The Rising Economic Tide and How It’s Affecting Silicon Valley Startups

About one-fourth of U.S. adults plan on moving within the next five years. Many of these Americans, especially young people, will migrate to the tech capitol of the world, Silicon Valley, in San Francisco, California.

With an estimated 3 million people currently living in this tech hub, the area has some of the most lucrative opportunities, financially stable businesses, and an extremely high rate of stress due to the constant fear of failure.

“Suddenly, the valve in my heart twists open, and all of the feelings start flooding out,” said Ryo Chiba, a Silicon Valley entrepreneur who went had to layoff his employees and friends at his marketing company. “The disappointment, the guilt, the anger, and the sadness,” Chiba added, all contributed to his Silicon Valley experience.

The Wall Street Journal reports that Chiba, who wrote a piece detailing his experience as a failing Silicon Valley CEO, has heard a strong reaction from the entire tech community, many of whom are experiencing similar situations.

“My eyes begin to water and my throat closes us,” Chiba added as he recalls laying off his best friends. “I try to speak, but can’t. I hoarsely force a couple words out, but stop mid-sentence… How did it get to this?”

According to CBS SF Bay Area, a new study shows why companies like Chiba’s are failing and the simple fact that, aside from the majority earners, the rest of the Valley can’t keep up with the economic growth.

“If the rising tide doesn’t lift all the boats, it replaces those boats,” said Russell Hancock, President and CEO of Joint Venture Silicon Valley, referring to the larger cost of living, amongst other things, and its effect on Valley residents and struggling startups.

The report, although unnerving for struggling companies and Valley residents, is optimistic about the future as long as there is a continued focus on a thriving arts community, public safety improvements, and higher education, the “Silicon Valley ecosystem” will be better prepared to take on these difficult economic challenges.

“These are the perils of prosperity,” Hancock added, “and the region needs to address them even while we celebrate our remarkable dynamism.”

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