[shawnee_]

Although this is probably won't be a popular viewpoint, Silicon Valley is likely reaching the end of its glory days. For the past 30 years or so, it has been able to exist as a largely insulated bubble -- mostly because it has been able to flex and grow as the rate of increasing demand started its exponential slope upward. But the reality of today is that demand for technical workers has outpaced SV's ability to grow. Because it is a peninsula, with limited space for growth and housing, the bubble is not infinite. Prosperity generally demands space, and there's just not enough of it here on this bleeding edge.

So, it's inevitable that other places will eventually benefit from the spillover. The questions are: where and how and when? Whatever cities can employ the most forward-thinking civil engineers and planners to literally build the city of tomorrow will be able to create an environment where cost of living coupled with a good cultural and environmental climate make it totally worth it to build a company elsewhere.

[mikeyouse]

The success of Silicon Valley isn't limited to the tech workers though, the entire infrastructure of the area is designed for startup success. All the financiers, lawyers, professors, etc. are 'lazy' in the sense that they prefer their companies and investments to be close to where they live.

There is ample supply of tech workers / infrastructure in NYC, Boston, LA, but the list of cities is a short one. There will absolutely be more companies formed outside of the SV area, but there is still plenty of room for growth here as well. There are a half dozen cheap communities in the East Bay which still have low housing costs, plenty of commercial vacancy, access to public transit and are actually a closer commute compared to driving to San Francisco (with Palo Alto as a center-point).

I have personal experience with two similar companies, one in 'Silicon Valley' proper and one in the East Bay. The company in SV had more employees by a factor of 2x, but was paying 15x more in rent for their commercial space! Both were backed by Sand Hill VCs and had professors from Stanford / Berkeley involved in the efforts. This could just be another data point in the "SV is too expensive camp", but it also points to the affordability of nearby areas which haven't seen the same level of expansion yet. Look up commercial / industrial real estate in Newark / Fremont / Hayward / Milpitas, you'll be shocked at how affordable it still is.

You don't need to build cities from the ground-up to have a climate hospitable for investment and venture success, it's much easier to be proximal to where such a place already exists.

[ChuckMcM]

I would agree except this 'bubble' is more like 50 years old at this point.

That said, it would be great news if more innovation centers spring up and survive, I'd love to have reduced traffic burden and a chance for entrepreneurs to get the same benefits they get in the Bay Area in terms of energy, funding, and community.

I suspect however that the next "exodus" won't really happen until you really can work anywhere and get solid telepresence or something like it experience.

[muzz]

This "viewpoint" has existed in many different ways and forms over the last 30 years.

Whether it was communications that would kill the Valley's proximity advantage (be it via the Internet, or even cheaper telephone and fax before that), or labor cost advantages (not just other states, but then other countries like India, China), or lower tax rates in other places, etc.

[JVIDEL]

I agree about the limits, but the problem is not urbanistic, in fact afaik the French tried to make a techhub in the nineties by offering great offices for cheap and it didn't work.

What limits other hubs are taxes and legislation: a guy I know in Brasil had tons of stories about taxation over there, and it wasn't pretty. Another guy in Europe said in some countries its nearly impossible to fire an employee.

Then there's funding: in some places there really isn't any, and what little there is comes with a price, like 60% of your startup up front for $20K or less.

Those are the things that really add up, Silicon Valley is not just SF, there are places nearby which are much cheaper. On the other hand you can't escape taxation (unless you like being in jail) or labor laws. And if there are no investors you are screwed too, unless you have rich parents.