# 24 – #Exodus or #NoExodus – our most contentious episode, yet

Episode 24 ends our trilogy on Silicon Valley and our “no bs” contextualization: from its history, geography and its most common and core myths. 

In this episode, we deep dive on our Silicon Valley loves (and hates) and finally address the elephant in the room: is there an exodus going on or not? Has Silicon Valley’s downfall started or is it highly exaggerated? Listen to our most contentious podcast yet.


  • Introduction (01:33)
  • Section 1: Hates (02:19)
  • Section 2: Loves (33:51)
  • Section 3: The Future of Silicon Valley (54:41)
  • Conclusion (1:13:09)
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, Managing Partner, Founder at Chamaeleon, @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: So today in episode 24 of tech deciphered, we’ll be finalizing our trilogy on Silicon valley. Our non bullshit view on Silicon valley, which started in episode 22, talking about what Silicon valley is and what brought us here, then continues in episode 23, with an episode specifically on the mythology of Silicon valley and our sevent myths of Silicon valley.

And today we will end with love, hate – our areas of love and our areas  of hate of Silicon valley and the bay area. And we will finalize with Silicon valley in transition. Is there an Exodus? Is this a mindset? Is this a geography? What will happen to this region? Bertrand?

Section 1 – Hates (02:19)

Bertrand: Should we start with things we love or things we hate? 

Nuno: I started with hate let’s start with hate. And then we go to love. Yes.

Bertrand: Let’s start with hate. That sounds very very harsh, but there are some reasons to be harsh about Silicon valley, not everything is the paradise you can read from far.

Nuno: Yeah. So maybe starting with the most obvious of them all, with crime safety, homelessness, and here we have to be very specific because obviously there’s this situation for example, of San Francisco and crime and homelessness in San Francisco, which is pretty pervasive. And in some ways it’s been a little bit amped up also with COVID as a lot of people left town and certainly are working more remotely.

But definitely there is a problem in San Francisco. There’s a problem also elsewhere, Oakland, I think is having a little bit of what I would call a Renaissance. It’s getting and becoming an exciting city and and solving a lot of its issues. But obviously we know the history of crime in Oakland is also a very serious one.

And then you have places that have obviously no crime at all, like Atherton, the richest town in America or the wealthiest town in America where, finding crime is probably difficult. So really a tale of two bay areas, so to speak or to Silicon valleys  

Bertrand: Sorry let’s not forget east Palo Alto 

Nuno: Yeah.

You have these dichotomies exactly to your point Bertrand, where you have Palo Alto, which we know next to Stanford and where a lot of very wealthy people live like mark Zuckerberg and others which is in general, relatively safe here, and then just east Palo Alto, which is not as safe. 

Bertrand: The other side of the highway.

Nuno: literally the other side of the 1 0 1.

And so again, in some ways it’s a little bit quintessential American, right? We know that from other cities like Chicago and in LA and other parts of the U S where you have certain areas that have  for a variety of reasons a significant amount of lack of safety and crime and all of that.

And then you have areas that are extremely safe and extremely  controlled in terms of crime as well. So I think the first hate we probably both share, there is a feeling of being unsafe in certain areas here in San Francisco. There’s parts of the town where you walk through that,  depending on the time of day you’re moving through, et cetera, it does feel incredibly unsafe.

Both of us moved here from Beijing and, that’s definitely very different from Beijing.  And that’s clearly a big hate on my list.

Bertrand: Yes, Beijing is definitely safe. I still remember one of my trips to San Francisco before living here and taking naively a hotel just four blocks west of the center of San Francisco, Union square and ending up in the Tenderloin, not realizing that it will be full of homeless people, needles, feels very scary at night.

So that was a mistake. You don’t want to get a hotel in the Tenderloin.  For me, however, what has been amazing is that first it’s such a great, beautiful city, world city. Right in the middle or very close to the middle, you have such an area of   somewhat lawlessness, but  it feels like it has extended across the years to the rest of the city.

And that has been something pretty scary. I’ve heard stories, anecdotes of people I know very well,  very close to me who got mugged at gunpoint. I know people very close again who have been beaten so strongly in the street for no reason that they ended up a week at the hospital. And I’m talking about people you will not think they will get beaten by anyone. I’m talking about very big, very large people who ended up being beaten on the street for no good reason.  In the middle of downtown, in the good part of downtown in a way, quote on quote.  So there is a level of lawlessness that, at least when I arrived in 2014 was not there at least not beyond the Tenderloin and it feels that it has expanded.

And as you talk about COVID one thing that definitely shocked me when you had so few people in the streets of San Francisco: it was construction workers, and homeless people. So it was very weird because you were used in some ways to seeing 10% of, I don’t know, homeless people in the street 5% and suddenly jumping to 50%,  and obviously they were not wearing mask or anything.

Nuno:  The point on expansion, I think when COVID, as I mentioned with people moving around did amplify the areas of town where people were moving into. And also there were encampments and specific areas that were allocated for homeless people. So obviously there was a bit of a change in terms of the geography of it.

Homelessness in San Francisco has always been linked to a variety of things to drug abuse to mental issues, et cetera. But from what I know,  economic homelessness, so people that really don’t have the money to afford the home, et cetera, increased dramatically pre COVID.  I’m not sure where it is with COVID but it does feel in some ways that there are a lot of parts of town   where you wouldn’t see a lot of homeless people, and people that were without a home.

That those parts of town expanded quite a bit during COVID. We’ll see what happens in the future, this is not an anti homeless episode. It’s more like, it does feel at times, I think San Francisco is a particularly good example of that, that there’s a lot of crime, that’s you just wonder, how can one live and one of the in principle most prosperous areas of the world and deal with that complexity and deal with all of that.

And it’s not about eliminating and telling homeless people, they need to go away or drug addicted people or whatever. It’s more about how do you control crime in this type of environment.  And to a certain extent, it does feel unsafe. I do feel unsafe. So that’s our first, that’s our first one.

Bertrand:  we won’t solve this question 

Nuno: It’s a complex, it’s a complex question.  

Bertrand: but for sure it doesn’t feel right. For sure it’s a problem that just got worse, as you say, encampments, tents, that was not something you saw much in San Francisco in 2014 when I moved. It has totally exploded and there are a lot of metrics to back that  and it doesn’t fit connected in any rational way to what should be happening in this city.  And you know there are a lot of very weird stuff happening. For instance, I remember hearing that a lot of cities outside San Francisco are dropping the homeless in San Francisco. 

So I have heard stories about sheriffs or police cars from these cities dropping the homeless in San Francisco, because they will be taken care of quote-on-quote. You have a lot of subsidies that San Francisco is doing, spending money on homelessness that attracts people obviously and there are crazy metrics.

I remember one metric around the cost of homelessness in San Francisco. I think the city is spending $100K a year per homeless person. So basically they are spending more money on each homeless person than the average salary in San Francisco, which is probably around 80 K the average income of the San Franciscan.

So there are things that simply don’t make sense, and that are happening  in this city.

Nuno: There’s history behind it. so maybe to finalize this point, cause we don’t want to hamper too much on it. It is important to understand the history of San Francisco.  Everyone thinks San Francisco is by nature, a liberal city, a very liberal city. And in reality, it became a liberal city as a reaction to being a very conservative city.

There’s a great book called season of the witch by David Talbot which talks about that transition, but seen through the eyes of summer of love and the repercussions of that. But again, it’s a wonderful thing to look into, as you said and rightfully so Bertrand, we won’t solve it. I don’t think we understand enough about it to be able to solve it.

And many intelligent people have looked into it. But it’s definitely a big big hate 

Bertrand: Maybe to follow on some things that is a bit more specific to San Francisco versus the rest of the bay. It’s also all the issues with permitting and education for people who follow what’s happening in San Francisco. It’s a city where it’s incredibly complex to start any business. And I’m talking more about the small business type of business, not startups, but really if you want to open a restaurant, a coffee you’re opening can be delayed by months.

