# 22 – The (no BS) truth about Silicon Valley – Start of Season 2

In episode 22, we begin the second season of Tech Deciphered, by deep diving into what Silicon Valley is, what made us (and others) move here, its unabridged mythology and whether there is really an exodus (or not) going on. This episode is the beginning of a trilogy that is an ode to our love and hate relationship with the region.


  • Intro (01:34)
  • Section 1: What (exactly) is Silicon Valley? (02:23)
  • Section 2: What brought us (and others) to Silicon Valley? (32:15)
  • Conclusion (46:09)
Our co-hosts:
  • Bertrand Schmitt, Tech Entrepreneur, business angel, advisor to startups and VC funds, co-founder at App Annie, @bschmitt
  • Nuno Goncalves Pedro, Investor, co-Founder and Managing Partner of Strive Capital, @ngpedro
Our show:
Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news.

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Intro (01:34)

Nuno: Welcome to season two of Tech Deciphered. 

Today, because we like to do really long episodes, we will start our trilogy on Silicon Valley. This episode will focus on what Silicon Valley actually is. We’ll go into the geography of Silicon Valley, the origins of Silicon Valley, the development of Silicon Valley. Then we will also talk about what brought us here, what brought Bertrand and myself to Silicon Valley.  In the next few episodes, we will go into the mythology and reality of Silicon Valley as well as other areas of love and hate , and we will finalize with Silicon Valley in transition. Is it a mindset? Is there an Exodus? Is there a no exodus?

Bertrand: Thank you Nuno, good to be here with you today.  How are you?

Nuno: I’m well, so let’s start with what is Silicon Valley? 

Section 1 – What (exactly) is Silicon Valley?

Today we start with what is Silicon Valley? And one could say Silicon Valley is a state of mind, but it’s actually a region of the world with a long history behind it. Bertrand do you want to guide us a little bit through the long history of Silicon Valley and where we’re at?

Bertrand: Yeah, sure. So as you say, it’s a long history, but that depends by which standard? 

Nuno: For someone from France and Portugal probably not very long, but yes.

Bertrand: Or China

Nuno: Long from a US perspective, I guess. 

Bertrand: It’s one of these places where you don’t have much standing that is more than a hundred years old, and one could argue, it might be because of earthquakes. But not just, I would say the modern California is probably and Northern California is probably 150 years old, started with the Gold rush.

And maybe before I go to the gold rush, obviously California was  in some ways discovered by the Europeans  500 years ago Nuno if we go back  to the origins of California and Northern California, and it was a spaniard, a Portuguese?   

Nuno: We will not have that discussion. And obviously it’s not questioned whether it was discovered, it was here, and there were native people here and then.  The Spanish conquistadores arrived. There is some argumentation whether Cabrillo  was actually Portuguese or Spanish, but he was definitely working for the Spaniards.

So we’ll let them do that. We’ll let the Spanish people get that.

Bertrand: Yes.  So California  was interspersed by a lot of missions and that connected the main roads. Actually historically the main road in Silicon Valley, El Camino Real, Nuno you want to say what it means.

Nuno: Yeah, the Royal way. So it was a way that was put there to connect the different missions. And it was the Royal way because the Spaniards were here at the service of obviously the monarchy in Spain. And that’s why it was called the Royal way or Camino Real. So now, you know.  

Bertrand: And so, that’s for me interesting part of Silicon Valley to think that you are on the Royal way most of the time when you are going from city to city. And actually California became American after a fight between  some different powers from Mexico to Russia to France 

Nuno: Having in the first five minutes should avoid creating a geopolitical clash. So yes, there were people here and then there were other people here and then there was some wars and we don’t have a view, we will have no judgment, we will just shut up.

Bertrand: No judgment. And  so that was around 150 years ago. What happens then what started to accelerate very quickly after California became part of the US and one of the latest state was the gold rush. And actually  California is called the Golden state. Golden, not because of the sunrise, but because of the gold.  That’s what started it all in the sense that’s what started to bring people to California. California had native people, as you said, but ultimately not so many. And that’s when started that big rush of people coming to California. And for me, that’s an interesting story to remember, that in a way California was started with the gold rush, a true gold rush, but we are still even today in the middle of a gold rush with tech companies. So there has been a mindset for now 150 years of coming here, trying to establish something new, trying to build wealth and trying to do it quickly if possible.

And people from all over the country or from all over the world coming here. When you think about it, people from all over the place from Europeans, Asian were coming already for that gold rush or at least were promised land of opportunities.

Nuno: And one important aspect is obviously the building of the railway connection to the rest of the United States. And so the importance of not just looking for gold here, but also the importance of creating an infrastructure that connected in some ways, the country from one end to the other was pretty vital.

And thus, we had all these different workers and, it was the notion of going West. That’s where the opportunity was, where the new riches was the land was. And obviously ideally the gold was right. There was always this object at the end of the day of which was more valuable than everything else.

