[cliftonmckinney]

Wrote a relevant blog post about this issue not too long ago. The article states the obvious of course. Talent isn't evenly distributed, but it is distributed. What's most compelling for perhaps Valley and New York companies only, is the wide disparity with regard to compensation:

Two Silicon Valley startups raise $1M and they each have need for a great team. Team One is on site. They spend a lot of otherwise productive time attempting to hire great engineering talent away from other equally impressive startups in the area. They pay $150k per person (let's call it $200k fully loaded) for talented, but not phenomenal people. Team Two is fully distributed. They decide to hire the best, no matter where they are, and at $150k per person everyone outside of Silicon Valley gives them a look with much less effort on their part. They save time, they save on office space in SV, and, best of all, they build a team of truly phenomenal folks who are happy to be making $150k, because it's likely $50k higher than they were making at whatever job they had before they got recruited.

Assuming you can build a better team in the Valley is only relevant if you have a reasonable expectation that you'll find similarly talented folks at the same price no matter where you are. That is simply not the case.

More on the blog: http://blog.workforpie.com/2013/06/04/the-case-for-remote-wo...

[hawkharris]

I've heard that the costs of living are very high in California. Is actual compensation much lower when you take this into account?

[krichman]

But that's part of the point, isn't it? If SV companies need to adjust for cost of living in SV, the same salary could attract a better employee in an area where adjustment is not so necessary.

[cliftonmckinney]

San Francisco is 1.85x what it costs to live in, say, Nashville, TN. http://www.wolframalpha.com/input/?i=salary+comparison+Nashv...

[seanmcdirmid]

The cost of living in California is high only compared to...the rest of the USA. But if you are talking international, I find San Francisco to be a bargain on everything but rent, and for many cities it is very much a toss up even there.

[SBCodeMonkey]

You should see the ridiculousness in the Santa Barbara/Goleta area... Same cost of living as Silicon Valley, Less Pay. Higher cost of living than LA, San Diego and Seattle but engineers get paid less than those areas.

[madsushi]

I know that Montecito was one of the highest priced zip codes in the USA, as of a few years ago. SB is stuck between the ocean and the mountains, with no room to grow.