# Dalton & Michael: Does Your Startup Need To Be In San Francisco?

**Author:** Dalton Caldwell, Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/IN-dalton-michael-does-your-startup-need-to-be-in-san-francisco
**YouTube ID:** ZqGOCF4O6ks

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Should you and your startup live in San Francisco? Y Combinator Partners, Michael Seibel and Dalton Caldwell, debate
their different opinions on whether startups are more likely to succeed in the Golden City or elsewhere. Where do they
find common ground? Watch to find out.

## Transcript

we're working together we're in the same room right now yes we get to live in the same area even though our personal decisions about where we live are wildly different yeah very different lives I don't have a yard I have kids too yeah [Music] all right this is Michael Seibel with Dalton Caldwell and today we're going to talk about does your startup need to be in San Francisco oh man we're just we're wading into the to the debate of the of the moment so why don't you kick it off you've got a

controversial how about this yes usually in these videos you and I just agree on everything it's boring we disagree strongly we have a different opinion here I'm so confident you're wrong okay good stuff so let me start by saying I don't think everyone startup needs to be in San Francisco to be successful build a successful startup and not live in San Francisco please okay please share so a lot of the reasons that folks read the discourse about San

Francisco and man there's a lot of test scores yes is they're very fixated on the lifestyle of living in downtown San Francisco yes they see all the photos on Twitter they hear the stories yes it's all over National media yeah like my parents know all about yes my dad's like so how's it going in San Francisco right like okay so for me personally I actually prefer to not live in a dense City I like living in a place that is warm and bright and sunny and I

can walk around and like the birds are singing and like yes there's trees everywhere um I kind of like living in a boring Place personally I'm just speaking for myself where there's not a lot of distraction and I can just kind of focus on the work I'm doing then you know really intense stuff going on around me all the time also as you know you know I got small children and just for my lifestyle and the happiness of my family like I prefer to live just in a different environment you like having a yard I do okay so I so I enjoy those things

um and then also I think sometimes what people forget especially aren't in the Bay Area is how the actual big employers for most folks in Tech are not in San Francisco down south Google and Facebook and Apple the Apple HQ is in Cupertino yes nowhere near the center of San Francisco boring companies yes and so clearly in the history of this stuff all these great companies were built outside of San Francisco like if we actually look how many of the most epic companies in the world in Tech were actually built in San Francisco yes it's actually not that many and so to argue that every company

has to be in San Francisco is factually wrong fair and here's why you're wrong okay so I I live on Market Street in downtown San Francisco fair just to be clear okay for me growing up living in a city was aspirational so I spent my high school middle school years in a suburb of New York and when you do that you know New Jersey right whenever

I'm from New York well where exactly they're like well you know Upstate like you know yeah I Middle School and High School New Jersey and when you're growing up in a suburb of New Jersey you know where you are is not where the action is that's true you know almost by definition and at least for me I perceive getting to the city as part of growing up becoming an adult that was a a big part of kind of my mentality um two I like nice restaurants and nice

bars and those things don't exist in the suburbs I know someone's going to be in the comments saying like but in my suburb there's like no no it doesn't sorry it's just good for where you live another thing that I like especially as a startup founder I liked having a chip on the shoulder I liked being in a place where there are things I couldn't afford where there were places I couldn't go unless I was more successful where I could kind of see what success could get me and I always felt like the suburb tried to hide that away like everyone

was in the same kind of house in the development and like we all have our own space we can't see each other like I liked seeing what if we were to make it what I might be able to get um that was really amazing also I spent my first kind of nine years living in a city in Brooklyn so I was used to living an apartment that was never weird for me and there are a bunch of amazing newer companies Uber Airbnb doordash I don't know those

those well Jordan Ash was Palo Alto food delivery that was their original name so they did move there they didn't start there and they moved okay so um I think that my core point is that um the city is the better place for a young startup founder to get ahead now this is kind of a fake disagreement because if you kind of have been parsing our words carefully we're talking about living in the Bay

Area yeah so I'll ask you straight up Dalton would you recommend someone starts a startup outside of the Bay Area yeah well I genuinely would not we agree so the part we're agreeing with is that again think about it we're working together we're in the same room right now yes we get to live in the same area even though our personal decisions about where we live are wildly different we have very different lives I don't have a yard I have kids too yeah and so what's cool is we get to work together yeah and we get to work with all these amazing people and yet we have very different choices

on how we want to live yes and that only would happen here because this place attracted both of us yes and I think that what's not spoken about enough at this point you make a lot is that there are certain cities that are just better and there's certain regions that are just better when you talk about all the reasons why but if you want to be the best in finance you're probably going to find yourself in New York if you want to be or maybe last or maybe London yeah if you want to be the best I

don't care anymore in essence breaks it yeah but Bryce kind of [ __ ] that up if you want to be the best in entertainment you're probably going to find yourself in LA and the reason why is because when you want to be top 0.001 you want to be around other people who are trying to be top 001 and I think both of us wanted to be top 0.01 startups yeah you're from Texas yeah from [ __ ] Jersey like we didn't grow up here yeah that's true we made our way here and

when you're here you get to consume all the other people like us who were looking to be the best and willing to get in the car and make our way here to do it so I think that's a huge huge Point yeah and I just think a lot of the folks that I talk to they have the opinion from reading Twitter and reading all this stuff that they all need to agree with you on this point and that like if moving to San Francisco means if they live downtown in the tender it means you have to yes make some really protest on the weekends yeah again it's

