Is San Francisco the right place to start and build a startup today?

Eiso Kant · published Oct 7, 2024

A large share of the world's frontier-AI-capable talent sits outside the Bay Area, spread across Europe and Israel, and building teams there is an unfair advantage because those people want to stay put but have no massively ambitious young companies to join

Their list of ~3,300 candidate researchers/engineers showed the Bay Area as the top single geo but a huge remainder across the UK, Switzerland, Tel Aviv, Amsterdam and Paris; conversations revealed highly capable people who won't relocate and lack ambitious local companies

Scope: no single deep talent concentration outside the Bay Area, with the UK the largest; Poolside is still an American company with people from San Francisco to Israel

48:07 20VC: Raising $500M To Compete in the Race for AGI | Will Scaling Laws Continue: Is Access to Compute Everything | Will Nvidia Continue To Dominate | The Biggest Bottlenecks in the Race for AGI with Eiso Kant, CTO @ Poolside

Severin Hacker · published May 19, 2025 · hedged

For an investor, staying in Europe is a defensible strategy because the market is much less crowded and you can become the top investor founders want to work with.

Europe is far less crowded with investors than Silicon Valley, so it's easier to reach the top of the market — the same thesis he used to start angel investing in Pittsburgh.

Scope: says the investor case is 'not clear', unlike the founder case; notes many of his Pittsburgh portfolio companies eventually moved to Silicon Valley

55:05 20VC: Duolingo Co-Founder on Why $3M is Harder than $100M to Raise | Why You Should Always Take Tier 1 VCs Even at Worse Terms | Why Europe Can't Win Unless the US Screws Up | How AI Impacts the Future of Work and Education with Severin Hacker

Martin Mignot · published Aug 11, 2025

Outlier companies can come from anywhere, not just Silicon Valley

Index's biggest return drivers came from five different locations including Amsterdam and London, which has always been a key focus of the firm

72:59 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Maor Shlomo · published Nov 24, 2025

Being outside Silicon Valley no longer hurts a company like Base44

The world has changed — he used to fly out every two weeks with his previous company and won't again; the war on talent in Silicon Valley is brutal; Wix provides the deep-pocketed backing that Silicon Valley would otherwise supply; Lovable is proof you can build from Europe

Scope: Silicon Valley is still the right place if your game is raising as much as possible to conquer the market and exit for cash

57:11 20VC: Base44's Maor Shlomo on How Vibe Coding Will Kill SaaS and Salesforce | Why it is BS that Vibe Coding Platforms Do Not Have Defensibility and Bad Margins | Why He Worries About Google, Not Replit and Lovable | Why Long Anthropic, Not OpenAI?

Demis Hassabis · published Apr 7, 2026

Basing DeepMind in London was a structural advantage because the UK had world-class talent that had not yet been galvanised into ambitious deep tech startups, and less competition for that talent

The UK has three or four of the world's top 10 universities, a rich scientific heritage, and great engineers, but no ambitious deep tech startup absorbing them, so DeepMind could also draw the best European talent

Scope: describes especially the early days of DeepMind

26:34 20VC: DeepMind's Demis Hassabis on Why AGI is Bigger than the Industrial Revolution | Why LLMs Will Not Commoditise & We Have Not Hit Scaling Laws | Bottlenecks in AI & The Energy Crisis Caused By AI | Whether AI Will Do More to Harm or Help Inequality

Josh Browder · published May 18, 2026

Starting out in the UK is an advantage because it's a less competitive pond for talent and media attention

Anyone can get on the front page of the Daily Mail with the right story, whereas US media is jaded and noisy; building an iPhone app in the UK then was seen as whiz-kid genius while in the US people did it every day

Scope: advantage of being a big fish in a small pond

75:50 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Paul Graham · published Oct 2011

Chance meetings are a more variable force than an encouraging atmosphere, but at their strongest far more powerful, because they produce the miracles that offset the disasters startups characteristically suffer.

Terrible things happen to startups in the Valley as everywhere, but great things happen too, so the distribution of surprises is skewed positive there.

source Why Startup Hubs Work

Paul Graham · published Oct 2011 · hedged

You cannot predict which lucky break you'll get in a startup hub, but you can expect that unexpected good things will probably happen to you if you deserve them.

Illustrated by founders running into Sean Parker on a Palo Alto street, who happened to have exactly the domain knowledge, investor connections and views on founder control they needed.

Scope: only in a startup hub; especially if you deserve them

source Why Startup Hubs Work

Paul Graham · published Oct 2011 · hedged

Even startups funded by Y Combinator get significant additional benefit from being in the Valley, beyond the deliberate introductions YC provides.

The frequency of helpful chance meetings in the Valley is so high that it's a significant increment on what YC can deliver on purpose.

source Why Startup Hubs Work

Paul Graham · published Oct 2011

Chance meetings work like the mental relaxation that produces ideas: they let your set of acquaintances drift, and the value comes from drifting just the right amount.

