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follow Patrick 2018 Apr 10, 4:13pm
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“Startups that decide to keep all their employees physically in one office in the Bay Area by default become vehicles that transfer cash from venture capitalists to Bay Area landlords,” Chris Nicholson, co-founder and CEO of Skymind, an open-source artificial intelligence startup, told the paper. ...That cost eventually translates into pressure on startup founders. For early-stage startups that rely on venture capital dollars, rising payroll spending means a lower chance to survive the brutal startup game.“Eighty percent of startups never make it,” Nicholson told Observer. “Startups need time to find a profitable business model before they burn out the VC money. It takes anywhere from three years to infinity. When a startup compensates employees with an enormous salary package, that shortens its time to find a profitable model.”
The cost of payroll to get that top talent, and talent that's constantly rubbing against other top talent is worth it. You simply don't get that anywhere else, and if you want to be able to build and scale, you need everyone on the same page, doing the same things, producing the same way. That's not possible in other parts of the world, if it was, we would see tech success all over the place, but in general, it's coming out of the bay area.