But in some ways it does characterize the mindset, this notion of opportunity that we take a little bit for granted, of the American dream. It’s actually very, probably best edified at the two edges of the coast, New York and here. And in some ways San Francisco was that. San Francisco was the polar center in many ways of that gold rush and that development.

Bertrand: Yes.  and so after that, what we have seen is California being first farmland you had on some part, gold rush then you had farmlands, huge lands. One uUof the biggest estate was the one from Mr. Stanford, who ultimately gave some land to Stanford University.   

Nuno: And being an alum of Stanford, I have to represent that this gentleman was a railway tycoon. So there’s some argumentation on how he actually made his money, but the most edifying piece of it is, the fact that they decide to build the university and decided to create and give away the land and give his resources to it, and structure the land in a very special way.

I don’t know if you know this Bertrand but the land of Stanford really cannot be sold. So there’s stuff today that is in Palo Alto that is actually owned by Stanford and it’s really long-term leases, but it can’t be sold. So it’s not like the university can get rid of land just to pay for stuff. They actually can only lease it really over long periods of time.

So very interesting you know how someone made their money out of this, literally this gold rush or this going West build of infrastructure and then decide, okay, I’m going to give it back and I’m going to build something that’s bigger than me. And it will withstand the test of time and it has shockingly enough.

Bertrand: Definitely has. Is one of the better names thanks to that act.  From there we got the development of the aerospace defense industry, as well as semiconductor and measurement industries. And it started probably just right before world war two.

The late 1930s that we saw that growth in these technical science industries.

Nuno: Yeah and actually the beginning of the 20th century, there was already quite a lot of things going on because of Navy and the presence of trying to communicate and doing transpacific communications, obviously Marconi had already done the transatlantic connection on the other side.

So there was already a little bit of an impetus to have the military involved. And if we look at California in general, not just the Bay area there are still military bases in California, obviously San Diego having very significant native presence. And in some ways, a lot of people, when they talk about Silicon Valley, they always talk about later Silicon Valley.

They don’t talk about the beginning of Silicon Valley, which as you mentioned, rightfully so was really fueled a lot by defense contracts, the aerospace, the Lockheed Martins, et cetera of the world that were really building things that were infrastructurally very important in terms of the defense or the perceived defense of the United States.

And then with the war and world war two in particular, that became pretty vital to the development of the American economy.

Bertrand: And then in a way the Silicon Valley we all know  was really started with HP. Stanford alums  setting up shop close by. Building their first measurement tools and step by step developing quickly the business thanks to the war initially. And basically they also started this myth of the garage we might talk more about that. The business was started in a garage in Silicon Valley. And sadly so HP is not, at least HP enterprise is not headquartered anymore  in Silicon Valley. 

Nuno: They sold their measurement unit effectively. So Agilent was sold some time ago. It was spun off some time ago.

Bertrand: Yeah I was talking about the more recent spinoff from HP enterprise . And from there a whole semiconductor industry from Fairchild, less known these days, to Intel obviously. And from Intel so many players came up.  

Nuno: And the name. I think that’s exactly the punchline to your point, Bertrand, which is that’s why it’s Silicon Valley, right? It was the emergence of semiconductors Fairchild, really being that first big child and then Intel and others coming out of it that actually gave it the name.

And geographically, we will talk about it, what it means. What is Silicon Valley and how was it originated geographically? We’ll talk about it next, but that’s really why the name is Silicon Valley. Cause it’s a Valley and it was born out of Silicon. It was born out of these incredible companies that were innovating around semiconductors use of Silicon.

Bertrand: And as we will discuss, it has moved over time in term of geography When we talk Silicon Valley, actually we talk more and more now about the Bay. The Bay Area as a region.  So going back on these geographic side. Started with Santa Clara, the South of the Bay area. Fairchild, Intel. Then going a bit more North, HP  and then the whole of the Peninsula. So what we call the Peninsula, it’s really  what’s between Santa Clara and San Francisco. 

And from there at some point, even San Francisco became cool from a tech perspective. It used to be absolutely not cool to be in San Francisco I remember 2010, maybe where there were so few people in tech in San Francisco and suddenly it all changed 2012, 2013.

Maybe it will change back actually we will see, it’s not clear that San Francisco loves tech people.  But ultimately what’s happening is that we are more or less now these days talking, not just really about Silicon Valley, but more about the Bay, because that tech industry is just so big all over the Bay area.

Nuno: And it is interesting to see that Santa Clara County historically has always had most of the tech workers. And it continues still being the largest. If we look through a County perspective, what’s really happened is obviously San Mateo and San Francisco have taken now a larger chunk over the last few decades  of tech workers.

But Santa Clara is still pretty significant. I believe 40 something percent of tech workers are in  Clara County still. Which would encompass as well San Jose and a few other places.  I don’t know, the coolness of moving to San Francisco it’s interesting. We’ll talk about my own journey to Silicon Valley in a second.  

