The San Francisco claim venue is an international powerhouse at launching startups that go on to dominate their industries. For locals, this has long been a blessing and a curse.
On the luminous side, the tech startup device produces well-paid tech jobs and dollars flowing into local economies. On the flip side, it also exacerbates housing scarcity and sky-high living costs.
These issues were top-of-mind long before the unicorn boom: After all, tech giants from Intel to Google to Facebook have been scaling up in Northern California for over four decades. Lately however, the ask of how many tech giants the region can sustainably aid is getting fresh attention, as Pinterest, Uber and other super-precious local companies embark on the IPO route.
The worries of techie oversaturation led us at Crunchbase News to take a look at the ask: To what extent do tech companies launched and based in the claim venue continue to grow here? And what part of employees work elsewhere?
For those agonizing about the inflationary impact of the local unicorn boom, the data offers a bit of reassurance. While companies founded in the claim venue rarely move their headquarters, their workforces tend to become much more geographically dispersed as they grow.
Headquarters ≠ headcount
Just because a company is based in Northern California doesn’t mean most workers are there also. Headquarters, our survey shows, does not always translate into headcount.
“Headquarters venue can often be the wrong benchmark to use to identify where employees are located,” said Steve Cadigan, founder of Cadigan Talent Ventures, a silicon Valley-based talent consultancy. That’s particularly the case for huge tech companies.
Among the largest technology employers in Northern California, Crunchbase News found most have fewer than 25 percent of their full-time employees working in the city where they’re headquartered. We lay out the details for 10 of the most precious regional tech companies in the chart below.
With the exception of Intel, all of these companies have a double-digit percentage of employees at headquarters, so it’s not as if they’re leaving town. However, if you’re a brand-new hire at Silicon Valley’s most precious companies, it appears chances are greater that you’ll be based outside of headquarters.
Tesla, meanwhile, is somewhat of an exclusive case. The company is based in Palo Alto, but doesn’t crack the city’s list of top 10 employers. In nearby Fremont, Calif., however, Tesla is the largest city employer, with roughly 10,000 reportedly working at its auto food stuff there.(Tesla has about 49,000 employees globally.)
Unicorns flock to San Fran, workers less so
High-valuation independent and recently public tech companies can also be beautiful dispersed.
Although they tend to have a larger percentage of employees at headquarters than more-established technology giants, the unicorn crowd does like to spread its wings.
Take Uber, the poster child for this trend. Although based in San Francisco, the ride-hailing giant has fewer than one-fourth of its employees there. Out of an international workforce of around 22,300, only about 5,000 are SF-based.
It’s unclear if that kind of breakdown is typical. We had trouble assembling similar geographic employee counts at other claim venue unicorns, mainly because cities break out numbers only for their 10 largest employers. The tiger’s share of regional unicorns are San Francisco-based, and of them only Uber made the Top 10.
That said, there is another, rougher methodology for assessing who works at headquarters: job postings. At a number of the most precious claim venue-based unicorns — including Airbnb, Juul, Lime, Instacart, Stripe and the now-public Lyft — a high number of open positions are far from the home office. And as we wrote last year, independent companies have been actively seeking out cities to set up secondary hubs.
Even for earlier-stage startups, it’s not uncommon to set up headquarters in the San Francisco venue for access to financing and networking, while doing the bulk of hiring in another venue, Cadigan said. The evolution of collaborative work tools has also enabled more companies to add staff working remotely or in secondary offices.
Plus, of course, unicorn startups tend to be national or international in focus, and that necessitates hiring where their customers are located.
Take our jobs, please
As we wrap up, it’s worth bringing up how unusual it once was for denizens of a metro venue to oppose a huge influx of high-skill jobs. In the past couple of years, however, these attitudes have become more common. Witness Queens residents’ mixed reactions to Amazon’s HQ2 plans. And in San Francisco, a potential surge of newly minted IPO millionaires is causing some consternation among locals, along with jubilation among the realtor crowd.
Just as college towns retain room for brand-new students by graduating older ones, however, it seems reasonable that sustaining Northern California’s strength as a startup hub requires locating jobs out-of-venue as companies scale. That could be good news for other cities, including Austin, Phoenix, Nashville, Portland and others, which have emerged as well-kown secondary locations for fast-growing unicorns.
That said, we’re not predicting near-term contraction in claim venue tech employment, particularly of the startup variety. The region’s massive entrepreneurial and adventure ecosystem keeps on producing precious newcomers well-capitalized to keep hiring.
We looked only at employment at company headquarters (except for Apple) . Companies on the list may have more employees based in other Northern California cities. For Apple, we included all Silicon Valley employees, per estimates by the Silicon Valley Business Journal.
Numbers are rounded to the nearest hundred for the largest employers. Most of the data is for full-time employees only. huge tech employers hire predominantly full-time for staff positions, so part-time, whether included or not, is expected to reflect only a very little percentage of employment.
Cities list their 10 largest employers in annual reports. We used either the annual reports themselves or data excerpted in Wikipedia, using calendar year 2017 or 2018.