San Francisco as a global innovation ecosystem hub. (Is) the spirit alive

4th article in the series I started, on the U.S. coastal cities as global innovation ecosystem hubs and powerhouses. The 3rd city & region I zoom in, after looking at Los Angeles and Miami. The stories cover a 5 year exploratory journey of a European on both coasts of the U.S. But go much farther in the past.

"I want to San Francisco and the Bay Area where folks burn to create, test and break together," I told to myself after a while spent in the South East Spain, in a beautiful city with friendly and relaxed people, where remote workers are kicked out of places as soon as a coffee mug gets empty or one has no chances to open a laptop at a cafe as the signs at the door forbid that, and waiters refuse to serve if you were to not follow the rules.

How it all started

I do not mean to retell the story of the Bay Area's history, with HP founders inspired by a professor at Stanford and starting in parents garage what is now one of the world's leading IT companies. I have my own story in mind, how San Francisco and the Bay Area experience started for me.

I was broke. 10 years ago, a few years after exiting from my advertising business and selling online media which we built along with my brother, to pursue much more exciting to me a business activity, live entertainment agency (artist booking & touring, show promotion), the company went down with a boom. There were too many players in the territories my company was active in, too much of international attention as well (think Live Nation Entertainment and likes), and too little concertgoers and money. And close to zero collaboration within the industry's players. I'll touch upon no-collab. again later in the article.

A schoolmate and friend of mine, former employee, shared a link to a 美国斯坦福大学 program offered online, saying that he is going to take it. He did not but I did. I put so much attention into it and literally ate the content provided by Chuck E. and folks at Stanford and its network, along with connections and possibilities provided by the program. It was a year-long program, an exclusive offer as it was gone afterwards and unavailable. After doing some personality hacks and tricks, our team got ranked No.1 in the final works, and we were pitching to some of the Silicon Valley's rising stars VCs along with experienced business mentors and sales coaches. I still remember Ernestine Fu asking tricky questions.

Anyways, I put the newly developed network in use and paired it with my prior experience in international negotiation, team development, company growth, and shit-management, and became the first mentor from the North East Europe coaching founders at Alchemist Accelerator - the world's leading b2b business accelerator. The first team I got paired with was a Kenyan start-up, Fleetsimplify . I enjoyed time spent with its founders, Balqis Chepkwony & Salim Omar even though there were many challenges, including internet interruptions and visa issues for the folks located in Kenya and willing to participate in the elite accelerator based in the Bay Area.

I will skip the rest of the story, just add that I am now one of Alchemist's admission judges and start-up coaches, and I am thankful to its MD and co-founder Ravi Belani and the rest of Alchemist team for the opportunity and lessons learned.

Is the spirit alive

In 2 years, San Francisco will turn 250, a respectable age. The city with such rich history has gone through various breakthroughs and turbulences, from settlers wrestling and merging to becoming a major shipbuilding hub during world wars, to the Great Depression, the Silicon Valley's growth, and Covid's challenges.

Many state that the Bay Area's innovative spirit has died, and all it (and its people) can do is to pump more money in blowing another business model bubble. Masses have left San Francisco recently for other parts of the Bay Area, California, Washington, or Florida (read about the great marketing of Florida and and the relocation wave in my previous article ).

Even Salesforce CEO Marc Benioff has been threatening to pull out of the city which is a great deal, as Salesforce is among today's San Francisco icons, with its Salesforce Tower and massive investments in the area's ecosystem. Salesforce's annual conference, Dreamforce is one of the largest events in the Bay Area gathering innovators from all around the world. Last year, OpenAI boss Sam Altman headlined it along with actor Matthew McConaughey and many more.

To calm you down, the 2024 Dreamforce will take place in San Francisco this October.

To consider the challenges the San Francisco ecosystem has been facing lately, let's look at what is that a physically located ecosystem requires.        

