Yikes, that open office picture looks like my nightmares.
I'll have to second your "yikes," that looks like a really distracting and very echoy place to work. I'd never get anything substantial done with any reasonable speed.
Edit: That said, that one definitely doesn't look like the most efficient use of space.
I think they're in Boston, but, even in New York, which, for office space is even more expensive than SF, the excuse that square footage is too expensive seems shaky, especially since it's been trotted out routinely over the past 3 decades.
This blog post shows a credible calculation, even assuming remarkably low salaries (and a fairly credible $5/sqft):
https://business.linkedin.com/talent-solutions/blog/hr/2016/...
The real key, though, is at the end:
> the calculation above doesn't count the cost of setting up the offices
For an early startup, that cost, both in dollars and, perhaps most importantly time (move-in delay), could easily be prohibitive.
Of course, once the company is past the early stage, it may just be habit or cargo cult.
You could always move. I for one would love more non-SF companies; it'd open up more options and opportunities to get off the sinking ship that is SF.
Headphones aren't the answer.