- At an event in San Francisco Wednesday, Reddit cofounder and venture investor Alexis Ohanian told attendees that “no one in their right mind” would build a company in San Francisco or the Bay Area.
- Ohanian founded Initialized Capital, his venture firm, knowing he had to travel often for his business and personal lives, so he created an environment ideal for remote employees.
- He cited the high costs of housing and doing business in the Bay Area as partial reasons why building a company there is challenging, but he also thinks younger workers are more inclined to work and start companies remotely.
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The sun is setting on Silicon Valley.
That was Reddit cofounder and venture investor Alex Ohanian’s argument at an event on hustle culture and work-life balance in San Francisco on Wednesday. He cited the area’s skyrocketing costs of living and doing business as key reasons why he is looking elsewhere as an investor.
“I will be shocked if I have anyone coming to our office anymore that is adamant about building a team in San Francisco or the Bay Area,” Ohanian said. “It makes me sad because San Francisco is great but no one in their right mind will build their company entirely here, and that’s just how you have to think now.”
Read More: Reddit cofounder turned investor Alexis Ohanian opens up about the myth of work-life balance: founders that think they don’t need coaching take ‘amazing leap of arrogance’
Part of the push away from San Francisco, Ohanian said, was the mentality that pushes founders to work long hours because it feels “right.” Even when a startup has matured beyond the two-guys-in-a-living-room model, founders set the example for the entire workforce and can’t rely on brute forcing their success.
“In the Valley we are mired in the ‘butts in seats’ mentality,” Ohanian said. “But companies that grow and are entirely decentralized, they have the strongest company culture. They have to. They overthink company culture because it’s core to their survival.”
Ohanian said he built Initialized Capital, his venture firm, knowing he would be traveling often for business and personal reasons, and so has created an environment ideal for remote employees. He said he rarely spends more than four months in one location, and the firm’s few employees are scattered across the United States. He claims this opens the firm up to new solutions and founders that would otherwise get passed over in red-hot Silicon Valley.
“Initialized was built to operate as a decentralized company, and I know it makes us a better firm because I’m not just in Silicon Valley problems and Silicon Valley solutions,” Ohanian said.
The 36-year-old credited Generation Z with leading the charge on remote working and thinks more companies will be forced to accommodate remote workers as younger employees begin joining the corporate workforce.
“One of the best parts of this new generation, Gen Z and Millennials to a certain extent, is that they are optimizing around experiential living,” Ohanian said. “Our parents were really into that white picket fence thing and we just aren’t.”
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