If not years, it’s very typical. The same if you want to build new housing, they keep saying that there is a housing problem in San Francisco. Yes, of course, because permitting is totally insane. Might take you 10 years to get a permit to build a new building. 

And on the education side, it has been crazy what has been happening under COVID.

The public school system was mostly totally broken not providing any service in person in San Francisco. And I think the rest of the Bay and California. they just focus on some crazy stuff in San Francisco, like for instance, just renaming the schools in the middle of the pandemic, not bringing kids to school again, they were focused on renaming schools.

So there is some part that is really scary and broken.  And talking about schools in San Francisco, you have to know that it’s a lottery system. So you don’t get the school allocated based on where you live. You just get school allocated  on a lottery system, which of course could mean that you have to bring your kids to a school on the other side of the city.

And guess what, that’s the  city with the least proportion of kids per capita in the US as a result of a lot of issues with how schools are run.

Nuno: But then you have the opposite issue, which is what I call the Menlo park Palo Alto divide. You know why Menlo park was always cheaper in terms of housing, even sometimes across the street than Palo Alto was. At the height of it it’s like 30% cheaper house from one side of the street to the other, because of school districts, because people want it to be in Palo Alto to get access to the better school district at that point in time.

I do think things have changed since then. And obviously there’s also private schools on top of public schooling, But a lot of also the economics of the valley, as opposed to San Francisco, where it’s a lottery system, were driven by the schools you could get your kids going into. I’ve spent quite a bit of time with nonprofits on the board of nonprofits, around education in California, and here in the bay area, initially with partnership for children, youth, and now with one goal for the bay area, there was a lot of funky things going on, which for European person might not make a lot of sense on how, for example, the school district organizations work, how PDA works, how the parent teacher association works and their importance and involvement, but there’s a really funky thing.

I don’t have kids, obviously Bertrand you have a daughter, but the interesting thing is even in public schools, let’s forget private schools for a second. You are highly incentivized. I am even gonna say pushed, in many cases to contribute to the school with money, right. and with assets 

Bertrand: With money and time. 

Nuno: I was hearing stories that are just mind-boggling. I won’t say the name of the school. It was a public school. And the teacher had an offer to go literally to go and move to another school, which in this case was a private school, I guess she was going to be paid more for that and some of the parents come together and offered her like an Hermes bag or whatever to stay. it’s just, it’s mind blowing stuff, it’s just, the system clearly has all these issues. 

And back to your point around permitting and services and education, a lot of teachers and a lot of workers in restaurants and chefs sometimes they can’t afford to live in the place where they have the business, right? Where they you know do their service? And that means they have to commute. And that means they have, incredibly complex commutes. I remember this is the most salient story to me. I was once in a Starbucks, I think probably in Los Altos, which is a decently affluent area and a table next to me, I couldn’t help it overhear a lady that was interviewing another lady for a position of, I think I would classify it as a grownup nanny. So someone took care of some kids who were maybe in their teens and one of the core questions, and she asked this question like two or three times in different ways, that’s the person who was interviewing asked was where do you live? Are you going to make sure that you’re going to come here? Because the person that was doing this before at certain point in time, the commute was so long, they gave up, and finally I realized that this person that was being interviewed was an hour to an hour and a half each way of traffic to get there.

So we’re talking about a two, three hour commute that she would need to do. I think it was four days a week or something. And you’re like, it’s just,  so there’s also this mentality somehow that then when you have a lot of affluence, you have a lot of people that have a lot of money that can afford to have certain means of service to them.

And there’s nothing intrinsically wrong with that. But when that intrinsic service is propelled to areas that are geographically very distance, which is the case in the bay area,  it becomes like a system that’s it’s very incomprehensible right. And if you’re talking about Asia and if you’re talking about Europe it’s basically within the context of a city and here it’s in the context of different cities and different towns.

And  it is mind-boggling to me. 

Bertrand: But at the same time, having lived in Beijing. Most of our engineering, they had a commute, one hour to one hour and a half. 

Nuno: but they’re commuting within the city. It’s not like I’m getting on a car 

Bertrand: There is public transportation in Beijing, and there is public transportation in Europe because I was going to say, Paris is the same. Maybe not as extreme 90 minutes, but definitely one hour plus is definitely happening and is typical. But you have public transportation. 

Here you have a very poor public transportation, you have to drive a car in many cases, so that’s an issue. And maybe another point, this one is not just the Bay, but just in general, California. And some other states in the US one thing that is scary is that they try to remove  competition at every level of the education system.

Removing the SAT exam at the entrance of universities. It’s removing gifted programs all over the state. It’s removing a math curriculum when you are in high school or middle school. It’s becoming pretty crazy for a country that is already super bad in term of STEM. Stem, meaning math science engineering type of programs and curriculum.  They are going to destroy it even more at every level of the education system.

So I’m hopeful at some point it will go back in it’s track, but it’s really scary from my perspective, and this is strong in California, but it’s happening in many states, all over the US.

Nuno: But then you have, again, like the other side, and this is the interesting piece of this, right? So you have, for all these dysfunctions, like in  public schools, et cetera, then you have some of the best preparatory, schools, high schools in the U S here as well. You have Nueva, which is for gifted kids, right?

You have Harker, Palo Alto high school is an amazing school. It’s this dichotomy that you systematically see and sometimes even within the same sub region.  

Bertrand: Yeah, private schools have a bit more control on their curriculum. That’s for sure. But I can see that in California state and now Washington state they are removing all public gifted programs from public schools, which is pretty scary because it means that if you want that, you have to go private, you have to spend even more money.

It’s even less accessible. All of this in some weird spirit of making things more accessible 

Nuno: And sort of the after school, the after-school out of school  support is really not taken for granted. And it’s been a big fight for example, of partnership for children youth of which I used to be a board member. And it’s just very complex, to make it work in public school districts and how to scale it.

Maybe moving to another hate it, we’re spending quite a lot of time on our hates, but moving to another hate obviously cost of living, the taxes, everything that you pay for. When I first moved to California, I was like, this place is, seems relatively cheap. And then you start realizing, yeah, but  you need to pay for this, and you need to pay for that. You need to pay for your garbage collection. The prices of energy are pretty silly and then taking into account that you pay a lot for your electricity and then you have brownouts and you can have, like I did in half moon bay I think it was almost two days without electricity, right?

When we have the famous PG&E debacle, so to speak, and you’re like, I’m paying all this money and I’m getting, effectively worse service and electricity than I would get in a certainly emerging market country. It’s incredible. Everything costs everything’s expensive. It’s not cheap.

It’s really a lot of people that I hear, entrepreneurs, young entrepreneurs are like, I’m going to go to the bay area and I’m going to move there. And I’m like, have you looked at how much it’s going to cost you to live there? Have you looked at how much it would cost you even flat sharing in terms of rent.

Have you looked at how much you’re going to pay for this and this, which you take for granted in your own home country. People sometimes just don’t do that. They don’t do that analysis. They don’t think through that.

Bertrand: I mean as you know, San Fransisco at least before COVID used to be considered the most expensive city in America, if not the world. And this price point is being reflected in the valley as well. So it’s extremely expensive. And when you add the taxes that are the most expensive in the U S with New York state and New York city it’s a very bad deal.

You might have what looks like a big salary, but so much is going away in your taxes, federal taxes, plus local state tax. And then you have to pay very expensive housing. And then all the services are very expensive. If you go out to restaurants to pay for food delivery, this is very expensive service at every level of the chain. I mean your $6 coffee. So it’s very expensive to live and it’s by far with probably New York city the most expensive city to live in America today.

Nuno: And just to frame this with examples that some of our listeners might not fully understand because the realities are different around the world. For example, to get internet access, I have a hundred megabits per second, where I live, I really have the most basic TV package because they forced me to have a TV package, but like the most basic it’s not even HD.

