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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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