[BjoernKW]

What I probably will never get is why - of all places - Silicon Valley is so obsessed with exclusively hiring locally.

You'd think that companies that are so eager to disrupt whole industries would be more susceptive to adapting more modern and efficient ways of organising work.

[ashwinaj]

As someone who has worked in Dallas, Austin and now Silicon Valley I can answer this question with some perdonal anecdotes.

Silicon valley is miles ahead and will remain miles ahead of these other upcoming "silicon whatevers". The environment is just different here; people are willing to put their lives into building something (it's arguable if that's healthy disposition), people are smarter (and also smart asses) and there is general "itch" to do something entrepreneurial. To scratch this "itch" there are people willing to put money and everything on the line which I haven't seen in Texas. There is a reason why most major technological developments come out from Silicon Valley and not elsewhere. Hell, if I were a hiring manager, I wouldn't hire myself for a position here if I were working in Texas :P (I'm exaggerating here, the point is that I never had the drive and neither do most of the people there)

P.S: Please don't inundate with negatives of silicon valley, we all know about it. What's unarguable is the technological output of Silicon Valley.

[BjoernKW]

I'm not sure you can say that most major technological developments come out of Silicon Valley. Perhaps the most obviously world-changing ones do but the majority of technological development still happens outside of Silicon Valley. Even if you just look at the software industry, where Silicon Valley clearly is leading, the majority of software is still developed outside of Silicon Valley. When considering other industries and disciplines this becomes even more obvious.

Regarding the entrepreneurial itch the same thing has been said about the US in general in the past. People elsewhere are just as smart and can be just as entrepreneurially-minded it's often just that the environment doesn't easily accommodate this drive (e.g. lack of adequate infrastructure or conditions not as amenable to entrepreneurship).

However, with the world becoming ever more connected and networked there is no good reason (other than VCs with ulterior motives as mentioned in the other comments) why people from different parts of the world shouldn't collaborate on new projects and ideas. In fact, this stubborn insistence on location might exactly be what's holding further innovation and entrepreneurship back because it excludes a huge number of people from taking part.

[ashwinaj]

That's true. I didn't mean measure it by lines of code but more by impact and forward thinking.

Despite the connectedness and networking in the other parts of the world, I'm yet to see anything world changing come out from elsewhere. It seems everyone outside the US is just reshashing what's being done in the US (social media, networks, taxi apps, what have you in emerging markets). And my argument is that it is the environment of Silicon Valley that facilitates this enterpreneurship and is hard to replicate elsewhere (yet).

[pc86]

I think there are a few possible reasons (I don't pretend to know which of these it is, or if it's one I haven't thought of).

1. Remote workers are actually not more productive than co-located workers. (I don't think this is it personally)

2. Investors and/or founders have some financial and/or non-financial incentive to keep everyone in SV.

Forcing everyone to be there drives up the demand for VC money as everything is more expensive, and when a CTO leaves to do his own thing, he's already there but probably can't afford to bootstrap, so he turns to VCs. If you had the same CTO working in Omaha for 90% of the pay, he'd be able to bootstrap whatever he wanted and the original company wouldn't have needed as much (or any) VC money in the first place.

I'd love to set up VC meetings then say a few days prior that I'm only interested in 100% remote team and see how many of them cancel.

[Inthenameofmine]

It's mostly because of the VC Ponzi scheme. US investors invest in US incorporated companies because it is easier to sell them and to get other later stage institutional investors interested.

There's two ways how companies can quickly exit nowadays:

1. Acquihire - and the companies buying normally want colocated teams. Acquihires are predominantly happening because the 10x-ers can leverage their capacities by incorporating and effectively bringing forward their entire future earnings to the present through an acquisition. The companies like it because the can lock-in 10x-ers for 4-10 years, which usually only stay for 6-24 months in one company and jump ship very easily, taking company knowledge with them. They generally have to be incorporated and operating in the US as it is difficult to enforce such contracts internationally. This is also the fastest way for seed investors to get big multiples back without having to wade through all the subsequent rounds. As a seed investor you also don't need to pick a winning product or biz model, rather just a very smart team. The best of these brain-investors have contacts in all the big corps to advertize their investments to them well ahead of time.

2. IP is most often useless without the people and knowhow who can use and implement it. That generally means the people who developed it. Most loss of IP value doesn't come from simply Chinese copying, or even patent wars, rather the people developing and using the IP getting hired away to the competition. By having them all in the US or even State such as California, and keeping them on a 4-10 year contract, you firewall that IP from the competition.

Combine the above two with the much larger and more liquid unified financial market of the US, and you can bid your equity up due to demand pressure. The same company, with the same tech, and same users, and same development team, can be 5-20x less valuable in terms of equity if located in the EU. This is also why there are so few large exits in Europe as compared to the US.