And I pay around $120 a month, $120 a month. If we’re talking about, for example, the situation in terms of costs that we were talking housing, if you’re talking about a house in the valley, in the heart of Silicon valley, and you say a million dollars, nobody will blink. People wouldn’t even say anything.

It’s okay. A million is okay, fair.  Thanks. So that’s like the starting point, right? 

Bertrand: to be clear, you don’t have a good house for a million dollar in Silicon Valley. 

Nuno: For a million dollars, you don’t have a very good house. Just to be clear. 

Bertrand: No offense to anyone, but it’s not going to be nice.

Nuno: Not at all. 

Not at all. 

No, people like you know, San Francisco an apartment, apartments at a million, also people, many people wouldn’t blink.

So we’re talking about that order of magnitude in terms of just sheer costs that you have to withstand  and that you have to deal with. We will come to the loves in a bit, but there is definitely a love on cars where obviously taxes in the us on cars and stuff are pretty low.

So the cars are cheap  but apart from that, housing is super expensive. You have all these hidden things that you don’t really understand until you buy a house or you’re buying your first house, like HOAs, where you have to contribute to your neighborhood and the maintenance of it.

Forgetting the licensing issues and all of that stuff that comes on top of it, basic things like you   Bertrand we’re talking about the taxes and state tax and all of that, there’s taxes then at county level and then there’s taxes also at town level, right. San Francisco has more tax than whatever’s around it. And San Francisco is a county.

But for example, I live in half moon bay, which belongs to San Mateo county. We have additional sales tax on top of San Mateo county because we are incorporated town and we have an additional it’s small, but an additional sales tax. So if I buy a car and my address is half moon bay, I pay a little bit more for my car because I have an increased sales tax because I live in half moon bay.

You’re like really? Why?

Because someone needs to make money revenue, someone needs to make stuff to maintain their town. Their part of the world, their little neighborhood,

Bertrand: Yeah the US is a unique patchwork of small jurisdictions. You have your city tax, you have your county tax, you have your state tax, you have your federal tax and all of this of course add up.  Going back to California, believe it’s one of the most expensive state in term of gas taxes. it’s still not bad versus Europe or Asia. But it’s one of the most expensive state. Going back to your internet access I’m going to make envious, but here in Washington state, I’ve got a Centurylink and I managed to get gigabit fiber. So gigabit both ways for just $65 a month. So that’s was one of the nice things of moving out of California. 

Nuno: Okay. I’m depressed now. Yeah.

And a good segue to this as you pay a lot of taxes and people like of course, and you have great infrastructure. And as we discussed in our first episode,  we don’t, and it’s worse than that, then there’s other issues. And now there’s a discussion whether this is, the fault of federal or the fault of the state.

And there’s a lot of debate around that. But obviously as you guys know, even globally, we have fires every year, it’s getting worse. It’s getting more out of control. So even really basic infrastructure maintenance where you’re trying to safeguard your populations, where you’re making sure that stuff like this doesn’t happen it’s very tricky.

I wouldn’t say it’s in the heart of Silicon valley, but certainly in north bay or further into north bay,  we had all these debacles  cities being destroyed and people dying with fires and you can’t help, but wonder. Really, is there no absolute control over what things we can do and how we manage this? anyway, very sad situation, but definitely something to think about.

Bertrand: And for the few people that are staying in silicon valley hearing that some are now saying they want to be out during the fire season, meaning from what July to October. So I’m hearing more and more people are now planning things that way for the coming fire season.

Nuno: I was talking to a friend of mine who moved back to New York. And I was saying, I’m thinking of going to Portugal for work. And obviously connecting with my friends and family as well, late September, October. And she was like, of course you’re avoiding fire season. I was like, sorry. So it’s becoming a thing now.

It’s yeah, fire season. I’m not here. I’m going to go somewhere else. The good news is we now have masks. We have masks. We have filters because of COVID. So we’re like, we’re ready now and more ready than we’ve ever been.

Bertrand: Having lived in China for six years, where  you used to have some of the worst pollution levels in the world, I can say I was not even prepared for how bad we got it in Silicon valley in September: to see an orange, fully orange sky for a full day. A day that was so dark. At the same time you had a heatwave of 40, 42 degrees, no air conditioning, because you are close to SF.

Usually it’s not too hot. It was horrible. It was a total nightmare scenario. It was bad. That’s one of the reasons ended up deciding moving.  It was just too much at some point on how you have to organize your life. And especially as we just said, in exchange of spending so much in term of taxes and cost of living.

And that’s a big question. I think people are ready to spend money in tax and cost of living if they get some true value in exchange for opportunities on that used to be the case. But I think that has changed quite a bit over time.  

And going back and going to infrastructure. We’ve got utilities, electricity that’s connected to fire because the moment you need them, actually that’s when they’re cutting electricity under your feet for hours or days at a time. You experienced 2 days. I know people who experienced a week without electricity. This is insane. Go to Asia, go to Europe, experiencing days without electricity in the middle of one of your  biggest, most important economically region. It’s just unheard of. Absolutely unheard of.  I don’t know if you have heard like me, but I was surprised. And also here in Washington state, so many people have generators.

They have electricity generators. In my neighborhood, we’re talking about 15% of people have generators. 15%.

Have you ever heard that in Asia or Europe? No.  so that’s pretty surprising. And maybe on the infrastructure part, we talk about the cost of maintaining roads.   The highest cost in the world in term of road maintenance. But in return you still get potholes. It is in a very climate friendly environment.

We are talking about a Mediterranean style of climate. This is California. This is not extreme weather causing terrible damage to the infrastructure all year long. This is not the case. So this is really surprising. And the other side of it is there is very little public transportation.

Yes there is BART to transport inside San Francisco. There is MUNI,  there is CALtrain, but this is a joke compared to any public transportation system, for an area of 8 million people. If you look at the whole bay area, this is a total joke. So as a result, traffic jams are insane in the region. During COVID, it was less an issue to be frank, but hopefully when we come back in person, it won’t go back to the old ways. Hopefully people work more remotely. We will see, but that used to be very bad.

Nuno: I would add well, the the traffic jams are back just to give you the, the pointer on that. 

Bertrand: And I’m sure people are even more worried to use public transportation with a virus and a pandemic going around.

So all taking their cars. 

Nuno: I would say just to close on that point, that at least we’re not LA, I spent a week in LA and I was like, this is the worst of the bay area all the time, literally. I mean, so at least we’re not LA, so we’re still happier than our Southern neighbors here in that sense. 

Talking maybe a little bit about culture and access to arts and access to things.

We, we do have some interesting things, obviously SF opera. We have  the symphony, we have great museums, like the museum of Modern Art is amazing. De Young museum is great. So we do have amazing places from a, from an art standpoint, but sometimes it does feel a little bit like a regional town I think in some ways it’s not London, it’s not New York, it’s not Paris.

So it’s not one of these top five cities in the world, top six cities in the world. Maybe our bar is a bit too high 

Bertrand: That’s the most expensive place to live in the world. So I think bar should be the highest.  

Nuno: And it is still secondary, right? People come here after they’ve been to New York and after they’ve been to London  like artists.

I would say it’s not a big hate issue for me, but it does feel sometimes a little bit regional,

Bertrand: It’s regional. 

Nuno: Versus other places. 

Bertrand: But I know people who left because of that reason.

Nuno: And then last but not least of our hates. And I think we’ll have different angles of entry on this. It’s maybe too PC this area too politically correct. And I don’t mean this in a hard way. It’s not the notion of, we should say whatever goes in our mind and not be penalized for it or not respect other people.

it’s a little bit more nuanced, which is sometimes you have to be this type of person to fit in the bay area. And that generates drones, that generates people that are all the same. And sometimes the real discussion then doesn’t happen because people are almost afraid of sharing their points of view and using sometimes even the wrong words.

