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Why San Francisco today is like every city tomorrow

San Francisco residents are used as lab rats in Silicon Valley's many new high-tech services

September 28, 2013 07:00 AM ET

Computerworld - Silicon Valley Internet startups aren't always in the bits business. Sometimes there are atoms involved. Some of the most innovative new web- or mobile-based services have a physical aspect involving real-world goods, delivery or rental.

Silicon Valley itself is mostly made up of suburban towns sandwiched between two medium-size cities -- San Francisco to the north and San Jose to the south.

When a certain kind of startup needs to test its idea in the real world, both to further develop the concept and also to impress its Silicon Valley investors, the test usually rolls out first in San Francisco, and often one or two other major U.S. cities as well. As a result of this concentrated range of experimental services, San Francisco residents live in an alternate universe where they can go online and do things that most of us can't do -- yet.

All of the companies that test their services intend to roll out nationally or internationally, and many of them do. For example, TaskRabbit is a former startup that lets you hire people to do odd jobs and run errands for you. It started in Boston and ran for two years on limited venture funding. But two years later, the founders moved the operation to Silicon Valley and launched the service in San Francisco. They got additional funding, and now they're in every major city in the country.

That's an ideal scenario for all of the services I'm going to tell you about below.

But sometimes experiments fail. A heavily venture-backed company called Artify.it, billed as the "Netflix for art," tested in San Francisco the concept of renting works of art. The idea was -- why buy art, then be stuck with the same pieces. By renting, you could switch it once in a while. Well, the concept failed and the company folded in June.

San Francisco is the make-or-break city for a large number of experimental services.

Why San Francisco?

San Francisco is an ideal location for testing startup concepts for several reasons. First, it's close to (or part of) Silicon Valley -- just a 36-minute Tesla drive to Sand Hill Road in Palo Alto, where many of the Valley's venture capital firms are headquartered.

Second, San Francisco is densely packed, like Manhattan is. San Jose has a larger population than San Francisco, but it's more spread out like Los Angeles.

Third, San Francisco has a high concentration of upwardly mobile, young urban professionals, the kind of people who are not set in their ways and have disposable income.

Here's a short list of some of the cool new startups that, while in San Francisco today, could be coming to your city tomorrow.

Outbox

Outbox exists to turn your paper snail-mail into email. Here's the crazy part: They actually come to your house and take the paper mail that's in your home mailbox three times a week. Then they scan it and put it online. Why? Because once it's digital, you can search, store and organize it into folders. You can add your mail to a "to-do list" item, so you don't forget to take action on it. You also can get your mail while traveling. Outbox removes your junk mail and recycles it. If you want to get some paper mail, say, wedding invitations or holiday cards, they'll deliver those back to you in a box once a week. The basic service costs $5 a month. Outbox is based in Austin, Texas, and the service is available in Austin and San Francisco only, with more cities to be added later.

InstaCart

Instacart is a low-cost grocery-delivery service that has been available for several months in San Francisco and rolled out only a few weeks ago in Chicago. Instead of having big trucks making the rounds, Instacart farms out the shopping to "Personal Shoppers," who drive in their own cars to Safeway, Whole Foods, Costco or Dominick's grocery stores, buy from your electronic shopping list and deliver it to your house. The basic rate is $3.99 per delivery, but it can go up from there, depending on the order and the store. Instacart intends to roll out to more cities soon.



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