Just as letting thoughts drift moves you off the wrong path onto an adjacent right one, meeting someone you have a lot in common with—like Page and Brin—is drift of the right size.

source Why Startup Hubs Work

Anish Acharya · published Feb 9, 2026

Because cities are the original network effect, being in San Francisco confers an enormous benefit for technology builders at this moment, even though a company can be built anywhere

Cities are the original network effect, and in this moment of technology many of the key secrets circulate informally in person in SF; there is also a selection bias in founders willing to give everything up and move there

Scope: opportunity is not equally distributed even if talent is; you can make it happen anywhere, but it is harder

5:06 20VC: Is SaaS Dead in a World of AI | Do Margins Matter Anymore | Is Triple, Triple, Double, Double Dead Today? | Who Wins the Dev Market: Cursor or Claude Code | Why We Are Not in an AI Bubble with Anish Acharya @ a16z

Josh Browder · published May 18, 2026

San Francisco is far less socially stratified than London — if you are moderately interesting you can befriend anyone there

People in SF are bored, whereas in London the rich keep to themselves in fancy clubs

80:05 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Paul Graham · published Mar 2012

The Bay Area was a better place than Boston to run Y Combinator, because of its far greater density of startup people (and better weather).

Foo Camp made the density difference vivid, and he also wanted YC to be the Y Combinator of Silicon Valley rather than let someone else copy it there.

Scope: retrospective account of a last-minute decision

source How Y Combinator Started

Alex Bouaziz · published Feb 1, 2023

Global HR/payroll will support many great companies but produce one clear winner that is significantly larger than the rest — a single trillion-dollar generational company

Scope: several $10B+ companies can also be built; only one generational winner

22:48 20VC: From $57M in ARR to $297M in Just 12 Months; Why Speed of Execution is the Most Important Factor to Success, Hiring 2,000 People in 3 Years Remotely & Secondaries; Why, When and How Much To Take Out with Alex Bouaziz, Co-Founder & CEO @ Deel

Aatish Nayak · published Apr 11, 2025

San Francisco's talent churn and talent war are real, but the Bay Area remains unmatched for growth-stage companies because experienced executives are concentrated there

The best executives in the world live on a small peninsula, have families and want to stay; the mind-melding and experience available there is second to none

Scope: early-stage talent can be found in other places; churn is not unique to AI

59:53 20Product: How Scale AI and Harvey Build Product | Why PMs Are Wrong: They are not the CEOs of the Product | How to do Pre and Post Mortems Effectively and How to Nail PRDs | The Future of Product Management in a World of AI with Aatish Nayak

Victor Lazarte · published Apr 14, 2025 · hedged

Starting a company on the US West Coast makes you roughly a thousand times more likely to build a tech giant, and the cause is concentrated knowledge of how companies are built rather than superior talent

Around 70% of the world's tech giants started in the Bay Area and Seattle while ~0.1% of people live there; people are just as smart in Europe or Brazil, but in Silicon Valley founders can access the accumulated knowledge of what has worked before

Scope: numbers presented as rough back-of-envelope math

23:14 20VC: Benchmark's Victor Lazarte on Why Portfolio Construction is BS| Why SaaS Spreadsheet Investing is Dead | Why China is a Stabilising Force for the US | Three Traits All the Best Founders Have & The Lie All Big Tech Companies Have Been Telling

Lucas Swisher · published Feb 23, 2026

You don't have to be in San Francisco to build a great AI company, but it materially helps

Very few people in the world know how to work with these systems; many are locked inside two to four companies and most of the rest are concentrated in a small radius in the Bay Area, so being elsewhere makes life needlessly harder

Scope: not impossible to build elsewhere; talent-density advantage specifically

60:37 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Matt Murphy · published Jul 27, 2026 · hedged

San Francisco has regained its centrality and the Bay Area's talent concentration gives investors and founders roughly 10-100x the context of being anywhere else

When technology waves come the Bay Area usually leads; constant conversation with entrepreneurs about what they're technically working on compounds context

Scope: the 10-100x figure is offered loosely ('probably like')

42:10 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Daniel Erickson · published Jun 5, 2020

There is no longer any need for startup teams to be co-located, and the Silicon Valley ethos should become location-independent so the best ideas get funded regardless of where the team is based

COVID has shown that distributed teams can still achieve outstanding results

22:41 20VC: How To Scientifically Measure Product-Market Fit, How To Efficiently and Accurately Segment Users Into Cohorts, Why Investors Analysing CAC's at Pre-Seed Is Not Useful & How To Determine Between Customer Feedback to Accept vs Reject with Daniel Eric

Alex Bouaziz · published Feb 1, 2023

Where you are born geographically materially determines the opportunities available to you, so companies should hire the best people wherever they are rather than within a 30-mile radius

He met exceptional people all over the world and saw that the same talent in the Bay Area would have had an easier path; his own early companies could only afford engineers outside Israel and most of those hires are still with him

4:41 20VC: From $57M in ARR to $297M in Just 12 Months; Why Speed of Execution is the Most Important Factor to Success, Hiring 2,000 People in 3 Years Remotely & Secondaries; Why, When and How Much To Take Out with Alex Bouaziz, Co-Founder & CEO @ Deel

