Does Your Startup Need To Be In San Francisco?

Dalton says a startup can succeed outside San Francisco and prefers a quieter, sunnier place with a yard for his family. He points out that major tech employers such as Google, Facebook, and Apple are based outside the city, and says many successful tech companies were built elsewhere. Michael prefers city life, citing restaurants, bars, and the motivation he gets from seeing what success could bring.

Michael and Dalton clarify that their disagreement is about living in San Francisco versus living elsewhere in the Bay Area. They agree they would not recommend starting a company outside the Bay Area, which lets people with different lifestyles work together. They argue that ambitious people cluster in places suited to their fields, such as New York for finance and Los Angeles for entertainment.

Michael argues that the Bay Area's startup network creates chance encounters, connections, and access to employees that founders may not notice until they leave. He says people who moved away during COVID later returned and missed the startup community. The value can be hard to see because people outside a network cannot easily know what opportunities they are missing.

Michael says founders should aim to build something great, comparing that ambition to the high bar for reaching the NBA. He acknowledges that companies can succeed elsewhere, but argues that moving to the Bay Area can improve a founder's odds. He compares the choice to learning basic blackjack strategy: a relatively easy step that can improve the odds in a difficult game.

Michael allows that health or family needs can make another location the right choice. Dalton's preference for the suburbs and Michael's preference for the city coexist within the same regional startup ecosystem. They close by noting that their conversation is taking place in the suburbs.