The best AI founders in the world are moving here

1. 0:00 – 1:50

   Coming Up

   1. JFJared Friedman0:00

      Why was San Francisco so definitively the center of the tech industry? Why did it all like agglomerate here?

   2. SPSpeaker0:07

      San Francisco's the place in the world where you can manufacture luck.

   3. HTHarj Taggar0:12

      Within a month of us moving in there, they launched Twitter. I was like, "I-..."

   4. GTGarry Tan0:15

      Wow.

   5. HTHarj Taggar0:15

      "This place is like incredible." (laughs)

   6. JFJared Friedman0:17

      Everywhere here are people starting companies, really ambitious companies.

   7. HTHarj Taggar0:22

      And then COVID hit.

   8. JFJared Friedman0:23

      In the last year s- some things have happened that have turned things around.

   9. SPSpeaker0:27

      They feel the energy.

   10. JFJared Friedman0:28

       I actually think the biggest factor is that.

   11. GTGarry Tan0:30

       They have all the building blocks to make San Francisco into the best city in the world. Welcome back to another episode of The Light Cone. Today we're talking about San Francisco. It was dead, but now like Lazarus, it is back. And not only that, we've got a new thing to talk about, which is Cerebral Valley. People from all around the world are coming to move to San Francisco to just a few neighborhoods, we're in one of them in the Dog Patch, to build the future, to build the future of AI. Why is that? What's going on?

   12. HTHarj Taggar1:11

       I think it's worth just charting the course of San Francisco over the last few years as a starting point.

   13. JFJared Friedman1:16

       So when we all got to San Francisco in 2006, D- San Francisco was coming out of its own doom loop, like doom loop 1.0.

   14. SPSpeaker1:23

       (laughs) The dot-com bubble.

   15. JFJared Friedman1:23

       From, from the dot-com crash. In the late '90s, San Francisco was f- full to the brim again, and then the dot-com bubble burst. And when we got there, it kind of felt like a ghost town, like al- there was a lot of vacancy. Rents, rents had crashed. Um, and then what brought San Francisco out of the doom loop was the Web 2.0 boom. All these YC companies like Stripe and Airbnb and Dropbox moved to San Francisco, and they started hiring employees who moved into apartments,

2. 1:50 – 4:22

   Startup Base Shift

   1. JFJared Friedman1:50

      and like the tech economy just like dragged San Francisco back out of, out of, out of the doom loop.

   2. HTHarj Taggar1:55

      Uh, this is like very specific point of like the Silicon Valley geography. I, I remember like when we were moving here in 2007, there was a real negative connotation about choosing to base your company in San Francisco instead of like-

   3. SPSpeaker2:08

      Palo Alto.

   4. HTHarj Taggar2:08

      Yeah. Palo Alto-

   5. SPSpeaker2:09

      (laughs)

   6. HTHarj Taggar2:09

      Mountain View, San Jose, even like anything south, and it, and it linked to the dot-com era where the perception, the belief was that during the dot-com era, all of the opportunists had come to and like moved into San Francisco because they wanted to like live in a cool city and have like cool things to do instead of like working. And it was a real conventional wisdom that post that era, if you were serious about starting a company, you'd choose to be based in like the peninsula. And if you chose to be in San Francisco, you were like actively choosing to not be serious about your company. It was a real neg- like investors really paid attention to this.

   7. JFJared Friedman2:45

      Attention, yeah. And we put YC itself in the South Bay. Sh- sh- sh- should we talk about where YC has been over the years?

   8. GTGarry Tan2:54

      Yeah. Y Combinator got started in, uh, Mountain View on, uh, one of the most legendary streets at this point. It was, uh, called Pioneer Way.

   9. JFJared Friedman3:02

      And as Harj said, in 2005, Mountain View was the place to be. Google had based its headquarters there, and people don't look at Google the same way anymore, but in 2005, Google was the undisputed king of innovation. All the smartest people wanted to be affiliated with Google, and so Mountain View became this mecca for smart people as the place where all the serious technologists were like conglomerating.

   10. HTHarj Taggar3:22

       Uh, another major factor is just in that era, people started, people starting companies just tended to be slightly older, right? Like even like the ten, like the Google founders were PhDs, like late 20s maybe. It's not old, but like not like 21, 22 just out of college. And I think even the-

   11. SPSpeaker3:39

       Late 20s, early 30s.

   12. HTHarj Taggar3:41

       Yeah.

   13. SPSpeaker3:41

       And there was a lot of it from Palo Alto also because of, uh, Stanford, right?