David Tisch · published Feb 27, 2023

Geography does not matter for startups and is overrated as a factor

BoxGroup is in New York only because its partners want to live there, and its San Francisco partner lives there by preference; the firm does not invest only in New York

Scope: framed as a view few around him hold

56:57 20VC: How Multi-Stage Funds Changed The Game For Seed Rounds, Why Signalling Risk is BS, The Three Most Important Variables for Founders When Raising Rounds & A Debate on Portfolio Construction: Does Ownership Matter with David Tisch

Anton Osika · published Aug 18, 2025 · hedged

Lovable would have been very successful regardless of whether it was built in the Valley or Stockholm

48:32 20VC: Lovable CEO Anton Osika on $120M in ARR in 7 Months | The Honest Truth About Defensibility and Unit Economics for AI Startups | The State of Foundation Models: Long Grok, Short OpenAI, Why | Replit vs Lovable vs Bolt: What Happens

Raaz Herzberg · published Dec 12, 2025

Starting Wiz at the onset of COVID was a net advantage rather than a handicap, and it neutralized the disadvantage of not being a Silicon Valley company

In lockdown the team had nothing to do but work for a year; remote selling let them compete with rivals who had salespeople in every US region without travel, and nobody knew they were in Tel Aviv, so location stopped mattering

Scope: specific to the first year of the company; they were scared at the time that there would be no money in the world

53:24 20Growth: How Wiz Built a $30BN Brand in Enterprise | What Worked vs What Was a Mega Failure: Lessons Learned | Why Marketers Make the Worst CMOs & What To Look for in Growth with Raaz Herzberg

Clem Delangue · published May 12, 2023

AI founders do not need to relocate to Silicon Valley; they can build a great company from anywhere and should optimize for where they are happiest

Founders build great companies when they are happy, so location should follow happiness; occasional trips to Silicon Valley are enough

Scope: you do need to be in Silicon Valley sometimes

11:41 20VC: Why The Future of AI Is Open Not Closed, Why We Are Years Away From AI Being Autonomous, Why AI Founders Do Not Need to Move to the Valley & Why Founders Should Not Meet Investors in Between Rounds with Clem Delangue @ Hugging Face

Emad Mostaque · published May 17, 2023

You do not need to be in Silicon Valley to build a leading AI company; a globally distributed, open approach can accumulate more talent, data and supercompute than any single-location company.

Bringing the technology to universities like the IITs, national broadcasters and family offices, and nation-built supercomputers yields talent, data and compute that centralized Valley companies can't match, and building in the open compounds it.

44:04 20VC: Why the AI Bubble Will Be Bigger Than The Dot Com Bubble, Why AI Will Have a Bigger Impact Than COVID, Why No Models Used Today Will Be Used in a Year, Why All Models are Biased and How AI Kills Traditional Media with Emad Mostaque, Founder & CEO @

Alex Lebrun · published Jun 19, 2023

Being in Silicon Valley used to be necessary to build an AI company but is no longer; founders should instead locate close to their customers

Talent is now very distributed and getting more so, and everything is distributed; his own Valley advantage was access to people like Siri's creator who gave him the confidence to refuse early acquisition offers — an advantage he wouldn't have had in Paris

41:24 20VC: Why No Models Today Will Be Used in a Year, Why Open Will Always Beat Closed in AI, Why Proprietary Data is Less Important Than Ever And Why EU AI Regulation is a Disaster with Alex Lebrun, Founder & CEO @ Nabla

Cristóbal Valenzuela · published Aug 28, 2023

AI founders do not need to be based in Silicon Valley.

He builds Runway from New York and has only been to the Valley a couple of times.

36:13 20VC: Why AI Models are not a Moat, Where Does the Value in AI Accrue; Startups or Incumbents, What the World Has Got Wrong About AI, Why AI Needs a New Story and Who is the Right People to Tell it with Cris Valenzuela, Co-Founder & CEO @ Runway

Christian Kleinerman · published Sep 22, 2023

AI founders do not need to be in Silicon Valley

There is amazing talent throughout the world and a lot of innovation is clearly happening elsewhere, even though the Valley has a special community advantage

Scope: Valley still offers community and idea-bouncing benefits

38:25 20VC: Are Foundation Models Becoming Commoditised? Do OpenAI and Anthropic of the World Have a Sustaining Moat? Why Smaller Models May Work Better? Why Incumbents with Data Power Win the AI War with Christian Kleinerman, SVP Product @ Snowflake

Harry Stebbings · published Apr 4, 2025

San Francisco's talent market is a serious drawback: acquisition is extremely hard, competition and salaries are very high, and employees churn between hot companies

US employees are promiscuous with jobs, leaving as soon as the work gets hard or a rival's up round looks bigger

59:59 20VC: Why To Win in AI, Investors Need to Change Their Approach | Why VC is Run by Principals and Associates and is a Broken System | The Bull Case for Anthropic & Whether Deepseek Changes Their Strategy with Nabeel Hyatt @ Spark Capital

Harry Stebbings · published May 16, 2026 · hedged

San Francisco is the worst place to start a company because a seed-funded startup cannot acquire and retain talent against well-funded AI companies.

