I’ve had occasion to speak with a number of startups in the Bay Area over the last few months. One trend I’ve seen is how many of them are located in San Francisco, in SOMA as well as other locations in the vicinity of Market Street. Two BART stops seem to cover a large number of these SF-based startups: Embarcadero and Montgomery.
It didn’t always used to be this way. When I first moved to the Bay Area, most tech companies — both established ones and startups — were in the peninsula. My first job was at a startup in Redwood City. SF was a city you used to drive through on the way to Marin County, and none of my friends from college worked in the city.
Things began to change around the end of the 2000s. I’m not sure what exactly it was — perhaps SF got really cheap or the peninsula got too expensive — but a lot more startups seemed to be popping up in SF. I met with an acquaintance at a game company near AT&T Park in 2010 and noticed how many tech companies I passed on the way to his office from the Caltrain station. The trend seems to have accelerated since.
It seems that there are relatively few new startups being started in the peninsula, and of the ones that are, many move to SF soon after their first serious round of funding.
I’m interested to see how this trend plays out. Being in a city definitely has its advantages in terms of attracting a certain type of employee (generally younger and single), but it may have adverse effects on hiring more experienced employees with families. It may also limit the radius within which companies can hire — unlike mid-peninsula locations like Palo Alto, SF is hard to reach from many places in the Bay Area (and much harder to find parking in!).
Be that as it may, I now have several friends who commute up from the peninsula into the city every day.