Jon Xu and Bo Lu of FutureAdvisor
Jon Xu and Bo Lu of FutureAdvisor

A few days ago, I stumbled upon the news that Sequoia-backed FutureAdvisor raised $15.5 million in fresh funding. It looked to be a straightforward venture capital story.

And then something caught my eye: The dateline on the news release was listed as San Francisco.

That was a surprise to me since founders and former Microsoft managers Jon Xu and Bo Lu made a point of relocating their online financial services startup to Seattle after graduating from the Y Combinator program in the fall of 2010.

In a 2012 interview with GeekWire, Lu noted the strong technical talent in Seattle, and pointed out the lack of distractions in the Emerald City that allowed them to focus on customers.

“We have not been pulled into a bunch of … things which we would have easily been doing if we were down in the Valley,” Lu said at the time.

Now, the entrepreneurial duo have returned to San Francisco with nearly all of their 25 employees, a move that started in 2012 after completing a funding round. At this point, just one person is left in Seattle.

Lu tells GeekWire that there were clear advantages to being located in the “center of the global tech industry,” a place where he says startups are “in the water.”

Spencer Rascoff at the GeekWire Awards
Spencer Rascoff at the GeekWire Awards

Interestingly, Lu’s remarks come amid building pressure in Silicon Valley, with tensions growing between the tech elite and the middle class. Zillow CEO Spencer Rascoff discussed that issue in his keynote speech at the GeekWire Awards earlier this month, saying Seattle has “the right balance of mutants and mortals.”

“The Bay Area is so overrun with people like us that they have attracted the picketers’ pitchforks,” he said.

Similarly, just this week we reported on Napster co-founder Jordan Ritter moving from San Francisco to Seattle to create a new “innovation studio” because of what he sees as an unhealthy environment in Silicon Valley.

Bo Lu
Bo Lu

“I’ve been building up a feeling, as I’ve watched the changes in Silicon Valley over the past 14 years, that things aren’t actually going in that great of a direction for society, for people, for the middle class,” Ritter said. “I don’t feel like it is a healthy place to be.”

At the age of 30, Lu is a passionate, smart and thoughtful entrepreneur. He shared his analysis on FutureAdvisor’s move to San Francisco with GeekWire, letting us post his comments in full.

A lot of interesting stuff to chew on here. Let us know what you think in the comments.

Here are Lu’s full remarks:

I wish I could give you a short answer on why we moved FutureAdvisor to San Francisco. Your question actually made me reflect a little on why we came and what I’ve understood about this place. Bear with me (or come back to this when you have a cup of coffee :).

The Bay area is the undisputed center of the global tech industry. There are many other vibrant and necessary tech hubs, including Seattle, but the sheer number of investors, entrepreneurs and talent in and around San Francisco forms a milieu that’s very favorable to building a business, and very difficult to replicate elsewhere.

Startups are in the water here. Within the tech industry, there’s a halo effect to working in a startup. A startup employer is a plus. I’m not sure about all the reasons for this cultural advantage, but I suspect it’s because, in absolute numbers, startups succeed more often and more visibly here than elsewhere. This is less true of other cities, where tech is often dominated by midsize and large corporations, attracting and retaining employees who are comfortable in those corporate cultures.

All that creates a startup community, and that’s important, because being a founder is a lonely road. If you’re around other founders, it’s slightly less lonely. One of the reasons Jon and I wanted to return to the Bay was because we went through YCombinator. A really good incubator puts you in contact with people who’ve been through the exact same experience you have. So valuable information circulates more easily, and you also feel a sense of belonging. Founders are so busy that most don’t have time to grab coffee a lot, but I run into someone I know at another startup about once a week on public transport. Big, dense cities are all about those serendipitous, accidental meetings.

That startup community produces other advantages. As a founder, one of the hardest things to do is judge talent. But the more you build your network, the more likely you are to know someone who’s worked with someone who’s applying for a job. FutureAdvisor needs really talented people, since we just raised our series B and are growing like mad, but we need ways to gauge just how talented they are. Backdoor references are important, because self-reporting doesn’t always work.

