Revisiting reflections on SF from pre-pandemic and pre-downturn times

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This off-the-cyle Friday issue is a precursor to a crowdsourced piece coming out this weekend.

Pandemic years have made us lose a sense of time. A lot has changed. One of the raging debates around these changes is the centricity of SF in the post-pandemic tech ecosystem and the appeal of SF as a city. You don’t have to spend much time on US Tech Twitter to see “SF is back” and “SF is dead” takes.

This weekend’s issue is a crowdsourced roundup of perspectives on SF from its residents working in tech. It is a good mix of longtime locals, recent migrants, and boomerangs who spent some time in other hubs.

I thought it would be fun to reflect on and republish my observations on Silicon Valley culture from 2019. My pre-pandemic observations on the tech culture of SF would help contextualize the unpacking of the “SF is back!” story over the weekend.

As all of us look at our stock portfolios get wrecked, here are a few points about the state of the markets back in 2019 when I wrote my reflection:

• Uber, Zoom, Slack, Lyft, Pinterest, PagerDuty, Datadog, Peloton went public

• Snowflake, Unity, Asana, One Medical, Doordash, Airbnb hadn’t gone public yet

• Microsoft hit the trillion-dollar market cap milestone, joining the league with Apple and Amazon

• Publicly traded Paytm, Policy Bazaar, Nykaa, Zomato were still raising private rounds in India

Some other happenings:

• Fall of WeWork, triggering Softbank Vision fund troubles

• Direct Listings were in vogue

• Amazon HQ2 drama unfolded

• Disney+ launched

Let’s get to it :

• Everybody wants to help and meet everybody. A major reason is the sheer density of financiers, advisors, storytellers, big tech companies, and startups that make social and professional networks very dense (a bunch of points I talk about below also play into this). The focus on always getting better at one’s job and finding the global maxima in careers amplifies this.

• The general interestingness quotient is very high. Most people intuitively get the practical power of information theory. An average person is very curious about how the world works. This isn’t surprising because technologists are always thinking about how things can be improved across every aspect of our society.

• The lack of linearity in career progression makes everyone subconsciously treat each other well. The lack of enforceable non competes and the collaborative nature of early-stage financing results in a very fluid labor market and mostly positive-sum games. An intern could become a hot startup’s CEO two years later.

• Bay Area is a massive rationality suspension self-contained machine. Normal people wouldn’t even bother thinking about it, let alone devote their lives and careers to the things that get experimented on and funded here. A major upside of having thousands of storytellers running around telling their crazy visions of the future is social cohesion because these storytellers need people predisposed to hear their stories and not laugh them off.Subscribe now

• There are so many people funding, advising, operating, and starting up new ventures. There is a constant race to do better, be better and help better. There’s almost perfect competition for having good habits, consuming knowledge, and being helpful. Everyone is trying to model off each other on the basics to compete with each other on things that truly matter. Every competitive edge gets priced in and becomes table stakes very soon because of the rich networks, general curiosity, and intense information/knowledge sharing online and offline. While this isn’t always good, it does seem like it’s a net positive for most.

• There’s a lot of talk about how SF is a tech monoculture. It is true, no doubt. This is the most common talking point when you talk about SV with people outside of SV. What’s often missed in this never-ending inconclusive conversation is how that feature is not a bug. There’s a reason only one physical location is an epicenter of entertainment (Hollywood or LA), politics (DC), and finance (Wall Street or NYC) in the US. There aren’t multiple Bollywoods (Mumbai) either. Clustering effects are real, both offline and online. Of course, one does not need to move to SF to build a career in tech. NYC is on fire. But, the entire NYC vs SF vs Rise of the Rest debate in tech context is futile and never-ending. Of course, the growing, visible, and obvious issues hurt the golden goose. And there are strong counterpoints to that too!