And I remember being told off by someone, I won’t say who it was, but someone I respected quite a lot. When I first came to the bay area, cause I was mentioning, there was the person at reception at the office that we were in, and I may have mentioned the girl at reception and the person took offense to it.

And I was like, it is a girl she’s quite young. And she is at reception. And if it was a guy, I would say, it’s the guy at reception. And it’s no, but you’re. And so I was like what should I say? It was like the receptionist or the person at reception, or sometimes it’s just, you’re like, oh man.

I understand that we need to be respectful and that we need to understand different choices and that we need to understand a bunch of other things, but it’s like really I remember south park did a full season on PC when PC principal was introduced on political correctness.

And obviously these guys are based in LA, but I was like, this is so San Francisco.   I understand there’s discussions that need to happen and there’s ways to manifest change. And in some ways change is needed. As we said, there’s a lot of issues, but then the discussion doesn’t happen because  everyone’s very afraid of saying the wrong thing of expressing themselves in the wrong way.

And I feel in some ways that takes away from the actual authenticity of the conversation. And in many cases, it doesn’t lead to meaningful and sustainable impact and change.

And it’s a loss because you have a lot of bright and intelligent people here, and every time in the news, oh, this guy wrote me this stupid email and this person tried to express themselves in this way.

And sometimes it is out of line  I’ll acknowledge it. Sometimes there are things that happen that are out of line, but sometimes you do need to have the discussion. You do need to have different points of view and people expressing that they have an easiness around certain aspects of this culture that maybe need to be revisited or maybe need to be evaluated

Bertrand: Yeah. Where I am worried is that when you go too far, in a way it’s trivializing the real problems, the real issues. And there are some real issues that might happen in a company environment, or outside a company environment that are important and that you want to be taken care of. But if you end up spending your time policing 50, 75%  that’s not so important, that’s not such a big difference. That’s not too much an issue. As long as you have a minimum of a skin to protect yourself.

That’s trouble that’s not the right way. And as you say, the big issue is that a lot of people don’t dare to speak. And that’s probably one reason a lot of people are leaving the bay is because they are here, but they don’t enjoy truly being here because they don’t feel they’re actually respected with their opinion, because there are a lot of opinions you cannot voice anymore.

And I feel, people talk about China, about censorship and a lot of this stuff. Yes, it’s true. It’s definitely there. But I have personally felt on a daily basis more need to censor myself,  others, in Silicon valley than in China. And that might surprise people or shock some people, but that’s the reality.

You have to be extremely careful of what you say, a single world here can destroy your career, even if it was a joke, even if it was a mistake, even if there was  nothing, no bad intent whatsoever. You might not have been aware of the latest etiquette on how you should talk to this person or using the wrong pronouns.

This is becoming very crazy. It feels like a place that don’t have real problems, but try to find new problem, or. is trying to hide its real problems. Because we talk about some real problems,  by talking constantly about some other problems. 

I would say it’s pretty bad. If you think America is a lot about being politically correct? actually, San Francisco is probably the epicenter of all this phenomenon of political correctness in America. And personally, for instance, that’s one thing I like in New York you feel people are a bit more in your face.

Don’t hesitate to be quite frank about their opinion. And this is a bit more fun in a way to be in New York, live in New York, from that perspective, versus San Francisco,

Nuno: So again, advice, if you are someone who is thick skinned who likes, push debate, aggressiveness, at least confrontation of points, even in a respectful manner, this sometimes will not be the right place for you. It will be a difficult place. It will be a difficult place to have really discussions at scale which is shocking, right?

Because again, so much intellect and so much so much skills are here that it’s really surprising.

Bertrand: You might have this discussion on technical or purely business matters, but anything beyond that can be very dangerous.

Nuno: Anytime you go into sociological issues, spiritual, religious issues, gender issues, sexually related issues. Tough. It’s going to be very tough to have those conversations. You can have it with a small group of friends or with very close friends, I would actually say, but anytime you go beyond that to a different type of environment, a larger scale environment, you’re gonna really struggle.

Section 2 –  Loves (33:51)

But let’s talk maybe about what we love here, cause there’s stuff to be loved here.

Bertrand: What we love here. So when it’s not on fire, climate is fantastic.  It’s a Mediterranean climate. It’s very enjoyable most of the year. You have a small winter what from December to February where it’s raining more.    but except for that time and the fire season now it’s a very enjoyable climate.

Just to be clear. There are a lot of micro-climates in the Bay, so I’m not talking about terrible weather in San Francisco. I’m talking about a bit nicer weather across the bay and overall California, especially Southern California, where it can be very enjoyable.

Nuno: I would say I live in Half Moon Bay, which has very similar weather to San Francisco. And just to defend the weather in half moon bay and San Francisco, we have great weather year round with a very disappointing summer. That’s how I normally position it where you’d expect heat and sometimes you get cold and it’s very confusing.

But then I could be, and this has actually happened to me Christmas day outside t-shirt because it’s moderate weather. And it’s nice. The valley itself, because it’s next to the bay. It’s a little bit more protected by the mountains unlike San Francisco does have a much nicer summer, much warmer.

I spent a summer at Stanford studying and, it’s gorgeous maybe a bit too warm at times, but it’s gorgeous. San Francisco and places like half moon bay, which have, as I said, a more moderate weather that in summer, bit cooler, a bit too cool just to be honest.

We didn’t compensate with Indian summer, we have Indian summer in September into October, and it’s incredible. So yeah.

Bertrand: Just to remind audiences there is a saying, I believe from Mark Twain  

Nuno: it’s hoax it’s attributed to Mac Twain, but it’s not Mark Twain 

Bertrand: HIs worst winter was a summer in San Francisco. 

Nuno: It must have been someone else that said that, but it was not mark Twain.  Someone important. But it is truly it’s a bit cool. I come from Lisbon originally and the way I position it is in, in a city like Lisbon, the trade-off is winter.

Winter is a bit wet and it’s not super cold, but it’s a bit cold. It’s not great. And the equivalent to that in the bay area sorry, the equivalent to that in San Francisco. And again, in half moon bay and places like that is summer is a bit too cool for what it should be, but then we get our revenge in winter, right and I often drive my car with a top-down in winter.

One thing everyone says, oh, in California should have a convertible. It’s actually, yeah, around this area, you probably should have a converter because you’re going to spend maybe even more than half of the days of the year with your top-down  that’s how incredible the weather can be from being a moderate weather.

Maybe adding to that sort of the great outdoors the amazing national parks, the amazing state parks the ocean, this is quintessential California. and I would say, it’s green on certain parts. It’s a little bit more arid than others. It’s just incredible. It is truly beautiful, truly gorgeous.

I think the climate plus this is often disregarded a lot of people when they talk about exodus vs, non exodus is, and people are leaving because it’s very expensive and whatever they forget this really basic thing, this is a wonderful piece of geography where people want to live, because it is actually gorgeous because it is actually rincredible that you can go and take a walk and go to the Redwood trees and you can drive a little bit and be in Tahoe and do skiing and you can go to the beach and enjoy a wonderful beach.

it’s just it, this is the postcard of California in some ways. I think between here San Diego, LA, but certainly here, I think we have very diverse set of conditions where you do have the green and the brown and the arid stuff all together. and then the mountains with ice.

It’s wonderful to live here. 

Bertrand: You have national parks like Yosemite, so it’s really amazing all the nature you can get 30 minutes away, one hour away, five hours away. So you have a lot of opportunities. It’s world-class for sure. it’s gorgeous, I think that’s the right word.

Nuno: We have wine. I don’t drink it anymore, but we do have.

Bertrand: Yeah. Napa  valley, Sonoma valley,  that’s some of the two best wine regions in the world just close by. Believe it or not, once in a while, they manage to beat French wine in term of quality. Depending on who you ask. 

