So we are how many months into this? I’m not even sure anymore.
And of the CEOs I’ve invested in who aren’t originally in the Bay Area, I’d say 50% have, for now, moved somewhere else. Sweden. San Diego. France. And more.
I even looked at myself. We looked seriously at moving to Hawaii, when it seemed to be a Covid-free island. And then less seriously at London, where I would have gone if it were up to me.
Last week, I visited SF for the first time since Covid hit. Hayes Valley, my first quick stop, was super depressing. Boarded up retail, trash everywhere, and the few restaurants opened could not really sustain distanced eating. Just sad.
And yet … and yet … the Bay Area is already coming back.
- First, VC is on a total tear. Investments in SaaS and Cloud since Q1 ’20 exceeded all our expectations. And all those funds will soon be raising even more funds. And the majority of that early-stage capital is still based in SF and Silicon Valley. Yes, VC has flattened and funds in Europe and Australia and Canada are much bigger. But the U.S. funds are even more much bigger, too. 🙂
- Second, IPOs are on a tear. And most of the SaaS and Cloud ones are in the Bay Area. Asana, Snowflake, etc. etc. Yes, they are working from home now. But not for always, not everyone.
- Third, the VCs and CEOs and VPs are still here. This is the most important point. We’re all running distributed teams now, and likely now be forever. The work world has changed forever, at least in tech. But every top Bay Area unicorn and decacorn CEO from our recent digital events is still here. Many were the only employees in their office during the SaaStr event. 🙂 (see Rob from Coupa and me below) — but they’re still here. And none of them are leaving. Some VCs may be in Tahoe now, for now. But no one is selling their house in Palo Alto. Not really.
We’re nowhere near through this Covid Crisis. But if you squint, walking down downtown Palo Alto, you can see no one is really leaving permanently. At least, not unless taxes get truly insane.
It looks like the SF Bay area will clearly remain where the CEOs are, the capital is, and the execs are. It’s just the rest of our teams may now be much more elsewhere. And that’s OK.
So I say the Bay Area deserves it knocks. Things have changed. And you don’t need to be here to build a unicorn. But — the odds are probably still higher if you do come here. Or at least, that will soon again be true. 80% of SaaS companies are still headquartered here.
If you’ve taken off for now, well that’s fine. Why not? You can even raise $100m+ over Zoom today if you’ve got a proven, hot company.
But in the end, maybe think about coming back in a little bit. Many have left. But the reasons to be here, it turns out, are still as strong as ever. Or at least, they will be again.
Everyone said Bay Area is dead. I counted San Mateo, SF, SF, Redwood City and Sunnyvale. https://t.co/xhTtNQDQJ6
— Sundeep Peechu (@speechu) August 24, 2020