When I first moved here, it was still very Peninsula driven, right? San Mateo, Mountain View with Google, Menlo Park, Palo Alto, going down to Santa Clara, with the big semi con guys, et cetera. And over time, it just started moving. You started having some of the cooler company, the consumer companies, some of the cooler enterprise companies, software as a service companies in particular, moving to San Francisco.

And it is relatively recent. We’re talking about something that probably happened in earnest over the last five to 10 years at scale which is quite interesting.

Bertrand: Yes, totally. That’s very clear trend, maybe Salesforce was one of the first really big tech companies headquartered out of San Francisco.  And I totally agree with you  with the timeline.

Maybe to share some numbers with you who are listening to this podcast. Close to 8 million people live in the Bay area.

It’s the second largest metropolitan region in California. It’s the fifth largest in the US. The Bay it’s really all over from North to East, to South to West. That includes San Francisco itself, and that surprise a lot of people, is only 880,000 people. Silicon Valley itself it’s 3 million people out of this 8 million.

So SF itself is really a small city.

Nuno: SF itself is a small city. It’s not really able to grow because to the West there’s ocean, to the East there’s the Bay, to the North there’s the Bay and ocean, and then to the South, there’s a bunch of other towns like, Daly city and Millbrae, and South San Francisco Millbrae et cetera. So It doesn’t really grow.

You have to grow in height. You have to grow with high rises, which we’ve seen a lot more in the last few years with Salesforce tower and a few others being built. But if it doesn’t go in height, it’s difficult to grow. We kept also forget in San Francisco there’s parts of San Francisco that are reclaimed land, like Marina area in the North very close to the Golden Gate bridge, it goes into the golden gate. It’s the lower part below the Golden Gate. In some ways it’s reclaimed land. It’s not supposed to be there. It was swamp back in the day. It was military back in the day. 

And so it’s always interesting people look at San Francisco as an old city with a lot of history, beautiful, et cetera.

But in some ways it’s always a city in flux and we seem to sometimes forget that it’s a city in flux where there’s always a bit of a fight with the natural conditions, the water, the earthquakes, obviously 1909, the big earthquake changed a lot of things. Freeways, it changed the how the city moved around itself as well.

And so it’s a really interesting aspect for me to talk about. The one thing I would mention is. And we’d probably be amiss to talk about it obviously to the North of the Bay area there’s wine country. There’s some interesting things there, but obviously less of a tech presence there. 

To East Bay, I’d say Oakland has become cool, obviously we can’t forget Berkeley just North of Oakland because of its university, because of also some startups there. And I personally actually live next to the coast. So the opposite of the Valley. So West of the Valley, the cool part next to the ocean.

And there’s also not a lot of startups up here. So when we talk about the big pieces of startup land, big tech companies, et cetera, there are really between normally San Francisco and San Jose. That’s basically it, on this side of the Bay. On the side of the Bay that goes San Francisco down rather than East Bay or North Bay or even further South.

So that’s basically what we mean by the San Francisco Bay area. I think we talk in tech about the San Francisco Bay area quite a lot. When we talk about it in the context of technology, it’s really that region that we’re talking about, the Peninsula, Santa Clara, and then San Francisco at the North.


Bertrand: And I would say San Francisco, you’re right. It’s limited. All the Bay actually is limited by constraints from the geography. But at the same time, if it was an Asian city, it would be 2 or 3 million or 4 million people. I do not know, and it would be a 30 million people geo area.

The height is not really used to the max that’s for sure. And if you go  to the Peninsula, actually, how can I say it’s a lot of big campuses, but very large not very tall. There are actually limits in term of height that I imposed by most of the cities in the Bay.

And it’s a lot of individual housing. So the density is actually very low, which actually create issues in terms of traffic, in term of distance, in term of lack of efficient commuting option.  It’s very surprising, it’s very backward in term of how you can transit across the Bay.

BART as a transportation option has been worse from my experience over the past six years.  And you can be shocked when you try the train to go through the Valley. If you come from Asia, it’s just insane.  It’s not a coal locomotive, but we’re not too far from that.

it’s surprising. It’s like you have on one side all these very advanced tech companies all over the place. And at the same time you feel that we are stuck in the fifties in term of how you live, how you organize, how you transport yourself.

Nuno: In terms of infrastructure as well. If you look at the roads they are some of the poorest roads that I’ve driven on in my life. It’s really a matter of money that goes towards maintenance and there’s many explanations behind this and how money gets floated through government in localities and at state level, et cetera.

But for someone who comes here for the first time, he might be shocked that you’re driving on a freeway and there’s a huge hole on it. And you’re like I’m in Silicon Valley, the land of Tesla, by the way, as well, Tesla is here. They’re actually East Bay for the most with Fremont. 