   14. HTHarj Taggar3:46

       Yeah. And people like wanted to be in the suburbs basically. And, and the investors wanted to be in the suburbs because they were all older. So it was just this natural pull. And then the first sort of young founder, Mark Zuckerberg, chose to be based in like Palo Alto as well, right? So like the serious up and coming startup was in Palo Alto.

   15. SPSpeaker4:03

       Stripe was also initially in Palo Alto.

   16. HTHarj Taggar4:05

       Yeah. Stripe was also initially Palo Alto. But then I think like YC actually, um, not because Paul wanted it to, but like it ended up contributing to the move to San Francisco.

   17. JFJared Friedman4:15

       Like dramatically.

   18. HTHarj Taggar4:16

       Yeah. (laughs)

   19. JFJared Friedman4:17

       Like we probably pulled it forward by years. (laughs)

   20. HTHarj Taggar4:20

       Yeah. 'Cause it was all a bunch of like young people

3. 4:22 – 7:51

   Y Combinator's Impact

   1. HTHarj Taggar4:22

      who wanted to not be in the suburbs, and they actually all ended up being in like the same building, right? Like you guys were living in-

   2. SPSpeaker4:28

      The Y-scraper.

   3. JFJared Friedman4:29

      Yeah. Harj and I lived in the same building, um, this building in north, in the North Beach area of San Francisco called Crystal Towers that came to be known as the Y-scraper because there were so many Y Combinator companies in it.

   4. HTHarj Taggar4:42

      We actually wanted to be living in the building, but we were rejected. (laughs)

   5. JFJared Friedman4:46

      Really?

   6. SPSpeaker4:46

      (laughs) Really?

   7. HTHarj Taggar4:47

      Yeah. We were rejected because we were, we came to submit our application. They told us there were lots of space, um, and then they told us just to go around the corner to the leasing office to get it, um, uh, filled. As I was walking out, I bumped into Justin Kan, who at the time was working just in old TV, and so he'd walk around everywhere with a camera on his head, um, which it turns out the building did not like. So they, they saw me talking to Justin, and they must have called the leasing office to say, "Reject their application." So by the time I got around, they said, "There's no room left." (laughs)

   8. JFJared Friedman5:18

      (laughs)

   9. HTHarj Taggar5:19

      I was like, "But like one minute ago you said there was like plenty of room."

   10. JFJared Friedman5:21

       (laughs)

   11. HTHarj Taggar5:21

       And I was like, um, um... But so we ended up like kind of living vicariously because we would try and come over to the building as much as we could for like dinners and lunches, and just every time we would learn so much. Like you had the founders of Dropbox in there, Scribd was in there, uh, Weebly.

   12. GTGarry Tan5:37

       There's actually a very important point here I think, which is for people who are builders, it's actually important to be around other people who are like that. So go, you know, anyone who has built something that you respect, that you think is really good that you want to build things similar to that, like try to be near them. Like actually just being in a, in community with other people like that-... greatly increases your chance of success. I mean, I think that was true for, for us. I mean, that's why we, uh, for Posterous, we applied to Y Combinator. Like, we looked at, you know, Steve at Reddit, or we looked at, at Drew from Dropbox, or James from Heroku, and we said, "Those are the kinds of things that we want to build." And I think, you know, today that, that sort of continues. Like, you want to be near people like that.

   13. HTHarj Taggar6:24

       I, I, my personal experience, I grew up, I was born and grew up in England. YC, reading Paul Graham essays, and hearing about YC and getting accepted to YC in 2007 is the reason that I moved. But the ... Initially, I only planned on moving for three months. Like, that's how long we could stay on a tourist waiver. Um, but as soon as we got here, it was just like a complete world of difference. Like, I went from being around all of my peers working in banking, consultancy, just thinking I was unemployed or too lazy to get-

   14. GTGarry Tan6:53

       (laughs)

   15. HTHarj Taggar6:53

       ... like, a real job. (laughs) And being in San Francisco and the Bay Area, especially amongst the YC founders, it was like, hey, like, everyone's doing a startup. Everyone's, like, in the same boat. We can all, like, support each other. Like, it, it's just, like, in the water. Like, it was my first time experiencing being in an environment that felt like nourishing versus draining for starting companies.

   16. GTGarry Tan7:13

       And you could feel that really intensely, like, just being in San Francisco. And then you found yourself in one of those legendary rooms very early on with your first startup.