I also get a sense, in San Francisco, that the only limit I face is the limit of my own ambition – that’s part of the culture here too. It’s a place that rewards talent, smarts, hard work and audacity in ways that other cities don’t. Disproportionately even. This is true for employees as much as for founders. The ideal employee is relatively autonomous, can use their own judgment to create new goals and beat expectations, and is willing to step up to the plate and accept more responsibility. I’m just there to help them execute.

Startups need founders and employees to be bigger than they thought they were, to accept more responsibility, to go after larger goals. That’s precisely the opposite of large corporations, which only reward workers with additional responsibility long after they’ve proven that their capacity outstrips their nominal job description.

A good metaphor for working at a startup is the bow wave. A bow wave is the wave that forms in front of a boat as it moves through the water. The wave is always slightly ahead of the boat, no matter how fast the boat goes. That’s how responsibility works at a startup: there’s always space to grow, people wear many hats, there’s room to invent something new within the company.

Unfortunately it’s still very much a who-do-you-know place as many of the best opportunities aren’t advertised. If other Seattleites (your readers) want someone to help them navigate down here, tell them I’m more than happy to help anyone who emails me. You can publish my email address:

The views expressed represent the opinion of the author and are not intended to reflect those of FutureAdvisor or serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities.  

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  • anagogue

    “This is less true of other cities, where tech is often dominated by midsize and large corporations, attracting and retaining employees who are comfortable in those corporate cultures.”

    This is why I scratch my head when Seattle is talked up as this innovative tech hub. The mentality here is predominately corporate and conformist. If you want competent cogs who are ‘comfortable in a corporate culture’, relocate to Seattle. With such a dearth of passion and creative thought, it’s no mystery to me why founders are lighting out for the Valley.

    • Weej

      Indeed, you are Costco, Microsoft, Boeing or Hipster. All three are pretty rigid cultures that don’t allow for deviation

      • NervousCat

        I noticed you left out Amazon.

  • blackylawless

    The operative and relevant question: Why would anyone in their right mind base their tech startup outside of the SF/SJ Bay Area?

    • blackylawless

      To be near their family? Anyway, at least Seattle is in the same time zone as the Bay Area and is a relatively short flight to the Bay Area.

      • Weej


        To be near the family should not be a criterion for where you locate your company, unless perhaps all the family is pressed into service.

        • blackylawless

          It is for most startups, as business opinion surveys amply show. The exception to this is the tech biz, where the reason to be in SValley (in the life support, sustenance, and enhancing system) is paramount.

    • Kary

      Based on another thread here, but be able to enforce non-compete agreements with your employees.

      • blackylawless

        Yup, putting Apple and Google illegal hiring policy machinations aside, a key advantage of the Calif-based tech industry is the free flow of expertise based on the free flow of labor.

        • Kary

          That’s an advantage for a company moving into the area, but for the established companies it would be a disadvantage. They want to hold on to their employees. So it cuts both ways. For the employees it’s just good.

          • blackylawless

            Not true, Kary. Innovation economics and just about ALL accounts of how the tech business works run counter to what you say, though your point does have superficial appeal. Recall Xerox PARC>Apple being the classic example, among many, of innovation diffusion, rather than the alternative being innovation incarceration. Bottom line is that the Apple and Google noncompetes were most epic failures of tech firm leadership at these firms. Had these firms tolerated the free flow of talent, smartphone innovation would not have plateaued, as recent experience suggests. In fact, innovation would have continued to be revolutionary.

          • Kary

            I’m not talking about what is better overall, either from an economic or creative perspective. I’m talking about what is better for the established company from a selfish perspective. The established company would prefer to have less competition for the services of their existing experienced employees.

          • blackylawless

            First off, I apologize for misreading.

