What the death of coffee shops tells us about Silicon Valley
The tech community needs physical places to meet, program, pitch, make deals and brainstorm
The Creamery never had particularly good coffee. What it did have was a perfect location at one of the technology industry’s most valuable intersections. The ramshackle café was in the start-up friendly SoMa district of San Francisco, across the street from the Caltrain station that ran commuters all the way down to San Jose at the southernmost tip of Silicon Valley.
That made it a favourite spot for venture capitalists visiting from Sand Hill Road who did not wish to waste precious time going too far into Soma to meet prospective investors. Founded in 2008, the café soon became a San Francisco institution, even as hipper coffee chains, such as Philz, Blue Bottle and Sightglass, expanded across the city.
The Creamery brought a serendipity to offline social networking that no app has ever matched. But no more: last month, the Creamery closed for good.
Many hospitality businesses across the world have fallen victim to the pandemic. In the UK, for instance, sandwich chain Pret A Manger is closing 30 branches. But Silicon Valley’s coffee shops are more than just caffeine stops — they are venues for programming, pitching, dealmaking and brainstorming.
That these conversations could be so easily overheard seemed strange to me when I first moved there, and it can be irritating for residents who don’t work in tech to be constantly surrounded by a nerdy hubbub. For me at least, over the years, it became a useful form of ambient awareness of the industry’s latest obsessions.
It is especially difficult to watch independent San Francisco outfits such as the Creamery disappear when there is so much money surrounding them. Red Rock Coffee in Mountain View is another Silicon Valley entrepreneur hang-out, as well as playing host to weekly open mic nights and the Knit Wit knitting club.
The founders of WhatsApp worked from there in the chat app’s early years; I bumped into them at the same low-key coffee bar soon after they sold the company to Facebook for $19bn. In July, Red Rock said it would close if it could not raise $300,000.
Mountain View is home to the headquarters of Google, LinkedIn and Silicon Valley’s pre-eminent accelerator programme Y Combinator, as well as the innovators of previous decades such as Silicon Graphics and General Magic. Family homes there typically sell for more than $2m. Yet after a month and a half on GoFundMe, at the time of writing Red Rock was still $200,000 short of its target.
If the tech community is letting hubs such as the Creamery and Red Rock die, maybe VCs just want fancier coffee these days. But I fear a deeper problem may be emerging.
Silicon Valley thrust social media and video conferencing on an unsuspecting world and in the past six months we have never been more grateful. Yet the cradle of the internet has always thrived on physical networking. Nowhere has been able to match the Bay Area’s density of talent, capital and ambition.
Now, the opportunities for serendipity — so vital for nourishing the community — seem to be diminishing, in no small part due to the rapid shift to remote working that the tech industry has embraced: Facebook, Twitter and others have all said they will allow people to work from anywhere after the pandemic recedes.
Talk of a mass exodus from San Francisco feels overdone. The city’s overheated housing market could see rents plunge 25 per cent and still feel expensive. Yet moves towards long-term remote working point to a less romantic future than upping sticks to Lake Tahoe: techies stuck in their tiny apartments, staring at Zoom all day simply to avoid the two-hour commute.
If tech staff do become more widely distributed, that would only reflect where most of the industry’s best ideas are coming from these days. Some of the most influential tech companies today are not based in the Valley: TikTok is Chinese, with its US base in Los Angeles. Shopify, the ecommerce platform that inspired several start-up ideas in the latest Y Combinator batch, is in Ottawa, Canada. The most important new internet markets — such as India, Indonesia and Nigeria — are far beyond the horizon of closeted US West Coasters.
Silicon Valley’s monopoly on ideas has been ebbing away for some time. Without the right physical places to meet unexpected people and exchange new notions, that trickle could become a flood. While Big Tech races to build an interconnected 3D virtual world, it must remember the value of IRL. Losing community hubs such as the Creamery risks undermining what has made the Valley so special for the past 50 years.