[DataDisciple]

I think the talent pool is getting smarter about how much their equity will likely be worth (hint, it's $0). Those who are joining startups now, are either naive to that fact (not good once they discover the data), or they care more about working on the problem than they do the compensation (which is the perfect employee if you can find it - but the cost of living in SF has made that nearly impossible).

So when the company you are going to work for is going to pay you less in cash, likely require you to work harder, and not offer any guarantee that they will be in existence in two years, you are taking a ton more risk for less reward. Financially it does not make sense, so you better be in it because you enjoy the work that much more than a big company.

Bottom line is that startups are going to need to pay more money to attract talent. The secret is out on common shares and what happens with liquidation preferences.

As for how YC could solve this, perhaps they offer an unemployment supplement to those who are laid off. Help talented folks reduce their risk and you will find it easier to recruit.

[DataDisciple]

Just another thought, but perhaps YC can explore more options for building startups in secondary markets where the cost of living is more manageable. I know the shop is famously SV-centric, but certain companies may have a better chance at success in markets like Salt Lake City, Austin, Des Moines, Nashville, etc.

Maybe an HQ2 process for YC.