Here's why some start-ups are leaving Silicon Valley

Why are startups leaving Silicon Valley?
Why are startups leaving Silicon Valley?

Salvador Dauvergen, a serial entrepreneur from California, bustled around a co-working space in Bali, Indonesia on a Monday morning greeting familiar faces. He was wearing a t-shirt, shorts and flip flops — or as he referred to it, the Bali business suit.

His surrounding is casual, even by entrepreneurial standards, with open-air work spaces overlooking a rice field, hammocks and a room for air conditioning. Outside of the office is a street — filled with inexpensive massage places and fresh smoothie shops — which leads to the Monkey Forest.

Burnt out by Silicon Valley's lifestyle, Dauvergen recently relocated to Bali to begin his next start-up in the food industry, about which he's hesitant to offer specifics since he has yet to launch.

"I have the same work day in terms of hours, but my stress level is incredibly lower compared to back home," he said. "I talk to a lot of my friends in the start-up world and tell them this is the new frontier."

Dauvergen said he thinks there is "app fatigue" in the U.S., which is one of many reasons he set his eyes on Southeast Asia for his next venture. While his long-term vision is tapping into Indonesia's vast 257 million population increasingly coming online, he's also thinking about the new lifestyle.

"Getting to a meeting from Oakland to downtown San Francisco is a lot of stress," he said. "Everything else there is so much more complex and here life is easier."

"The cost of living, deployment, marketing is substantially lower," he said of Bali. Similar to when he was in California, he still outsources to contractors outside the U.S., but being in Indonesia has an added benefit: He's now on a similar timezone with many of his developers in Asian countries, he said.

It's not just remote islands to which entrepreneurs are flocking.

After receiving doctorates from Stanford, MQ Wang and Tony Zhang formed tech start-up Zero Zero Robotics, and based the company in Beijing. The company's flagship product, drone camera HoverCam, is marketed and sold around the world and recently just announced a partnership to sell in Apple stores. While the start-up has an office in Silicon Valley, its headquarters are in Beijing, with more offices in Shenzhen and Hangzhou.

A few years ago, Wang and Zhang likely would have stayed in Silicon Valley — but not today.

Global venture funding was down 23 percent last year, but fell 28 percent in Silicon Valley, according to a report by PwC and CB Insights/MoneyTree.

Meanwhile, the share of unicorns — companies valued at more than $1 billion — located outside the U.S. has gone from 30 percent in 2013 to 58 percent last year.

Still, Silicon Valley obviously maintains an appeal for many would-be entrepreneurs, as it offers deep funding and talent reservoirs that are largely unrivaled. But as people now have unprecedented access to technology and resources from just about anywhere in the globe, that preeminence may be increasingly less important.