Bertrand: And term of money invested per mile of road, let’s not forget, California is the highest spender of maintenance per mile of road. So it’s not a question of how much is going in that direction. It’s how much he’s really getting there at the end of the day. 

Nuno: Yes. 

Bertrand: That will be for another story I guess. 

So 8 million in term of population for the Bay. We are talking about around 800,000 tech jobs. So  that represent around 10% of the population, around 20% of the jobs in the Bay. So for sure, usually you end up meeting people who are either in tech or maybe in wine and food.

Nuno: Or biotech. 

Bertrand: Or biotech. 

Nuno: Life sciences isn’t biotech, which is different   

Bertrand: it’s different. But you don’t have so many other industries. We’ll talk about some HQ’s in the Bay. Of course we have some more traditional companies from a Wells Fargo who are headquartered there. To a Levi’s. To a Chevron. Of course you have some traditional industries, very well represented in the Bay.  But still it’s a lot in tech industry and that’s what everyone talks about. If you go to any cafe, restaurant, you cannot escape the tech environment. 

Nuno: You can’t. It’s the tech Mecca or Vatican as I call it. So it is the center of tech  and it’s clearly so. And I do think if it’s 20% of the jobs in the Bay area in tech, it’s probably under-representing it. Cause if you then take into account service provisioning and all the stuff that goes around tech jobs and enables tech jobs, it might be probably higher even than that. 

Bertrand: Oh, of course.

Nuno: The demographics of the Bay are also very interesting. You already alluded to Chinese presence here from way back. There was definitely a tremendous Asian influence in the Bay area. San Jose in San Francisco are the third and fourth cities in the US with the most Asian Americans.

In terms of demography, Asians are 23.3% of the Bay area. Again, these are older numbers of 2010 census numbers. We don’t have the 2020 ones, but I suspect the numbers will be quite high for the Asian population here. If we then look at what do we would classically call Caucasians it’s 42.4%. 10.1% Hispanic. Latinos was still very significant part of the population is Hispanic here as well. 6.70% what are described as non-Hispanic black or African-Americans. And then, a very small  percentage 0.7% native Americans or Alaska natives, 0.6% Pacific Islanders. And then 5.4% from two or more races and 10.8% from other races. 

Relatively diverse place racially. And I think it does show certainly the Asian influence and presence here. The Latino influence is also very heartfelt as well as the African-American ones. So it’s really a bit of a melting pot in some ways a really diverse area of the world.

Bertrand: And from a melting pot perspective. The big number for me is 32% of the population is foreign born, 32%.  I don’t know many places in the world with such a high percentage, maybe Singapore, maybe UAE. Probably New York is not too far. But it’s a very huge percentage.

And that’s definitely one of the attraction of Silicon Valley. You are going to meet a lot of people. Some of the smartest people from all over the world who are located in that one place. And that’s one thing to keep in mind when people talk about the tech industry, it’s American centric, it’s led by Silicon Valley.

It’s not representing the rest of the world. Actually it is representing the world because its staff, its employees are from all over the world, really from all over the world. And that’s seen in the employees, the staff  of these tech companies. So for me, part of the success of Silicon Valley is that it’s actually not just American centric.

I remember back in the days, take a company like Nokia go to Nokia headquarters. It’s not representative of the world. It’s not. It’s representative of Finland. Maybe a bit of the Nordics. It was not diverse. 

Nuno: And it was in the middle of nowhere, right? Nokia headquarters was in Espoo. right. 

Bertrand: Middle of nowhere I don’t want to be too aggressive, but definitely,  And also, it’s cold in winter over there.

So of course California has for itself this attractiveness. Obviously it’s not just that there’s a big tech attractiveness. There is overall climate attractiveness as well. But more seriously I think that has been one of the key reason of the success of Silicon Valley. At least up to a point, it attracted people from all over the world.  

Nuno: Maybe a good segue for us to talk a little bit about, one thing that we haven’t really deep dive too much into, which is also academia and the influence that it has in the Bay area. Cause it’s very easy to see money and see big tech companies. And we’ll talk about that in a second, but we have Stanford, we already talked about Stanford.

One of the top universities in the world, a relatively young university, late 19th century. But definitely one of the top universities in the world, Berkeley, University of California, one of the top universities in the world as well, University of California at San Francisco, which on the medical side is one of the top medical centers in the world as well. And we have it all here. Within some tens of miles of each other, they’re all here. And not only this attracts the most and the best talent in the US that competes to get here, but it also attracts talent from all over the world to come here. 

A lot of people go that route. They come here, they study here and they stay. And the connection of that is very powerful because if you asked anyone what companies are headquartered in Silicon Valley, I’m sure. I would say it’s Apple and Intel and Google and Facebook. And they would probably get to Twitter and Uber and a bunch of other companies, but there’s so many more companies that are here.

