I strongly disagree that the high cost of living is beneficial for startups. Keep in mind the very term Silicon Valley comes from chip companies (Fairchild, Intel, etc.) who came to SV because it was cheap, open farm land. There isn't a business in the world that doesn't want to optimize on costs.
Take a look at a modern SV company now: Apple. It creates lots of jobs in SV, but far more in China.
SV succeeds in spite of the costs, not because of them.
> Keep in mind the very term Silicon Valley comes from chip companies (Fairchild, Intel, etc.) who came to SV because it was cheap, open farm land.
It's funny you mention Intel here -- since the 70s/80s they've continued to expand in Hillsboro, Oregon (a suburb of Portland), where they bought a lot of cheap farmland. It's worked really well for them and the ~16k people they employ in the state. The only downside is a sort of "employer lock-in" for the employees, especially the more specialized ones.
Back in 2005, I was accepted into Portland State for a grad CS programme, and I recall a large chunk of the accompanying leaflets read like a giant recruiting advert for Intel. I never gave it much thought back then because I wasn't going there anyway, but your point sort of explains it!
I strongly disagree that the high cost of living is beneficial for startups.
You're absolutely right. High COL is good for well-connected people who get funding easily for stupid startups, because it makes the labor pool more captive. It's bad for the quality of startups.
Take a look at a modern SV company now: Apple. It creates lots of jobs in SV, but far more in China.
And then the murderous, unionbusting thugs who run the sweatshops buy real estate in California, pricing the locals out of their own housing. It's the circle of life... ?
Take a look at a modern SV company now: Apple. It creates lots of jobs in SV, but far more in China.
SV succeeds in spite of the costs, not because of them.