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Aug 1, 2023 · 15m · y-combinator

Does Your Startup Need To Be In San Francisco? · Y Combinator

Michael Seibel · 7m spoken Dalton Caldwell · 5m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Y Combinator group partners Michael Seibel and Dalton Caldwell debate whether tech startups must be located within San Francisco proper or the broader Bay Area. They conclude that while personal living preferences between city density and suburban quiet vary, residing within the greater Bay Area ecosystem provides an overwhelming statistical advantage for startup success.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The partners hold 98.2% of the talking time here. How this is scored →

The partners as informed peer 7.2 Guest teaching 4.0 Guest disagreement 3.2 The partners pushing back 3.4
05100:0010:000:32–2:39 · The partners as informed peer 6/10 Dalton's Preference: Suburban Living and Tech Giants Dalton sets up his argument that startups do not need downtown SF, citing historical evidence that major tech titans like Apple and Google were founded down in the South Bay suburbs. Michael playfully pushes back, setting up the central debate between suburban focus and urban density.2:39–5:02 · The partners as informed peer 7/10 Michael's Preference: City Density and Founder Ambition Michael counters with the psychological benefit of urban density and hungry ambition, listing companies like Uber and DoorDash. Dalton interjects with a factual correction that DoorDash started as Palo Alto Delivery in the suburbs.5:02–8:27 · The partners as informed peer 7/10 Agreement on the Broader Bay Area Region Both hosts converge on their shared premise: startup founders need the Bay Area region even if lifestyle preferences within the region vary. They draw domain parallels to New York finance and Los Angeles entertainment.8:27–11:01 · The partners as informed peer 8/10 The Power of Regional Network Effects Dalton and Michael articulate how unseen network effects function, noting how founders who left the Bay Area during COVID returned once they realized what community density they were missing. Both hosts reinforce each other with high-level industry insight.11:01–14:42 · The partners as informed peer 8/10 Aiming for Greatness Over Just Being in the Game Michael uses an NBA analogy to argue that founders should aim for greatness rather than just being in the game, while Dalton frames the choice around statistical odds rather than outliers. They dismiss common counterarguments like MongoDB being in New York as exceptional anecdotes rather than solid base rates.0:32–2:39 · Guest teaching 5/10 Dalton's Preference: Suburban Living and Tech Giants Dalton sets up his argument that startups do not need downtown SF, citing historical evidence that major tech titans like Apple and Google were founded down in the South Bay suburbs. Michael playfully pushes back, setting up the central debate between suburban focus and urban density.2:39–5:02 · Guest teaching 5/10 Michael's Preference: City Density and Founder Ambition Michael counters with the psychological benefit of urban density and hungry ambition, listing companies like Uber and DoorDash. Dalton interjects with a factual correction that DoorDash started as Palo Alto Delivery in the suburbs.5:02–8:27 · Guest teaching 3/10 Agreement on the Broader Bay Area Region Both hosts converge on their shared premise: startup founders need the Bay Area region even if lifestyle preferences within the region vary. They draw domain parallels to New York finance and Los Angeles entertainment.8:27–11:01 · Guest teaching 4/10 The Power of Regional Network Effects Dalton and Michael articulate how unseen network effects function, noting how founders who left the Bay Area during COVID returned once they realized what community density they were missing. Both hosts reinforce each