Why you should care
Because the next big boom in Silicon Valley could be coming out of one unexpected sunny suburb.
In case you missed it, Silicon Valley is back. And booming.
Whether or not you live in technology’s fertile crescent, you probably heard about the tech market’s news-making year in 2013. Between the cute (Uber’s kitten-delivery day) and the controversial (protests outside Twitter’s new headquarters and buses transporting Googlers to their South Bay campus) — not to mention the optimistic buzz of rising entrepreneurs — the Valley and its northern neighbor San Francisco ruled the airwaves last year. Which suggests that even more eyes will be on the hilly city in 2014.
But every story needs an underdog — and for this story, I’m putting my money on Mountain View, the strong-shouldered suburb about an hour south of SF. Full disclosure: This is where OZY set up shop, but my faith in this city began long before I headquartered my company here. Mountain View, home to 75,000 people, is also home to some of the world’s most important billion-dollar corporations — and it’s looking more and more like the breeding ground for a growing number of mega-valued private companies.
Just the latest proof of that? Facebook’s $19 billion purchase of our neighbors, WhatsApp.
In other words: There’s gold in them there hills or, more accurately, in the Valley — about half a trillion dollars’ worth. And nearly $50 billion is waiting to be mined from a select group of Mountain View-based startups that have yet to go public. In the race to the top, Mountain View is closing in on Palo Alto and sweeping past its other Bay Area neighbors. There’s no telling how long this boom will last, but it’s big and could get a whole lot bigger very fast.
This city, once a flyover between Stanford in Palo Alto and Lockheed’s compound in Sunnyvale, has produced people as diverse as Sal Khan and Jose Antonio Vargas. And now it’s producing some serious, industry-defining talent.
You’ll find tasty companies in San Francisco — Square, Airbnb, Dropbox — but Mountain View is serving up an even heartier menu. Everyone knows the obvious players:
• Google: $300 billion
• LinkedIn: $23 billion
• Symantec: $17 billion
But it’s the private companies, with impressive valuations according to market reports, that are the ones to watch:
• Mozilla: $1.5 billion
• Evernote: $1.2 billion
• Quora: $1 billion
• PureStorage: $1 billion
• Coupons.com: $1 billion
• MobileIron: $600 million
• 23andMe: $200 million
• Ooyala and Coursera: Revenue of $50 million each last year
Having lived in Mountain View on and off for 15 years, I’ve enjoyed a front-row seat to the boom-and-bust cycle the Bay Area has become known for. And sure, Valley insiders and skeptics may rightfully scoff at any town asserting a claim to being the next heart of Silicon Valley. But I see something undeniably major taking place here. There’s a lot that could be the cause: the Caltrain station that brings thousands of people from San Francisco to downtown Castro Street; housing prices, which are climbing but still cheaper than SF; and there’s office space, which runs about $30 a square foot in Mountain View, compared to nearly $60 per in SF’s ultra-trendy SoMa neighborhood.
Mountain View is looking more and more like the breeding ground for a growing number of mega-valued private companies.
Don’t just take my word for it. Take Google’s double-barreled investments in housing for its employees, its sprawling campus, and all the money it’s throwing at transporting its employees to MV (from buses to boats). Nothing shifts a town into high gear like having a multibillion dollar company in its midst. Think Seattle when Microsoft came to town or Palo Alto in the heyday of Hewlett-Packard.
Observers with a longer lens might remember that in the first dot-com boom in the 1990s, companies like Sun Microsystems saw the glint of gold in the surrounding hills and came running — to the precise location where Google now has its mega-campus.
But OZY’s got more love for the up-and-comers, like our neighbors 500 Startups, and the increasing number of companies who are hitting $1 billion valuations well before their IPOs. After all, the incubators in Mountain View have a lot in common with the semiconductor labs that exploded here in the 1950s and launched an entire industry. The main difference? This time MV isn’t just booming in biotech or software. It’s got its fingers in all the pots.
And that doesn’t even take into account companies that are in the process of gathering their first rounds of funding. In Q1 and Q2 of 2013 alone, OZY’s stomping ground pulled in three times the amount of early-stage money per capita than our San Franciscan neighbors. How’s that for a town that started as nothing more than a stagecoach stop between SF and San Jose?
Mountain View has come a long way, baby, to say the least, and its story is far from over. This particular underdog — named for its view of the Santa Cruz Mountains — is revving up to scale the heights.
Don’t say we didn’t tell you.