incentives for tech companies to set up shop in the city in the 2009-2012 time range... https://www.wired.com/story/no-more-deals-san-francisco-cons...

[ghaff]

It also generally became trendy for that demographic to live in (certain) cities after they graduate. My company set up an office in the Seaport (partially) for that reason because our main location an hour west of Boston was a deal-killer for some people.

[clpm4j]

That's certainly true. A career in tech became widely popular and trendy for millenials and now zoomers (I believe CS is now the most popular undergraduate major across US colleges?). Basically once people realized you can make more money in tech than on Wall St, a percentage of new grads who would have moved to NYC diverted for SF.

[ghaff]

>I believe CS is now the most popular undergraduate major across US colleges

I saw that in one Google search and it seems incredibly unlikely. This seems much more probable (even if you assign some of the engineering degrees to CS):

https://www.niche.com/blog/the-most-popular-college-majors/

[nostrademons]

It was largely driven by Millenials, who wanted to work in cities whether they're founding or working for a startup. YCombinator (itself based in Mountain View) found that most of their startups preferred to locate in SF, oftentimes many of them in one building. At one point there was the "YScraper", the Crystal Tower building in North Beach that was home to Justin.TV (parent of Twitch/SocialCam/Cruise), Xobni, Weebly, and Scribd.

Also your list of South Bay startups is pretty incomplete - there's also WhatsApp (Mountain View), Box (Redwood City), Coursera (Mountain View), Khan Academy (Mountain View), Tesla (Palo Alto, with manufacturing in Fremont), the Signal Foundation (Mountain View), RobinHood (headquarters is Menlo Park, not SF), Zoom (San Jose), GoFundMe (Redwood City), Carbon3D (Redwood City), WealthFront (Palo Alto), Impossible Foods (Redwood City), Roblox (San Mateo), and GoPro (San Mateo). I do agree that the center of gravity of the valley moved northwards in the 2010s though. Prior to then, it was debatable whether SF was even really part of the valley, while since then it's been a major tech hotspot.

[rm_-rf_slash]

Short answer: early Silicon Valley needed space for fabricators, the dotcom era needed space for data centers, then around 2010ish there were enough cloud providers and internet connections you could start a company anywhere but you already had plenty of talent in the bay and San Francisco is fun.

Long answer could be a phd thesis but “people needed lots of space until they didnt” kind of suffices.

[rogerbinns]

I've seen several commentators blame AWS! Before AWS, startups needed to budget for web servers and similar hardware, and a place to put them. That meant bigger offices with more floor space, plus power and similar services. Once AWS came (2007) startups could be anywhere, with the city tending to be more attractive to younger folk.

[jdsully]

Very few people were putting them directly in their offices, and they certainly weren't buying bigger spaces to fit them. Datacenters are the natural home for this stuff and the price was never exorborant if you're not insisting on a tier 1 facility.

[rogerbinns]

Imagine it is 2003 and you are doing a startup. You aren't deploying anything yet. You need a source code control server, a bug tracker, build servers, testing systems (so many versions of Windows), developer workstations, a file server, and various other bits of infrastructure (plus backups). This easily results in multiple systems per developer. Internet connectivity was slow and expensive which is why this kind of stuff was in the office, not at a colo. So your office needed proportionally more space per person.

[abalone]

Not a good theory. Before AWS startups would colocate. On premise was rare.

[rogerbinns]

You did still want on premise at the beginning, while going through the earlier phases of startup development. For example you need source code control, build servers, bug tracking, test setups, file servers, as well as developer workstations.

[abalone]

Not a significant space issue at the beginning. Still not a good theory.

[abalone]

Quite simply crime rates in SF came down around 2010. It was high in the 90s but even then the first dot com boom had some startups in SF and some in SV. Notably Salesforce. But by the second Web 2.0 boom (as it was called) SF was a very attractive place for young workers.

The earliest SV companies wanted to be physically located near Stanford and Moffett for the govt subsidies/contracts. Still happens (read The Entrepreneurial State) but physical location is not as important in the internet age.

Frankly I would not give this Sf.citi lobbyist piece much credence. “Migration” could simply be a temporary effect of the pandemic. We may very well see young people come rushing back into SF for the same reasons as before.

And crime? You wouldn’t know it from HN threads but SF violent crime is again at all time lows.[1]

[1] https://www.macrotrends.net/cities/us/ca/san-francisco/crime...

[astrange]

I thought the move into SF was actually caused by a specific tax incentive around 2010, but don't remember the details.

[cobookman]

Robinhood was in in Menlo Park / Palo Alto.

Here's a list of startups in Palo Alto: https://angel.co/location/palo-alto

Here's a list of startups in Menlo Park: https://angel.co/location/menlo-park

I'm sure if you have crunchbase pro you'd be able to do more analysis. But Silicon Valley is still pumping out a lot of startups, and high-tech firms.

[Apocryphon]

Zoom is based in downtown San Jose.

[foobiekr]

They were over by Great America for a long, long time. Eric was used to Milpitas @ Cisco.