Why the second hottest private business in Silicon Valley moved to Palo Alto instead of San Francisco

Mixbook CEO Andrew Laffoon and co-founder Aryk Grosz say moving from San Jose to Palo Alto, and not up to San Francisco, was key to their company's 550 percent growth between 2010 and 2012. Mixbook was ranked the second fastest growing private company in Silicon Valley by the Silicon Valley Business Journal this year.

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Cromwell Schubarth: Senior Technology Reporter- Silicon Valley Business Journal; Email | Twitter | Google+

Mixbook founders Andrew Laffoon and Aryk Grosz say they couldn't have become the second fastest growing company in Silicon Valley if they hadn't moved to Palo Alto early in 2012.

Their online photobook business' revenue soared about 550 percent to almost $25 million between 2010 and 2102. That was good enough to get Mixbook ranked No. 2 in the Business Journal's annual rundown of the top private companies in the region.

At a time when many online companies followed Twitter and Pinterest to San Francisco, the Berkeley grads rejected the city by the bay last year. Instead they opted for the leafier neighborhoods near Stanford when it came time to move from their first offices in San Jose.

"San Francisco is a bit over-rated," Laffoon told me when I interviewed him for the profile I wrote for this week's Silicon Valley Business Journal. "Most of our employees are based in the South Bay, anyways. It would have been a really hard slog to move it up to the city."

There wasn't much thought to expanding in San Jose, either, where Mixbook was bootstrapped while Laffoon's wife attended grad school there.
It boiled down to a people problem, according to Grosz, who is the technology chief at Mixbook.
"Hiring is a lot more difficult than I ever thought it was going to be, especially in Silicon Valley and especially being in certain locations," he said. "Depending on what part of the Valley you are in, it changes the demographics regarding the kinds of engineers and talent you can attract, regardless of how your company is doing."
There simply weren't enough people available in San Jose with the cutting edge software skills Mixbook needed, he said, adding that shifting operations to Palo Alto made a huge difference