A $3M seed startup is competing for the same people as Abridge, OpenAI and Anthropic with vastly larger war chests

Scope: asked as a position he invites Shiv to rebut

54:59 20VC: Lessons from Jensen Huang on "Founder Mode" | How to Know if OpenAI or Anthropic Will Kill your Company | How USV Liking Music Made Them $1BN on an Investment | The Five Year Desert to Product Market Fit & a $5.3BN Valuation with Shiv Rao @ Abridge

Harry Stebbings · published May 18, 2026 · hedged

San Francisco is the worst place to start a company today

Talent is extremely expensive and hard to acquire, the competing pool of companies like Anthropic is immense and brilliant, and talent tenure is so short that you can't build institutional memory

Scope: asks 'am I wrong?' and whether he's been infected by UK bias

79:14 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Anastasios Angelopoulos · published Aug 3, 2026

The Valley talent market is so competitive that only companies paying absolute top dollar can retain top engineers and scientists, leaving seed-stage startups that raised around $10M effectively unable to hire

Compensation is where the competitiveness shows up

34:28 20VC: 70% of Neolabs Will Die | There Will be a $100BN US Open-Source Model | Data is a Trillion $ Market | Governments Cannot Regulate Models: It is Too Late | The Cyber Attacks to Come Will be Insane with Anastasios Angelopoulos @ Arena

Matt Clifford · published Jul 1, 2024

It is more plausible to build and hold together a world-class AI research team in London than in the Bay Area

The hardest part of building an OpenAI or Anthropic-scale company in the Bay Area is retention — the moment you have a first demo, Sam Altman can offer your best researchers packages you can't match; London also has DeepMind, European offices of Anthropic and OpenAI, Wayve, and Oxford, Cambridge, Imperial and UCL

31:07 20VC: LLMs Are Reaching a Stage of Diminishing Returns: What is the Next S Curve | The Bull & Bear Case for China's Ability to Challenge the US' AI Capabilities | How AI Changes the Future of War & How Agents Will Reshape Society with Matt Clifford @ EF

Eiso Kant · published Oct 7, 2024

London, not Paris, is Europe's deepest AI talent pool, because DeepMind and Google made far larger investments in building that talent base there than Meta did across London and Paris

Historical pre-ChatGPT talent formation traces back to which companies built the talent base and at what scale; DeepMind out of London deserves the most credit and Google's investments dwarfed others by sheer headcount

50:17 20VC: Raising $500M To Compete in the Race for AGI | Will Scaling Laws Continue: Is Access to Compute Everything | Will Nvidia Continue To Dominate | The Biggest Bottlenecks in the Race for AGI with Eiso Kant, CTO @ Poolside

Harry Stebbings · published Apr 11, 2025

It is easier to build an AI company in London than in San Francisco

London has AI talent supply from top institutions and universities but lacks San Francisco's employee churn

59:20 20Product: How Scale AI and Harvey Build Product | Why PMs Are Wrong: They are not the CEOs of the Product | How to do Pre and Post Mortems Effectively and How to Nail PRDs | The Future of Product Management in a World of AI with Aatish Nayak

Paul Graham · published Aug 2007

Founders should move near other YC startups, because the peer pressure that drove them over the summer will keep operating.

A whole neighborhood of YC startups now exists in San Francisco, sustaining the same peer pressure.

source How Not to Die

Paul Graham · published Oct 2011

Y Combinator functions as a Valley within the Valley, artificially amplifying both the density of startup people and their willingness to help one another.

source Why Startup Hubs Work

Paul Graham · published Sep 2022

YC is the biggest cluster of great startup founders, and was deliberately designed to be such a cluster.

Even people trying to attack YC concede the point; the founders knowingly designed for the historical clustering phenomenon.

source What I've Learned from Users

Amjad Masad · published Mar 10, 2023

Startups still do best in San Francisco, though the intangible community effect can be found elsewhere and New York has much more of it today

There is an intangible optimism and feeling in the air in SF, and community matters to startup success

Scope: the intangible driver can be found in other places; New York now has a lot more of it

38:56 20VC: Why AI Will Lead to Thousands of Billionaires and Elon Musk's, Will TikTok Be Banned and How Facebook Should Be Investing in AI & Why Startups Have Become Too Soft; We Need a Spiritual Reform with Amjad Masad, Founder & CEO @ Replit

George Sivulka · published Jan 22, 2025

Silicon Valley is the place to build an AI company and Hebbia is the exception rather than the rule as a New York AI company

Hebbia works in a Silicon Valley style, pursues and invests in new technology the same way, started there, and has almost only Silicon Valley investors

