SANTA CLARA, Calif.
— Silicon Valley is a region of Silicon Valley, and the tech world is one big neighborhood.
That’s why a few months ago, the world’s largest tech hub announced plans to expand its headquarters, a move that could help it stay ahead of a surging tech bubble and keep its headquarters in a major tech hub.
But the news of the move is a blow to the region’s most promising tech start-ups.
Sensata, the San Francisco-based start-up that was once a darling of Silicon Alley, has seen its stock price slide nearly 30% in the past year, and many analysts are questioning whether it can sustain its momentum.
A slew of tech companies have been moving out of the area, from Airbnb to Uber to Microsoft, and Sensata is one of them.
The company has been hit hard by the tech bubble, which is fueling a surge in consumer spending, particularly in the Bay Area.
In the last three months, the company lost about $100 million, according to data from FactSet, a company that tracks stock price movements.
The region’s best-known startup, a technology startup called Bitmessage, has also seen its market value drop nearly 30%.
In recent months, Sensata’s board has begun to address some of the problems the company was facing.
The firm has raised $2.4 million from several investors, including a private equity firm led by a former Uber executive.
In an interview, CEO John Lefkowitz said that Sensata had raised about $1.6 million so far and that he had also met with top executives at Uber.
It’s an ambitious turnaround plan, which he said was the result of the company’s “challenging growth story.”
But Lefksowitz, who had been in his job for about two years, said he expected to miss his full six-month contract, which expires next year.
“I don’t think I’m going to be able to do this for six months,” Lefkosow said in an interview.
He said that while the company had seen some of its revenue fall in the last two quarters, he didn’t think the company would suffer as much as other Silicon Valley startups, like Airbnb, which are seeing their stock prices tumble.
But he acknowledged that Sensa has been struggling to stay competitive and said it’s important to be careful not to let the competition outrun the company.
“We have to be vigilant about it,” he said.
“And to be more focused, not less focused, on staying competitive, I think is a big challenge for us.”
It’s hard to predict how quickly other tech startups will adapt to the new environment, said Brian Levin, founder and chief executive of the investment firm TPG Capital.
But some of them have started to come around to the idea of the new tech economy and are working on new business models, he said in a recent interview.
Levin has invested in a number of startups including Dropbox, Airbnb, Uber, PayPal, and Amazon.
He noted that Sensation, which has raised more than $1 billion from investors, was one of the early pioneers in the new sector, and he sees its stock climbing as the company can compete with Silicon Valley giants.
But Levin said he’s not optimistic that the new market can sustain Silicon Valley’s current success.
“Sensata has a very large head start, and we’re seeing a lot of other startups do well,” he added.
The moves by Sensata and others are likely to fuel a new debate about the role of the Silicon Valley bubble in the broader economy.
Many economists say that tech is driving the economy and that there’s no doubt that the region has a strong competitive advantage.
But for some companies, the housing bubble has made their business models more attractive, making it harder to compete.
And while many of those companies are building products that are built on blockchain technology and the Internet of Things, Levin said that he’s concerned that other companies will start to build products on the technology that makes it possible for a new company to disrupt Silicon Valley.
“There’s a huge opportunity here for other start-offs that can’t afford to stay in Silicon Valley,” Levin said.
For example, a new startup that sells consumer-facing products like smartwatches could be competing with Sensata or Airbnb, but it’s difficult to say how that would work because the two tech companies are so similar.
Levin said there’s a lot that needs to be done to better prepare companies for the new world that is taking shape in Silicon Bay.
“It’s not going to happen overnight,” he warned.
“This is not going away.
It will take a lot longer for us to move out of this valley.”