Netflix is obviously here, financial services you talked about, Wells Fargo, I believe Bank of America the headquarters is here as well. It certainly started here. You have all these big gaming companies like Zynga, Roblox. You have all these FinTech innovators like Square, Stripe Coinbase.

Now a lot in the news.  you could go on and on, you have biotech with Genentech, you have Zoom is here. Obviously Airbnb, Dropbox you have all these enterprise behemoths, like Adobe Autodesk, salesforce, we talked about already VMware, Workday, Docusign. And it just saying these names it’s interesting because some of them are relatively older companies. 

An Intel has been around for several decades now. Google has been around since the late nineties. So it seems now a bit older company, but then you have all these new companies that come on out of nowhere. Stripe emerged almost out of nowhere and they’re just gigantic. And I think that’s a very powerful thing that we tend to forget. Again it’s very tech driven, but certainly within tech, if you choose a sub-industry of tech, it’s likely there would be significant companies that were created here that are at least unicorns, even, maybe Decacorns, so over 10 billion in valuation.   

Bertrand: Actually that’s a good segue to VC investment and how Silicon Valley compares to the rest of the US. Out of $156 billion of venture capital raised in the US in 2020  PitchBook metrics. Nearly 40% of deal value was invested in Bay area headquartered companies, 40%, four zero of total VC investment in dollars.

That’s a huge number.  That has always been huge. And maybe we’ll talk later about this in another episode, but even if it’s large, it’s actually going down in term of per deals. It’s only 22%. Now, so there is a trend that has been going downward, and I don’t think it has ever been that low actually 22% of deals made in Silicon Valley.

So it’s probably very clearly connected to the new trend of starting startups from anywhere, working from anywhere. And VC is ready to invest anywhere, at least anywhere in the US. But I was just reading about this VC based in New York who was making calls to invest in Singapore  () 12 hour time zone difference).

So it’s really not just ready to invest all over the US but also ready to invest all over the world.

Nuno: And so I have a quiz for you Bertrand, which is, and these are numbers already from this year. So first quarter of 2021, how many unicorns do you think were created in the first quarter of 2021 in the Bay area?

Bertrand: Created meaning? Not Unicorns and became unicorns in first quarter of 2021?

Nuno: Yes.  I’ll give you a hint. So I’ll give you a hint, which is in quarter one in the United States, there were 56 new unicorns born in the United States first quarter. So how many of those were in the Bay area?

Bertrand: I would say half.

Nuno: Around half. So 25 were in the Bay area. And you would say that doesn’t look quite impressive. 25 out of 56 in the US in one quarter is pretty damn impressive if you asked me. Globally, there were 86 in the same time period. So we’re talking about almost the third in the Bay area, in this region that has 8 million something people that we’ve been talking about.

Okay. So when people, and we’ll talk about exodus vs non- exodus  later on in another episode, but definitely this is the center of tech still. It doesn’t really change. And this is, after COVID people are working remote, a lot of things are happening. Some companies are changing their headquarters and doing all sorts of things.

It’s incredible. It’s incredible.

Bertrand: Yes, the metrics are amazing.  but we will talk more about it as you say there is also a part where.Silicon Valley is also becoming more and more of a spirit in a way, a spirit mindset and business model  you could argue. And of course, many tried and failed to build their own local Silicon Valley. I guess, only China got to that level  of success.

But definitely I believe that change is coming, but we’ll talk more later.  Maybe one small point that is not truly appreciated is that Silicon Valley, it’s really actually at equal distance from Europe and Asia. 

If you are in New York you are close to Europe. If you are coming from Europe, you can do business in New York, very easily, quickly. It’s an easy flight, six hour flight. What  six hour times on difference. It’s not that hard. I’ve done weekends in New York. That might sound crazy, but you can do weekends from Europe. Actually here, it requires more commitment. If you come from Asia or from Europe to come to Silicon Valley, it’s a 10 hour plus flight if you have direct. 

It’s nine hour time zone difference – you are a bit far. Thanks to zoom it’s different, you’re not really that far anymore from anywhere but still at some point in the time zone, you’re in the middle of the afternoon and New York is not yet to bed, but Europe is in bed. Asia is not yet woken up. And you’re alone in your time zone. 

And so it feels a bit different at some point in the day where you are far  from everyone, from everywhere, every important economic region.

Nuno: I remember when I first moved to the Bay area, I had a partner in my first fund Kristof, and Kristof always used to say, you’re going to start waking up earlier. And I was like, no, I’m not a morning guy. And yeah, he was right. The West coast wakes up early cause you have to follow suit and align with New York.

And you also have to align with Europe and get some time in with Europe. But to your point, you do have these parts of the day where you’re really literally alone. You’re feeling New York’s almost gone. And then you look at Asia still not up, and there is that sense of we’re a little bit far from everyone. 