And it’s for a trip, weekend trip, three day trip, to just go there and enjoy some nice wine, some cheese, they even have cheese in the wine country.

You don’t so many places with good cheese in America, so that’s something you can truly enjoy over there. So that’s very nice. Just one hour away from San Francisco, barely. So that’s a pretty amazing destination right away.

Nuno: And just to piss you off, I think wine spectator did an analysis of their rankings on wine over a decade. And they came to the conclusion that in reds, the number one country in the world in terms of classification was Portugal followed by the U S in second place.

And in whites, the number one was Germany. I believe if I’m not mistaken, I think it was Germany. So again, yeah, french dominance, I, still believe is highly pushed by marketing.

Bertrand: I’m not aware of this ranking. Never heard about this ranking.

Nuno: But just to make the point on wine country, again I hgo to wine country often with friends and I don’t drink alcohol anymore but I do go there and it is an experience it’s well done, you know, from Sonoma coast to Napa valley, it’s well done. It’s really the essence of US put into wine.

It’s well, marketed, put together. The experiences of tasting are well put together. It’s really incredible.

Bertrand: It’s nice. It’s not France level, but it’s nice.  I’m talking about the experience, not just the wine, the experience. 

Nuno: It’s more well-marketed in some ways it’s more, it’s again, it’s service industry and, I think France just has so much history that you could put a stone there and it sells itself because it’s like the stone has been there for 500 years.

Bertrand: Exactly. You go to Bordeaux and then you visit some small village close by and you are in this grotto cave. And you’re like 1000 years of history.   

Nuno: Portugal Is similar. Right. It’s been there for a long time and there is a tradition behind it. I remember again, I won’t say names, but a friend of mine where it’s a couple she’s American. My friend is Portuguese. I remember that her happiness when she took me to a place.

And I think it was in Sonoma coast, a winery that had been there since 1930 something. And my friend and I who are Portuguese, looked at each other. It’s what do you mean? This is like contemporary wine, or these guys are new kids on the block or something, which, and so sometimes history is seen with different lenses.

There’s a lot of pride here, which I like, but it’s sometimes like, yeah, we’ve had places like 500, 600, 700 years in Portugal and it’s fine. 

It’s okay. 

Bertrand: But I must say as a French person, it was very enjoyable to be able to have access to a wine country so close by that is truly world class without joking. All jokes aside it’s truly world-class. And that was truly bringing to me a taste of home. You know, the landscapes, the wineyards, the wine, the cheese.

So that’s a very positive side, I believe  for Silicon Valley. And continuing on some of these topics, of course, there are a lot of high-end restaurants, all around. I forgot, but it’s pretty well listed in term of Michelin star restaurants worldwide.

Nuno: Yeah. So the bay area I don’t know if it’s still true, but it certainly was pre COVID has more three Michelin star restaurants than New York.  The beginning of the farm to table movement was here. I would probably say maybe Chez Panisse was one of the first big ones and big proponents of that mode of basically getting your produce from your region sometimes even cultivating it to yourself if you had the space to do. Restaurants like French Laundry have a place where they do cultivate a lot of their things.

Bertrand: Favorite of our Governor of California. Of course.

Nuno: yes. We will not go into that during COVID. But definitely there’s amazing restaurant here. And I think the history of then as we discussed in our first episode of Asian culture being here, the history of then obviously we have quite a lot of Latino culture. Also here, all melded together has created some unique and amazing restaurant experiences.

I, Bertrand knows this I’m very nerdy. And so I keep a list of Michelin star restaurants that I’ve been to and I forced rank them. At least I forced rank those I think are worthwhile force ranking. And my number one is actually now here in the bay area, it’s SingleThread in Healdsburg, which is now a three Michelin star restaurant.

And they bring together California cuisine with Japanese cuisine, which in a way that is really truly amazing and unexpected. One of my other favorite restaurants here in the bay area is  Benu by a Korean chef Corey Lee. And, it’s again, bringing these flavors together and it is truly exceptional.

We do have some amazing restaurants here. I would say, and I won’t go back to the hates yet, but I would say the mid-fair is a bit missing in the bay area. So we have incredible high-end and you have great, hole in the wall, low fare restaurants and then the mid end is missing or it’s too expensive for you to even notice it.

But definitely we’re incredibly well-served. In terms of  restaurant experiences, innovative experiences. For a period of time, we had the only female chef in the world and she’s French actually, the only female chef actually in America,  sorry, not in the world. The only female chef in America that had more than one Michelin star.

And now she has three Michelin stars which is Dominique Cren.

And she came here and I don’t think she actually had any education from what I remember in restoration or as a chef. So she learnt it here. And it’s incredible how innovative a lot of these chefs are.

So we have incredible experiences here. As I said, the mid fair mid-end is not great. And it’s a bit lacking at times. So be careful with what restaurants you choose to go to, but you have some truly unique experiences here.

Bertrand: And you have as you said, you talk about Japanese food there is fantastic Mexican food, there is fantastic Californian type of food. You can get some great French food. So it’s really  not just world class, but you can really get access to world cuisine and that’s some of the great part  of Silicon valley and the Bay. 

Talking quickly about some positive side on the infrastructure, of course it’s incredibly expensive, but you can get access to great healthcare, great hospitals.

You have some of the best specialists in the world, some of the best hospitals in the world, you better get a great insurance as well to be able to benefit from it without getting bankrupt but it’s absolutely world-class.

Nuno: We have 2 probably of the best hospitals, hospitals with a big H, in the world, which is Stanford and UCSF university of California, San Francisco. I These are two of the best in the world, full stop, across many specialties and people will come here just for stuff that’s just generally complex and difficult.

Again, you should have a good, health insurance but it is truly world-class. I personally have used Stanford for a variety of historic reasons. And in my experiences, they have been absolutely incredible. It doesn’t mean that the healthcare system is not broken. It is in the US as we’ve discussed in other episodes, but it does mean that if you’re here, at least you have access to the best.

And that’s  within a range of, 40, 50 miles, you have really good healthcare, impressive healthcare.

Bertrand: And I definitely concur having used both of these hospitals actually. it’s fantastic. it’s world-class care that  you can get

Nuno: Maybe to the next positive thing, laid backness. We talked about this in our previous episode on myths and how you have to understand laid back in a different context in a more nuanced way, but it is true that people are a little bit laid back and not only the way they dress and maybe sometimes a bit too much on the way they dress, the hoodie, and the t-shirt and not really sometimes up dressing for specific events.

But that laid backness is good. And as I said, it’s a very purposeful, laid backness, is a very purposeful part of the culture, as we mentioned in the previous episode around the myth.  But it is very appreciated. I always say maybe the only relatively big town city in California that is more laid back than us is San Diego.  It’s where I felt it. LA is a intense in a different way, it’s laid back in a different way as well. 

Bertrand: LA you have to be very carefully laid back. 

Nuno: Here, you have to be laid back in a specific way, but it’s good. It feels easy. It doesn’t feel like, I spent a lot of time, for example, in Seoul, in South Korea, there’s an intensity that you can never take away.

You can’t get out of that intensity and here you can. Again, it’s a purposeful laid backness is part of the culture. It doesn’t mean people are not competitive. They’re not driven. They’re not aggressive. It just means that there’s a notion to life. Nobody will look at you funny if you said, yeah, at 5:00 PM today I just went to the ocean and looked at the ocean. People won’t look strange at you cause they’ll know that maybe you’ll catch up on work somewhere else. And you just went to the ocean because it was nice weather. And so it’s not quite, I would say from the experiences that have been shared to me, the experience of a city like Sydney, where, in summer, people do relax quite a bit at a certain point of the day but there was a little bit of that here.

So not the same extent, but a little bit of that here. And I think that’s very positive.

