These days, you clearly can build a successful SaaS and Cloud company outside the Bay Area.  Shopify, Atlassian, Canva, Hubspot and so many others leaders founded and HQ’d outside SF all inspire us.   And our course, Microsoft and Amazon in Seattle, along with Smartsheet and many others.

And it is just sooo expensive here in the Bay Area now.  Like crazy expensive.  And aren’t we all moving to distributed teams?  And there is so much more venture capital dedicated to SaaS and Cloud all across Europe, India, Asia, Canada, Australia, and more.  Not as much as in the SF Bay Area, no.  But so much more capital outside of it.

Still, networks matter.  And finding veterans that have done it before really helps, especially as you scale.  And where are these networks and veterans?

Well, at least in SaaS, they are still in the Bay Area.  For now at least.

I took a quick weighted look at the BVP Cloud Index, and added in a few recent IPOs — Slack, Zoom, etc. — almost all of which are in the Bay Area, too.  Weighted by market cap, 80% of public Cloud and SaaS companies are still in the SF Bay Area:

There are many ways to slice this data.  You could add in Microsoft, Amazon and Google and it would plummet to 50/50.  You could add in SAP and Oracle and it would go back up closer to 80/20.  You could remove Adobe and Paypal, and then it would be 70/30.  And more of the next-generation, from Canva on, is from outside the Bay Area.

Still, the Bay Area remains where it is at for Cloud and SaaS.

So what conclusions can we draw?

Well, build your SaaS company where you can best build it.  You can do it from London, from Paris, from Toronto, from Syndey.

But if you are OK coming to the Bay Area, and especially, if you sell into tech and/or partner with other Cloud and SaaS companies, I say still come.  At least some of your founders.  Most all the leaders are still here.

And having them here, and all their veterans and alums, and their partner programs, and all that … that still helps you scale.  Even these days.

And you’ll need all the help you can get.

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