   17. HTHarj Taggar7:23

       Yeah, it was, a- again, just like a total, um, serendipity luck factor. Evan Williams, the founder of Twitter, had happened to be speaking at a conference at my college in, like, 2006. And he'd, y- we sort of, my co-founder, who's my cousin, um, Kovea, like, we spoke to him and he is like, "Hey, like, if you guys move out to San Francisco, like, we have some free office space and you should just, like, we have some desks and you should just, like, come hang out there." Am- which is what

4. 7:51 – 10:06

   Twitter's San Francisco office transformed startups energy

   1. HTHarj Taggar7:51

      we did. And that startup at the time was called Audio, um, Odeo, which is a podcasting company that was not actually doing very well (laughs) . And you could actually feel it in the office. But I mean, it's why they had space and free desks, right? Like, they had more space than they needed. It was very much people would come in, like, 9:00 to 5:00. And so it just wasn't like, a, a super dynamic environment. But within a month of us moving in there, they launched Twitter (laughs) and, and Twitter just, like, took off. And then suddenly, like, the whole energy in the place changed. There were always, like, interesting people coming in and out of the office. And just like, you got really energized by being around something that was clearly working so well, and it made you want to, like, put in more effort and, like, feed off the energy.

   2. JFJared Friedman8:33

      Oh, oh, oh, and what's funny is Harsh's startup was in the same office as Twitter. And at the same time, I was running a different startup. And Twitter moved offices after they outgrew that space, and they moved into my office building. And so my startup was actually across the hall from Twitter's second office. And this kind of like, this might seem like a, a bizarre coincidence, but it's actually, like, not that unusual. Because all of tech was concentrated into this very small area in, like, downtown and SoMa. Like, people who haven't been here don't, don't realize just how dense it was, where, like, you could go from any startup to any startup in San Francisco in, like, f- 15 minutes. (laughs)

   3. HTHarj Taggar9:13

      Yeah.

   4. JFJared Friedman9:14

      Yeah.

   5. HTHarj Taggar9:14

      I, I mean, I remember a very specific example of that. Like, we, we left the office to get lunch, and we step outside and we bump into Ron Conway, like, the, like, legendary angel investor. And he just starts asking us some questions. And we start... And we'd met him at a YC event. Um, and we just told him like, "Uh, we've got, like, a bunch of problems. We really want, like, to get Blah Blah Blah as a customer." And by the time we got back to our office, he'd like, shot off these intros to all of the companies for us-

   6. JFJared Friedman9:40

      (laughs)

   7. HTHarj Taggar9:40

      ... um, to help us (laughs) like-

   8. JFJared Friedman9:41

      (laughs)

   9. HTHarj Taggar9:41

      ... with, like, making sales. Like, I was like, "Wow, this place is, like, incredible." (laughs)

   10. JFJared Friedman9:45

       Yeah.

   11. DHDiana Hu9:45

       I mean, the crazy thing, I think San Francisco's the place in the world where you can manufacture luck. And startups, for them to really get big, lots of things need to happen to be right. There's something special about being surrounded with all the people that kind of know how and they're all here and they're willing to help. Because starting

5. 10:06 – 14:38

   Startup Culture

   1. DHDiana Hu10:06

      companies is actually a very anomalous thing in other parts of the world. It's a strange job. And to your point, Harsh, starting a company could be looked at, "Oh, you're just a bum. You're not really working at the beginning. What is it going on?" But here, people really celebrate it because people understand how hard it is.

   2. HTHarj Taggar10:24

      How was it for you, Diana? I'm curious. Like, 'cause you grew up in Chile. Like, how was the move to Silicon Valley and-

   3. DHDiana Hu10:31

      Yeah.

   4. HTHarj Taggar10:31

      ... being around this culture?

   5. DHDiana Hu10:32

      So relate a lot to the story of being a misfit. So in Chile when I grew up, I was always the weird kid, just stay indoors, because also it was very difficult being the only Asian kid. There were no other Asian kids around. And I really loved reading books and when I got a computer, I really like, um, also building a lot of these RPG games back then, emulators, I got a lot into that. And internet was be- like, my bubble, but I didn't know anyone like that. And what was cool is I always admired all the builders. And my dream was that at some point I would move to be in Silicon Valley and be there. And what was special that I didn't know and there was this pull, is that when I got and moved to, uh, went to Silicon Valley, I started working at Intel, was my first job, it's the first time I felt at home. There were a lot of people like me who really liked to nerd out and really like to go deep on subjects and building. And I wasn't judged, because I was judged back then. I had to sort of hide and not talk about my interests when I go in that super deep. And that was special, where it was celebrated and you can build. And there's also the experts in different areas, and everyone is just as deep as you with building and it's just as exciting and, and optimist instead of being judged on why you like this weird thing.

   6. GTGarry Tan12:01

      Uh, one of the funniest things that I remember from reading Paul Graham essays that I think was one of the reasons why a bunch of us found his essays, um-... was he would always describe what it was like in high school to be a nerd (laughs) . And then, I, I think that might be a common experience for us where, you know, you sort of grow up in the, in default society. Default society, you realize is a little bit foreign. It has different values than you. It, um, you know, sort of values appearance more than sort of the substance. Um-

   7. DHDiana Hu12:33

      And that kinda keeps going.