other with high-level industry insight.11:01–14:42 · Guest teaching 3/10 Aiming for Greatness Over Just Being in the Game Michael uses an NBA analogy to argue that founders should aim for greatness rather than just being in the game, while Dalton frames the choice around statistical odds rather than outliers. They dismiss common counterarguments like MongoDB being in New York as exceptional anecdotes rather than solid base rates.0:32–2:39 · Guest disagreement 4/10 Dalton's Preference: Suburban Living and Tech Giants Dalton sets up his argument that startups do not need downtown SF, citing historical evidence that major tech titans like Apple and Google were founded down in the South Bay suburbs. Michael playfully pushes back, setting up the central debate between suburban focus and urban density.2:39–5:02 · Guest disagreement 5/10 Michael's Preference: City Density and Founder Ambition Michael counters with the psychological benefit of urban density and hungry ambition, listing companies like Uber and DoorDash. Dalton interjects with a factual correction that DoorDash started as Palo Alto Delivery in the suburbs.5:02–8:27 · Guest disagreement 2/10 Agreement on the Broader Bay Area Region Both hosts converge on their shared premise: startup founders need the Bay Area region even if lifestyle preferences within the region vary. They draw domain parallels to New York finance and Los Angeles entertainment.8:27–11:01 · Guest disagreement 2/10 The Power of Regional Network Effects Dalton and Michael articulate how unseen network effects function, noting how founders who left the Bay Area during COVID returned once they realized what community density they were missing. Both hosts reinforce each other with high-level industry insight.11:01–14:42 · Guest disagreement 3/10 Aiming for Greatness Over Just Being in the Game Michael uses an NBA analogy to argue that founders should aim for greatness rather than just being in the game, while Dalton frames the choice around statistical odds rather than outliers. They dismiss common counterarguments like MongoDB being in New York as exceptional anecdotes rather than solid base rates.0:32–2:39 · The partners pushing back 4/10 Dalton's Preference: Suburban Living and Tech Giants Dalton sets up his argument that startups do not need downtown SF, citing historical evidence that major tech titans like Apple and Google were founded down in the South Bay suburbs. Michael playfully pushes back, setting up the central debate between suburban focus and urban density.2:39–5:02 · The partners pushing back 6/10 Michael's Preference: City Density and Founder Ambition Michael counters with the psychological benefit of urban density and hungry ambition, listing companies like Uber and DoorDash. Dalton interjects with a factual correction that DoorDash started as Palo Alto Delivery in the suburbs.5:02–8:27 · The partners pushing back 2/10 Agreement on the Broader Bay Area Region Both hosts converge on their shared premise: startup founders need the Bay Area region even if lifestyle preferences within the region vary. They draw domain parallels to New York finance and Los Angeles entertainment.8:27–11:01 · The partners pushing back 2/10 The Power of Regional Network Effects Dalton and Michael articulate how unseen network effects function, noting how founders who left the Bay Area during COVID returned once they realized what community density they were missing. Both hosts reinforce each other with high-level industry insight.11:01–14:42 · The partners pushing back 3/10 Aiming for Greatness Over Just Being in the Game Michael uses an NBA analogy to argue that founders should aim for greatness rather than just being in the game, while Dalton frames the choice around statistical odds rather than outliers. They dismiss common counterarguments like MongoDB being in New York as exceptional anecdotes rather than solid base rates.

