Lots of San Francisco residents are starting to revolt against the technology industry’s invasion of the city.
Maybe the tech industry should start looking elsewhere for its own good.
The place is just so expensive.
Yesterday, we told you the story of how Julia Hartz, the co-founder of a startup called Eventbrite, wanted to “throw up” when she signed her company’s lease in San Francisco.
She told us that commercial rents in San Francisco have tripled over the past two years.
She estimates that staying in San Francisco will cost Eventbrite an extra “tens of millions of dollars.”
“It’s very hard to stay in San Francisco as a growing tech company,” she says.
Citing research from Ijad Madisch, founder of ResearchGate, they say “prime commercial real estate” costs SF-based startups, on average, $US102,000 per year.
That’s a huge amount — far more, in fact than the cost of real estate in New York. In New York, the average annual real estate cost for a startup is closer to $US86,000.
Among the 11 most expensive cities for co-founders to launch startups, only two demand higher real estate prices than San Francisco: Beijing ($190,000/year) and London ($140,000/year).
San Francisco also has high talent costs.
The Information estimates two software engineers will cost an SF-based startup $US217,000 per year. In New York that number is only $US170,000. Only Palo Alto, Calif., is more expensive, at $US242,000. In London, the cost is $US123,000.
Add it all up and The Information ranks San Francisco as the most expensive city for founders. Average costs there are $388,513 versus $US379,121 in Palo Alto, $US317,022 in New York, and $US304,462 in Seattle.