   8. GTGarry Tan12:33

      ... there's a certain way to do it, right?

   9. DHDiana Hu12:35

      The... And that kinda keeps going even after college. Let's say you, um... For young founders, their friend who may not be founders end up getting whatever the standard job, being an investment banker or working for a consulting or whatever, or the big tech job, and they end up having this standard life where it's like, okay, they get the promotion, they get the nice vacations, they get the time off, and a lot of their meaning is more outside of work. And then when you're friends with, uh... Nothing against that by the way (laughs) w- with. When your friends are like that and you're doing your startup and you're working 24/7, and working very hard, and not really having a lot of money to take the vacations, the fancy vacations, you kinda get a little bit judged, implicitly not directly. And that can be a bit demotivating. And I think what's special being here is you surround yourself with people who are in that same mode, in that same vibe, where those who are working hard and you're chasing your dreams to build something and it's not looked down that you're not taking a fancy vacation or going to the fancy dinners. It's actually, on the other hand, celebrated that you're working hard and really taking, taking a leap.

   10. JFJared Friedman13:47

       I think that's such a deep point, Diana. And I think that is actually the true reason why startups and startup founders conglomerate in Silicon Valley. Like, some people think it's transactional reasons like, "Oh, this is where the investors are so you have to be close to the investors," or like, "This is where the, like, employees are so you have to be, like, the place where you can hire employees." And like those... I actually think those are, like, factors, probably more minor factors. I actually think the biggest factor is that. It's like people become the average of the people who they surround themselves with. When you're in a city that doesn't value this kind of thing, it's really hard to stay motivated. It's really hard to be as ambitious. When you move to Silicon Valley and you're surrounded by people... Like, everywhere here are people starting companies, really ambitious companies, people who are, you know, who are, who are really trying to change the world in a very serious, very dedicated way.

6. 14:38 – 17:19

   Culture of Ambition

   1. JFJared Friedman14:38

      It just, like, wears off on you and it makes you motivated to wanna do the same thing.

   2. HTHarj Taggar14:41

      It's also, like, um, there's a particular sense of, like, long-term ambition here, um, where, like, startups just take so long to actually work out and make any difference, that everyone who starts out here is on that journey and is just, you know, I think alter- generally, like, altruistic and wants to make a difference, but you're also just very incentivized to think long term and, um, not pay attention to, like, short-term status games. You'll ca-... You kinda care about, like, your relationships over a long period of time. And if you contrast that to, say, like, a finance hub like New York, there's a huge amount of ambition there, but it is... tends to be more like, "How much money are you making right now?" And one thing we all see is people come to San Francisco or YC with maybe, like, they, their ambition level, like, they think is at, like, you know, like, on two out of five scale, but, like, they grow from all the other people. And especially if the company starts doing well, like, their ambition changes, right? And so, like... And I think that's a very unique thing here where if you're working on, like, technology, like, there's almost no bound to, like, how far, like, your ideas can go. It's just like, how long do you wanna keep pushing them and working on them for? And if you're around, like, other people who are also interested enough in what they're doing to keep doing it, versus trying to hit some, like, end state of success, I think that's how you end up with these companies where... That you have, like, Larry Ellison working on Oracle for, like, decades, like, anything that happens anywhere else.

   3. GTGarry Tan16:03

      This is actually a, a place that generates social movements. Like, we believe X. Like, I believe that, uh, AI and large language models might regen-... Recreate, uh, every type of enterprise software. And that's happening, like, right before our eyes right now. Or we believe that, um, you know, electr- electrification and, you know, decarbonization will remake how we use energy in the world. Like, that's sort of happening before our eyes. And then being around people who have those ideas. Like, not all of them are going to be right. Even having a culture where being wrong is okay, uh, that's very rare. And I think that's, like, you know, having a truly inclusive place where it's, uh, basically, what do you believe and what do you believe that nobody else believes yet? That, that's the very unique reason why I think San Francisco is the most special place in the world.

   4. HTHarj Taggar16:57

      Like, right up until COVID, it was clear that San Francisco was the center of the startup and technology world, right? Like, you could-

   5. GTGarry Tan17:04

      Completely.

   6. HTHarj Taggar17:05

      Right? Like, every neighborhood was becoming busier. Like, rents and property prices kept getting, like, more and more expensive. Like, it was very clearly the center of everything. And then COVID hit.

   7. GTGarry Tan17:14

      People hated techies more and more.

   8. HTHarj Taggar17:15

      (laughs) Yes. I mean, yeah. Like, I think that was partly sparking the backlash.