58:02 20VC: Why All AI Companies Are Under-Valued | The Future of Foundation Models: Scaling Laws, Generalised vs Specialised, Commoditised? | From Unable to Afford Rent to Raising $130M From Index and Peter Thiel with George Sivulka @ Hebbia

Nabeel Hyatt · published Apr 4, 2025

In the age of AI, a founder who is genuinely all-in should be in San Francisco rather than London or Berlin, and Europe's core problem is that the truly all-in founders will choose SF

A startup's default state is death and everything — recruiting, raising, all of it — is hard, so a founder trying to mitigate everything that could kill them wants to be where the AI dinners and the best people are, which is San Francisco right now

Scope: of course people can and do succeed in London or Berlin; there are exceptions to every rule

59:01 20VC: Why To Win in AI, Investors Need to Change Their Approach | Why VC is Run by Principals and Associates and is a Broken System | The Bull Case for Anthropic & Whether Deepseek Changes Their Strategy with Nabeel Hyatt @ Spark Capital

Severin Hacker · published May 19, 2025

As a founder, you would be more successful based in San Francisco than in London.

Scope: explicitly scoped to founders, not investors

54:38 20VC: Duolingo Co-Founder on Why $3M is Harder than $100M to Raise | Why You Should Always Take Tier 1 VCs Even at Worse Terms | Why Europe Can't Win Unless the US Screws Up | How AI Impacts the Future of Work and Education with Severin Hacker

Severin Hacker · published May 19, 2025

Silicon Valley VCs of that era were interested only on the condition that founders relocate to the Bay Area, and none wanted to be the first investor in a non-Silicon Valley company.

Every SV firm made relocation a requirement and lost interest immediately when Duolingo refused to leave Pittsburgh; several later invested once others had gone first.

Scope: Based on Duolingo's own Series A roadshow; Union Square was the exception

62:42 20VC: Duolingo Co-Founder on Why $3M is Harder than $100M to Raise | Why You Should Always Take Tier 1 VCs Even at Worse Terms | Why Europe Can't Win Unless the US Screws Up | How AI Impacts the Future of Work and Education with Severin Hacker

Josh Browder · published May 18, 2026

A California LLC is uninvestable and a startup must be a Delaware C Corp, be based in the Bay Area, and build a software-style product to be backable

He made these three changes conditions of his investment in Micro1 and they changed everything for the company

Scope: stated as his own investment conditions

41:40 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Josh Browder · published May 18, 2026

The best structure is leadership based in San Francisco with talent hired globally, because SF's serendipity is irreplaceable even though its talent market is punishing

SF gives you serendipitous encounters — you bump into Sam Altman on the street — while global hiring arbitrages the cost problem, as Deel demonstrates

Scope: partially agrees with Harry's cost critique; New York may work similarly

79:43 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Ryan Petersen · published Jun 20, 2026

Flexport overcorrected on distribution and should pull more talent, especially leadership, back to San Francisco

The leadership team is too distributed; getting the CFO to move to San Francisco made the business much better

Scope: Flexport still needs to be everywhere, not just San Francisco; no large SF sales team needed since customers aren't there

36:15 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Cyan Banister · published Oct 19, 2020

San Francisco and California's politics are the cause of startups and residents leaving — high taxes and a feeling of being unsafe are driving people to red states

People can only be taxed so much before they flee to states with better taxes, and they say they feel safer and have higher quality of life in those states — largely because of the conservative thinking there

37:38 20VC: Cyan Banister on Her Relationship To Money, Risk, Her Investment Decision-Making Process, Why We Will See A Reckoning in the Early Stage Market, Her Biggest Takeaways from HQ Trivia & The Future of Silicon Valley

Marc Andreessen · published Mar 30, 2026

Silicon Valley and San Francisco have serious structural problems as a place to build — cost of living, housing, transportation, commutes, and politics — and San Francisco in particular is a city whose voters do not want it to grow or want business there.

He is a keen student of the region's issues and does not think everything should be concentrated there; practical quality-of-life and political conditions are genuinely bad.

Scope: stated while identifying as a committed Californian who has not left

40:22 20VC: Marc Andreessen on The Future of Venture Capital: Will a16z Go Public | Why Labour Displacement with AI is Wrong | Why Introspection is Dangerous | Why "Diamonds in the Rough" is BS in VC | Why a16z Invested $300M into Adam Neumann

Max Altman · published Nov 21, 2025

Living in Austin doesn't hurt his ability to get deals and actually improves his decision quality

In New York or San Francisco he makes many hectic decisions but not great ones; he thinks most clearly with space to reflect before calling a founder

Scope: acknowledges Austin has far fewer strong companies than San Francisco

34:50 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Harry Stebbings · published Apr 7, 2026

Being far from Silicon Valley is core to innovative thinking

28:24 20VC: DeepMind's Demis Hassabis on Why AGI is Bigger than the Industrial Revolution | Why LLMs Will Not Commoditise & We Have Not Hit Scaling Laws | Bottlenecks in AI & The Energy Crisis Caused By AI | Whether AI Will Do More to Harm or Help Inequality

Paul Graham · published Oct 2009

The startup world is unusually benevolent and its important people unusually accessible, because creating wealth is not a zero-sum game.

