You should move to San Francisco

Kiwi founders often ask me why I moved my startup to San Francisco. This usually leads to a discussion where I try to convince them to move over too. So in the interests of efficiency I've compiled my thoughts here.

tl;dr If you're an early stage Kiwi founder, you should probably move to the San Francisco Bay Area.

Why move at all?

It's a priori extremely unlikely that your home country also happens to be the single best place in the world to maximize your chances of making your startup a success.

Startups are hard! The evidence suggests that our odds of success are slim. If (1) it's true that basing your startup in the SF Bay Area materially improves your chances of success; and (2) you care deeply about the success of your startup, you should strongly consider moving.

When stated this way, it seems pretty obvious. Perhaps you disagree that the SF Bay Area will improve your chances of succeeding. It's possible that's true for you. But for many founders I speak to, I suspect that staying in New Zealand isn't a conscious choice, but something decided for them by inertia.

Can't I build a successful startup from New Zealand?

Yes, it is 100% possible to build a successful startup from New Zealand.

But remember — the goal is to bend the odds of success in your favor. Empirically, startups founded in the SF Bay Area seem more likely to be successful than startups founded anywhere else in the world.

Here are the cities that produced the most unicorns as of 2022:

If you rotate this graph sideways, it looks suspiciously close to a power law distribution:

If we combine the entire San Francisco Bay Area, we end up with 241 unicorns, and the uneven distribution becomes more obvious: the SF Bay Area produces 2x as many unicorns as New York, and 6x as many unicorns as London. Austin, Dallas, Denver and Miami all combine into a rounding error.

Is it still worthwhile moving if I don't have a network in the US?

Having pre-existing connections in the SF Bay Area is overrated. Not because networks aren't helpful, but because building one is a tractable, surmountable problem.

The SF Bay Area has a strong culture of paying it forward. Successful people here are often willing to spend time and social capital helping founders with no network if they seem to be working on something interesting.

There are three things you can do:

1. In my experience, Kiwis tend to be modest and avoid making impositions on others. You will need to overcome this cultural quirk and simply cold email / DM people you find interesting. I have had at least 3-4 life-changing lucky breaks from doing this (including: finding investors, finding my co-founder, finding my first customers), and dozens of less earth-shattering but still significant interactions.
2. There are many newsletters that advertise multiple IRL events per week. These are mostly a waste of time, but with enough persistence, you will meet at least some interesting people that you click with.
3. Use your existing network—yes, this is a chicken and egg problem, but you almost certainly have a nonzero network you can lean on to start with.

A general rule is that each person you meet can introduce you to two or three more people, so a network that starts with a single new friend in the Bay Area can still spread like a fractal tree. With a few months of intentional effort, your Bay Area network will be about as significant as your New Zealand one.

Ambition

I know many incredible Kiwi founders, but the standards for achievement in the SF Bay Area are unquestionably higher. You'll find yourself one or two degrees of separation from the Main Characters of Tech, which will raise the floor and ceiling of your own ambitions.

This is an incredibly motivating influence. Meeting impressive people IRL reinforces that they're just humans, and it makes their achievements tangible in a way that reading about them doesn't.

If you're in New Zealand and you say that you want to build a unicorn, you may as well be declaring that you will be running for President. In the SF Bay Area, people will tell you they will change the world with incredible earnestness. And why not? They've probably met people who are no more brilliant than them who've done exactly that.

What if I can't afford to move to SF?

This really sucks. I nearly had an aneurysm after realizing that the market rate for a senior-level engineer approached the GDP of a small NZ town.

But I don't think it's as bad as it seems. A common belief is that you try to raise as much capital as you can, and the dollars that the market allocates to you forms the budgetary scope for how ambitious you're allowed to be.

I think that the causality flows in both directions—capital has a tendency to become available to match your ambitions. So if your plans require $X, to a surprising degree you can will your way into $X becoming available to you.

That is to say that yes, building a company in SF is much more expensive than building a company in NZ. But this will at least partially be mitigated by the fact that VC pockets in SF are correspondingly deeper, and they may meet your ambition with more capital than you would be able to raise back home.

You will most likely need to adjust your lifestyle. When my four-person team first moved to SF, we all lived together (along with our significant others) in an Airbnb that became our makeshift office. It was an incredibly fun adventure and I don't regret doing it, but this may not be feasible for everyone.

I'm planning on moving to the US, but I'm deciding between San Francisco and $OTHER_CITY

If you're going to uproot your life to move your startup to the United States, moving anywhere other than the SF Bay Area is crazy. It's like flying to Hawaii and spending all of your time in a mall.

Your strong default assumption should be that the number 1 place to move to is the area that produces more unicorns than any other location. Remember the power law! The SF Bay Area isn't merely 10 or 20% better than other places, but somewhere between 2-100 times better.

A potential reasonable reason to choose a different location could be due to some quirk of your user base / target market, e.g. if you're selling software to Wall Street banks it would make sense to be in New York. I can't think of any other good reasons.

Now isn't a good time, but I'll move sometime in the future.

Unfortunately, it's unlikely that the perfect time to move will ever materialize; as your startup grows and you accumulate more responsibilities, you will be more entrenched in your current location, not less.

This should give you a sense of urgency, because the place you live in is very lindy. Every day that you stay, the probability that you will move decreases.

Here's my suggestion—try living in SF for 90 days! The U.S. has a visa waiver program that allows visitors to stay in the country for up to 90 days at a time. Even if you ultimately decide not to move permanently, 90 days will be enough time to build a network and have a sense of whether you would enjoy building your startup here more permanently.

The hinge of history

From Scott Alexander:

I try to avoid San Francisco (...) I could have stayed in Michigan. There were forests and lakes and homes with little gardens. Instead I’m here. We pay rents that would bankrupt a medieval principality to get front-row seats for the hinge of history. It will be the best investment we ever make. Imagine living when the first lungfish crawled out of the primordial ooze, and missing it because the tidepool down the way had cheaper housing.

You might not believe that ASI will happen in our lifetimes—but what if you're wrong? What if you miss out on seeing the greatest (and if you share Scott Alexander's neurosis, most terrible) event in human history playing out in front of you? What if you miss out on seeing the first lungfish crawling out of the primordial ooze?

Even if LLMs are a dead-end to ASI, at minimum they're one of the greatest innovations and platforms shifts we'll see in our lifetimes. Moving to the SF Bay Area gives you front row seats to something—if it's not the hinge of history, it's at least the hinge of our careers.

Suppose you are an aspiring musician in mid-late 18th century Berlin. You've heard stories about the great contemporary geniuses of the Vienna Golden Age: Mozart, Haydn, Beethoven, and Gluck. But if you were living in that moment, you might not have appreciated the extent to which Vienna was a once-in-a-millenium, lightning-in-a-bottle combination of circumstances that wouldn't be replicated again in you or your descendants' lifetimes.

Don't make that mistake! You have less time than you think.