7. 17:19 – 19:18

   San Franciscos after COVID hit

   1. JFJared Friedman17:19

      Office vacancy was, like, 0.5%.

   2. HTHarj Taggar17:22

      Yeah. New apartment buildings, especially in, like, the area where the Salesforce tower was built. I, I always felt that felt like another turning point. Like, huge tower, like, that whole... We had our, um, startup office was based right around the corner from there, and just the new apartment buildings going up on every block. Like, it really felt the center of everything.

   3. JFJared Friedman17:40

      I remember in 2019, it seemed like one of the biggest problems that YC had was that there was not enough place to put all the people who wanted to move to San Francisco. Like, there was not enough housing, there was not enough office space. We were just, like, bursting at the seams.

   4. HTHarj Taggar17:53

      Yep. And then COVID hit.

   5. DHDiana Hu17:55

      What happened in COVID (laughs) ?

   6. JFJared Friedman17:57

      Yeah.

   7. DHDiana Hu17:58

      How'd things kinda turn around so...... downturn in a matter of few months.

   8. GTGarry Tan18:04

      Yeah, everything changed in a matter of a few months.

   9. HTHarj Taggar18:07

      I think right up until COVID, everything we said is very true. Like, there, it was clearly the center of the tech world. Like, everything, people were moving. But there were clearly problems with the city. Like, beneath the surface, like, homelessness was increasing, like, crime was increasing. Like, there were all these, like, tensions that people looked past because, like, you had to be here. And then I felt like COVID hit, remote work became, like, necessary, and it was a chance for a lot of people to finally move out and experience living in another city where they didn't have as many of these problems that San Francisco did. So like, I would meet people who would talk about San Francisco as though, like, uh, Jared put it this way, like Gotham City, right?

   10. GTGarry Tan18:51

       (laughs)

   11. HTHarj Taggar18:51

       Like, if you were on Twitter or if you were just bumping into casual people, they're like, "Oh, like-"

   12. GTGarry Tan18:55

       Like, "San Francisco is so boring."

   13. HTHarj Taggar18:56

       "... San Francisco's boring." Yeah. (laughs) It was really like that, right? It was just like, "Wow, like-"

   14. GTGarry Tan18:59

       If you're from San Francisco, I'm sorry.

   15. HTHarj Taggar19:02

       (laughs)

   16. DHDiana Hu19:02

       You go out at night.

   17. GTGarry Tan19:03

       Yeah.

   18. HTHarj Taggar19:04

       Yeah. (laughs) And it was... And this was basically all of, I think, like, 2021 and, like, most of 2022.

   19. GTGarry Tan19:10

       And then in the last year s- some things have happened-

   20. HTHarj Taggar19:13

       Yeah.

   21. GTGarry Tan19:13

       ... that have turned things around-

   22. HTHarj Taggar19:15

       Yeah.

   23. GTGarry Tan19:15

       ... and are starting what Garry's calling this boom loop. Like,

8. 19:18 – 20:05

   AI's Central Role

   1. GTGarry Tan19:18

      w- what, what happened in the past year?

   2. HTHarj Taggar19:19

      It's... Well, the clear thing is AI, right? Like, the, um, ChatGPT launching, um, was like a complete, like, reset and brought everyone back. And I think, like, to Garry, like, the broader point, in order to work on AI pre-, like, Chatta- ChatGPT3 launch, you have to be sort of like counterculture misfit. It was not at all a mainstream thing to be working on. It's kind of like-

   3. GTGarry Tan19:43

      It was not cool to work on AI. If anything, actually, you know, it was a little bit of a dead end for some people at that point, like-

   4. DHDiana Hu19:51

      It was a bit of one of the AI winters back then.

   5. GTGarry Tan19:54

      Right.

   6. DHDiana Hu19:54

      And people were keep going because th- they knew something that everyone didn't. This is that part of being counter.

   7. HTHarj Taggar20:01

      I think it, it's a really important point because pre that, like, and during the COVID remote

9. 20:05 – 21:43

   Silicon Valley hub

   1. HTHarj Taggar20:05

      work period, there were multiple hubs that had the claim to be like the next Silicon Valley. And I don't think anyone was claiming that, like, any one of them would be as big as Silicon Valley, but there was just like a f- a general view that, hey, like, the future of innovation is just going to be distributed and dispersed in, like, some of it will be New York, some of it will be in LA, some of it will be in London, like, all around the world. But the thing that actually drove the next wave happened in San Francisco, and it doesn't seem coincidental. Like, if anything, you can argue the fact that the city got so bad and it's still, like, it's come back and it's, like, now the center again is just evidence of how strong the, like, network effects are here.