At the same time we’re sort of a little bit equidistant, as you mentioned, between Asia and Europe, because it’s 10 plus hours flights for both, at least the Northern Asia part  and Europe.  And that means we’re sometimes the hub as well. So people will come through here on the way to Asia or from Asia on the way to Europe.

And that generates some interesting aspects of it as well. But I do feel that we are a little bit regional in some points. I always make this joke that Silicon Valley or San Francisco in the Bay area is like the little village that ruled the world that remembers me of Asterix the cartoon.

And it’s a little bit like we ruled the world is we’re really a small little village and we’re relatively regional. San Francisco is a very small town. It’s definitely not New York.  There’s a very limited population here. And it’s just by magic almost that this part of the world is so prevalent in terms of tech innovation and in terms of financial returns, driven by startups and tech companies.

It’s always a little bit mindbogling to me. It’s a cool area. It’s tiny. And we rule the world in some strange way in tech.  It’s always a little bit mind-boggling.

Bertrand: And if we stay on the geopolitical, what’s interesting  when you come from Europe, you see the US, you have this deep connection  with the US settled by Europeans. You could feel close to home going to East coast from Boston to New York. Again, you are not too far from home both from a timezone  perspective or flight perspective, but when you go West coast it’s truly a different world.

It’s a unique world with little actually coming  from a European. mindset or background. It’s more a pioneer spirit except maybe for the wine part, the wine country part full of Europeans and French people, of course.  But there is this incredible mix with Asia, and that’s one of the big benefits of the US is that, it has East Coast are very closely connected to Europe and this West coast that is actually deeply connected to Asia and the Pacific. And that gives some unique advantage I would say to the US, that deep connection to both sides.  Europe on one side, the Pacific and Asia on the other side, which Europe is lacking in some ways. Europe has some deep connection with the US, but definitely less deep with Asia at least from my perspective

Nuno: Absolutely. And that’s a very unique what I’d call a very unique connective tissue for US that’s sometimes forgotten. It is a country built on immigration. We talked about the 32% number that you said is incredible of foreign born people that are in the Bay area. And it is true that is the reason for the US success. It is the attraction of all this talent and all these people, these hardworking, talented people from all over the world.

Bertrand: and the brain and talent they brings, but also the connection back home, the business connection and the ability as a result  to know how to do business with these regions that might be missing in Europe for instance.


Section 2 – What brought us (and others) to Silicon Valley?

Nuno: Maybe on a more personal note or on a personal note, we can talk about what brought us to Silicon Valley and our own origin story, so to speak, using superhero terms. Why did we come here 

Bertrand: You are truly American Nuno 

Nuno: My mother always says you were always American. You just were born in Portugal.

I don’t know. I take that as a compliment. 

I started coming here probably. I think the first time I came here, I was actually or 17 years old. I came here over a weekend, long story. I won’t go into, it was a very fascinating weekend in San Francisco. I fell in love with the city. And I was spending a month in San Diego.

So it was literally just a weekend trip. The next time I really spent any decent time in the Bay area was around 2005. And then 2007, I decided to spend a lot of time here. I was already based in Beijing and working in Asia Pacific with McKinsey and company, but I decided I wanted to spend time here.

I wanted to understand what made companies stick. Already had what I called the startup bug. I had already helped a European company, sell to a NASDAQ quoted American company. And I was like, this is really interesting. And starting to spend time here with companies being an advisory board to a bunch of companies.

I was fascinated. I spent every few months, I would say every, at least every six months. I spent some time here. And I didn’t realize it back then. I was still very much a tourist, but in some ways I felt I was connecting to the Bay Area and getting my network here and all of those things. I then decided to create my own venture capital firm, in retrospect, one of the most risky things or one of the riskiest things I’ve done in my life.

Had I known type of thing and decided to actually move here beginning of 2012. And I’ve been living here since, so over nine years now.  And my arc here was very interesting because from a mindset perspective, there were a couple of things that I really expected from the Bay area.

And I think there were really instructed by the time that I spent here every few months, between 2007 and 2012. And. I felt people were very open. They would give you the time of day they would meet you. They would try to do business with you. In some ways I thought I found a different trust equation, something that was much faster, that was much more at a second level.

So much more focused on meritocracy, right? People that have achieved a bunch of stuff. We’ll talk about it later. When we go into the myths on why some of these things are true, and some of these things are not necessarily always true, but there was definitely that sense of openness. The sense of meritocracy, the sense of this is where the best in the world are.  And in doing that move here I became an entrepreneur and this is the funny thing. I came here to do a VC firm, and I didn’t realize while I was doing a VC firm, my own VC firm, that I was also becoming an entrepreneur and I’d done some entrepreneurial activities in the past, back in Europe.

But it’s interesting. I became an entrepreneur without knowing. I’ll set some time out. If I ever write a book, it’s going to be the accidental entrepreneur. I always assumed it would be very easy to be someone who is creating something new here that people wouldn’t look  in a different way at you, that they would be very forgiving and helpful and thoughtful.