Bertrand: Yes. I totally agree. That’s something I enjoy and  I can wear jacket, I can wear suits, but honestly I’m very happy to be more relaxed. Up to a point.   But I think that’s appreciable, We’re all working hard, doing a lot of stuff.

No need to overdo it or try to show our worth by what we were. I believe showing our worth by how we think, how we work, how we are truly meritocratic, that’s what matters.  

Another big positive point I believe for the Bay, at least from my perspective. I guess our perspective both you and me, it’s okay to be quirky. It’s okay. To be a geek in Silicon valley on different topics, you are a geek on food, on different topics. I’m of course a geek on a lot of gadgets and other stuff. So that’s a place where you don’t feel like that weird person that people have to be scared from. This is normal. This is okay.

Actually, if you are not obviously geek on some topics here. You’re probably in the wrong place.

Nuno: There are only two places in the world where I feel it’s we the nerds control. It’s here in the bay area. And it’s basically San Diego during Comicon. That’s the only two places on earth where I’m like, the nerds have won, this is their place, leave them alone. And truly, if you tell someone I’ve nerding out on “sous vide”  or I’m nerding out on electric bicycles, or I’m nerding out on whatever, in the bay area, people will go on a debate with you and they’ll probably be nerds as well.

And it’s so wonderful. It’s one of the key reasons why I love living here, because I think again, Bertrand and I are nerds. We love stuff. And when we get into to it, we get really into it. And it’s wonderful to be in a place in the world where that is celebrated rather than oppressed. It’s celebrated it’s in some ways, it’s you are the people that are moving this forward and it’s really wonderful to be here. And it’s funny, right? You can talk about this all the time. You can talk this with other people and you never feel odd.  

Bertrand: It’s expected actually. 

Nuno: Yeah. You have to have quirks. Yeah. You have to have stuff that you really go nerd out into.

Otherwise, it’s strange if you’re not. 

Bertrand: Yeah, it’s strange.  If you are not then it means maybe you don’t belong here in some ways

Nuno: some ways that then we go back to our drone type view of the world. But again, I think that’s wonderful and the other thing you have to be very clear about the Bay Area is because it’s the land of the nerds, when people start going into something, they really go into something, right?

So if you go into doing iron man triathlons, at some point, you want to be world-class right. I know an entrepreneur. I won’t go into names, but he’s well known you know, his age category, the world championship in Ironman triathlon, as he was building a company that then IPO, right? It’s what the hell, right? You don’t have better things to do.   People here, when they take it seriously, they will take it very seriously. The level of intensity goes up immediately. And I think that links well to something we’ve talked about in the past, which is this is the land of insecure overachievers.

It is the land of people that are overachievers that somehow are still always a little bit insecure. And that’s what it’s creates this amazing wheel of innovation and change and renewal systematically.  So very special.

Bertrand: there is competition at every level, and not just business wide, Not everyone of course, but there is definitely that. And yeah usually people don’t do things halfway.  They try to go all in on some topics  and interest and again, personally, I think it’s good to have some specific interest to learn, to go deep and to think about stuff beyond work.

I think another piece  we both enjoy a lot, like a lot, is that you have people, culture, from all over the world. That’s really, for me, an amazing part of Silicon valley, we talk about more than 30% of everyone in the bay being foreign born.  That was really one piece of the attraction for me.

And of course, with that comes a culture of  inclusiveness,  being very diverse, to be open to that. It’s really something I believe is very positive and one of the key strengths  of Silicon valley. That attractiveness to different part of the world.

Nuno: it’s wonderful to see because it’s always in motion and nobody again will bat an eye if they see multi-racial couple, african-american guy, Asian girl, or Asian guy, Indian girl. nobody will bat an eye at it. And in some ways, as we talked about, there’s a lot of issues here sometimes, and maybe it is a bit too politically correct as a part of the world.

But that intrinsic nature of it being the far west in the good old days and the fact that it had so much inflow of foreigners and people that immigrated here from Asia and other parts of the world has been very positive. There was truly a multicultural nature to how things work here in the bay and how people interact.

And it is absolutely wonderful. and one of the reasons why I really do enjoy being here having lived in Beijing, Beijing is still obviously just the law of big numbers. It’s still obviously dominated by Chinese and it makes sense, the expat community is obviously much smaller.

And here we don’t even talk about an ex-pat community. It’s almost like it’s intrinsic that a significant part of us are foreigners.   I don’t think I’d heard the word expat mentioned to me in my context of being here in the bay area at all for the last nine and a half years until today, actually.

And and it was relating to something else that I was working on and it is wonderful. It is wonderful. there’s no notion around that, you came from somewhere else. Great.  And so yeah, wonderful place to be in.

Bertrand: But from that angle, there might be a point where in a way, people from all over the world, might be spending a bit more time between people from all over the world versus Americans, between Americans.  There is some level of divide from that perspective, 

Nuno: I don’t know. I feel it depends on the circles you move in. I, early on in my life here in the bay area, I lived in San Francisco and I spent most of my time around San Francisco and probably Palo Alto, Menlo park, San Mateo.  And I felt back then, it was a little bit like that. I was mostly moving in circles of other foreigners and other people that were here.

And then I moved to Half Moon bay, which is a small town America. Just happens to be a small town America in the middle of Silicon valley and the bay area.  And it’s different, right? And I think my experiences have become richer because of that, of really interacting with sort of Americans and people that have been here where they’re third or fourth generation in the region.

It’s not third, fourth generation in the US. They’re third or fourth generation here, right on the coast. And there’s something special about that. And some ways I feel my perspective on that has changed a little bit from the past, I used to have this notion that the notion of friendship in the U S is different, certainly on the coasts than it is in Europe or in Asia.

That the tonality of interactions is different. And I  think I’m now a little bit more nuanced than how I look at it. Obviously, Americans are their own people and they’re their own way of interacting. And I think as we’ve mentioned, previous episodes because of our consumption of American media, we’ve been convinced that we get them and sometimes we don’t and they’re different.

But in some ways I feel I’ve appreciated it a little bit more, living in a smaller town, having to deal with people in an area that has some diversity to it, but not quite exactly the Silicon valley or San Francisco diversity.  And there’s a lot of good things about it as well. Honestly, a lot of good things about it as well.

Bertrand: Yeah. And that’s something we might take for granted coming from San Francisco or knowing New York city, but it’s not true all over the US this diversity. I remember at some point I was traveling quite a bit between Minneapolis and San Francisco.  The gap was huge. When you go from one city to the other: very, very, very different cities.

And sometimes I was amazed to think that wow this racially diverse foreign born population that see everywhere in San Francisco, that’s not something you see everywhere in a city like Minneapolis, which is a great city, by the way. Great city, as long as it’s not winter, it’s cold, really cold over there.  But that’s something to keep in mind. 

Nuno: Yes.

Section 3 – The Future of Silicon Valley (54:41)

Moving direction to talking about the future of Silicon valley, the San Francisco bay area and what’s happening next. And there’s a lot of questions on a lot of people’s minds, is San Francisco and Silicon valley is still going to be the center of tech in the world, with COVID and a lot of people being distributed and working all over the world. Does it make sense to have one region that has a particular ascendancy in terms of innovation and creation of incredible startups and tech behemoths? Is there an exodus happening in the bay or are people just moving around and going somewhere else? And I’ll put a stick on the ground. I don’t think so.

I think there’s a blip which was created by COVID and where a few things happened. 

One where people realized that they could work from somewhere else when everyone is working remotely. And as we know that will not stay forever. We just had the announcement that apple is telling people that they need to come back to work three days a week.

Other big companies have mentioned similar measures going forward. So I think this whole fully remote mechanism of the world won’t subsist, certainly at scale. Beyond maybe the next six months or one year where certain parts of the world are still going and dealing with their COVID issues.  Secondly, the nature of Silicon valley,  we mentioned some of the stats in the last episode around in the last two episodes around unicorns being created here, the economic prowess of startups here.

