Tech's center of gravity shifts north to San Francisco

Fast-growing tech firms are shunning Silicon Valley for San Francisco to help them attract new talent

By Cameron Scott, IDG News Service |  Software, Silicon Valley, startups


The venture capitalist Vinod Khosla recently described Silicon Valley as a state of mind, rather than a geographical place. If that's the case, that state of mind can increasingly be found in San Francisco.

Young tech companies have been flocking to the city at such a rate lately that, in the words of Peter Wendell, founder of Sierra Ventures, in parts of San Francisco "you can almost go door-to-door."

San Francisco, a short hop by train or car from the chain of towns that make up Silicon Valley, has long had some tech stars of its own. But the number of prominent tech startups that have opened new or expanded offices here lately is a break from the past. The technology center of gravity in the region seems to be drifting northward to San Francisco.

Pinterest, Twitter, Zynga, Dropbox, Yammer and Rackspace are just a few of the companies that have moved into new office space here in the past two years. Companies have come to see opening a San Francisco office as a way to attract talent, and as more big names start to run their businesses from the city, so others feel pressured to be here to stay in touch.

As a mark of how powerful the lure of a San Francisco address has become, the fast-growing social network Pinterest left its Silicon Valley office in Palo Alto last week to set up shop in San Francisco. The company is already touting its location in its pitch to prospective employees.

Despite the high cost of living and notorious summer fog, many of the 20- and 30-something engineers who staff the technology industry prefer to be in San Francisco, which is seen as more fashionable and cosmopolitan than the suburban towns that stretch along Silicon Valley. That preference accounts for the fleets of shuttles that take workers from San Francisco to Silicon Valley and back each workday.

But the workers would rather avoid a commute if they can, and increasingly, they have that choice.

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