Which I think for the most is true. We will again talk about the nuances of that. It’s not totally true. There’s also things that are really lost in that logic. And I really tried to connect back to my networks, being a McKinsey alum. Having been long time in telecom space, trying to connect with the telecom guys and, obviously starting to build my venture capital firm and my activities and the startups that I was investing in trying to broaden my network, both top-down from the alumni networks that I had, but also bottom up from the activities that I was developing with the startups that I was investing in, that I was working with, et cetera.

That was very powerful way to get into the market. And it’s very interesting. I won’t go through my old arc in the Bay Area cause I’ve gone through ups and downs here significantly. But  I would say when I first started living here, I realized I was totally wrong about many things. We’ll go into that into the myths.

I also realized I had what I call the kid in the candy shop time, where I thought I was in a candy shop and this is also cool and I’m meeting so many brilliant people and so many exciting things, and everyday was like magical almost. And I think that lasted easily for a year or so, maybe more than a year. 

I also, in my first year here, I went to Stanford, and became an alum of Stanford. So that also augmented my experience in some ways. And then I would say probably one year, one year and a half into it, I had what I always call the piece of disillusionment, right?

The cycle of disillusionment, which is when you started realizing. This place has a lot of problems and it has a lot of issues. And, why am I here? And it’s so expensive. It’s so difficult. It’s so complex. We’ll talk about some of these pet peeves and pet hates and loves  at a later episode. I stuck with it in some ways I stuck with it a little bit by accident again.

Instead of just moving back to Asia where I’d come from, or going back to Europe I decided to stick with it through the thick and thin, and I had a couple of really difficult years. But through those difficulties, I’ve started creating what I call my own Silicon Valley, my own Bay area. The people that I engage with, the people that I do business with the people that I work with.

And I also started creating my own competence levels and my own notion of self-worth. The Bay Area is a relatively unforgiving place, right? It’s a very competitive place. There’s a lot of talented people. We also talk about the nuances of that in a second.  But really being able to emerge and having that self-confidence was something that I developed over those years, and then at the other end, I think probably around 2015, 2016, I started realizing this is a place where I probably like to spend a lot of my time over the next few years.

And right now, actually, interestingly enough, the Bay area is the second place in the world that I’ve spent the most time on given that I’ve lived in probably 10 countries and I’ve worked in 35. That’s significant. And I’m going nowhere. So I’ll give you the punchline on exodus versus no exodus. I decided to stick with it and live here for a variety of reasons we’ll  go into at later episodes.

Bertrand: Thank you Nuno for sharing.  On my side, my first trip to the Bay was maybe 2003. I was doing  my MBA, my Wharton MBA at the time and I was interested to participate  to some event.  I forgot which one it was, it might’ve been something around Wi-Fi.  And I did some trips here and there.

But when I really came back for a bit was 2009 2010. I actually spent a few weeks on Stanford campus for a few reason.  And when I started to really be back was 2012. 2012, I had started App Annie in Beijing, we opened an office in San Francisco at the time. And I was there quite a bit. I don’t know, maybe a two, three weeks a quarter for the next two years living and working in San Francisco. That was pretty intense.

Loved it, liked it. So much that, step by step, we moved different function s from App Annie to San Francisco, and moved fully our headquarter in 2014. And that’s when I moved full-time to San Francisco. 

Nuno: And Bertrand that first office, was that the one that you guys ran out of space when you opened it? 

You did the house warming of the office and you already didn’t have enough space for all the people you had.

Bertrand:  That might have been the case. I remember initially we did so many temporary office spaces That was crazy having to move every six months. A room, a bigger room and step-by-steps your office and a bigger office. So it was quite a lot of move, but in a very small  area all very close between the big baseball stadium on one side and Moscone center on the other side, and a bit further up Market and Third, Market and Fourth.  So a really small district all from 15 minutes, 20 minutes walking distance.  So we managed to stay very close.  was a deep Downtown of San Francisco, quite close to the Financial district.

And one thing I liked was the ability to have so many meetings where I just go walking So that was really amazing from that perspective. So I moved in 2014, moved the company, moved myself with my wife, and actually after two years in San Francisco, we decided to move at least personally, to the Peninsula, to Burlingame. 

Because we were tired of the cold summers of San Francisco. A lot of tourists don’t know when they come to San Francisco that you should not come in short and short sleeve in the summer time because San Francisco is going to get cold. So we decided to move to the peninsula to enjoy some more normal summer weather. Nuno, I see you laughing.

Nuno: Yes. Someone was posting yesterday on Facebook a difference between where I live, which is next to the ocean and the peninsula of 30 degrees Fahrenheit, which since I’ve been in the US for a very long time, I don’t even remember how many degrees Celsius it is.  

