I love San Francisco. I’ve called the Bay Area home for more than a decade, and I believe it’s a truly special place. This place has been uniquely friendly to startups since the 1980s, but it’s likely not the place I’ll build my next company. It simply costs too much (clearly, prices in San Francisco have ramifications far beyond tech and startups, but that’s not the focus of this piece). Costs are raising alarm bells

The course we’re on is to become an executive city, home to the headquarters of large tech companies but generally absent even high-skilled practitioners. New companies will build their talent bases elsewhere, even if a few execs remain in the Bay Area to access funders and partners. Many people will contend that this isn’t the right path for the city, but absent big changes or shifts in startup cost structures, it appears to be the path we’re on. In a remarkably short period of time, it seems that our collective mentality has shifted from “it’s a risk to start a company outside the Bay Area” to “it’s financially irresponsible to build a startup here.”

There’s no way of knowing what a post-SF startup ecosystem looks like. Perhaps we discover that no other location can build the critical mass of capital, talent and culture enjoyed by the Bay Area, resulting in fewer, better-funded companies in existing hubs. Perhaps we embrace a distributed model, with startup headquarters in existing hubs but most talent located elsewhere.

But let’s assume for a second that a new hub — or a few — are able to emerge. Let’s assume that our SF issues don’t go away anytime soon, and startups migrate wholesale to places like Toronto, Denver or Austin. Any big industry transition will have its challenges, but there are reasons to believe that the startup ecosystem will be better off post-Silicon Valley:

Startups will be able to push through hard times

For the last decade or so, the “lean startup” methodology has encouraged new companies to pay what it takes for top talent, then get their products out the door, like, yesterday. You have a few months to run a bunch of quick tests, and if you can’t prove success, you die.

The problem is a version of the mythical person-month: even with a solid group of super-talented people, sometimes it takes more than a few iterations of a product to find something truly valuable. Stewart Butterfield raised $17 million to work on a failed video game for nearly four years before pivoting into Slack. A less credentialed CEO would have raised less and probably failed. In 2004, a small team in Ottawa built a site to sell snowboards online. They jammed on that concept for over two years, before discovering that the real value was in the shopping cart technology they’d built. The result is Shopify, now worth over $16 billion.

We have examples of startups that almost failed and didn’t, but what we don’t know is how many were close to a breakthrough when they shut their doors. You could argue that there are many more companies that are over-funded and should probably die, and that’s true. But either way, exorbitant SF rents are a bad destination for venture capital dollars. Startups with most of their talent in lower-cost areas will run leaner but may still be able to raise similar amounts, making them able to push through the inevitable challenges on the road to product/market fit. We may see startups succeed and grow in Denver, Austin or Salt Lake City that would have died in their infancy in the Bay Area.

Suffocating margin pressure will be released

The past 15 years — the social media, user-generated content and app era — has seen the creation of some largest-scale, highest-margin businesses in history. That wave has largely subsided, and it’s unclear whether future waves will be capable of the same effect. As startups attack areas like financial services, medical devices and mobility, capital requirements and gross margins may not look as attractive compared to software companies grown in the 2000s and 2010s. The problem is that new startups are competing with tech giants for talent, but may never have the margins to support those salaries.

The Google money-making machine simply sells pixels on a screen, so its margins allow it to pay whatever it takes for talent, either to to improve its core products or explore other spaces. It can outbid anyone for the best people in any area it’s interested in, creating a startup “kill zone” for companies whose businesses venture too close or otherwise look attractive.

Today’s software giants are globally unique businesses, different even than other tech companies: Apple, making physical products, has gross margins in the high 30s. Meanwhile, Alphabet’s margin is 58%, even after all its investments in AI, self-driving cars and other moonshots. Salesforce more than doubles Apple at 74%, and Facebook clocks in at a whopping 83%. Let me say that again: more than four-fifths of FB’s forty billion dollars in annual revenue can go to salaries, gym subsidies or in-office massages. These are companies whose margins and scale may never be repeated, but who are setting the prices for Bay Area talent. Unless startups have a real shot at building an ultra-high margin business, they’re putting needless pressure on themselves by playing that game. A distributed startup ecosystem will help relieve that pressure.

The experience bubble will be broken

One of the most profound benefits of a startup diaspora from the Bay Area will be the problems that companies choose to work on. Many entrepreneurs gravitate towards problems that we ourselves experience. I am an entrepreneur living in San Francisco, and my problems are generally experienced by other entrepreneurs living in San Francisco. Therefore, we have VC-backed companies chasing our most trivial inconveniences, while huge issues experienced by the rest of the country are left untouched. A more distributed startup ecosystem might help.

The degree of this shift will depend on how wide the startup ecosystem spreads: if most startup activity remains in SF/NYC/LA/Seattle, the change will be minimal. But if we see the likes of Denver, Salt Lake City or Raleigh start to rise, I hope that the types of companies being started will also change. A breakout winner in one of those cities will help cement its future.