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Where have all the Start-ups gone?

Original post made by Palo Alto Forced-out, Downtown North, on Sep 13, 2016

The city council election this fall will be decided on what voters embrace as the future vision for Palo Alto. One issue that has come to the forefront is the debate on downtown zoning. Currently two large companies are out of compliance with Palo Alto’s current downtown zoning. Recently the mayor was quoted as saying he wants to loosen the ban on hardware and software development companies downtown to allow start-ups but wants to continue to restrict big businesses from locating downtown.


This January 2016 CNBC news report by Ari Levy and Josh Lipton explains why this is critical in maintaining a start-up culture in Palo Alto. 


“The CIA-backed start-up that's taking over Palo Alto”, CNBC January 2016, see Web Link


The article quotes numerous small businesses including start-ups that have been priced out of downtown. The downtown ground floor is zoned for retail creating a façade that belies the transformation from small start-up and small business to big business in our downtown business community.


“Jeff Clavier, a prominent venture investor in early-stage start-ups, moved his main office from Palo Alto to San Francisco because of a lack of investment opportunities. His last Palo Alto-based start-up, marketing software developer Kahuna, left Palo Alto in late 2015 for a 42,000-square-foot space in Redwood City.

"Start-ups cannot compete against Palantir and sign super long leases at top dollar," said Clavier, founder of SoftTech VC. "Now, you just have a bunch of Palantirians hanging out in P.A. There's nothing wrong with that except it once had a vibrant start-up community and that's gone."

Comments (4)

5 people like this
Posted by Lemon Squeezey
a resident of Midtown
on Sep 14, 2016 at 6:14 pm

Lemon Squeezey is a registered user.

Easy: The venture capital has dried up. Some of it has leftbSand Hill Rd; some of it has left Sillycon Valley. Some has even left California and gone to Austin or North Carolina

4 people like this
Posted by Wow
a resident of Old Palo Alto
on Sep 14, 2016 at 8:06 pm

I wonder if we still have start-ups downtown. It sounds like they have been squeezed out. The CNBC news report linked above gives quite a few anecdotal examples.

Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Sep 15, 2016 at 9:35 pm

"Start-ups cannot compete against Palantir and sign super long leases at top dollar," said Clavier"

So why isn't Clavier outbidding the likes of Palantir for office space? Doesn't he believe in his startups anymore?

Is Silicon Valley dead at last?

2 people like this
Posted by Todd
a resident of Another Palo Alto neighborhood
on Sep 15, 2016 at 10:04 pm

Apparently the startups are "supposed" to leave once they reach a certain size. Unfortunately they don't always tailor their businesses plans to visions certain council members have...

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