it's I again I talk to people when I find people for YC and I think they have a lot a lot of people have like a lot of anxiety about these issues and again what they don't realize is do you know how many people live in East Bay and they live in the peninsula and they like it's a huge area it's a huge area yeah but we all get to work together yes but we get to make our own decisions yes we get the benefits of living in the berry and having the network effects of the city yes without all living in like the like our lives are not the Twitter thread no showing photos of what's going on in Downtown San Francisco well and I think fit like what's tricky is that

they're all of these embedded interests who I think are influencing startup Founders right they're the politicians who are like oh come to my city come to Miami because like like we're trying to make it startup friendly those politicians what they're looking for is tech jobs they're not like the what they really need is a Google office like they're not going to get the Google office by having a startup culture but their politicians didn't realize that yeah there are other people who are just looking to kind of flame folks on Twitter and right like

the easiest way you could do that is start posting [ __ ] about San Francisco socks right and then get into some debate and I think the smartest Founders look past that they look past all these like stupid debates and one of the things I think they see about the Bay Area is the network effect so why don't you go like what what's going on here like why our billion dollar companies just seem to keep popping up after decade after decade here well I think look Network effects are powerful we know this this is the thing that makes things like Airbnb work like uber

work like all the startups Network effects are like really powerful that's why Facebook has any value at all is Network effects and basically what's weird about Network effects is if you're not benefiting from them you don't know what you are missing yes and a lot of the times when people want to talk about well I don't mean to live there blah blah blah okay but that's fair you won't know what you're missing yes it's all the things that won't happen it's all the people that you won't meet all the chance encounters you won't have all the employees you won't have like

all these surface area for luck you know I like to talk about how to maximize luck you know think about how many people again let's talk about non-tech if you want to make it as an actor think about how many people their story of their big break is that something happened in like Los Angeles or New York yeah or a band that moved to Los Angeles or New York and like when the when the actual moment happens when someone spots them or finds them or like that lucky moment whatever that is yes the work that they did before that was to put themselves in that position yes and so no one is going to take someone that's outside of this area and tell you this

is why this is what you're missing out on I think the people here sometimes don't understand the network effects they're consuming you and I both saw a lot of people leave the Bay Area during the covet all of them came back and they also don't say that as publicly they don't say that as public they all came back yeah and all of them said the same thing which was basically like I missed the community but I never really understood that I was consuming the community I thought I was working all the time but like I actually was consuming a community of people who are

really into startups and when I moved to Seattle or Austin or New York that Community wasn't as strong and I missed it but isn't it respect there yeah and there is a good lifestyle startups is different than Tech yeah and I think that like what's so funny is that like you know this is this is counter-intuitive and hard when the people who don't consume a network effects don't know what exists and the people who do consume that perfect sometimes don't realize it exists either so this is like a subtle point it's it's it makes sense that people be confused

by this like and then you add in some Choice photos of San Francisco and it makes sense why people would say why me do this anymore yep what I will say though to kind of like finish this point is I think one of this slightly dangerous things that kind of sneaks into this startup game then also also causes people to not want to come here is that people don't realize that they need to be aiming for greatness I always like to equate this back to sports where it's like there are so few spots in the

NBA let alone the All-Star team let alone the Hall of Fame the bar is so high to get into the NBA that anytime you're a basketball player anywhere you want to be the best basketball player yeah on your high school team on your AAU team on the Invitational event you want to be the best possible player anywhere because you know that like the average NBA player was the best basketball player like anywhere and I think that sometimes startup founders

miss this point and they're kind of like I want to be in the game versus I want to win the game yeah yeah and I think that like it's really easy to say well you know I can be in the game in Austin I can be in the game in Seattle there are investors there there are people that I can be in the game in New York and I wish that we were more honest that like yeah you can play basketball for your high school team but that's not that's necessary but not sufficient to make the MBA if you want

to be a great founder who really impacts the world and helps lots and lots of users you have to aim for great yeah you can't just aim for being in the game and I actually just bring it back to statistics and odds it's gonna be really precise because I can imagine how some people will respond to some of the things you're saying here yes and they're going to throw anecdotes at us they're going to say yeah there's this and there's this and there's shopify's yeah so yeah and it's true yes I have nothing to take away from this mongodb is in New York and I've been told that by every [ __ ] New York founder for a decade mongodb yeah and

but the point is we're actually trying to impart advice to increase your odds of success because just like with people that want to become Hollywood celebrities or rock stars it's hard there's certainly anecdotes of people that were discovered and like everything slipped into place for them yes but if you actually just look at the numbers of like how you increase the odds of success moving to an area moving to the big leagues was a key part of it and so I would just encourage folks that are unsure about this debate or they don't have their mind made up to to realize

that the anecdotes are true that you can do a startup outside the bay area of course and like maybe there's a really good reason you want to do that I don't know sure who maybe there's health reasons or family like great of course but if all you want to do is play the odds and optimize for Success yeah I I can't really understand why you wouldn't yeah want to be here and I think and that's not anecdotes that's numbers that's just numbers yeah you know it's funny because I was thinking about this in the context of Casino where I'm like imagine you sat down the blackjack table

but you didn't know basic Blackjack strategy right so you know to double down when to split yeah so when you could still you can still win you can't but like it is so easy to get that one hour of instruction and that increases your odds so much getting into the bay area is so relatively easy to all the other things you have to do to succeed choosing where to live is so relatively easy all the other things you have to choose correctly Why not pick up the easy wins it's an easy percentage multiplier and I'm like

this game is so hard you might as well take the easy one and it's like so to wrap it up we have a strong disagreement I think the suburbs are horrible you clearly like them by the end of the day there's room for both of us yeah we're both in the same ecosystem right we're both working together yeah and we're recording this video in the freaking suburbs too we came to my to my area oh man all right great chat also thanks

[Music] thank you
