If you don’t know, we are in the midst of a great big Social Media BUBBLE. With companies such as Facebook, Twitter, LinkedIn, Airbnb, and Uber continually raising their valuations, Silicon Valley/San Francisco is experiencing one of the biggest influx of wealth with more and more Internet and Tech companies going public. Money from all over the world is being thrown at the Social Media space, and thousands of employees who work at these start-ups are killing it.
Wealth spreads vigorously and has a positive knock-on effect. Perhaps some of the employees will cash out to start their own start-ups, thereby hiring new people. Perhaps others will go on a spending rampage and buy cars and houses in droves. It just might be a good time to put down that deposit on a Maserati or Bay View Pacific Heights penthouse before Facebook goes public with a $70 billion valuation! Government coffers get a nice influx of tax revenue and start spending on ridiculous infrastructure projects again. Whatever the case may be, the tidal wave of money is about to get unleashed in the Bay Area, and this is the place where you want to be.
The LA Waiter
There’s a common perception that all waiters in Los Angles are starving actors. Is that so bad? No, not at all! These aspiring actors are here because they’ve taken a risk to follow their dreams to Hollywood. They audition for roles during the day and bust their butts at night making $13 an hour waiting tables. Who knows, maybe a Director or Producer will spot them one day and invite them to audition. Perhaps they’ll bump into someone who is connected in the movie business. Whatever the case may be, those who are in Los Angeles looking to break in certainly have an infinitely higher chance of success than someone who never comes.
My Indecisive Friend Craig.
I was at a conference in Buenos Aires, Argentina the other day when I bumped into a friend of mine who was also attending for the week. He told me about his desire to relocate from New York City to South America, but he was having an awful time landing anything. “I got some interviews here and there, but nothing ever came out of it,” said Craig. Craig is extremely accomplished with 10 years of experience and an MBA from Dartmouth, yet he couldn’t find any real leads.
The problem with Craig is his situation, I told him. Few firms are willing to hire him if he’s living all the way out in New York City. Instead, he needs to come out to Buenos Aires for a month, get a temporary apartment, and show to his employers that he is serious about living there. Just like a start-up asking for capital, a founder will have a much likelier time raising capital if he is working on his company full-time rather than on the side.
Boom Town Baby
I might be jaded, having lived in San Francisco for the past decade. That said, I’ve also lived in six countries and have worked in New York City as well. Nowhere is more dynamic than right here right now. When example after example of success hits you in the face, you stop being jaded and start being realistic.
During Sunday open house hunting one time, I asked what the sellers of this $2.7 million house do for a living since they looked so young in their mantle pictures. The real estate agent said, “They’re 28 years old and work at YouTube. The couple met when the company first started and they’ve now sold their shares and are relocating back to Texas to start a family.” Awesome!
Just the other day, I asked my friend who is a partner at a Private Equity shop how business was going. He actually just said, “So so.” When I asked how come, he mentioned, “In the past, start-ups and later stage companies alike would come knocking on my door for capital. Now, we have to knock on their doors and make a presentation to pitch why they should accept our capital!” In other words, there is so much liquidity out here and not enough companies, even though there seems to be countless!
Every Friday or Saturday I have poker night with my buddies. Three are running their own startups, one is an internet lawyer, two work at Google, and another two work at Private Equity shops. We talk about everything and anything business related in between hands. We often joke that our poker table alone would be a good startup management team, but too bad we’re all sharks who would try and out bluff one another!
The point is to be around like-minded people. You can’t go to a coffee shop and not hear about someone talking to their friend about starting a company or creating a new mobile app. It’s as if entrepreneurship is embedded in our area’s culture. You might not think many people succeed, but you’re wrong. More people succeed at creating companies and making tremendous wealth than you can imagine. The amount of wealth is bursting at the seams!
Don’t follow those silly Money Magazine stories about the best X, Y, Z towns to live in you’ve never heard of. You need to be where the action is, despite the cost of living. Because when you hit it big, or land that plum job at the next big thing, the cost of living will become a secondary issue. The reason why things cost the way they do is because people get paid or create wealth the way they do. Otherwise, it’s unsustainable. If you are an aspiring entrepreneur, what are you waiting for?
See you by the Bay before the bubble bursts!
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Carlyle Coash says
Living in the Bay Area on and off the last several years has certainly been a lesson at what happens when there is a boom. Facebook, Google, Yahoo, Netflix, eBay (the list is endless) dominate the South Bay for sure. The downside is the effect on things like rent. As an entrepreneur I feel the squeeze of this, since I work from home now.