• There’s almost perfect competition for having good habits, consuming knowledge, and being helpful. Everyone is trying to model off each other on the basics to compete with each other on things that truly matter. Every competitive edge gets priced in and becomes table stakes very soon because of the rich networks and intense information/knowledge sharing online and offline. Naturally, there are limits on everyone’s personal or organizational bandwidth, willingness, and prioritization. Just like how big public companies being at the mercy of public narratives and quarterly results open up room for startups to identify gaps and creep up on incumbents, it is easy to exploit what the most successful and sought-after people here can’t do despite best intentions to make a name for yourself. It is easy to build a lasting reputation in the eyes of outsiders by just being responsive, respectful & helpful (i.e., asking about their story, proactively making intros, etc.). I used to think one has to hit a certain threshold of success and influence, but that isn’t true. Helping those who most likely wouldn’t be helped by those with power and influence today is how up-and-comers build their networks here.

• There’s a small set of folks in SV that get brought up universally in my conversations with well-known people in SF for being brilliant and/or nice. It makes me realize how small the tech community is, the value of personal “brand,” and relationships-driven journeys here. Subscribe now

• It is both understandable & surprising how spending some time doing anything at a recognizable, successful startup becomes a badge of honor & a credential for whatever one does next. The network & brand name gets weighted more heavily than personal competence. One reassuring thing about this credential is that there are new ones every 3-5 years, unlike elite banks, consulting firms, and big tech. Those old-school credentials are also badges of honor in SV, regardless of how meritocratic we might think SV is. Just look at the backgrounds of people in the venture! Big Tech, large private companies & platforms like YC have now become the new ivy league schools or career launchpads of tech. A 2-3 year stint at them opens up exit options like angel investing & top startup gigs the way top-tier investment banking does for prestigious buy-side options.

• I was convinced that intellect was the number one factor that drives investing. Build a knowledge base, and things will come to you. Now I’m in SV; I’m amazed by how wrong I was & how interpersonal dynamics drive so much. Of course, the savviest people are extremely intellectually rigorous. But, I underestimated how far one can get just in interpersonal relationships. One major thing differentiates early-stage technology investing from public market investors. Understandably so. The ruthless analytical rigor needed to do well in public markets is absent from early-stage investing. There is so much room in early-stage tech to excel using social skills. That has challenged my view of early-stage investing the most.

• It is interesting how many personal brands and past successes play a role in staying top of mind & attracting opportunities and people. Whenever I ask an insider who are some early-stage investors they like working with or are good at X, I get a small subset of the usual suspects. If the recommended folks don’t have a good track record, the recommender has either worked with them in some capacity or was top of mind because of online brands or recent encounters at some event. The consequence of this behavior gets reflected in the data.

• One major realization so far has been the powerful influence of a well-known or successful person vouching for someone (mainly due to interpersonal dynamics) who meets a basic standard of competence. That person’s growth & reputation skyrocket. While it is always awesome to be on the receiving side of such endorsements, I am uncomfortable with the extent to which the endorsement outweighs hustle and competence. Of course, this isn’t limited to SV. I do my best to counteract this by publicly and privately promoting lesser-known people who are good at what they do (regardless of whether I am or would be friends with them).

• Having a prepared mind isn’t about having strong opinions. This seems counterintuitive because the tech blogosphere and podcast-sphere are all about having an opinion on everything. The truly intelligent and savviest people I have met define having a prepared mind very differently. It is about knowing enough to know you don’t know enough so that you can ask quality questions and be a good sounding board.

I think much of it holds up pretty well post-pandemic, as you will hear from folks over the weekend on Scatter Brain. Of course, the world has changed since I wrote the above, and I had no idea a pandemic was about to hit us. Since I’m no longer based in SF, I don’t have the same vantage point as before. This is why I’m crowdsourcing takes from people currently living and working in SF to unpack the “SF is back!” story. My take on SF is that it is a special city in good and bad ways and is not for me. It helped me professionally at the time, and I enjoyed the beauty in and around it. My lasting memory, sadly, is being held at gunpoint in the middle of the day.

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My take on The Current Thing 

Chats from earlier this week :

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"Let's kill the story!” with Jack Randall, ex Comms Head of Robinhood