So very specific view that, I would say, and just putting a stick on the ground. I don’t know if Bertrand is going  to,  agree or not agree. But I don’t think there’s an exodus and I think the numbers that are out there actually don’t show an Exodus. And if anything is indicative and beyond anecdotal, for example, rental prices in San Francisco that had gone down significantly during COVID. Actually interestingly enough, the prices of selling houses hadn’t gone down dramatically, but rentals had, are back to prices pre COVID times. Again, I think people are coming back. There’s also inflow of people that want to move here and want to work here.

And the engine of innovation, the engine of creation, despite a lot of noisy people that moved elsewhere to Austin, to Texas in general, to Miami, to other parts of the U S despite that noisiness, the numbers don’t show that, they don’t show the decline of the bay area. Don’t show the decline of Silicon valley in any way, shape or form.

Bertrand: So obviously we disagree. I think a lot of numbers are showing big change, actually big trends. And we have to be careful about some price trends for instance.  if I take the bay, the Peninsula, some house price, as you say, yes are going up. Or one reason is that there are actually quite a few people coming from San Francisco wanted to leave.

Then you have people like me from the peninsula who are considering or already left.   I can tell you in term of people around me, I’ve seen a significant, chunk, percentage of people who have left the bay, some have left for California, some have left for Pennsylvania.  I’ve seen quite a lot of people leaving  to Nevada as well.

So I’ve seen quite a few. Myself I moved to Washington state.  So of course there are official stats about California that has seen a net loss of population that was the most significant in I don’t know decades.  

Nuno: I’ve seen numbers that show the opposite, that there isn’t a significant net loss. So anyway I don’t know which numbers are correct 

Bertrand:  I think these ones were official state numbers. 

Nuno: yeah.

Bertrand: So I’m not sure there’s much disagreement on the official state level numbers. So it’s pretty big and it’s creating a lot of tension around the state in term of how are we going  to pay some of the spending. Right now  it’s actually a great time.

I don’t know if you’ve seen there is a surplus for California, thanks  to the increase of the stock market.  But if we take the number of companies that have announced they have moved headquarters we have Tesla, we have Oracle, we have HP entreprise.

Just days ago, we’ve got snowflake announcing they move headquarters. Now the official headquarter is Montana for them. That’s probably a first for a big tech company. So there has been a trend, like never before in term of companies moving headquarter. This is something to acknowledge.

I think people are realizing a few things., One is, so a lot of things to like in California, in the bay. And of course that huge concentration of people in tech, that expertise in tech and at the same time, a recognition that might not mean all of these people want to live and work there.

They want to live somewhere else. They want to have different trade-off in their life in term of climate, in term of education, in term of government policy.   And therefore they would like to work somewhere else. And now that a lot of corporates are operating in many different geos, as well as remote work becoming a serious possibility, I think this trend is inevitable that there would be dramatic change. Does it mean Silicon Valley won’t be important for tech. Of course it will stay important for years to come. But personally, for instance, my take is that in 10 years from now, when we look at what are the best companies that have been started  10 years ago in the 2020s.

I’m sure we will see a lot of companies started somewhere else, not just somewhere else, but that will be remote first as a policy in term of company and as a result where the location doesn’t really matter anymore. We’ll see, but I’m definitely betting. We will see a lot of remote first companies  10 years from now, and we will have seen a huge distribution of knowledge and opportunities beyond Silicon Valley inside the US but also US itself, we will see more coming from Europe as a proportion. . We will see big increase from Asia so we’ll see more spread of knowledge and in a ways that was inevitable with so many foreigners in Silicon valley, many people are considering coming back.

Nuno: So I think the part where we is that obviously there’s a tremendous internationalization of innovation and the creation of amazing companies and startups all over the world. I think it’s been ongoing for a long time. It’s not because of COVID. I think COVID has propelled some of it, but

Bertrand: Oh, it’s an acceleration. Yes, 

Nuno: It’s not the only accelerator. As I said before, with strive, we started investing multi geography out of the bay area, 11 years ago. the writing was on the wall.

Yeah, but I think it’s been ongoing for a long time. So that’s the part where we definitely agree.

The part to where I think we fundamentally disagree is  silicon well and the bay area will continue without a doubt being the epicenter of technology in the world. Again, I always put Beijing in its own spot. Beijing is a very unique spot and will have a lot of relevance, certainly for the Chinese market, but, forgetting that for a second, the rest of the world outside of China, it is going to be the epicenter still.

There was a blip, COVID changed a lot of things because at a certain point in time where people realize I’m living in one of the most expensive cities in the world and one of the most expensive areas in the world, and I can be literally anywhere. People went somewhere else. Not everyone went somewhere else. Some people did. 

Now there’s a couple of things that are happening. One there’s inflow, there’s people that are actually moving here that did not live here before. We always forget that. But there’s people doing that right now. Again, anecdotal, I was talking to a friend of mine he has an apartment in San Francisco, although he lives in the peninsula and he rents it out and someone just left a month or two ago. And he was like, oh my God, it’s like in the middle of this time and how am I get someone? He immediately got two people that moved in are engineers recently hired by a well-known tech company.

And they’re fine. They’re paying more than the previous tenant paid. And so that inflow will continue happening. 

Secondly, people will come back. We forget the notion of coming back because there are a lot of people that moved way. And there is again some anecdotal evidence of that, the guy who moved to Austin, Texas, and had really poor experience there and then moved back to the bay area and wrote about it.

And why Austin, Texas was so difficult and crappy and whatever, obviously this is all anecdotal, it is what it is. But people will come back. Because again, with all its issues, all the things we said, we hated about it. There’s all these things we love about it. And they will unavoidably come back.

And then there’s centers of gravity. There’s academic centers of gravity, UC Berkeley, UCSF, Stanford, there’s technology centers of gravity, Google, apple, Facebook, these companies, I don’t think are going to move their headquarters to Montana. 

Bertrand: Who 

Nuno: Some have moved for tax reasons, right?

Some of them for tax reasons and some have moved a lot of their operations outside, but in all honesty,  you could say, well, it’s the mindset spreading around the world, which is also true. I think the mindset of the people here is spreading around the world, but in fundamental reasons, I think we had a blip and this place is going to go through a cycle.

That’s just happened to that this time, the cycle was much more accelerated was almost like we had  A catastrophe, which we did and now there will be a rebalancing of it. So over the next decade, I don’t think there’s going to be an issue again, unless there’s like a catastrophe that we can’t anticipate and what happens,  but if it happens even on a global basis, again, who knows what will happen to our soul.

But I would say it is going to continue being the epicenter of tech. I don’t see that changing.

Bertrand: Yeah,  I personally believe it’s  changing. It will be one of the center of tech. Maybe still the biggest That’s probably for sure, but I think the ability to start and grow and develop your business in tech from anywhere is bigger than it ever was.

And it’s truly disruptive since the ability to really not just work remotely, but learn remotely for instance, you have so many blogs, Twitter people to follow podcasts to listen to, YouTube. Now you have clubhouse, you have all these sources of information and knowledge. Even universities are truly losing their grip on knowledge.

Stanford Berkeley, of course they are fantastic universities, but you have so much fantastic content now available online. of course you won’t have directly in same ways access to the network, but that’s a huge difference when suddenly you are only paying for the network because truly  for many type of content you have the best knowledge available today in the world taught by the best professors in the world available online, if not free at relatively cheap cost, or a bit more expensive cost, but even then a  penny versus the cost of an MBA or a master’s degree.

So I think this is truly world changing even. That has never happen to Silicon Valley. So I think we are truly in a new territory and I think this is true disruption. I think Silicon valley is actually working very actively on disrupting itself and that it will be least partially succeeding.

