“Goodbye Silicon Valley, Hello ‘Small Tech’: The Rise of Innovators Outside the Valley”
It’s official, the era of Big Tech dominance is over and the reign of ‘Small Tech’ has begun. The past year's events have sent shockwaves through Silicon Valley, causing the most prominent players in the tech industry to take a hit. With a drop in earnings and mass layoffs, Big Tech’s stranglehold on innovation and talent is starting to loosen. This shift provides opportunities for a new generation of tech entrepreneurs to step up and create value in ways that Big Tech has forgotten.
The work from home revolution and the global competition for talent have opened the door for innovation from anywhere. The best coders are realizing that the security and earnings promised by Big Tech are not guaranteed, leading them to explore opportunities elsewhere. China’s trillion-dollar investment in tech companies and infrastructure only highlights the importance of fostering a diverse and competitive tech landscape.
Small Tech startups have the potential to provide the sustained growth that investors are looking for and the competition that regulators desire. While the fundraising environment may be more challenging, it could actually benefit established and mature startups. On the other hand, early-stage and riskier ventures may face more difficulties, potentially leading to layoffs and consolidations.
The Silicon Valley of yesterday, with its iconic tech pioneers like Steve Jobs and Bill Gates, is no longer. The oligarchic and monopolistic nature of the Valley, coupled with the skyrocketing cost of living, has made it a far less attractive place for innovation to flourish. The current generation of tech leaders in the Valley is far less dynamic and the wealth generated by their companies needs to be filtering down to their employees as it once did.
It’s time to bid farewell to the monopolistic monopoly factory that is Silicon Valley and embrace the next wave of tech innovation from ‘Small Tech’ entrepreneurs worldwide. The future of tech is in their hands, and we can’t wait to see what they’ll create.
The post-war dream of California as a sunny and sprawling place full of opportunities was once attainable for the middle class, even in major metropolitan areas like San Francisco. However, in the past 25 years, this dream has become increasingly unrealistic due to rising home prices and housing supply shortages, making the Bay Area unaffordable for most people. This is in part due to regulations hindering new construction and geographical constraints reducing the amount of buildable space. The city’s homelessness problem has also worsened, with one in every 100 San Franciscans homeless and 73% of the homeless population being unsheltered. The pandemic has worsened the situation, with many tech companies subleasing their office spaces and many workers finding less value in living near the office they no longer need to commute to. The high taxes in California, poor city services, and unresponsive leadership have caused many high-value tech workers to leave the state. This has led to a Golden State exodus, with cities like Miami and Austin being the beneficiaries.
However, there are already signs that these cities are poised to make the same mistakes that led many Californians to leave. With its lack of state income tax, low corporate tax rates, and ample building land, Texas has become a popular destination for tech workers. Elon Musk, Tim Ferriss, Ryan Holiday, Joe Rogan, and Luke Nosek, among others, have all relocated to Austin, which has become a hub for tech companies and start-ups. Despite the advantages of Texas, it remains to be seen if these new destinations will truly be better for the emigrating tech workers.
The impact of attrition on startups: Incorrect attrition assumptions can lead to missed company goals. It is important for executives to review their assumptions and have contingency plans for unexpected resignations.
Compensation is the main challenge in hiring: To mitigate this, many startups offer location-agnostic salaries or a single-tier premium salary for US-based employees. Companies need to understand the compensation philosophies of their competitors to remain attractive to candidates. There is a trend towards smoothing regional salary differences and moving to a US-national rate with premiums for expensive markets. The days of candidates accepting lower salaries at startups are ending.
Recruiting capacity is important: The market for strong recruiters is hot, making it difficult for companies to build their recruitment teams. Executives should map their recruiting capacity to headcount plans and expand their teams in advance.
Attrition predictions for 2022 are lower: Companies are projecting lower attrition this year compared to 2021. There is a move towards a “hub and spoke” model with smaller offices near clusters of employees.
Hiring remains competitive: The tight labor market affects nearly every industry. Companies face constraints due to compensation against other offers and internal recruiting capacity. Only 3% find candidate location as a barrier to hiring.
Flexible work is becoming the norm: Before 2020, only 37% of companies allowed flexible or remote work. Now, 95% of startups will allow remote work, with 41% not requiring employees to return to the office.
The changing job market has provided a glimmer of hope for those seeking a better work-life balance. With the rise of remote work, the opportunity to escape the challenges of city life has become a reality for many. As someone who has spent a decade in the tech industry in San Francisco, I have seen the consequences of urban life firsthand. The daily dangers and depravity, the homelessness and violence, have taken their toll on me. I am tired of being a witness to these atrocities and I want to escape it all. Remote work offers me the chance to build startups from the safety and comfort of my own home, while still being able to contribute to the growth and success of my company. I believe that the future belongs to remote-first startups and the employees who work for them will be happier, healthier and more productive. The environment in which we work is everything and it’s time to start prioritizing our well-being.
