Let’s take a look at the present situation and the future
Silicon Valley is as iconic as it gets.
Known as an area where not only famous tech giants live but also thriving startups vest. Many people around the world come to pursue their dream career in tech in the Valley.
But with COVID-19 hitting the world hard, especially in the states, many companies were forced to adopt working from home procedures to remain active during this time.
With such an unexpected turn of events and as the virus continues to spread, the question that some have been asking, will Silicon Valley return to normal after this all boils out?
Let’s take a look at the situation first.
Startup employees laid off and executives hoping out
Since March, there have been around 77 000 employees in startups that have been laid off, with a majority based in the Valley.
With such a large number of employees laid off, it’s expected that many will seek other living and working arrangements out of the vicinity of the Valley, especially with the high cost of living within the area.
This will help spread the technical talent across the country and even potentially overseas. The movement will help drive the concept of building ‘products everywhere’ rather than in one central location.
Although this has slowly been happening with many big tech companies stationing their HQs outside of the Valley, the pandemic will help accelerate this movement. On the other hand, the Valley’s billionaires have instead traded the valley life to live in other places outside the states like New Zealand, at least for the time being.
“Right now I’m sitting with a view of the airport. All of the 737s stopped landing about six weeks ago but I can’t believe how many private jets are still coming in. Half of Silicon Valley seems to be flying into their boltholes and bunkers — it’s quite bizarre,” Jason Wilby — co-founder of insurance platform Open
Although this movement looks to be temporary for most, it’s a sign that people will move quickly to stay safe.
VC meetings may no longer need to be face to face
One of the key benefits of being in the Valley is having the ability to network.
With networking brings opportunities to speak with VCs, angels, and other investors.
Historically, when raising rounds or speaking to VCs, doing everything in person has always been preferred. Like interviews, traditionally, even if you do an initial scouting call on Zoom, at one point, it is expected for you to meet the investors in person as well.
With COVID-19, this has become less of a norm as investors have started to adapt to working with deals purely through video conferencing.
Angel investors like Jason Calacanis discuss that initially (on his podcast), he was entirely against the idea but has now since become warm to it and has even made investments in startups with founders he has never met in person.
This may mean, however, that having sound finances and a stable balance sheet will be even more critical, and so is the ability to generate revenue will be much more sought after within an early-stage startup.
Although it is more than likely that bigger deals will require an on-site catch-up, it would seem earlier investments may not need to go through this process as COVID-19 continues to shape the world.
A permanent focus on remote working and a ‘cheaper’ workforce
As many startups and big tech companies have been forced to convert to a working from a home model, many have discovered that having employees remote connect, even if they’re not based in the Valley, has been actually productive.
This focus on working from home has raised one big answer for those sitting on top; remote working can actually work.
For companies like Facebook, this realization has meant that they have become more aggressive in hiring outside the Valley.
Why? Well because it’s cheaper.
This pandemic has proven that even huge tech companies like Facebook can run at max capacity with workers at home, so why pay the exorbitant salaries when they can hire many workers outside of the Valley.
Facebook has even gone to announce that they will be regulating where everyone is working to avoid needing to pay those who moved out of the valley, ‘Silicon Valley wages’.
“We’re setting a date for Jan. 1 for when you either need to move back to where you were, or tell us where you are and we’ll basically adjust your salary to your location at that point,” Facebook founder and CEO Mark Zuckerberg said, according to CNN.
This trend will most likely continue even as the pandemic subsides as big tech companies and startups look to cost cut but still retain good talent.
No this doesn’t mean the Valley is disappearing and everyone is moving
Yes, this article does raise a lot of changes in the Valley, and some are sticking around.
Even when discussing this topic with someone in a leadership role at a Series C startup (who wished to remain anon) based in the bay area, they stated that there would be a difference in many things like fewer perks and talent distribution would be widespread but “The valley will always be the valley”.
Humans are social beings, and when we eventually prevail over the virus (and a vaccine is found and distributed), the Valley will normalize out over time even with these changes.
In the end, these massive tech companies that have spent billions on their campuses not only wanted to do this to entice employees to work for their own company but also to treat it as a second home.
This is why companies like Google and Apple have spent billions to create the ‘best office building’ in the world.
“We do have a shot at building the best office building in the world,” the late Apple cofounder Steve Jobs told the Cupertino City Council in 2011 when he announced the project. “Architecture students will come here to see this.”
After all, these campuses help drive a human to human connection, and at least for the time being, nothing could replace the power of face to face connection and the power of networking within the area.