Nuno: So  the frame of mind I use for this is slightly different from yours. And I think that’s why we’re disagreeing quite a bit on this. And maybe the reality will be somewhere in the middle, but anyway the in-person connection doesn’t disappear. We had a blip for the last year and a half or the last year, which may probably still sustain itself because of different countries being at different speeds on vaccination, a variety of other things for a few more months, maybe another year.

But assuming we can get over this, the in-person thing doesn’t disappear. My connectivity with someone that I know, and that I interact in person is never going to be exactly the same as that with a person that I always interact over zoom or over a call, et cetera, ‘s not like magically, the world has changed.

It’s just the way we interact. The way we are able to do deals has been adapted.  but there is still a bit of a center for gravity. As we discussed in previous episodes. I do believe that we’re going to have more distributed companies  more around hybrid rather than fully remote or fully distributed, but certainly more distributed than we have before for sure.

But the notion of spatial connection and where you are and where you spend your time, doesn’t disappear. And in that world, my view is that you’ll have two fundamental types of places, the places that are just truly pleasing to live in because they’re beautiful. And I put Lisbon there, right?

Lisbon is a wonderful place to live in, amazing food. It’s certainly cheaper than most other countries in Europe, certainly cheaper than most of the US,  it’s wonderful to live there. There is  ha thriving, maybe a striving, but a thriving tech community it’s getting amped up.

There’s a lot of things happening. Living there is a no regrets move, right? Versus for example, Berlin, nothing against Berlin, wonderful city, but again, they have winter and they have other things. So there’s going to be places where truly pleasing to live in, where you could have a great work-life balance, the Sidney’s of the world, et cetera, hand you can work from there.

And then it’s about, does this work with the rest of the construct of the company that I work for or that I’m building or not. And then there’s the other places which are the places that matter and the places that matter are the places, normally, in my opinion, where you have access to resources of which one of the resources is capital.

And in all honesty, back to first principles, we’ve heard a couple of VCs that have moved elsewhere, but VC firms have not gone anywhere. It’s not like magically, Sequoia has come out and said, oh, we’re now all going to be remote you know.  Brian Schrier now is going to move to Miami, right?

Because Miami is the new hotspot for us and whatever, it hasn’t really changed that dramatically

And capital is going to be here.  

Bertrand: Many GPS of famous VC firms have moved.

Nuno: They will come back because they don’t need to be here right now. But at some point they will need to be here 

Bertrand: and some I have heard have officially gone remote. So  I’m not saying all of them have done that. 

Nuno: I think the concentration of private capital that exists in the bay area, again, New York and London have other concentrations of capital New York in particular around sort of big markets, public markets, et cetera.  The concentration of private capital here has been increasing, not decreasing, right. And we have the tiger globals of the world and others being more active here, not less, you have the hedge funds of the world being more active here not less. So again, I don’t see, and again, this is a very pleasing place to live in except being very expensive. So it maybe has two out of my two criteria that could be met as well.

I don’t see how this becomes less spatially relevant. I think other places will become less spatially relevant, but I don’t see how this will be less spatially relevant. 

Bertrand: Most VCs have been investing way more beyond their own geographic areas than ever before. So yes, there is  a lot of capital here for the firms that are based here that have been started here, but instead of spreading this capital in a 30 miles radius, like it has been done for the past 40 years, most have been at least investing all over the U S starting with Covid. Much less geo constraints than ever before.

And if you pick some of the most famous VCs in the U S actually some have been very vocal that they were not just investing all over the U S which is nearly table stake at this stage, if you don’t want to lose deals but also going outside the US. Some have been very vocal investing from New York to Singapore, for instance, to Europe, with their partnership based in New York.

So I’m in disagreement that there is more happening in the Bay than ever before. There has been an overall increase in capital spent for sure. But there has been much more spread since COVID beyond the bay. 

You cannot require, an entrepreneur to move here or a startup to move here anymore. it’s not possible. 

Nuno: No. There’s two different things. We totally agree that the capital’s getting more and more distributed. That’s a good thing. We’ve talked about that in previous episodes as well. That’s not what I’m saying.

What I’m saying is geographically, this area is still meaningful because of the capital that’s being deployed lives here. It lives here.

Bertrand: Oh, it’s meaningful. 

Nuno: And that is meaningful. So if you don’t spend time here, if you don’t have someone in the company here,  it is that you can maybe be a Romanian company and build all your company from Romania.

But at some point maybe you need to have something here. And I don’t think that having something here is going to disappear. for me, it means that spatially, this place doesn’t become less relevant. It just becomes relevant in a different way. For certain aspects and it has a center of gravity around the big corporations.

We didn’t talk about M&A, it’s not just capital that I’m receiving to build myself up. It’s also capital that I receive to exit. And the capital’s also here. So it’s okay, you’re trying to sell yourself to Google. Where are you going to sell yourself to Google in London?

The odds are, maybe the scouting team’s there, but you have to have some interaction if you want to have a mountain view deal done. again, that’s my point 

Bertrand: DeepMind, Google best acquisition in machine learning is from the UK. 

Nuno: I think it was overpriced, but anyway it was a wonderful acquisition. They were based in the UK. Yes.

Bertrand: And you take for Romania, UIPath is still based out of Romania. 

Nuno: They have a significant New York presence. If you look at the HQ, they would say it’s New York, right? So again at some point you need to be where the capital is, or at least someone needs to be there. And that drives the numbers that drives the importance of the markets. Again, we talked in the last episode, the number of unicorns that have been created in the bay area since the beginning of the year versus the rest of the U S and the rest of the world is significant.

Obviously you could say it’s a lagging indicator because new unicorns, if they’re unicorns now, it’s like seven years ago. 

Bertrand: That’s why I’m talking 10 years from now. 

Nuno: My thesis is, and that’s why we fundamentally disagree is over the next 10 years, this will still be the most relevant tech place in the world, because what we had here was a blip and a blip is going to end.

And unless again, there’s another catastrophe, which we all hope globally there isn’t. If the blip ends, things go back to its gravity and its gravity is the people that are now very vocal about I’m in Miami and I’m in whatever. And then blah, blah, blah. Many of them will come back. I have no doubt of that and it will happen again.

And this has happened before we know this has happened before it happened 2001 to 2003. 

It has happened before it will continue happening. 

Bertrand: I don’t disagree that it will stay relevant and important center of tech. It just doesn’t disappear right away. It can take 20 years, 30 years to lose the relevance. Look at Detroit. 

Nuno: But we fundamentally disagree. It’s what exactly I’m saying. No, this is not going to be Detroit. I think we disagree because of that. 

Bertrand: I certainly hope not. And I don’t think it would get that bad except if the government keeps trying their best  to scare people away and companies away. But ultimately what happened in 2003 other time period is very different. Now there is the ability to work remotely. There’s the ability to share knowledge on a global scale, like never before.

So I think that it’s difficult to just look back at 10, 20 years  things have been changing. The world has become more globalized as well. As we all know, there are some giant companies that have emerged from Asia as well. Don’t get me wrong. I think it will still be big,  will still be relevant. But I don’t believe it will stay the magnet it used to be.  You will find many other opportunities  to have success with your business or with your career.

Nuno: So we disagree. That’s what we take away. And we should revisit this in a couple of seasons. So maybe season seven or eight, we do a revisit episode to see what was right.  And then maybe in season 11 or 12, we do the final tally and see who was right.

Thank you Bertrand

Conclusion (1:13:09)

Bertrand: Thank you for listening episode 24. This was our last episode on our trilogy  on silicon valley and the bay area. I hope it was useful, that you got some learnings from our discussion. As you can hear, we got a lot of agreements on quite a few topics and some disagreements on some of other topics.

So we’ll see what what happens ultimately. We hope that you can  learn from that and build your own opinion. And of course we are not your only source of information on these topics. So please inform your opinion, make your own opinion. it’s a fascinating place. It’s a fascinating region and still a lot of opportunities there. So thanks for listening. Thank you Nuno.

Nuno: Thank you.