            Well, that selfish perspective, you mention, in fact, is not in the interest of the “selfish” entity. This is counter-intuitive, but quite true. Hopefully Apple and Google have learned their lesson, not from the sanctions, but the dry-spell in innovation for the past two years or so, due to constraining the mobility of talent.

            To Google’s credit, and other large tech firms like SAP and IBM, corporate sponsored venture funds that these firms fund is an excellent approach to move along the development and realization phases of innovation, that would not otherwise see the light of day in a large hierarchical organization, which, though great with research and talent retention, may not realize the accelerated innovation it needs for growth. The feedback and benefits of innovation from such sponsored startups has shown to be more beneficial to those sponsors than mere retention and subsidy of talent to pursue innovation, merely because the large institutional features of large corporations stymie the flow and dynamism of ideas that may, in fact, be generated in those companies.

            Again, I apologize for reading your statement wrong. I just want to be damned sure that the thought that localized tyranny need not apply in a society (or tech corporations) that want(s) to move forward, and such is the case with the tech business.

          • Kary

            Well, judging by the new versions of Google Maps for Android that came out about a year ago and the changes to the web version of Google Maps, I may need to concede your point! ;-)

          • blackylawless

            Unfortunately, it’s become a race to the bottom cost game in the smart phone biz (service cost still high). I’m all for less expensive smartphone, but I’m not for the situation of this happening because of the lack of product innovation. Anyway, if the OnepluseOne phone is any sign, Apple and Google have only themselves to blame, but like I said, I don’t mind that there’s a price innovator (nondifferentiated product), if there’s still an innovative high end. Right now, it’s only a cost game.

  • NFLGuru

    in this day and age of the internet, it shouldn’t matter where the company is, you should be able to work remote from where you are comfortable. this is the only way to get talented employee. productivity is self-controlled and highly productive people needs no management, they are out to create and grab opportunities for themselves, thus, they should be allowed to work from anywhere and contribute greatly.

  • Kary

    The quote includes the phrase: “One of the reasons Jon and I wanted to return to the Bay was . . ..” Assuming that means they once lived there, that seemingly would be a reason they might move back. If I recall correctly, Boeing’s corporate headquarters for similar reasons.

    • blackylawless

      Boeing HQ move (WA to IL) was motivated by the desire to be closer to its customer’s decision makers (IL, TX, and MD-DC-VA) regardless of having to decouple from the centers of innovation (WA and CA), much to its own detriment.

      On the other hand, Future Advisor moved closer to both decision makers and innovators, all located in the SF/SJ Bay Area.

      • Kary

        I remember Boeing’s expressed reasons for the move, but they made little sense for an airplane company in the 21st Century. But looking further I can’t see that either Condit or Stonecipher had a prior connection to Chicago, so I might be thinking of another company.

        • blackylawless

          I thought it was a rotten move on their (Boeing HQ move) part. Even to be near customers, well, Seattle is that much closer to East-Asia (where the growth is). O’Hare is the flagship United Airlines hub: so what? If their emphasis was the defense biz, why stop in Chicago, why not move the HQ to northern VA. Maybe they wanted to get closer to DC, but not make it so obvious, so they had the United Airlines excuse.

          Anyway, you’re so right; it made little sense (move of HQ from Seattle to Chicago).

  • Shane Mac

    It’s called Sequoia money. If you raise from the big dogs in SF, you bet they put a lot of pressure on you being there if you want their money. When you want the best VCs, you sacrifice on the things that you can change.

  • LendingRobot

    Sigh… a loss for Seattle and its FinTech industry. Finance is puny, here.

  • some guy

    In a thread about starting and growing a company, there’s a discussion of…wait for it..Boeing. Could this be any more obvious?

  • balls187

    I’d love to see data comparing startups who started in Seattle and fled to the Bay Area and see how well they fared post relocation.

  • BBaekDDudeSSan

    Two Vietnamese guys.

  • Coco

    Bo Lu is handsome…

  • NervousCat

    The best TV show on tech industry originates from Pier 3 in San Francisco – Bloomberg West.

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