The case against living in the Bay Area, for ambitious tech people

come on, man

Here is a tweet that made lots of people mad:

First off: it’s engagement bait and probably not worth writing a whole post about. But dammit, I got baited and here I am.

Second off: I do not live in the Bay Area. I never have. I’ve had a reasonably successful career, and now co-run a fast-growing tech company. But by the standards of this tweet, I and many well-known tech people around the world lack either judgment or ambition. Maybe both!

What makes Flo’s tweet such perfect engagement bait is that there’s no sufficiently ambitious accomplishment that would disprove it.

Why? Because it’s tautological. Bay Area people, in the frame of this tweet, are by definition the most ambitious people in tech. Thus, ambitious behaviors are behaviors that take place in the Bay Area. Round and round we go.

It’s circular thinking, but as G.K. Chesterton liked to point out, all circles are perfect. They just may not be big enough to hold all of reality.

Look, if you want to play the Tech Industry (tm) game the way Bay Area people are playing it, you should absolutely be in the Bay Area. You will be surrounded by people who are living and breathing AI and devtools and infra and open-source. You will rub up against funders and founders and grifters and strivers of all stripes. It’s a tight-knit industry and the groupthink can be suffocating.

Here are some things it is very hard to avoid believing if you hang around ambitious people in the Bay Area:

• Taking as much money from venture capitalists as you can, as soon as possible, is a mark of success and a status symbol unto itself.

• Every problem has a technical solution if you’re smart enough.

• “Technical people” (software developers) are the noblest and most useful people at a tech company.

• SaaS (software-as-a-service) is the world’s most prestigious business model.

• Graduates from a few top schools (Stanford, MIT, etc) and people under thirty make the best employees.

• Naming your company Splip.dev reflects sound judgment.

• If you want to build a great tech company, you need to swarm the problem with your entire team in a physical room.

• Spending all your time on a laptop in a featureless $5,000/mo studio apartment is a great way to stimulate outside-the-box thinking that will change the world.

The TV show Silicon Valley lampooned all these ideas a decade ago. The weird thing I’ve noticed is that when Bay Area tech people watch that show, they don’t seem to understand that they’re being made fun of. They think they’re being celebrated. That’s how thick the bubble is.

I’m not saying the Silicon Valley zeitgeist hasn’t changed in ten years. Heck, it seems to change every five minutes. Big Tech companies are dreadnoughts one second, tottering late-stage empires the next. The podcast-industrial complex is way farther to the right politically than it was ten years ago. There seems to be some gesturing in the direction of hardware engineering that we haven’t seen in awhile.

But it’s remarkable that my list of entrenched attitudes HBO’s Silicon Valley was making fun of in 2014 are, if anything, more entrenched in 2024. That screams “conventional wisdom.”

If you’re an ambitious person with good judgment, wouldn’t it be smarter to disrupt that system from outside, rather than immersing yourself in it?

I know and respect many wonderful people in the Bay Area. But Emily Freeman and I have bet our business on some different ideas:

Build a working business before you take funding, not afterwards

Emily and I started Freeman & Forrest with $1,000 each from our own pockets. We suspected the market needed a player who could sit between tech creators and tech marketing teams, building great influencer marketing programs as a service. We probably could have raised some VC funding with a pitch deck at that point and started building some sort of two-way marketplace product.

Thank God we didn’t. 6 months later, having bootstrapped a business profitable enough to fully employ a team of 7 and share hundreds of thousands of dollars with the creator community, we’ve realized that almost everything we assumed about how to solve this problem on Day 1 was wrong. If we’d spent those six months building out a product on our Day 1 assumptions, we’d be worse than six months behind; we’d have a bunch of useless technical debt to unravel too.

We may yet raise a small amount of funds later on. But it’ll be to build tools around the business model we’ve already proven, not to keep our lights on.

It seems to us that the less you need infusions of cash to survive, the more you can dictate terms when you do want to raise strategic capital. We’re ambitious enough to want control of our own destiny.

SaaS is less and less interesting as a business model

The pure SaaS play, as a business model, is really more set up for the tastes of VCs than for either founders or customers. SaaS follows the power law VCs crave: on long timescales, a tiny minority of SaaS investments generate ridiculous, outsized returns. And the only way for founders to hang in there long enough for that to happen is to sell huge stakes in their company to those selfsame VCs. Convenient.

