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Is San Diego The Next Silicon Valley? No, Say Many Local Startup Workers

If you follow news about local startups, you’ve probably heard this a lot lately: San Diego is the next Silicon Valley. Really?

If you follow news about local startups, you’ve probably heard this a lot lately: San Diego is the next Silicon Valley. Really?

It's a pretty bold claim, the idea that San Diego — with a much smaller tech workforce and much less venture capital dollars — could actually be the next center of the tech universe.

I wanted to know if anybody working at local tech startups actually thinks it's true. So I went to the closing fair of San Diego Startup Week, which recently took over downtown's hip outdoor space Quartyard, and asked people if they really think San Diego could be the next Silicon Valley.

"I don’t think that San Diego is going to be the next Silicon Valley," said Tim Ryan, co-founder of a local company called LabFellows, which caters to the needs of biotech companies. "But I do think it has the potential to be a major startup ecosystem and innovation hub."

Photo by Nicholas McVicker

Employees at Bizness Apps work at the company's new La Jolla headquarters, June 17, 2016.

Most people tended to agree with Ryan. About 70 percent of the people I asked said no, San Diego is not the next Silicon Valley. But that’s part of why they like being here.

"You go into Silicon Valley and it’s huge," said Jules Schwab. She works at TeamVibe, a workplace social networking site.

"Here, there’s just a stronger sense of community," she said. "Everyone’s pretty much one to two years into their company. We’re a very small, tight-knit community. I think that’s what differentiates us."

True believers say San Diego's tech startup scene may be small, but it's growing. A handful of people fully endorsed the idea that San Diego has a shot of getting on Silicon Valley's level.

“It’s totally possible," said Shadrach Vaughn, co-founder of Lite App, which teaches millennials about personal finance.

"One, the housing is much cheaper here," Vaughn said. "There’s a young group of people here. There’s startup potential. There’s space. And moving forward, we just need to execute on it.”

On Startup Week’s website, organizers wrote, "We have a lot to celebrate in San Diego right now, including our startup scene getting some awesome recent press as 'the Next Silicon Valley.'"

A List of 'Next Silicon Valleys'

All of the following cities have been dubbed the 'next Silicon Valley' in the media over the past year

Reno, Nevada

Beersheba, Israel

Minneapolis, Minnesota

Ho Chi Minh City, Vietnam

Jacksonville, Florida

Shenzhen, China

Austin, Texas

Guadalajara, Mexico

Asheville, North Carolina

Havana, Cuba

Sydney, Australia

Waterloo, Canada

San Diego, California

Many media outlets, including KPBS, were speculating about whether San Diego could take on Silicon Valley. But some basic facts show San Diego has a lot of catching up to do.

Silicon Valley companies raise a lot more venture capital. Last year they got about $28 billion. San Diego companies got about $1.2 billion. And most of that went to biotech.

San Diego also has far fewer tech workers.

According to the Bureau of Labor Statistics, the heart of Silicon Valley has 2.5 times as many people working in "Computer and Mathematical Occupations," a category that includes jobs like computer programming and software development. That number doubles if you factor in workers from other parts of the Bay Area, like San Francisco and Oakland.

But San Diego optimists say the tides could be turning. They say the Bay Area is getting too saturated, and those looking to jump ship could be attracted to San Diego.

That rings true to Andrew Gazdecki, the chief executive officer of a startup called Bizness Apps that just recently relocated to La Jolla.

"San Francisco is awesome, but the cost of living really caught up to us," he said.

Gazdecki's company aims to make designing an app easy for small business owners. They've helped create around 450,000 apps, according to their website. The company employs 70 people and Gazdecki is hoping to hire more.

The Bizness Apps office may be located in San Diego now, but it definitely looks like a San Francisco startup.

"We brought some things down from San Francisco," Gazdecki said. "We brought our ridiculous arcade game, Big Buck Hunter.”

Bizness Apps has the breakroom games, the standing desks and the relaxed vibe you'd expect to find at a growing tech company in the Bay Area. But Gazdecki said San Francisco was actually not a good home base for his company.

"It’s a great place for the top two percent of companies you hear about like Uber, Airbnb, Twitter," he said. "But we really struggled to find experienced leadership in San Francisco, just because of the level of competition for those sorts of roles."

Frustrated by the recruitment process in San Francisco, Gazdecki started recruiting in other cities. He considered tech hubs like Seattle and Austin, where the cost of living is lower than in San Diego. But he found qualified people in San Diego, and that’s what convinced him to move.

“What we looked at was, how can we create a competitive advantage by essentially being a bigger fish in a smaller pond?" Gazdecki said.

Gazdecki thinks San Diego could be the next Silicon Valley. But he doesn’t know of any other startups that have recently uprooted from San Francisco for greener pastures in San Diego. He hopes Bizness Apps is pioneering that migration, but he admits it’s not a real trend yet.

And he says it hasn’t all been smooth sailing. Most of his employees actually decided to stay in the Bay Area and work remotely, rather than join him in San Diego.

“If you’ve moved an apartment before, it’s not a lot of fun. Try moving a company," he said. "It’s a lot of work. But the benefits we’re seeing clearly outweigh the effort and cost it took to make the move. So we're pretty happy with what we did, and we couldn’t be more confident in the company’s future here."

So, is San Diego the next Silicon Valley?

Some say it could be. Most say the comparison is misguided.

But everyone I spoke with for this story was optimistic that San Diego can make a name for itself.


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