Since wealth creation isn't zero-sum, you don't have to stab people in the back to win.

source What Startups Are Really Like

Paul Graham · published Oct 2011 · speculative

The unusual generosity in startup hubs may stem from startups being less of a zero sum game than most business, or from founders' scientific backgrounds where collaboration is encouraged.

Startups are rarely killed by competitors, so helping others costs little; and science culture encourages collaboration.

source Why Startup Hubs Work

Paul Graham · published Oct 2007

Any argument that startups need not move from London to Silicon Valley would equally prove startups need not move from small towns to London, which almost no one accepts; so the difference between cities is only one of degree and Silicon Valley is the best place for startups.

The opposing argument reduces to absurdity: few would deny a startup in a small agricultural town benefits from moving to a hub with infrastructure, accumulated knowledge, and other people doing it.

source Why to Move to a Startup Hub

Paul Graham · published Oct 2007

It is the argument for staying in a city because of its country that is nationalistic; on a one-world view, moving from London to Silicon Valley is no different from moving from Chicago.

source Why to Move to a Startup Hub

Paul Graham · published Oct 2006 · hedged

Startups prosper in hubs for the same reason any industry does: that's where the experts are, raising standards and supplying talent, sympathy and supporting industries.

Standards are higher, the people you want to hire want to live there, supporting industries are there, and chance meetings are with people in the same business.

source The 18 Mistakes That Kill Startups

Paul Graham · published Oct 2007

Startups thrive in startup hubs because startups are a highly specialized business and people in hubs understand that business better.

By analogy with a Google search engineer's account that Google beat Yahoo not through anything specific but by understanding search so much better.

source Why to Move to a Startup Hub

Paul Graham · published Nov 2005

Founders not located in the Bay Area, Boston, or Seattle should consider moving, because startup hubs matter.

It's not a coincidence that few startups come from places like Philadelphia.

source How to Fund a Startup

Paul Graham · published Oct 2006

Places that aren't startup hubs are toxic to startups, so requiring founders to move is doing them a favor rather than a burden.

Indirect evidence: the microscopically small number of startups per capita that succeed in Houston, Chicago or Miami shows something must be suppressing them.

source A Student's Guide to Startups

Kevin Systrom · published Feb 22, 2023

San Francisco will rebound from this downturn and come back stronger than before

It has been through many downturns and always rebounds harder; extrapolating the current decline in a straight line is a mistake

48:29 Sf will rebound from downturn and return stronger as it always has

Kevin Systrom · published Feb 22, 2023

The Detroit analogy doesn't apply to San Francisco — remote work and pandemic shifts aren't a fundamental change to the industry that sustains the city

Detroit declined because a fundamental change hit its industry; no comparable structural change has hit the nerd community that constitutes SF

49:09 Detroit style decline analogy misapplies to sf absent a fundamental industry change

Harry Stebbings · published Feb 1, 2023

Concentrating a lot of smart people in one place with nothing to do but work is a great way to build great companies

22:14 Silicon valley is a mindset not a geography

Alex Bouaziz · published Feb 1, 2023

Venture still carries a bias that Silicon Valley companies are the only ones that can succeed, and too few funds take the risk of backing hungry founders elsewhere

COVID shifted it somewhat and Deel is living proof the assumption is wrong, but the mindset persists

39:58 Venture industry bias still favors silicon valley founders over hungry founders elsewhere

Clem Delangue · published May 12, 2023

AI talent — scientists and ML engineers — is heavily geographically distributed, even if early-stage startup energy concentrates in Silicon Valley

Looking at the full stack beyond early-stage startups, the talent is dispersed: 10 of the 13 authors of Meta's LLaMA, arguably the best open source model released, are based in Paris at Meta's AI lab there

10:30 Ai talent is already geographically distributed beyond silicon valley

Anton Osika · published Aug 18, 2025

Distribution and centre-stage attention are easier to get in San Francisco or New York, but Lovable proved it can be achieved from Stockholm through storytelling, building in public and amplifying users' own stories

Sharing everything the company is doing and empowering Lovable users to tell their stories is how they broke through from outside the US hubs

46:37 Storytelling and public building overcomes non hub distribution disadvantage

Harry Stebbings · published Aug 18, 2025

Silicon Valley teams have inherently higher churn, which prevents the compounding of knowledge within teams

On a bad day a competitor like OpenAI offers a bigger package and people leave, so knowledge never compounds inside the team

48:15 Sf high churn prevents knowledge compounding within teams

Jack Zhang · published May 27, 2025

London is a better tech ecosystem than Melbourne and an exciting place to build, chiefly because of its global nature, though it is very expensive

He values the global mix and has enjoyed meeting many entrepreneurs there

81:55 London is an excellent global hub despite high cost

Christian Lanng · published Sep 27, 2023

Silicon Valley's startup ecosystem recycles knowledge far faster than elsewhere because of the sheer density and rapid death rate of startups