   2. GTGarry Tan20:43

      Effects are, yeah. And it's not just OpenAI. Basically, all the AI ended up in San Francisco. OpenAI, Anthropic, Scale AI, basically all the big AI companies, all the big, all the big tech f- AI research labs, it's all in the Bay Area.

   3. HTHarj Taggar20:56

      And now we're saying, like, post-ChatGBT, like, we're seeing San Francisco really come back. How is it different? Like, what are we seeing that's, like, different in sort of this iteration of San Francisco versus, like, the peak pre-COVID?

   4. GTGarry Tan21:10

      Well, commercial real estate is down. (laughs)

   5. HTHarj Taggar21:13

      (laughs)

   6. GTGarry Tan21:13

      But, um, I guess the wild thing is, like, we still have some real big problems downtown and, uh, in large parts of SoMa. And SoMa was sort of where they allowed to, you know, they... Where they allowed developers to build housing. And by default, I think a lot of people watching this who are not from San Francisco, a lot of them might end up in SoMa and then realize, "Oh, this isn't a place where I want to live," and then they leave. But, you know, I think the thing I want people to sort of understand is, like, Cerebral Valley is not SoMa. Cerebral Valley

10. 21:43 – 25:33

    Emerging Neighborhoods

    1. GTGarry Tan21:43

       is actually a play on Hayes Valley, which is in the center of the city. There's lots of incredible food and, you know, shops, and like, that's where a lot of, uh, the best AI companies are choosing to be. Uh, right now we're s- sitting in the Y Combinator offices. We signed more than 100,000 square feet here. So, you know, the amazing thing now is we can have, you know, three different events going all at the same time over here. Like, this is, uh, a very different part of town that, uh, has a neighborhood vibe that's very safe. And so, you know, explore the neighborhoods. Figure out... Don't just do the default thing, which is live in FiDi or SoMa. Like, there are so many neighborhoods that are incredible, and they might cost a little bit more, but you will get the real San Francisco experience if you do that.

    2. HTHarj Taggar22:25

       Yeah. As someone that moved back, I think the single thing that struck me most that's different is how much the neighborhoods have changed. Like, it really matters which neighborhood you're in now. I feel like pre-COVID, you sort of... You knew, like, the Tenderloin, the Civic Center were, like, the bad areas of San Francisco. And outside of that, every neighborhood maybe had a slightly different flavor, but it didn't actually matter too much if you were based in, like, SoMa versus FiDi or all of the... Or even the Mission. But, like, now, it's like, it's very important that you pick the right neighborhood, right? (laughs) Um, like, and we... I feel like YC, like, we're now in s- like, the Dog Patch, which we sort of lucked into, I would say, like, what is probably the best neighborhood in San Francisco.

    3. GTGarry Tan23:08

       Yeah.

    4. HTHarj Taggar23:08

       Like, what do you think?

    5. GTGarry Tan23:08

       How about we talk about moving YC to San Francisco? Which is something we talked about for years, but COVID happened and other things happened, and, like, now we were finally in a position to do that. And you two actually led the search for YC's new headquarters. Do you wanna talk about, like, the places that you've looked at and how we ended up here?

    6. HTHarj Taggar23:24

       I mean, there were lots of neighborhoods, lots of different other places, but, uh, if anything, we did it startup style, which is, uh, Dog Patch is really safe. Um, it's being redeveloped. Um, and this is actually before OpenAI moved in over here. And then there was a space, uh, right next to where we are right now that was the powerhouse for Pier 70. So, it literally housed the, uh, the engines that generated the power for, uh, where we are, which is the shipyards that built a third of the, uh, US Navy during World War I and II. So it's just sort of like this incredible, uh, symbolic significance of, um, so much power being generated in that-

    7. GTGarry Tan24:05

       (laughs)

    8. HTHarj Taggar24:05

       ... that house. So that, that's actually our main event area. And then we just took over the, uh, the office next door. And so, you know, now we have a really sweet YouTube studio right here. (laughs)

    9. GTGarry Tan24:16

       Yeah.

    10. DHDiana Hu24:16

        And across the street, there's also two other YC companies, Astranis and also Gusto, right?

    11. HTHarj Taggar24:21

        The Dog Patch is great. That's where our center of gravity is. But what's some of the pushback you all get from founders about moving to San Francisco and things they're worried about? And what's the advice you give them?

    12. DHDiana Hu24:32

        Especially, uh, international founders. There's a lot of, uh, the consumption of news is from Twitter and i- i- th- there's a lot of things about being not safe and being scared of coming here. But when they actually move to the right neighborhood, they're pleasantly surprised.

    13. GTGarry Tan24:51

        Yeah.

