Demographics in the Valley have grown younger, and the focus of the industry has shifted from chips to Web- and mobile-focused businesses. Plenty of companies are taking advantage.
Twitter creator Jack Dorsey's start-up, Square, chose San Francisco over New York because it's where many of the best designers and engineers live, he says. Square's workforce has tripled, to 400 people, from a year ago, and a considerable portion are engineers and designers.
Cloud-software company EVault, a division of Seagate Technology , relocated 100 employees from the East Bay and South Bay to a sparkling new headquarters near the Moscone Center this spring. It hopes to double in size over the next year.
"Logistically, we wanted everyone to work under one roof," EVault CEO Terry Cunningham says. "Public transportation was easier, and there are obvious benefits being in a major city. So many cool venues."
Moshi, which makes accessories and electronics for mobile devices, hopes to move in early October from Sunnyvale. It employs about 100 worldwide, 15 in the U.S. It intends to more than double its domestic workforce here in the next six months.
"Being close to a cluster of R&D facilities made sense (in the South Bay) when you needed lots of engineers," says Jon Lin, executive director for Moshi. "That's no longer the case, with so many designers, and social-media and mobile companies, in S.F."
It took tiny online shopping service Reclip. It only a few months in Mountain View to decide to head 30 miles up Highway 101. CEO Cheryl Yeoh, 29, said the company's young, single staff was drawn to the city's lifestyle and culture.
The Peninsula may be home to megaplexes such as Facebook and Google, but for smaller, nimble companies such as HYFN, San Francisco is the place to be, says HYFN CEO Morgan Harris.
The 40-person Los Angeles company, which develops mobile and social apps, is adding 10 in the city rather than in the Peninsula.
Flush with $7 million in venture funding, Dotloop opened an office here with plans to hire 15 to 20 people.
The real estate software firm is based in Cincinnati. San Francisco "is the obvious hotbed for technology companies, and it is an attractive city for younger, talented people," CEO Austin Allison, 27, says.
Foreign-based tech start-ups that have recently established operations in the U.S. will consider only San Francisco, because of its European flavor, the allure of living in a major city, its proximity to so much talent and investors, and its proximity to Silicon Valley.
"If you're a coder, you go to San Francisco. It's just like moving to Los Angeles if you're an actress," says Henrik Lenberg, 30, vice president of platform at SoundCloud, which is based in Berlin but opened its first U.S. office here in September.