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Illustration: Sarah Grillo/Axios

In launching their next startups, a growing number of founders are choosing to forego the San Francisco Bay Area and its sky-high rents and intense competition for engineering talent. Instead, they are setting up shop in places like Austin, Seattle and even New Mexico.

Why it matters: As technology becomes a growing part of the economy, Silicon Valley can't — and probably shouldn't be — home to most new startups.

When Jeff Haynie started has last company, Appcelerator, he moved from Atlanta to the Bay Area because he felt he needed to be close to other startups and those who fund them. But, when he was starting his latest venture, Pinpoint, he decided to leave the Bay Area and set up shop in Austin, Texas.

The bottom line: Haynie is not alone.

While specific numbers are hard to come by, Bloomberg Beta partner Roy Bahat said he is definitely seeing more entrepreneurs with Bay Area ties setting up shop elsewhere. He highlighted the trend in a series of tweets back in February.

A tweet previously embedded here has been deleted or was tweeted from an account that has been suspended or deleted.

"You’ve got to do your tour of duty in the Bay Area but once you have, you have your network and people are willing to write you a check," says Mark Johnson, former CEO of Zite, whose current startup, Descartes Labs, is based in Santa Fe, New Mexico.

Our thought bubble: This kind of story is often framed as a tug of war between Silicon Valley and the rest of the country. But Silicon Valley isn't going any where, and for every startup or founder who leaves the Bay Area, someone else graduates from Stanford or wants to move here. This is about tech becoming a bigger part of the overall economy.

Where to go: As for which cities will benefit, Bahat said to look at where Google, Apple and others are setting up shop.

  • "If you want to see where founders of the future will go, look at where today's successful companies are opening new offices," he said. "Every hire in one of those offices could be tomorrow's extraordinary founder."
  • That means cities like Seattle, Portland and Austin that already have their share of tech growth — but also emerging tech hubs like Atlanta, Northern Virginia and Indianapolis.

Driving the trend: There are a variety of reasons why those founders leaving the Bay Area are doing so. For some, it's the cost of labor and housing, while for others it's for more personal reasons. For Johnson, it made sense to be in New Mexico, because that's where the technology the company is built on was developed.

  • Descartes Labs uses satellite imagery to find patterns using an approach developed at Los Alamos National Laboratories. Johnson worried about hiring, but says that he finds lots of good talent — "not the people Google would have found, but the people Google should have found," he said.

Yes, but: While there are plenty of people with technical skills, one thing there is a lack of outside the Bay Area are the people who really know how to scale a fast-growing tech company.Johnson, who is in the midst of spending a month back in San Francisco, said he always imagined the company would eventually move back to Silicon Valley, but that being in New Mexico is now a core part of the company's identity.

  • While he says he needs to come back every now and then to do networking, he notes that all those conferences and parties and coffee meetings weren't nearly as essential as he once thought.
  • "Having the space for me to think, contemplate, and focus on work is fantastic," he said.

Go deeper

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The potential GOAT of chess faces intriguing challenger

Illustration: Sarah Grillo/Axios

The World Chess Championship between Norway's Magnus Carlsen and Russia's Ian Nepomniachtchi began on Friday, 1,094 days after Carlsen won his fourth consecutive title.

Why it matters: During the long, COVID-fueled layoff, chess entered a new era, and with the championship finally here, the age-old game is ready for its close-up.

Department of Interior proposes raising cost of drilling on public lands

A horizontal drilling rig and a pump jack sit on federal land in Lea County, New Mexico. Photo: Callaghan O'Hare/Bloomberg via Getty Images

Oil and gas companies should pay more to drill on federal lands and waters, the Department of the Interior argued in a report released Friday, saying that the current rates were "outdated."

Driving the news: The Department of Interior report said that the federal government's oil and gas leasing and permitting program "fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers."

10 hours ago - Health

U.S. to restrict air travel from 8 countries over new COVID variant concerns

A COVID-19 vaccine is administered. Photo by Joe Raedle/Getty Images

The U.S. will impose new air travel restrictions in response to the Omicron variant, a new COVID strain first detected in South Africa, President Biden announced Friday.

The big picture: Air travel from South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique and Malawi will be restricted starting on Monday.