Stakeholders

An innovation ecosystem is comprised of parties, called stakeholders, having the necessary resources and willing to collaborate and invest. With investment of resources, I mean not only financial, but also time, knowledge, connections, equipment, and more. The stakeholders, as defined by Dr. Fiona Murray & Dr. Dr.Phil Budden of 美国麻省理工学院 , are entrepreneurs, risk capital providers, education institutions, corporates and government.

San Francisco and the Bay Area has had a perfect set of all the parties present. Of education institutions, 美国加州大学伯克利分校 , 美国斯坦福大学 and many more universities are present and actively contribute to developing the ecosystem.

Regarding risk capital providers, the Bay Area sets the tone of venture fund trends and knowledge across the globe. Some names include Andreessen Horowitz , Sequoia Capital , Menlo Ventures , all of them having invested in and partnered with aforementioned Alchemist accelerator and its portfolio companies. Entrepreneurs and innovators flock the area. There are all possible global corporations present or headquartered in the Bay Area, with their innovation and ecosystem teams actively engaging with other stakeholders. Visa , 埃森哲 , 微软 , Meta among them. In addition, some of the country's most recognized government institutions can be found in San Francisco, along with the state's offices.

And then there are countless business accelerators, consulting companies and ecosystem building consultancies.

Density

For an ecosystem to be present and functional, it requires a dense representation of all types of stakeholders, making a perfect balance for an ecosystem to thrive. The Bay Area has been a magnet of the stakeholders, especially corporates, investors, and future entrepreneurs - young professionals from all around the world.

Culture

With all the stakeholders present and packed in the city or region, it takes the right attitude and culture to build and break. San Francisco and its Bay Area has been famous for it. Young folks come together in universities, hackathons, or garages to prototype, test, break, crack, rebuild and roll out or abandon innovative products. They have been always happy to share their experiences and takeaways by speaking at smaller gatherings and larger events, blogging and podcasting, teaching at universities, or mentoring at business accelerators.

In the Bay Area, 1+1 is at least 2 if not 1 000 000, and 2+3 is 5 000 000 (000) for sure when it comes to team members and other stakeholders coming together to build something big.

Jack Dorsey created Twitter with a help and trust of other players of the ecosystem. Now valued at over $40 billion and owned by Elon Musk, it is one of the most influential media channels globally.

苹果 was started in Los Altos, Bay Area, almost 50 years ago, by 3 friends, and is one of the most valuable companies globally, impacting how people spend an big portion of their days connecting, creating and consuming staff.

谷歌 and its first search algorithm were created in Mountainview, Bay Area, by Stanford students Larry Page & Sergey Brin.

LinkedIn , now owned by 微软 , was developed and launched in Mountainview, Bay Area, 22y. ago, by a group of young men who were united by an interest to create things and test them out. Reid Hoffman & Eric Ly were the core initiators, with Allen Blue , Konstantin Guericke , Jean-Luc Vaillant joining the core in the first office - a living room.

Software, tech firms... What about REAL, I mean, physical things?

• The first cable car in the world was launched in San Francisco over 150 years ago.

• The iconic jukebox was invented and first installed in San Francisco 135 years ago.
• The slot machine was invented in San Francisco, too, 130 years ago.
• TV, soon to celebrate its first centenary, was also developed in San Francisco.
• A bendy plastic straw, now being replaced by paper, bamboo etc. alternatives, was created in San Francisco, to enjoy a comfy and stylish sip of a milkshake.
• The computer mouse, even if you do not use it (I do!), was developed in the Bay Area, in Menlo Park.

Want more?

San Frans are renowned for their liberal thoughts and attitude towards other people and environment. It is not without surprise that the LGBTQ+ was designed in San Francisco. The author of the rainbow flag is Gilbert Baker.

The universities in the region have contributed a lot to the innovation space impacting lives globally. At UC Berkeley, chemist Jay Keasling discovered a process to create a malaria-resistant drug. The Bill & Melinda Gates Foundation financed its development, so it would be launched by Sanofi , a drug company, in 2013 as a full-fledged medication.