speaking balance: gold is the partners, purple is the guest (3 minute bins)

0:00 · the partners 97% · guest 3%0:00 · the partners 97% · guest 3%3:00 · the partners 98.6% · guest 1.4%3:00 · the partners 98.6% · guest 1.4%6:00 · the partners 98.3% · guest 1.7%6:00 · the partners 98.3% · guest 1.7%9:00 · the partners 99.3% · guest 0.7%9:00 · the partners 99.3% · guest 0.7%12:00 · the partners 97.9% · guest 2.1%12:00 · the partners 97.9% · guest 2.1%15:00 · the partners 84% · guest 16%15:00 · the partners 84% · guest 16%
Sharpest disagreement ▶ 4:35 DoorDash Suburban Origins Push

Dalton immediately interrupts Michael's list of urban success stories to point out that DoorDash originally started out in Palo Alto.

 Hardest push from the partners ▶ 2:39 Michael Refutes Dalton's Anti-City Stance

Michael bluntly opens his counterargument declaring Dalton is wrong and arguing that urban density provides essential ambition and drive.

 Biggest teaching moment ▶ 4:39 Dalton Corrects DoorDash History

Dalton catches Michael citing DoorDash as an urban startup by reminding him its original name was Palo Alto Delivery.

 The partners hold their own ▶ 12:45 Deconstructing New York Outlier Examples

Michael and Dalton call out the persistent MongoDB and Shopify anecdotes used by regional defenders, explaining why outlier examples do not change broad probability curves.
the scores for every segment, with the reasoning behind each
ChapterTopicThe partners as informed peerGuest teachingGuest disagreementThe partners pushing backWhy
Dalton's Preference: Suburban Living and Tech Giants 6544 Dalton sets up his argument that startups do not need downtown SF, citing historical evidence that major tech titans like Apple and Google were founded down in the South Bay suburbs. Michael playfully pushes back, setting up the central debate between suburban focus and urban density.
Michael's Preference: City Density and Founder Ambition 7556 Michael counters with the psychological benefit of urban density and hungry ambition, listing companies like Uber and DoorDash. Dalton interjects with a factual correction that DoorDash started as Palo Alto Delivery in the suburbs.
Agreement on the Broader Bay Area Region 7322 Both hosts converge on their shared premise: startup founders need the Bay Area region even if lifestyle preferences within the region vary. They draw domain parallels to New York finance and Los Angeles entertainment.
The Power of Regional Network Effects 8422 Dalton and Michael articulate how unseen network effects function, noting how founders who left the Bay Area during COVID returned once they realized what community density they were missing. Both hosts reinforce each other with high-level industry insight.
Aiming for Greatness Over Just Being in the Game 8333 Michael uses an NBA analogy to argue that founders should aim for greatness rather than just being in the game, while Dalton frames the choice around statistical odds rather than outliers. They dismiss common counterarguments like MongoDB being in New York as exceptional anecdotes rather than solid base rates.

Statements from this episode (8)

Opinion
Caldwell: Startups Do Not Need to Be in SF to Succeed
“I don't think everyone's startup needs to be in San Francisco to be successful. And that you could build a successful startup and not live in San Francisco.”
Dalton Caldwell Aug 1, 2023 ▶ 0:44
Assertion Not checkable as stated
Caldwell: Few Top Tech Companies Were Built in SF Proper
“And so clearly in the history of this stuff, all these great companies were built outside of San Francisco. Like if we actually look, how many of the most epic companies in the world in tech were actually built in San Francisco? It's actually not that many. An…”
Dalton Caldwell Aug 1, 2023 ▶ 2:23
Insight
Caldwell: Founders get Bay Area network effects without living downtown
“We get the benefits of living in the Bay Area and having the network effects of the city. Without all living in, like, the, like, our lives are not the Twitter thread. Showing photos of what's going on in downtown San Francisco.”
Dalton Caldwell Aug 1, 2023 ▶ 7:33
Insight
Seibel: Cultivating startup culture won't bring corporate tech offices
“Those politicians, what they're looking for is tech jobs. They're like, the, What they really need is a Google office. Like, they're not gonna get the Google office by having a startup culture, but their politicians didn't realize that.”
Michael Seibel Aug 1, 2023 ▶ 8:00
Insight
Caldwell: Founders Outside Hubs Don't Realize What They Miss
“And basically, what's weird about network effects is if you're not Benefiting from them. You don't know what you are missing.”
Dalton Caldwell Aug 1, 2023 ▶ 8:54
Assertion Not checkable as stated
Seibel: Everyone who left the Bay Area during COVID returned
“You and I both saw a lot of people leave the Bay Area during COVID. All of them came back and they all said this.”
Michael Seibel Aug 1, 2023 ▶ 10:01
Insight
Seibel: Building in Austin, Seattle, or New York is settling
“It's really easy to say, well, you know, I can be in the game in Austin. I can be in the game in Seattle. There are investors there. There are people there. I can be in the game in New York. And I wish that we were more honest that like, yeah, you can play bas…”
Michael Seibel Aug 1, 2023 ▶ 12:03
Insight
Seibel: Moving to the Bay Area is an easy startup multiplier
“Getting into the Bay Area is so relatively easy to all the other things you have to do to succeed. Choosing where to live is so relatively easy to all the other things you have to choose correctly. Why not pick up the easy wins? It's an easy percentage multipl…”
Michael Seibel Aug 1, 2023 ▶ 14:19
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