Bertrand: I have so many memories of if I took Celsius 18 degrees and rainy in San Francisco and 20 minutes away, 28 degrees and sunny and very hot  just driving 20 minutes. So that region is very well known for its micro-climates. Actually San Francisco itself has different micro-climates if you want to the deep end, but definitely huge differences between San Francisco and the rest of the Bay.

Nuno: So this is a 15 degrees Celsius for those who were thinking about it, 15 degrees Celsius difference between two areas that are literally 20 minutes from each other by car.

Bertrand: Yes. So it’s not a joke when people say they move  just to get a bit of weather. So  we moved to the suburbs. We really enjoyed  our time there and we were really I believe well located between Palo Alto and San Francisco. So very convenient to be right in the middle.

But ultimately, we decided to leave a few months ago and to move North, stay on the West coast, go to the greater Seattle area. We moved actually  right between Seattle and Bellevue in Mercer Island. And again going back to suburbia. 

And enjoying it there, for a lot of different reasons. One, a belief that  opportunities in tech are becoming more and more widely distributed and not just centered in San Francisco.

A belief also that the Bay is becoming  more and more irrational in term of how it is managed in some ways  by local governments.  And also overall costs of living, taxes. 

I come from Paris, that new region has a more similar climate to Paris. And I was missing the seasons, so that’s another part of why we moved  to Seattle.

Nuno: You get the rain now.

Bertrand:  30 minutes of rain in the day that’s okay. We have green… 

Nuno: We have green here as well. Come on, I have green here. I actually live in one of the colder places. 

Bertrand: Show me the green.

Nuno: There was plenty of green actually just outside.   I do understand what you mean,  it is more moderate weather in the Bay area, even in places like San Francisco, or where I live on the coast.

And obviously you miss a little bit the seasons right there. There isn’t really a winter.  Spring and summer melds a bit, late summer into autumn is amazing. The peninsula is a little bit more hardcore, right? So a little bit colder, but still not a real winter and then very hot in summer.

I understand why one would want the seasons again. But I moved from Beijing here, like you did. And we used to have only two seasons in Beijing as well. So at least now we have something that’s more or less the same and it gets nice. And  at least you can have the “top down” here in this region of the world a significant part of the year.

Bertrand: Yeah, I’m not sure anyone would miss the seasons of Beijing. It can be real cold, can be real hot and humid. But a great spring, 

Nuno: Very short.

Bertrand: Yes. Two weeks.  But some great memories of Beijing, just to be clear. 

Nuno: Yes. 

Bertrand:  And so why did I decided to move to San Francisco. It was a few things.

One was talent. It was very difficult to grow a global B2B tech company out of Beijing. You can grow B2C companies out of Beijing very well. You can grow B2C China centric companies. Very well. But that expertise in global B2B tech very hard beyond engineering. Engineering of course can adjust more easily to different types of business models, but all the marketing, all the sales, all the HR, even the financing was really more difficult because we are very atypical out of Beijing with that context.

So we felt that it was very difficult to recruit the right talent, becoming more and more expensive. And at some point, if you have to pay real top dollars why not pay similar amount of dollars in the Bay and have a much, much wider range of talents that are available. So the first point was talent. 

The second point was partners and clients. To have so many clients, partners, just walking distance in San Francisco and then close by in the Peninsula, in the Bay, the Googles, the Facebook of the world, the Apple of the world, that just was amazing for business and more efficient for business.

And finally, as we talked, in term of VC investment, having access to the top VCs in the world, but also definitely by far the top VCs in global B2B tech was very important for us and what I’ve seen doing fundraising from Beijing and getting great investor  from IDG capital in China to others like Greycroft or Sequoia actually in the US while we were were still based  in Beijing.  We were extremely lucky and fortunate to get them, but at some point, what I saw is that we were about definitely missing a lot of investors we couldn’t meet, we couldn’t reach because they were not ready to invest beyond the US but also sometimes beyond the Bay Area. 

At least at the time  one unwritten rule of VC business in the Bay was you invest in companies where you can drive to or maybe even bicycle to. So we felt, you know, if we have to pick a place, let’s pick a place where you have all this right combination of talents, clients, partners, and investors to help drive the business even harder and further.

Nuno: And we at Strive Capital broke that rule in a famous meeting in San Mateo many moons ago.

Bertrand: Indeed 

Nuno: We were like, no, we’re multi geo. We don’t care where you’re based. It’s fine.

Bertrand: Thank you for joining us for this episode. This concludes our episode 22. The first episode in our trilogy on Silicon Valley. Next episodes will be about what we learnt living in Silicon Valley, living and working in Silicon Valley. The myth versus reality. Our love and hate relationship with Silicon Valley. As well as how is Silicon Valley transitioning? Are we facing an exodus? Are we moving to a new Silicon Valley mindset everywhere. That will be for our next two episodes. Thank you so much. Thank you, Nuno.

Nuno: Thank you, Bertrand.3