    14. DHDiana Hu24:51

        Which is, which is nice. But this is not to say that the city doesn't have problems. There's definitely neighborhoods that they still should avoid, which we actively advise them where to be actually.

    15. HTHarj Taggar25:03

        Which, which are the neighborhoods? Where, where should people be based?

    16. GTGarry Tan25:07

        Personally, I love, you know, Mission Dolores, Noe Valley. These are great areas. They're a little bit more expensive. I think, you know, Glen Park is actually an incredible neighborhood that's sort of, you know, hidden. Bernal Heights is, uh, right over the hill from, uh, you know, where we're at in the Dogpatch in Potrero Hill. Uh, Mission Bay is brand new so... And it's very close to YC. So that's actually-

    17. HTHarj Taggar25:31

        And OpenAI.

    18. GTGarry Tan25:31

        And OpenAI.

    19. HTHarj Taggar25:32

        Yeah.

    20. GTGarry Tan25:32

        So,

11. 25:33 – 28:14

    Proximity to Y Combinator

    1. GTGarry Tan25:33

       uh, yo, I actually think that, you know, during the batch we actually tell people, "Can you be within a mile of Y Combinator in the Dogpatch?" And the reason why is, you know, you're going to be working 80, 90 hours a week, like, writing code or talking to users. But, you know, on those Friday nights, you're going to come out to, uh, actually this office and we have, you know, uh, a launch event where people demo their software and grab a beer, and then afterwards they go out to the bar or grab, grab pizza. And then, you know, Friday and Saturday nights, that's when you can let your hair down a little bit and actually, you know, see the other people in your batch. And then those are the relationships that, um, you sort of take with you for, frankly, the rest of your life. I mean, one of the more surprising things that, uh, I'm still surprised by is, you know, when I got married after doing YC, two whole tables were my Stanford friends, but two whole tables, uh, were actually my Y Combinator friends. And, uh, Paul Graham even came and he even wore pants. (laughs)

    2. DHDiana Hu26:30

       (laughs)

    3. HTHarj Taggar26:31

       (laughs)

    4. GTGarry Tan26:31

       Yes.

    5. DHDiana Hu26:32

       There's a- there's actually a founder map that lays out where all of the founders of the current batch are staying. And the center of gravity is around our office here in Dogpatch and that's not random reason, that's by design, and maybe we can talk about why is that?

    6. GTGarry Tan26:48

       I mean, I remember in my, uh, YC batch, we actually did the manual version of this making a collaborative Google Map in summer of 2008 and this was while it was still in Boston. And the funniest thing was, uh, that's how I got to know my co-founder Brett Gibson. Uh, him and his co-founder were working on a different startup called Slinkset, um, and we actually would just grab beer- pizza and beers every weekend and when they couldn't raise money, we ended up, uh, sort of merging our companies. And then so Brett Gibson, who ended up being my co-founder for Posterous, uh, ended up being my co-founder for Posthaven and then also worked with us at YC on the software team, and now he runs, uh, Initialized.

    7. HTHarj Taggar27:32

       And it all started by just him happening to live next to you in Boston when you were going through YC.

    8. GTGarry Tan27:36

       And so where you live, who you hang out with, I mean, it's pretty wild that these things end up mattering and, you know, San Francisco is the best place in the world to sort of build that network, that fe- I mean, you're not building a network, you're actually just making friends for life and that's like the real version of it.

    9. HTHarj Taggar27:54

       And then you mentioned Cerebral Valley, it did actually start as Hayes Valley, like a play on that.

    10. GTGarry Tan27:59

        Yeah.

    11. HTHarj Taggar27:59

        But I actually think, like, Cerebral Valley is this neighborhood.

    12. GTGarry Tan28:02

        It's kind of-

    13. HTHarj Taggar28:02

        (laughs)

    14. GTGarry Tan28:02

        It actually is. It's kind of weird that Cerebral Valley became known as Hayes Valley. I think the real origin for that is just that there is this one hacker house in Hayes Valley, but it was literally just a house.

12. 28:14 – 30:18

    San Franciscos Hacker House

    1. GTGarry Tan28:14

       (laughs)

    2. HTHarj Taggar28:14

       But again, to what we're talking about, during the period that that hacker house started, San Francisco was pretty dead.

    3. GTGarry Tan28:20

       Yeah, it was, it was so dead that like the hacker house was probably like the most happening place.

    4. HTHarj Taggar28:24

       (laughs) You could become the center of San Francisco by literally having the one house (laughs) with, like, 10 hackers in it working on, like, AI stuff, right?

    5. GTGarry Tan28:31

       Exactly.

