5 ms·

In my opinion, the problem is less about the founders and early employees as it is about the scaling. It’s a lot easier to convince young college graduates (as

In my opinion, the problem is less about the founders and early employees as it is about the scaling. It’s a lot easier to convince young college graduates (as older folks will want/need much more compensation when working for a risky startup) to join a company in hip, trendy metro areas than it is to convince them to work in, say, Wisconsin. I suspect that is why companies that intend to scale prefer to move to larger metro areas, even if that means going from a more rural part of a state to a bigger city like Madison. That being said, I have noticed quite a few specialist technical/consulting firms popping up all over my native Upstate New York. Those firms don’t need the armies of employees the way a Google or an Uber does, so I think that they can offer a higher pay to cost of living ratio and attract strong talent, kind of like Tom Cruise in The Firm, accepting a lower salary to work in Memphis but taking home more net income than if he had gone to New York.

snarf21 9y ago
Right and the thing about scaling is that it is not the money. It is the talent and the opportunities. It takes sustained effort to build over many years. It requires decent schools turning out decent talent that feed companies that hire more talent. Like the parent said, if there is only one game in town, that is high risk. You can't play get-a-raise ping pong if there aren't the companies to do so with. The other problem is at acquisition time. EVP of Google don't want to hire a team in BFE, Wisconsin or Lancaster, PA. They know those people aren't moving to SV and the EVP isn't taking two flights and an hour train/car to visit that remote office. Tech startups in these areas have to be more focused on revenue and not IPO and Acquihire.
throwawayjava 9y ago
It might help if mid-western companies paid equivalent salaries as on the coasts. There seems to be this attitude in the Midwest that lower CoL justifies lower salaries, as if there's no need to compensate for lower QoL with money. Given equal salary, hordes of people will choose Midwestern winters over SF rent. But this attitude of "I don't have to pay you as much because land is dirt cheap, never mind that it's on a flat prairie in -20F weather" needs to be reversed. Especially since most of that land isn't ever appreciating, so I'm just paying rent to the bank instead of to a landlord anyways. Midwestern companies: don't do CoL adjustments if you aren't also willing to do QoL adjustments.
- maxsilver 9y ago
  > There seems to be this attitude in the Midwest that lower CoL justifies lower salaries, as if there's no need to compensate for lower QoL with money. As a local Midwesterner, they don't do this because many people here don't want to think their QoL is lower and some will even feign offense that you implied their QoL is any lower than anywhere else. Ironically, this bites them in the ass in wages. Companies don't pay people fairly out here because they don't have to. Most of the locals have convinced themselves that their QoL isn't any lower. Their own employees proudly display their own below-market wages as evidence of why their home is a great place to live, they are essentially negotiating their own wages downward. It's a pure win-win for most companies, why would they want to disrupt that process?
  - gamblor956 9y ago
    I explain it to people this way when they ask why I left the Midwest: the Midwest is the Walmart of America. It's large, cheap, and the quality of most aspects of life is relatively low (weather, food, social life, career growth, etc.). But if it's all you can afford, it's a better place to be than somewhere expensive.
  - redblacktree 9y ago
    You guys are doing all this theorizing, but I live in the Midwest because that is where my family is. That's part of QoL.

snarf21 9y ago

Right and the thing about scaling is that it is not the money. It is the talent and the opportunities. It takes sustained effort to build over many years. It requires decent schools turning out decent talent that feed companies that hire more talent. Like the parent said, if there is only one game in town, that is high risk. You can't play get-a-raise ping pong if there aren't the companies to do so with. The other problem is at acquisition time. EVP of Google don't want to hire a team in BFE, Wisconsin or Lancaster, PA. They know those people aren't moving to SV and the EVP isn't taking two flights and an hour train/car to visit that remote office. Tech startups in these areas have to be more focused on revenue and not IPO and Acquihire.

throwawayjava 9y ago

It might help if mid-western companies paid equivalent salaries as on the coasts. There seems to be this attitude in the Midwest that lower CoL justifies lower salaries, as if there's no need to compensate for lower QoL with money. Given equal salary, hordes of people will choose Midwestern winters over SF rent. But this attitude of "I don't have to pay you as much because land is dirt cheap, never mind that it's on a flat prairie in -20F weather" needs to be reversed. Especially since most of that land isn't ever appreciating, so I'm just paying rent to the bank instead of to a landlord anyways. Midwestern companies: don't do CoL adjustments if you aren't also willing to do QoL adjustments.

maxsilver 9y ago
> There seems to be this attitude in the Midwest that lower CoL justifies lower salaries, as if there's no need to compensate for lower QoL with money. As a local Midwesterner, they don't do this because many people here don't want to think their QoL is lower and some will even feign offense that you implied their QoL is any lower than anywhere else. Ironically, this bites them in the ass in wages. Companies don't pay people fairly out here because they don't have to. Most of the locals have convinced themselves that their QoL isn't any lower. Their own employees proudly display their own below-market wages as evidence of why their home is a great place to live, they are essentially negotiating their own wages downward. It's a pure win-win for most companies, why would they want to disrupt that process?
- gamblor956 9y ago
  I explain it to people this way when they ask why I left the Midwest: the Midwest is the Walmart of America. It's large, cheap, and the quality of most aspects of life is relatively low (weather, food, social life, career growth, etc.). But if it's all you can afford, it's a better place to be than somewhere expensive.
- redblacktree 9y ago
  You guys are doing all this theorizing, but I live in the Midwest because that is where my family is. That's part of QoL.