For startup founders looking to make it big, San Francisco can seem like a promised land. The tech industry is booming, with plentiful Silicon Valley venture capital and a community that’s supportive of innovation.
But San Francisco is also crowded and competitive, and living there is getting more and more expensive. A recent study by real estate marketplace Zumper found that a one-bedroom apartment costs more in San Francisco than anywhere else in the country.
In part because of the rising cost of living, some startup founders have decided it’s time to leave San Francisco for other cities.
Tilde, an open-source-centric startup, recently took the plunge and moved its five-person team north to Portland, a smaller city where real estate is still affordable and people come from all walks of life.
“In San Francisco, you go to Blue Bottle and every guy around you is pitching an investor or talking about funding,” Tilde cofounder Tom Dale said to Business Insider. “Many of my friends who weren’t in tech had to go very far east to find somewhere affordable to live. It means that generally the people you interact with on a daily basis are in a limited set of professions.”
“There are people with other points of view in Portland,” he added.
That’s not to say that Portland doesn’t have a growing tech scene — Tilde joins startups like Simple, Panic, and Sprint.ly, which have already set up shop in the city. Big-name companies like Salesforce, eBay, and Airbnb have also opened outposts here in recent months.
“It’s a big community without being overwhelming. It helps people step up. There’s less of an intimidation factor,” Tilde cofounder Leah Silber said. “Companies are showing people that it’s OK, that you’re not losing much by leaving San Francisco.”
For real estate startup Cozy, which builds rental management software, moving away from San Francisco was never really part of the plan.
“We found that after we raised seed funding, we were having a hard time finding top-notch Ruby engineers. We decided to look in Portland, just because we knew of conferences they had there before, and we immediately found three people,” Cozy founder and CEO Gino Zahnd said to Business Insider.
“Over the course of 2013 and 2014, we hired people from all over the country and gave them the choice between living in San Francisco or Portland,” he said. “100% chose Portland.”
For Zahnd and his Cozy team, quality of life was a major motivator in considering a move. In Portland, they can walk or bike to work down wide, tree-lined streets — a major change from fighting San Francisco traffic during the morning commute.
Plus, the city has a food, music, and cultural scene that’s just as good as what you can find in San Francisco, Zahnd says.
“The biggest perspective change is that the struggle is not necessary to build an insanely high-quality product or work with insanely talented people … Being in Portland gets us out of the echo chamber and insane recruiting tactics, and it helps us focus on our goals,” Zahnd said. “I’ve been in San Francisco for 20 years, so I was a little nervous at first. But for me personally, with each week that passes, I miss San Francisco less and less, and I’m more confident in my decision.”
For a real estate company like Cozy, the housing market was another obvious consideration.
“San Francisco has a stigma for being so expensive. The number I like to use as a base line is that in San Francisco, the median price for a single family home is $US1 million,” Zahnd said. “In Portland, it’s under $US300,000.”
The team at Tilde experienced a similar phenomenon. All five cofounders were renters in San Francisco, but four of them were able to buy homes when they moved to Portland.
“I have a mortgage payment that’s half of what my rent was in San Francisco,” Silber said.
Dale agreed: “You can afford to live downtown, and you don’t feel unsafe like in SOMA,” he said. “Plus, the public transit is amazing for a city of its size, and parking is plentiful.”
Last summer, just before he moved to Portland, Dale shared his feelings towards San Francisco and tech in a blog post. The whole piece is worth a read, but we found this selection especially interesting:
The brobdingnagian salaries we’re getting paid haven’t just skewed the market; they have taken it in two hands, turned it upside down, and shaken it like a British nanny. My friends who are not in technology keep getting pushed further and further away, or into smaller, dingier accommodations.
The recent BART strikes are just a single data point in a larger trend: we’re alienating everyone who isn’t in technology. It’s not sustainable. The stomach-turning coverage of the BART strikes should throw into stark contrast just how bad things have gotten. Even I, who makes a decent salary, have seen the great American dream of home ownership recede into the distance.
It took a long time for me to realise I was part of the problem. Yeah, I might be in tech, but I’m not one of these social media douchebags, I thought. Doesn’t matter. The fact that I get embarrassed when a girl at a bar asks me what I do should have been my first clue.