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There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Very few places in the world can feed the l

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Very few places in the world can feed the labor needs of a fast growing tech company. Even the largest companies in the Bay Area have to go to New York, LA, and elsewhere to hire more people. What that means is that you are welcome to start a company wherever you like, but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place.

eru 13y ago
If your management structure can deal with remote workers, chances might improve.
pionar 13y ago
But it's normally not a good idea to grow by "hiring a lot of people fast". Startups outside of SV aren't really interested in the rocket growth. What happens usually is that companies with that hockey-stick growth generally just have a lot of layoffs down the road, e.g. Zynga (if they're not bought out for way too much money before this can occur). The navel-gazing doesn't really occur outside of that environment, and the "need to scale" is really just a pissing contest that amateurs crow about while the real men and women get shit done by growing organically, turning a solid profit quarter after quarter and not caring what SV hipsters that don't know what the word profit means say they need to do.
nlavezzo 13y ago
Our company (FoundationDB) is based in the DC Metro area and we have tons of success hiring and retaining top tier engineering talent. The stories we hear about how hard it is to hire while we're out in SV sound really bad. I can only speak for DC, but there is a huge labor force here of highly skilled engineers that have been working on (mostly top secret) defense / intel projects at huge government contractors. They know their jobs are there for them again if they leave and decide to come back, and often they are happy to jump ship and work in a startup if the team and product are compelling. I imagine DC isn't alone in having a niche industry of highly skilled engineers that would be open to startups. Often they're not involved in the startup culture though so it takes some effort to find them.
notacoward 13y ago
Difficulty hiring is one of the best reasons to start a company anywhere else. Sure, the labor supply in SV is high, but so is the competition for those workers - including competition from extremely rich and aggressive companies like Google and Facebook who will deliberately lure away your top people with offers you can't match. There are several other places where the labor supply is 80% and the competition is 10%. Lower cost of living doesn't hurt either, and if you can handle remote workers that's even better. Living in the shadow of tech giants seems like a distinctly bad idea unless your goal is to get aquihired by one of them.
Spooky23 13y ago
It's a bigger deal for VC backed companies that need to grow faster. I know of a few small, profitable companies that acquire talent by luring them away from major metro areas. Also, lots of big companies are attracting talent from people who are not in an urban cluster like SF, NYC, etc. IBM is a great example of that.
justincormack 13y ago
If the largest bay area companies have to go outside the bay area to hire, then why start in the bay area?
mbesto 13y ago
There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Isn't this THE problem everyone is complaining about in the Bay Area right now? but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place. I can name so many other places in the world that I could hire way more developers elsewhere. There's different types of technically capably labor supply. The one your talking about is most likely the people who are writing very complex algorithms, NLP, or the "hackers" who are writing rails apps over the weekend. The other 90% is writing Java, .NET, SAP (ABAP), etc for big co. These resources are not in short supply and can be found virtually anywhere in the world.

eru 13y ago

If your management structure can deal with remote workers, chances might improve.

pionar 13y ago

But it's normally not a good idea to grow by "hiring a lot of people fast". Startups outside of SV aren't really interested in the rocket growth. What happens usually is that companies with that hockey-stick growth generally just have a lot of layoffs down the road, e.g. Zynga (if they're not bought out for way too much money before this can occur). The navel-gazing doesn't really occur outside of that environment, and the "need to scale" is really just a pissing contest that amateurs crow about while the real men and women get shit done by growing organically, turning a solid profit quarter after quarter and not caring what SV hipsters that don't know what the word profit means say they need to do.

nlavezzo 13y ago

Our company (FoundationDB) is based in the DC Metro area and we have tons of success hiring and retaining top tier engineering talent. The stories we hear about how hard it is to hire while we're out in SV sound really bad. I can only speak for DC, but there is a huge labor force here of highly skilled engineers that have been working on (mostly top secret) defense / intel projects at huge government contractors. They know their jobs are there for them again if they leave and decide to come back, and often they are happy to jump ship and work in a startup if the team and product are compelling. I imagine DC isn't alone in having a niche industry of highly skilled engineers that would be open to startups. Often they're not involved in the startup culture though so it takes some effort to find them.

notacoward 13y ago

Difficulty hiring is one of the best reasons to start a company anywhere else. Sure, the labor supply in SV is high, but so is the competition for those workers - including competition from extremely rich and aggressive companies like Google and Facebook who will deliberately lure away your top people with offers you can't match. There are several other places where the labor supply is 80% and the competition is 10%. Lower cost of living doesn't hurt either, and if you can handle remote workers that's even better. Living in the shadow of tech giants seems like a distinctly bad idea unless your goal is to get aquihired by one of them.

Spooky23 13y ago

It's a bigger deal for VC backed companies that need to grow faster. I know of a few small, profitable companies that acquire talent by luring them away from major metro areas. Also, lots of big companies are attracting talent from people who are not in an urban cluster like SF, NYC, etc. IBM is a great example of that.

justincormack 13y ago

If the largest bay area companies have to go outside the bay area to hire, then why start in the bay area?

mbesto 13y ago

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Isn't this THE problem everyone is complaining about in the Bay Area right now? but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place. I can name so many other places in the world that I could hire way more developers elsewhere. There's different types of technically capably labor supply. The one your talking about is most likely the people who are writing very complex algorithms, NLP, or the "hackers" who are writing rails apps over the weekend. The other 90% is writing Java, .NET, SAP (ABAP), etc for big co. These resources are not in short supply and can be found virtually anywhere in the world.