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It has always been mindboggling to me that startups are still so all in on the Bay Area. Most problems mentioned in the article go away if/when you are willing to staff developers in an area that is not as ridiculous in terms of cost of living as the Bay area. According to StackExchange data, the 50th percentile pay for a Full Stack Developer with a Bachelors degree and 3 years experience (a profile that would seem reasonable for a startup hire) in the Bay area is $140k, whereas in the St Louis and Minneapolis it is $89k. Not sure why for many startups Bay area seems to be the only option. If they staffed their developers in a place like St Louis they'd be able to avoid the SF salaries and still pay in the 75th percentile for the market and the developers would have more purchasing power making $115k in the midwest or Raleigh than they do in the bay area making $145k.

Being a developer in St. Louis, the median developer that makes 85k here is not really the kind you’d find at a good Bay Area company. When you look for the good ones, they often have competing remote offers with salaries not that different from the bay: The biggest difference is that nobody gives real, useful, valuable RSUs the way FAANG does. Barring one of those jobs, the trade off is pretty appealing for developers.

The problem for a startup here is money and customers. There is some local money, but in practice, you will be raising from firms in SF or Boston. To do that well, you will be sending a founder on trips a high percentage of their time: Our CEO was out 50 percent of the time this year. It’s OK with three founders or a small team already, but the seed stage is very rough, especially for a solo founder.

There is also the matter of customers. If you are doing B2B for startups, or straight sales to developers, the market isn’t here. Consumer? Any physical bits are not going to grow the fastest here. Do you want to start selling to large masses of people with little time and loss of disposable income? Not the best test market. So you better be doing something that is better done from here. An agriculture startup, with farms across the river, for instance. Still, it will be rare for this to be your ideal location there.

Still, I wish for more startups here, but the negatives are very visible, and we have very few success stories that tell people it’s worth trying.

The Bay Area offers software engineers a career growth trajectory that other places simply don't.

That $140k number might be a reasonable 50th percentile for what a junior engineer would make at a startup in the Bay Area, but compensation can increase quite a bit after several years in the industry, especially for engineers who move to large companies which give stock compensation. They will far outpace the earnings growth of engineers elsewhere.

It's much easier to achieve that kind of career trajectory in places with high concentrations of tech companies, e.g. the Bay Area and Seattle.

That makes things look even better for St Louis and Minneapolis type places. Startups in BA can't even hire juniors for $140k while if they pay $100k in St Louis they will have people jumping at a chance.

Now I'm sure the BA people average better but somebody in the top 5% from St Louis is going to be pretty good.

Note: I'm from Auckland, New Zealand and $US 100k would be a very good salary.

Well, this assumes that the x %ile in smaller markets is interchangeable with the x %ile in the more expensive ones like SF, Seattle, NYC, Boston. But I know lots of people from cities like St. Louis who live in these much bigger tech cities because if you’re in the higher range in comp. for your years of experience, it’s just a much better deal being in the more expensive city. So I would guess that in these smaller cities, you will miss a lot of the top 10-20% developers

The cities I mentioned (St Louis, Minneapolis, Raleigh) and comparable cities like Austin/Columbus etc are not podunk small towns. They are all major metros that are host to big universities and local colleges and as such producing a large amount of talent. I don't disagree that many devs from these cities move on to bigger cities, but I'd wager that a large majority of college grads from universities in these cities stay there and work for local companies (and them staying there is not a reflection on their talent level but more about the ties to the local community).

Even if I concede to your assertion that a vast majority of the top 10-20% of developers from these cities leave for the big tech centers- most startups are not doing the kind of work that requires their tech team to be made up of "rockstar" top 10-20% developers.

From the perspective of a potential employee, taking a job in a lower paid part of the country seems like a bad idea. You would generally be giving up some quality of life and neither debt nor savings care about cost of living.

Although maybe it would work if some of the second tier cities agreed to pay off the debt and contribute to the savings of people that agree to work there.

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