Thousands of startups within a small radius, most die within months, and the people immediately recycle into new startups carrying the knowledge

42:44 Density and fast failure recycle knowledge

Daniel Khachab · published Oct 28, 2024

Silicon Valley's extraordinary company-building has not improved average quality of life where it happens — and life there is getting worse

Every Caltrain stop has a $100B+ company yet the train is a garden shed on rails, the roads are bad, and homelessness is next level; the best foundation models and vertical winners all come from that small strip of land with none of it showing up in living standards

64:47 Extraordinary wealth creation coexists with declining local quality of life

Shiv Rao · published May 16, 2026

San Francisco is the right place to build right now, and companies that inflect need to move there

The concentration of cracked early-stage teams, ideas, creativity and energy is unmatched; you osmotically absorb ideas and get access to talent and mentorship you can't get elsewhere

55:19 Sf concentration is worth it move at inflection

Sebastian Siemiatkowski · published Feb 16, 2026

US VCs pushing already-grown European companies to move their engineering centre to Silicon Valley is bad advice that can destroy traction

Truecaller did it on VC advice, couldn't recruit because nobody in Silicon Valley knew the brand and they were too mature to attract talent as a startup, shut it down and lost a year

50:48 Relocating a mature company to sf destroys recruiting and traction

Severin Hacker · published May 19, 2025

A company headquartered outside Silicon Valley should not open a Silicon Valley office.

It creates an internal funnel moving your best employees to Silicon Valley, where they then get recruited away by whatever the hot local company is, so you lose your talent.

53:18 Opening a satellite sf office creates a talent drain funnel

Jason Wilk · published Apr 21, 2025

Being based in LA rather than a tech-heavy hub was a real advantage during the crisis because it let him escape constant exposure to the tech scene

His golf club and social circle contain no tech founders, so he wasn't surrounded by it at all times; being a virtual company helped too

21:38 Distance from tech hub eases psychological burden during public crisis

Victor Riparbelli · published Jan 15, 2025

It is easier to move people from the Valley to London than from the Valley to New York

Americans want to experience European lifestyle, cultural heritage and London's melting-pot character

59:01 Moving talent from the valley to london is easier than to new york

Cyan Banister · published Oct 19, 2020

With rents and property values falling, more conservatives should move to San Francisco, which could turn the city around

Lower cost of entry makes it feasible, and the city needs political diversity to fix itself

40:48 Lower cost of entry invites political diversity that could help fix san francisco

Jean-Denis Greze · published Jul 21, 2023

The knowledge of how to build and scale a startup has internationalized — other regions have proven they can export Silicon Valley's company-building culture — though the Valley retains an edge in people who have done it multiple times

On a recent Europe trip he found that things which were specialist Valley knowledge ten years ago, like what a first PMM does or growth hacking and PLG, are now widely understood

20:50 Startup building knowledge has internationalized though the valley retains an edge in repeat operators

Nabeel Hyatt · published Apr 4, 2025

High talent churn incentivizes companies to keep innovating and move fast — or to fake it with synthetic growth

The competitive labour market forces continuous innovation and speed, so the skill is separating real innovation from synthetic growth

60:23 High talent churn forces continuous innovation or synthetic growth fakery

Ryan Petersen · published Jun 20, 2026

Flexport largely moved its team out of San Francisco because of cost and lack of employee loyalty

Job hopping is prevalent and SF is expensive; only ~4% of the company is now based in SF despite being founded there

35:40 Cost and job hopping push teams out of sf

Max Altman · published Nov 21, 2025

The majority of the best companies will still be built out of San Francisco, but founders there must be outward-looking and target at least the entire United States to succeed

Rippling works because Parker targets a product a nice HR woman in Nebraska will love, rather than a coastal niche

21:20 Sf remains the best base only with a nationwide market focus

Paul Graham · published Oct 2011

The right way to explain the huge variation in startups per capita is not that most towns kill startups but that failure is the default for startups and only a few places actively save them.

Framing the question as 'what kills startups in most towns' was wrong; startups elsewhere are just doing what startups naturally do, which is fail, so the real question is what saves them in places like Silicon Valley.

source Failure is the default for startups and hubs uniquely rescue founders from it

Paul Graham · published Oct 2011 · hedged

The antidote that saves startups in hubs has two components—being somewhere startups are the cool thing to do, and chance meetings with people who can help—both driven by the number of startup people around you.

source Hub effect comes from two components cultural normalization and chance meetings both scaling with startup people density

Paul Graham · published Oct 2011

A culture where startups seem normal matters most at the earliest stage, when someone moves from merely wanting to start a company to actually doing it.

It's quite a leap to start a startup and an unusual thing to do, but in Silicon Valley it seems normal, whereas elsewhere people treat founders as if they were unemployed.

source Cultural normalization of startups matters most at the earliest decision to start

Paul Graham · published Oct 2011

Having the people around you care about what you're doing is an extraordinarily powerful force that even the most willful people cannot resist.

