A Silicon Valley startup founder moved to Austin to flee San Francisco's high housing costs and said 'FOMO' will prompt more in the 'hive-minded' Bay to move to newer tech hubs
Ben Rahnema. Ben Rahnema
The startup's founder, Ben Rahnema, moved from San Francisco to Austin in early November, one of many in the Bay Area who fled to the city of Texas during the pandemic.
He told Business Insider that a move to remote working, a growing network in Austin, and housing costs were all factors in his decision to move.
He paid for a one bedroom apartment in San Francisco and now has a three bedroom house in East Austin with a home gym and back yard for the same price.
Rahnema said "FOMO" in the "Hive-Minded" Bay Area could encourage more people not to miss the next best thing to move to cities like Austin, which already have their own tech scene.
He said Silicon Valley might not be such a powerhouse in the long run, but that doesn't mean it's dead or not recovering, and "people are exaggerating the decline of San Francisco."
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When Ben Rahnema lived in San Francisco's Cole Valley neighborhood, he rented a one-bedroom apartment with his partner.
Now, having moved to Austin, Texas, in early November, Rahnema has a three bedroom house, front and back yards, a home gym, and a large home office - for about the same price.
Rahnema, a graduate of Y Combinator and founder of a company backed by the famous VC firm Initialized, represents one of many in Silicon Valley's tech talent pool who decided to leave the Bay Area for Austin during the pandemic . The migration from Silicon Valley to Austin was already on the move, but it is now becoming clearer how influential the Texan capital can become to the broader tech scene as more people make the move.
One of the main reasons Rahnema felt attached to life in the Bay Area was to be close to the best technical talent, similar to many others moving to the area. Rahnema founded his B2B startup Source in 2017 and set up offices around the bay, including in Oakland and the Bayview neighborhood of San Francisco.
With offices closed across the country, workers no longer necessarily have to live near them.
Rahnema, who said he and his partner are considering moving before March, told Business Insider that "the benefits of staying in SF have been watered down significantly during the pandemic." "If we move to one of those cities where a number of other people move within our network and into technical fields, we can get basically the same benefits," said Rahnema. So they moved to Austin on November 1st.
He told Business Insider that he set up a Slack channel from Y Combinator founders who moved to Austin and had to be limited to 150 members because there were so many people. He also said he had 15 to 20 acquaintances who made the move.
"I've had the opportunity not yet personally, but practically, to meet a lot of people who are here or who are moving here," said Rahnema. "And it was great, really, really fast to build a local network and community just because so many people are moving to Austin."
"FOMO" spreads in the "swarming" Silicon Valley
Austin already has its own technological ecosystem that has existed for decades. IBM, Samsung and Dell Technologies are cementing the city as a technology hub. And with so many moving to the capital, more and more people began to think about moving so as not to feel left out.
"There was a critical mass of people moving around and in typical Silicon Valley fashion everyone has FOMO and doesn't want to miss the next seat," said Rahnema, calling the decision-making process "Hive-". open minded. "
It seems that the tech community in Texas will only continue to grow - Oracle is moving its headquarters to Austin, Dropbox CEO Drew Houston is moving to town, and Tesla CEO Elon Musk is saying he is moving to Texas. The Boring Company is planting roots in Pflugerville, north of Austin, and a Tesla Cybertruck factory is under construction nearby. That list doesn't even include offices that Apple, Amazon, Google, and Facebook have built or are planning to build in and around the city.
Austin, Texas in 2019. Katie Canales / Business Insider
Other cities like Miami are in the running as resettlement locations, but Rahnema said most of the founders in his network weren't very interested in moving to the city of Florida. Instead, he said Miami seemed to be attracting high-income venture capitalists.
"I don't know if Miami really appeals to people who are engineers, people who build things," he said. "Maybe the more successful ones who have already made it and have loads of money."
VCs and founders interested in different cities could accelerate the move to remote working even further, said Rahnema. When both parties aren't in the same city, they need to remotely connect to fund businesses.
Because of this shift to remote working, the valley may have less prestige than in the past, but "I don't think there will be another place to take its place," said Rahnema. "I think it's going to be more than just working in all of these different places," Austin included.
The city is located in the beautiful region of Central Texas, which includes the sprawling Hill Country and well-known locations such as Enchanted Rock, Barton Springs, and Zilker Park. However, Rahnema said there is one part about Texas and its higher temperatures that he already doesn't like: the mosquitos. He said he received a welcome gift of 20 bites when he moved to Austin in November.
There's plenty to do outdoors, which for many could be a determining factor in their decision to move to Austin - people moving from the Bay Area want something similar to what the area has to offer, Rahnema said.
The beauty of the San Francisco Bay Area, with its temperate climate, proximity to the ocean, and hilly terrain to the north, east, and south, is an attractive draw for transplants. But that may not be enough to keep people there, as housing costs remain as high as they are, although they have come down a few during the pandemic. In San Francisco, the average rent for a one-bedroom apartment is $ 2,650, according to Zumper. You can get a four-bedroom apartment in Austin for about $ 300 less. Many people like Rahnema want a more comfortable living situation that is not a cramped apartment.
However, he believes the Bay Area will definitely bounce back, although the headlines suggest otherwise. He said that there are still great networks there and more people stay than leave. And a new wave of young, ambitious workers could come to the city now as rental prices fall during the pandemic.
"I don't think San Francisco is dead or that the Bay Area won't be a major city for technology and general," he said. "I definitely think people are exaggerating SF's demise."
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