Even on those terms, our view is that SaaS’s dominance in tech is expiring. Relying on self-service signups (optimistically called “product-led growth”) sounded great in 2010, but it doesn’t work for enterprise customers. To do major deals with big players, you need enterprise sales and support and customizations—all the boring non-SaaSy stuff that Microsoft and Oracle do so well. We prefer to build that into our business’s DNA from the start rather than to treat it as a necessary evil later on.

If you want smaller customers, SaaS is a race to the bottom. The more useful AI and low-code tools become, the higher the bar must be for another startup to commit $1000 or more per year to your product rather than just rolling an 80% solution with tools that are already available to them, or buying a cheaper clone of your product that someone spun up with AI in 48 hours.

At this point, I sense that a lot of tech’s institutional preference for SaaS businesses is based more on ego than anything else. Being a SaaS founder is seen as being a “real” founder, much more so than running a productized consulting business or agency. VCs encourage this attitude because it benefits them. Get out of the Bay Area, and that snobbery fades.

We are not precious about what bucket our business falls into. We may very well release SaaS tools at some point, for a use case that we determine makes sense. At the moment we are focused on “doing things that don’t scale, at scale”—which means building a cyborg amalgam of automation and amazing humans that can delight customers of any size.

A corporate culture dominated by “technical” people is just as unbalanced as a team dominated by any other skillset

Getting rid of my personal Software Developer Supremacy mindset has been probably the biggest step in my personal career growth over the last 5 years.

In 2020 I left a senior software engineering role to take a job reporting to the CMO of A Cloud Guru. I spent the next 2 years in a slow-rolling existential crisis of my own making. I felt humiliated by working with a bunch of marketers. My internalized arrogance told me that software developers were the people who really mattered to the business, that the “nontechnical” people on the go-to-market side of the org were second-class citizens, that I was sabotaging my own value as a human being by throwing in my lot with them.

I’m not proud of these attitudes, I’m just telling you that I struggled with them, and I know a lot of other career software engineers do too.

Again, in retrospect: thank God I went through that while I was still young enough to change. I ended up spending 4 years on go-to-market teams and learned some things that blew my little software developer mind:

• Digital marketers are tremendously “technical”, they just have way less ego about it. They automate stuff to solve problems for the business, not to flex their intellectual superiority.

• It turns out that sales and marketing and customer support actually do matter to the success of the business. They matter a lot. And their jobs are not easy.

• The things that bring developers a sense of fulfillment (mostly, building more and more software tools for themselves and each other) do not bear any direct relationship to things that people with budgets are willing to pay for.

• Automating tasks is great, but automating human relationships is sometimes very unwise.

All of which is to say that if you stay stuck in the Software Developer Supremacy mindset, of which the Bay Area is the central hive, you run the risk of building expensive things that nobody wants.

We started from the other end: we built a strong go-to-market motion, and are now adding in more and more automation to scale it. We’ve been profitable since Month 1, and we intend to stay that way.

There’s no surplus value in hiring in the Bay Area

Gotta be careful how I say this.

Again, I know GREAT people in the Bay Area. So smart, so cool.

But if you are trying to hire out there, you are going to find a lot of your options fall into two categories:

1. Experienced people with big egos who cost a ton of money

2. Inexperienced people with big egos who cost half a ton of money

Silicon Valley’s whole thing is supposed to be disrupting, arbitraging, exploiting inefficiency, unearthing surplus value. I don’t see how you can do that at scale by hiring in Silicon Valley.

Freeman & Forrest loves hiring people from nontraditional backgrounds: moms returning to the workforce, career-changers, etc. Some are a little older and have meaningful life experience. They come from low-cost-of-living areas. I’ve been telling other people for years to hire this kind of talent via the Cloud Resume Challenge. I am putting my money where my mouth is. We are blown away by the talent, motivation, and egoless execution of the folks we’ve brought in. They are crushing it.

If you want to think outside the box, it helps to live outside the box

The basic insights about how to build a tech business, developed in Silicon Valley, are pretty much commoditized and available to everyone now.

If you build a strong enough reputation, the internet will allow you to work with great people no matter where you are personally based.

I live in North Carolina with my wonderful family. Emily lives in Colorado with hers. The other members of our team range from Las Vegas to Idaho to Michigan.

Speaking of ambition: one of my ambitions is to stay happily married and have kids who still talk to me when I’m 60. That means building a life that works for my whole family, and the Bay Area isn’t the right place for me to do that.

That said, I am squeezing in a quick trip to San Francisco between Thanksgiving and AWS re:Invent. I’ll enjoy hanging out with some great people, knocking out my work, and then moving on. If you’re smart and ambitious, I recommend microdosing the Bay Area. A little bit goes a long way.