    6. HTHarj Taggar28:31

       But, like, it's not true today, like OpenAI has this huge lease right around the corner from here in, like, Mission Bay, which is next to the Dogpatch. We're here, like, the startups are gonna start being based here. Like, this seems like it's the real center.

    7. DHDiana Hu28:44

       This is the real Cerebral Valley right here.

    8. HTHarj Taggar28:47

       Yeah, this is-

    9. GTGarry Tan28:47

       Yeah.

    10. HTHarj Taggar28:47

        This is the real Cerebral Valley.

    11. GTGarry Tan28:48

        And I think a lot of the companies that we're working in- with right now, uh, they're gonna find product market fit, they're gonna get their first million, then 10 million, then 100 million, then billion dollars a year in net revenue. They're gonna fill the office towers in FiDi and SoMa. They're going to build these businesses that create thousands of jobs and there's not going to be, you know, one Salesforce tower. There might be dozens, if not hundreds in the next 10 years and so we're really talking about a real boom loop here.

    12. DHDiana Hu29:18

        This is already happening. I was talking to companies from the last couple batches and there's this, uh, office space in SoMa where there are a bunch of YC companies that just got- that just raised their seed round and they're surrounded around each other and they feel the energy. There's this thing about being in the right vibe. (laughs)

    13. GTGarry Tan29:38

        They need a cool name like Yscraper then.

    14. HTHarj Taggar29:41

        I think we're also seeing, like, another just effect of being here is, like, the AI specifically. Like, if you're working on developer tools, like, in a big area right now, like, you want to be here. They're all of the best engineers who are going to be using your, like, cutting edge developer tool or infrastructure all based out here. If you're building AI software, you need someone, especially enterprise software, you need someone who's going to be your champion and advocate and is going to take a bit of a bet on, like, a startup that's using some, you know, like, cutting edge AI model that's not fully proven yet and they're all, like, those people tend to be here. It's always clear that you can build companies outside

13. 30:18 – 31:00

    Success Odds Maximization

    1. HTHarj Taggar30:18

       of San Francisco and Silicon Valley, like, there's always going to be exceptions. And maybe there'll actually be more of them over time but I just think all else being equal, if you're starting out and you- and you want to play just maximize the odds to be in your favor, I think you should- you should be here despite the- the fact that it'll always be exceptions.

    2. DHDiana Hu30:36

       Why don't you want to get more lucky here in San Francisco? (laughs)

    3. HTHarj Taggar30:39

       Yeah, basically. Right.

    4. GTGarry Tan30:39

       Yeah, maximize your luck so... The great thing is, I mean-We want San Francisco to be hyper inclusive, and what that means is, uh, you don't have to pay that much for rent, uh, you can feel safe walking down the street, there's great small businesses that are, uh, you know, thriving, and then frankly, this is the place where you should start

14. 31:00 – 33:05

    Hyper-Inclusive Environment

    1. GTGarry Tan31:00

       your startup and thrive here as well.

    2. SPSpeaker31:03

       100 years from now, what does San Francisco look like in tech?

    3. GTGarry Tan31:08

       I mean, I'm a big fan of, uh, Gene Roddenberry's ideal for Starfleet Command. I mean, this is the ultimate techno optimist dream, which is we unlock so much abundance in the world that money doesn't exist anymore and people can search the stars to try to find and create their own meaning. Um, and I, I think that there's no mistake, like Starfleet Command from Star Trek: The Next Generation and Star Trek, you know, the universe broadly, it's like right there in the Presidio (laughs) in San Francisco. I think that, um, if you take the agglomeration effects of the smartest people in the world, the best builders in the world, and you put them in one place and they create this scene, like this, um, you know, set of people who all run in the same direction, create these companies that matter and then people stay here and, you know, they make the schools awesome, they build housing, they actually, you know, invest into arts, we actually make this city the kind o- the best city in the world. Like, we have all the building blocks to make San Francisco into the best city in the world where, you know, give us your misfits, give us your nerds, give us your autists-

    4. SPSpeaker32:27

       (laughs) .

    5. GTGarry Tan32:27

       ... give us the people who, you know, just wouldn't fit anywhere else, like they have this capability with their hands and with their brain to create something that has never existed before and we put them all in one city and they go and create software and hardware and technology and biotech and climate tech for, that will touch billions of people and all of that wealth comes back into this one city and we make the city more and more awesome. That's what San Fransokyo is. That is what San Francisco could be, and we will manifest this. The boom loop is happening, guys.

    6. SPSpeaker33:04

       (laughs)

15. 33:05 – 33:26

    Outro

    1. SPSpeaker33:06

       .

    2. GTGarry Tan33:06

       (upbeat music) So maybe that's a great place to end. That's it for this week of The Light Cone. We'll see you guys next time.

Episode duration: 33:26