I don't. But I couldn't compete with the salaries in Sacramento, either. Let's put it this way; I paid myself something like $40K last year (salary/profit whatever... I spent $40K on me last year)
Obviously, I'm unable to pay market rates for experienced/connected people.
Right after the .com crash it was easy. Even through the mid '00s, I was picking up people I knew personally that had worked with me during the dot-com that were now stuck making sandwiches. "I can't give you much of a raise, but I can give you a raise and work that counts as experience towards what you want to do."
Of course, that's harder now. My latest two contractors are one very raw recruit who is local, and one reasonably good person that is in the midwest and doesn't want to move.
I mean, you find someone that could be good, then you train them, then you give them maximum flexibility and hope they stick around for a while. Yeah, they move on, and that's okay... they then become the best resources for finding your next local raw recruit.
(for an example of 'maximum flexibility' I don't have any set hours; my employee shows up at the office maybe once a week, usually unplanned, and he often takes off on vacation with short notice. I mean, yeah, Facebook has 'pet insurance' and they probably tolerate you rolling in at eleven, but they expect you to be in the office most of the time.)
But yeah, you hire when the economy is shit, and you do what you can to hold on when the economy is gangbusters.
The thing is, the people you want (as customers, mentors, and employees) are thick on the ground here. Like I was saying, for the same skill? I don't even think you pay more here, because standards are just that much higher.
> What about commercial real estate? Even in Sacramento, it's just simply not feasible.
really? huh. The only reason I don't own a santa clara 'industrial condo' right now is that my credit is shit. (well, that and I don't have a whole heck of a lot to use as a down.) warehouse space here can be had in the $100-$200 per sqft range, and you look at layfayette near el camino (a not awesome part of santa clara, but still, part of santa clara) and you see nice big industrial condos starting at about $150K. You can rent in santa clara, 1000-2000sqft places for $0.50-$1.00 per sqft. (I'm talking essentially industrial units... but that's what I want.)
So yeah, uh, I guess I don't really see real-estate as a limiting factor. (I mean, yeah, if you want to be in mountain view, it's rather more expensive. But, I don't see why you would want to be in mountain view where you have to compete with google for real-estate when you can move to Santa Clara and have incredibly cheap power and incredibly cheap dark fiber provided by the city.)
Again, I think the key to understanding the economics is that while salaries are higher here, the standards for Engineer skill are proportionally higher as well.