Graham himself was briefly tempted to consider starting another startup merely because a VC responded eagerly.

source Surrounding social encouragement is an irresistible motivating force

Paul Graham · published Oct 2011

What now sustains Silicon Valley is its people, not its physical infrastructure or weather, which only helped get it started.

Now that the reaction is self-sustaining, what drives it is the people; for Page the crucial component was Brin and vice versa.

source People not physical infrastructure or weather sustain an established hub

Paul Graham · published Oct 2011

Creating a startup hub requires a large number of people interested in startups, for three reasons: density is needed for chance meetings, startups need very different things so supply must be varied, and enough people set the social norms.

Without density chance meetings don't happen; different startups need different specific help (Sean Parker for Facebook, a database person for another); and once enough people share an interest they set norms that encourage ambition instead of pulling you back toward the mean.

source Hub formation requires critical mass for chance meetings varied specific help and social norm setting

Paul Graham · published Oct 2011 · hedged

Silicon Valley's distinctive quality, compared with other prosperous American cities, is best described as optimism.

There are different kinds of prosperity, and the Valley doesn't look like Boston, New York, LA or DC.

source Silicon valleys distinguishing trait among prosperous cities is optimism

Paul Graham · published Oct 2011

Succeeding in a city with few other startups is not impossible, only harder, and requires exceptional self-generated morale and discipline.

Wufoo succeeded from Tampa, but the Wufoos were exceptionally disciplined.

source Succeeding outside a hub is possible but requires exceptional self generated discipline and morale

Paul Graham · published Oct 2007

Advising startups to move to Silicon Valley is a claim about cities rather than countries, and applies even to startups already in the second-biggest hub, Boston.

He gives the same advice to US startups; Y Combinator tells its Boston-cycle startups their best bet is to move to Silicon Valley, so it applies even more to lesser cities.

source Hub advantage argument applies even from the second best hub like boston

Paul Graham · published Oct 2007

All other things being equal, the more of a startup hub a place is, the better startups will do there — but other considerations can outweigh the advantages of moving.

He is not claiming every startup must go to Silicon Valley; e.g. founders with families uprooting them halfway around the world could be too much of a distraction.

source Hub advantage holds all else equal but other considerations like family disruption can outweigh it

Paul Graham · published Oct 2007

Immigration difficulties can be a good reason for a startup to stay put, because dealing with them consumes attention a startup can't spare.

Dealing with immigration problems is like raising money in consuming all your attention; one Canadian startup they funded spent six months on it and gave up rather than lose more time from their software.

source Immigration difficulty is legitimate reason to stay put since it consumes scarce founder attention

Paul Graham · published Oct 2007 · hedged

A startup tied to a specific industry may be better off in that industry's center rather than in a general startup hub.

source Industry specific startups should locate in their industrys center rather than a general startup hub

Paul Graham · published Oct 2007 · hedged

A startup with a definite funding commitment from a good investor where it is should stay rather than move.

Finding investors is hard, so you generally shouldn't pass up a definite funding offer to move.

source A definite committed funding offer where you already are outweighs moving to a hub

Paul Graham · published Oct 2007

Startup hubs are markets, and markets centralize because face-to-face contact makes deals happen in a way technology has not yet duplicated.

Even now that traders could be anywhere, they cluster in a few cities.

source Markets including startup hubs centralize because face to face contact still beats technology mediated deals

Paul Graham · published Oct 2007 · hedged

Cheaper startups will increase rather than end the importance of startup hubs like Silicon Valley.

You can start a startup anywhere but must make it succeed, and hubs' value lies in face-to-face meetings that no near-term technology will replace.

source Cheaper more mobile startups increase rather than erode hub importance since hub value is face to face meetings

Paul Graham · published Oct 2007

The right question about being in a startup hub is not whether you need it but whether it brings any advantage at all, since any advantage your competitors take and you don't hurts you.

Anything that brings an advantage will give competitors an advantage over you if they do it and you don't.

source The right hub question is whether any advantage exists not whether its strictly necessary since competitors will exploit any edge

Paul Graham · published Oct 2007

Because seed-stage startups are increasingly mobile, seed funding is a national rather than regional business and local clones of Y Combinator won't work.

Cheap startups are tiny and move easily; the best local talent will move to the real Silicon Valley, leaving only those without the energy to move.

source Seed stage mobility makes seed funding national not regional so local yc clones fail as best talent relocates

Paul Graham · published Oct 2006 · hedged

37signals succeeding outside a startup hub is probably an anomaly rather than a pattern for the future, despite startups getting cheaper.

Historically certain towns have always been centers for certain industries, and being outside them was a disadvantage—a pattern much older than Web 2.0.

source 37signals outside hub success is a historical anomaly not a repeatable pattern

Paul Graham · published Oct 2009

The peer community of other startups, and living in Silicon Valley specifically, is a major and underappreciated advantage for founders.

Founders valued facing similar obstacles at similar times, and in Silicon Valley you constantly hear cutting-edge news and meet useful people.

source Peer community of fellow founders facing similar problems is a major underappreciated sf advantage