[esonderegger]

I spent a lot of time asking myself the question "would this company be successful if it had been started in St Louis?". On the one hand, they could offer an incredible salary to cost of living ratio. However, when I thought about my coworkers, a good number of them had spouses/significant others who worked for Facebook/Apple/Google. Also, there was a lot of value in knowing that if this company went belly-up, there would always be another company nearby to work for.

At least in this case, the decision to be located in the valley was rational at the individual level, even if it may be irrational collectively.

I think Seattle, Boston, LA, and NYC also have critical masses of talent that make them acceptable for starting a tech company, but unfortunately those places aren't really affordable either. The decrease in proximity to talent and capital probably isn't worth the marginal savings in cost of living.

If anyone is going to break the chicken vs. egg cycle and set up shop somewhere truly affordable, I think it will have to be one of the big companies, opening up a satellite office and offering employees the ability to choose where they want to work. They're all so profitable that they don't seem to mind the money that's going to Bay Area landowners. I wonder how expensive things will have to get before they start to get creative.