Some Silicon Valley venture capitalists who recently took a bus tour of Midwestern cities, say flattering things about Detroit, notes Forbes magazine contributor Peter Cohan:
San Francisco-based GGV Capital ($3.8 billion in capital) investor Robin Li commented that the Madison building in downtown Detroit, now-refurbished as a tech incubator, was "nicer than San Francisco." . . .
Cyan Banister, a partner at Founders Fund (the $3 billion fund started by Peter Thiel), was among those bus passengers using Zillow to identify how much bigger their houses would be if he lived in Detroit or South Bend. . . . "If it weren't for my kids, I'd totally move. This could be a really powerful ecosystem."
But don't be fooled, Cohan says. Silicon Valley has no intention of shifting to Detroit to get relief from way-too expensive homes and congested traffic there.
Cohan, an author, consultant and investor in Marlborough, Mass., has some cred. His bio says he ditched corporate America and started analyzing tech stocks as a guest on CNBC in 1998.
He lists four reasons why Silicon Valley, not Detroit, will remain a tech investment center:
- The money is there in Silicon Valley: Most of the nation's venture capital is invested in San Francisco, New York and Silicon Valley.
- The talent is there: A July 2017 CBRE study found that the San Francisco Bay area remains the country's leading location for technology jobs.
- San Francisco is slowly adapting: There is tiny evidence that San Francisco is building housing for people who make less than $100,000.
- People have been saying Silicon Valley is over since the 1970s. "People have been saying Silicon Valley is too expensive and too crowded since the 1970s," Stanford historian Leslie Berlin tells Cohan. She's skeptical that people are over Silicon Valley.