There is an energy though. An anything is possible quality. So I try to connect to that to stay excited. Thanks for the article. It’s good to be in the “hotspot”!
yeah rents in the Bay Area are crazy and a lot of people end up living with roommates well into their late 20s and sometimes even their 30s.
I agree there’s lots of energy and opportunity, but also a lot of competition too.
What a heart touching article. I did not put much emphasis on the place to live but the great tips in between those articles. I really love your style of acting. Got here today for the first time from thrilling heroics. Keep writing epic sh-ts.
Everything about the internet is booming these days and I am also taking my share but will cut a large share soon. I hope the American embassy will gimme an American visa so I can come around!
Invest It Wisely says
San Francisco does seem like the place to be…! What makes it so magical?
Financial Samurai says
Some of the smartest and most creative people in the world just come here. So, once you mix everybody together, amazing things happen b/c there are the best people in their own specialties to help out and get things done!
Great post! It really made me think about the subject of relocation, following our goals… and that’s what I did last year when I moved to Toronto 🙂
I lived in Buenos Aires my whole life, so I have know some people there, if you want to put me in contact with your friend Craig I may be of help….
Financial Samurai says
Thanks for reading man. Yeah, seriously… HALF THE BATTLE is being in the right place at a good time. Enjoy Toronto, and see you around the sphere!
My friend is out there right now heading up the North American division of an internet gaming company. He’s working his butt off and I hope it will pay off for him in the end!
Sounds like it is a cool place to be. I prefer to be on the other end of the spectrum where the cost of living is extremely low, land and real estate are cheap, and any money you do make goes a lot further.
But, cheers to those in Silicon Valley – keep giving us all the good stuff!
Financial Samurai says
I’m SURE it will pay off for your friend at the internet gaming company. Could it be Zynga perhaps, whose valuation has risen to $10 billion from just $3 billion last year?
Doesn’t matter, b/c the gorilla raises all the chimps!
Financial Samurai says
@Y&T – Hit me up next time you’re in SF for sure! Yeah, things are getting nuts here again. Bracing myself for some crazy wait times everywhere I go! You can just feel the electricity. Buzzzzzzz.
Financial Samurai says
@Don – Once FB goes public, they are going to use their publicly traded currency to gobble up plenty of smaller social media companies. It’s an an absolute certainty in my opinion! The wall of money is coming!
Wow, that’s amazing, great post, Sam.
makes me want to move down to the Bay Area too! Also, watching the facebook movie made me want to move down there too. I loved San Fran when I visited two years ago. Such a chill relaxed attitude, yet at the same time you could feel the buzz of entrepreneurship and business. Sort of like business buzzing and hidden behind a chill vibe!
Great to hear that the economy is booming again in the silicon valley.
Money Reasons says
California definitely looks like the place to be!
I agree, being in the action enables you to see and hear opportunities that an individual might miss when they don’t live in the area.
What I find interesting about social media companies (and even the smart phones companies to some degree), are all the cool new games and other clever apps from other smaller companies that the social media brings to light! Where I work at, a programmer developed a Facebook app and I wondered “Why”?
Well, Facebook and other social media has many eyes watching, and that means opportunity, so now I understand why…
I’m quite curious to see what will happen to the Bay Area after all the big social media companies go public myself. Silicon Valley is bustling again and it’s exciting to feel the buzz and hear stories of so many 20-30 year olds raking it in. Do you think there will be any impacts on job opportunities and entrepreneurs in NYC? I think New York will always be a fabulous city but it just seems to lack the luster of Silicon Valley these days & after all the weather in California is so much better too. 🙂
Financial Samurai says
Yeah, it’s nuts how many high tech companies are out here. The map needs to add on some of the internet companies now as it’s kind of old.
Read about the founder of Digital Sky who bought the $100 million dollar house in Los Altos hills the other week? The tidal wave of wealth is coming, and I am POSITIVE high end real estate is going to resume its upward trend. The money always goes to real estate as people diversify.
NYC will be just fine. Everything is coming back in force. Just got to be in the game.
Woah. I went and looked up his house. It’s crazy. 18 acres and a 25,500 mansion. That’d be way too much house for me even if I was as rich as he is. It shows he’s confident facebook, zynga, and groupon are gonna go up, up, up.