4 ms·

One thing that seems strange to me as an outsider is how all your tech startups and companies are clustering in areas with very high cost of living. I don't kno

One thing that seems strange to me as an outsider is how all your tech startups and companies are clustering in areas with very high cost of living. I don't know much about the US since I'm European but I do keep track of stuff around here on HN. I can understand it from employee point of view - large city - big job market and naturally those places are also more desirable. But if you're going down the startup route you're already going to sacrifice things for a potentially big payout down the road (assuming you have stocks - right ?) which is why I would have no problem relocating to a cheaper/less desirable area in order to lower the operational costs and increase the chance of success. Maybe I'm thinking about it wrong but unless you are doing B2B or direct sales location shouldn't matter more than having funds to stay operational/becoming profitable ? One explanation I can come up with is that if you are looking for investors instead of profitability it makes sense to be closer to them - but at the same time that kind of feels like perverting incentives. I was under the impression that the costs differences can be huge (2x) between regions - maybe that's not the case ?

shostack 11y ago
Access to employees and access to investors is a big part of it for sure. Depending on the nature of the business, it might also be access to prospective customers, particularly for b2b tech plays.
- moonchrome 11y ago
  Do startups commonly have traditional employees in US ? As in people working for a paycheck and no shares ? I feel like if I was going to work in a startup I would have no problem moving for a couple of years and taking less money in exchange for shares in the company (ofc. if I thought the company was going somewhere) From what I can see* locally it's usually founders with shares in company and there's also a growing number of investors/incubators in Eastern Europe (where the cost of doing business/living is considerably lower than Western Europe). Perhaps it's because Europe is more separated legally and governments also play a big role (trying to imitate US model) so investors are "forced" to go to multiple places instead of bringing everyone to them. *I'm very superficially familiar with startup scene, I'm considering getting in so I'm trying to figure things out :)

shostack 11y ago

Access to employees and access to investors is a big part of it for sure. Depending on the nature of the business, it might also be access to prospective customers, particularly for b2b tech plays.

moonchrome 11y ago
Do startups commonly have traditional employees in US ? As in people working for a paycheck and no shares ? I feel like if I was going to work in a startup I would have no problem moving for a couple of years and taking less money in exchange for shares in the company (ofc. if I thought the company was going somewhere) From what I can see* locally it's usually founders with shares in company and there's also a growing number of investors/incubators in Eastern Europe (where the cost of doing business/living is considerably lower than Western Europe). Perhaps it's because Europe is more separated legally and governments also play a big role (trying to imitate US model) so investors are "forced" to go to multiple places instead of bringing everyone to them. *I'm very superficially familiar with startup scene, I'm considering getting in so I'm trying to figure things out :)