Is it because they:
a) aren't motivated to b) don't know what the potential is there may not even know what is going on. May not even know about YC or VC's etc. c) don't think there is potential there (think it's all over hyped and focuses on a few people who win). d) have family obligations which prevent them from moving to the valley e) Other reasons?
Thoughts?
- Cost of living relative to expected salary is too low.
- Can work for big public companies that pay well in lower-cost areas.
- Weather preferences.
- Family lives thousands of miles away from SF.
- Over 30, still interested in doing technical work.
- Want to own a home, not a millionaire.
- Interested in starting a business, low-cost matters if not going for VC.
- Found interesting & challenging technical work elsewhere.
Etc.
This is kind of like asking why people didn't all move to NYC in the 2000s, or Texas during the oil boom, etc.
Here are my reasons (in order of declining importance):
1) Crazy real estate prices (and as a result higher salaries do not compensate for higher cost of living).
2) Higher taxes. Income, sale, and excise taxes in California are high. In addition to that, federal income tax is higher, because in order to compensate for higher cost of living I need to earn more, which brings me into higher tax bracket.
3) Weather. Too cold for my taste.
a) The compensation game is less ridiculous here. With pressure from the finance industry, all companies (including startups) tend to offer decent salary and don't over-rely on equity compensation.
b) I don't like driving. From my limited experiences, it seems that it's necessary to (occasionally) drive in the Valley.
c) SV seems way over-hyped. Yes, people are building some cool things—but far more people are just making knock-off apps and it's all a bit of a bubble. When the tech bubble pops, SV will be hit the hardest.
d) I don't want to live in a (tech) monoculture. It's interesting interacting with people from other industries and living in a real metropolis.
I live in a small northeast city. I have a 4 bedroom, 2500 ft^2 house that cost about $200k, and is in a great school district. I'll own it outright in about 10 years.
In SV, I'd probably make 2x the salary, but my cost of living would be about 5x. The taxes are probably higher than even New York.
In Pittsburgh the median sale price for a house is $129,000, according to Trulia.
In Palo Alto the median sale price is 17x higher, about $2.2 million, with significant yoy increases: http://www.paloaltoonline.com/news/2013/12/24/real-estate-ma.... "In
If you're making $100K in Pittsburgh, you're doing quite well. And you might want to increase your salary by a tremendous amount, perhaps 5x-10x because obviously some costs don't change, to justify moving to Palo Alto and buying real estate. (Yes, there are other places to live in Silicon Valley, but speaking as a homeowner here, there aren't any that are non-coastal cheap.)