UC Berkeley again. Its professor, Geoff Marcy has discovered about 1/5 of all the exoplanets discovered so far. Wondering what's an exoplanet? Read this piece by NASA - National Aeronautics and Space Administration .

That is not it and there are lots more of discoveries, inventions, and innovations developed in San Francisco and its area. A real powerhouse, isn't it.

What did go wrong?

If it did at all. Covid came, and one of the world's most tech-savvy regions was totally ready to go fully remote. At the same time, the people in the Bay Area were desperate to come together and keep building and breaking. They were restricted from that. And as with people in Spain or Italy where coming together for extended families or large friend groups for drinks and food is a must, and people were suffering during the pandemic, the innovators in the Bay Area saw their spirits slowly dying. Or at least going to sleep.

The full cafes of the Bay Area turned into abandoned spaces. Co-working places closed down. Office spaces shrank. Expensive apartment buildings were left uninhabited as the Bay Area's innovators went remote and looked for cheaper rent options outside the bay. San Francisco was hit the hardest as the empty spaces were taken over by homeless people and robbers, and San Frans rushed to leave the now criminal parts and streets of the beautiful hilly city.

Other parts of the world and the States took the opportunity and promoted their lovely, friendly, safe and welcoming environments and invited the bay's innovators to come build and break things while building their ecosystems. Many left. For Austin TX, Miami FL, or Dubai UAE, or China, Canada, Portugal, and more. Some of them will never return. But the space never stays empty.

(When) Will San Francisco thrive again?

There is a popular thought that it is not the politics that set the tone in the U.S. It is people (and business, and insurance companies). It is more than true in San Francisco and the Bay Area. In a place where the collaboration is the key, it takes people to rebuild, and while many have left, the Bay Area and San Francisco have all the necessary resources to remake the area.

The process is already ongoing and ships the results. In Q4, 2024, San Francisco was the leading region in the U.S. in terms of VC investment made, followed by Boston (50% of that of SF's) and New York, according to analysis made by Ernst & Young based on Crunchbase data.

The question is whether the investment amounts reflect to the actual situation in the region, or is it generated by inertia, and secured by ghost entities not physically represented in San Francisco or the bay.

Anyway, thousands of talented students flock the region to study at the world's top and some of the most innovative universities. Same as the office premises, living spaces and emptied cafes are reoccupied by new tenants. San Francisco is a magnet for those seeking the collaborative make and break environment, risk funding, knowledge and a testbed for sometimes crazy ideas.

Is San Francisco still the best place to make crazy ideas reality, or has become a home for risk limiting business model innovators, that is what time will show.

O.K., let's hope the spirit is still alive. How does one engage with the San Francisco's ecosystem?

Corporate incubators, business accelerators, networking events, degree and professional programs, open days, co-working spaces and casual cafes, or renting a room with the right roommates - there are countless options to seek the door to enter one of the world's longest-lasting and leading innovation ecosystems. A totally different approach when compared to the exclusivity of the LA's entertainment industries.

Nothing to do with San Francisco, but as the talented music producer, singer and songwriter John Legend recalled in his show, A Night with John Legend, at the Hollywood Bowl, he had one lucky coincidence among others - he was a roommate with Kanye West, another young artist and music production innovator, making his way up in the entertainment business. They ended up working together and reaching unbelievable hights in the industry.

Thanks for reading my San Francisco story, another piece in the series of takeaways from my 5y. exploratory journey across the United States. Next up, is a city on the East coast. If you have not yet read but are interested in the ecosystems in Los Angeles or Miami, go on and explore them with me here:

The Magic City. Miami as a global innovation ecosystem hub.

Los Angeles as a global innovation ecosystem hub.

Here is the intro on why the series. I hope these articles will serve the purpose and help you navigate your innovation and growth path in or with the United Sates. Please add your thoughts and takeaways in the comments section.