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The tech elite are abandoning Silicon Valley in droves because of 'groupthink' and out-of-control living costs- here's where they're headed
The tech elite are abandoning Silicon Valley in droves because of 'groupthink' and out-of-control living costs- here's where they're headed
Melia RobinsonMar 9, 2018, 22:18 IST
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Silicon Valley is on the brink of an exodus.
Members of the tech elite from Peter Thiel to Tim Ferriss are leaving San Francisco and the peninsula to the south - still the global hub of tech finance and innovation - to escape the self-described groupthink and arrogance of the Valley.
A recent article in The New York Times declared, "Silicon Valley is over." The author followed a dozen venture capitalists on a three-day bus trip through the Midwest, in pursuit of hot startups in underrated areas of the country. They marveled at the cheap home prices in cities like Detroit, Michigan, and Madison, Wisconsin, compared with the extreme cost of living in the Bay Area.
San Francisco lost more residents than any other US city in the last quarter of 2017, according to a report from real-estate site Redfin. Data suggests the great migration is far from over.
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Last month, 49% of Bay Area residents said they would consider leaving California because of the cost of living, according to a survey of 500 residents by public-relations firm Edelman.
These are some of the high-profile defectors who have left Silicon Valley in recent years - and where they're headed.
Peter Thiel, one of Silicon Valley's biggest success stories, became a social outcast in tech after the libertarian billionaire-investor supported Donald Trump's presidential campaign.
In February, Thiel revealed he's leaving the San Francisco Bay Area and moving to Los Angeles. His venture firm and foundation will also set up headquarters in Los Angeles.
In March, Thiel told The New York Times that the groupthink happening in the Valley can be dangerous. "Network effects are very positive things, but there's a tipping point where they fall over into the madness of crowds," Thiel said.
Thiel also has the option of moving to New Zealand, where he has dual citizenship. He owns a mansion in the resort town of Queenstown and an estate on the shores of Lake Wanaka.
After spending decades in Silicon Valley as an entrepreneur and an investor, Tim Ferriss decided that Silicon Valley had changed for the worse and moved to Austin, Texas, in 2017.
Ferriss, who considers himself "very socially liberal," told Business Insider that the tech scene can be punishing for people who don't subscribe to the same set of beliefs.
Ferris said there's a feeling in tech that "if you don't conform to what Silicon Valley views as the established set of credos and beliefs for a hyperliberal, you do get attacked."
Austin is working out for the "4-Hour Workweek" author.
Ferriss said "in Austin I found a ... very young community and a medley of feature film, music — certainly tech if I need to scratch that itch — but there were more perspectives that I could borrow from and learn from than I found readily available in my circles in Silicon Valley."
Dave Asprey went from cloud-computing executive to biohacking guru in Silicon Valley. He's built a multimillion-dollar empire around his DIY approach to human enhancement.
Kasireddy said Los Angeles caught her interest because of its proximity to San Francisco, its booming tech sector, and the diversity of interests among residents.
Elon Musk runs a gamut of startups from Los Angeles to Silicon Valley, but he makes his permanent home in LA. He owns a staggering five mansions in the Bel Air area.
Musk told the Los Angeles Times, when he told his friends he was leaving Palo Alto for LA, "they all thought I was crazy." He said, "people in the Bay Area have forgotten that there's been a huge concentration of aerospace engineering talent here, for more than a century."
Musk began renting his now-permanent home in Bel Air in 2010.
If the SpaceX founder gets his way, the next Silicon Valley could be on Mars.
Cybersecurity executive Robert Wood, who now runs the security team at software company SourceClear, said he was living paycheck to paycheck during his years in San Francisco.
"We ended up only staying in San Francisco for a year and a half but we blew through all of our savings and racked up some credit card debt just trying to keep up," Wood told Tech.co.
He escaped to a Bay Area suburb for a year before eventually moving to Washington, DC. Wood said his mortgage costs "just a bit over half" of his downtown San Francisco rent.
Some of the most influential people in Silicon Valley left the Bay Area decades ago.
Jim Clark, the cofounder of Netscape, was one of the first tech visionaries to pursue life outside of Silicon Valley. He decamped for Florida in 1999 during the first dot-com era.
"One pays a lot to live in the great climate and intellectual environment of Silicon Valley," he told The Mercury News in 2009. "Everything is too expensive and taxes are ridiculous."
Clark said he saved $150 million by moving to Florida and avoiding California income taxes. He continues to live in Florida, though he recently put his Palm Beach estate up for sale.
Steve Case, one of Silicon Valley's most well-known entrepreneurs, has lived in Washington, DC, for more than 25 years. The AOL cofounder runs a venture capital firm, Revolution.
The firm's website describes its mission as establishing Revolution as "the premier firm outside of Silicon Valley." Case has pledged to invest mostly in startups outside the Bay Area.
"We are seeing in this third wave of the internet entrepreneurship both regionalized and globalized," Case told CNBC. He added, "I think we've probably hit peak Silicon Valley."
