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Comment by Finbarr | Hacker News Reader

My prediction is that money will keep flowing into SV companies, but the teams will all start going remote. Shogun is fully distributed and it's incredible. We're able to pay amazing salaries to everyone outside of the Bay Area, for way less than we'd pay in the Bay Area. The result is happy employees/contractors with no sense of entitlement. They're also not all getting hounded by recruiters constantly because they don't have "San Francisco" as their location.

It doesn't make any sense to raise investment in SV and spend it here. Your runway will be 3x or more longer if you hire outside the Bay Area. Also, there are smart people everywhere! There's a pervasive viewpoint in SV that the world's smartest people all come here. It's true that there are a ton of smart people here, but there are way more equally smart people who don't want to deal with the crazy immigration and politics of the US, and the sky high cost of living in SV.

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Innovation is driven when smart people interact with other smart people, and that is the value of SV and its ecosystem.

Obviously I'm generalizing, but your (or anyone else's) remote employees may be the smartest of the bunch or even in the world, but if they are not exposed to outside influences and are satisfied in their own locales, they will remain good/great loyal employees but will never (again generalizing) become entrepreneur. Otherwise, why would you be in the SV if you could do it remotely.

So, if this remote model keeps on evolving, then obviously it will have a negative impact in the long run on SV ecosystem, since these smart loyal employees remain just then and never become entrepreneurs.

However, I think this model only works till companies reach a certain size and I do not believe that companies can scale beyond a point on a purely remote workforce. So, overall I think SV and its ecosystem is safe.

I agree with your statement about innovation.

The remote workers are getting exposed to outside influences by working for SV companies and with other remote workers. In fact, I think they benefit from exposure to a wider range of opinions than one typically encounters in SV. They also travel a lot because being fully remote gives them a ton of flexibility.

I think many of them will try to become entrepreneurs at some point. The challenge for people outside SV is always going to be funding. But starting tech companies is constantly getting cheaper.

It remains to be seen whether there is a breaking point in scale for remote teams. Zapier is now in the hundreds and it still seems to be working well for them.

To be clear, I do think people will continue to move here to start companies for the foreseeable future, and so SV is safe in that respect. Reputation and momentum count for a lot. However, I'm guessing the workforces will start to shift outside of the Bay Area.

Is it?

My experience of innovation is that it tends to be a singular affair. Not a result of group hangouts and all day brainstorming meetings but the result of a single unreasonable person who is seized by an idea that's either not obvious or - more commonly - something other people were aware of but didn't rate much.

I don't see why you'd need physical proximity to innovate in that way. Unless by innovation you're referring to product development generally.

How do you fairly determine salaries for remote workers? Does it take into account their location? Also, does it account for the fact that SV workers (if they can afford a house) may be able to net six-figure appreciation (at least during certain periods)?

The 3x runway outside SV is undoubtedly true, but I wonder how VCs feel about that. My understanding is that VCs typically want to give you no more than 18-24 months of runway. Are they cool with startups raising money and then enjoying a 4-6 year runway with remote workers?

We don't really take into account location. We advertise a range, then ask people what they want. Typically we're able to come in at or above what people want. The main factors are experience and the value that an individual can add to the team.

Most SV workers can't afford a house. How would we account for that?

Some VCs seem to be cool about it. I guess it depends on who you have as investors.

Salaries are determined by market rates and negotiating power. Fairness has nothing to do with it.

> The result is happy employees/contractors with no sense of entitlement.

I don't get what you mean. No sense of entitlement to, say, a fair share of the money flowing through your company?

Do the founders also live in a cheaper place or do they get SF money in return for "dealing with" Silicon Valley?

If you can extend the runway for your seed money this way, can you do it forever while still being an SF/SV company? Won't this eventually create huge differences in pay?

If I am tired of my India Remote salary and want a Singapore Remote salary, wouldn't it actually be in your own self-interest to give it to me without my actually moving to Singapore?

I don't disagree with your premise, but it sounds a bit like you're trying more for cheap labor than for building the best team you can regardless of geography. Sorry if I'm misinterpreting that.

I can see how you would come to that (incorrect) conclusion. No sense of entitlement to free lunches, plush offices, massages, and other perks that are common in SV. In return, no expectation of being tied to the office or working crazy hours.

We pay everyone exceptionally well - way higher than they would normally make in their home countries. Even at low-mid Bay Area levels. Just not near the top end of Bay Area salaries. There's no huge disparity in the pay for anyone. See my comment history for who is hiring posts with salaries included.

The founders live in SV and earn less than most of the workers actually. I think longer term we're going to just move away - we have no ties here at this point and we're just throwing money down the drain.

> entitlement to free lunches, plush offices, massages

Are they really so common that candidates expect them, or is it just a Google-et-al thing? Serious question, I know a lot of tech folks in SF and I don't hear about the comical "perks" except from Google and Facebook people working in the Valley.

> See my comment history for who is hiring posts with salaries included.

Done. So out of curiosity do you attempt to pay the same actual salary regardless of the candidate's location?

FWIW I don't live in the US, and I work remotely, and have done for many years. I work with people in Europe, the US and Asia. It always seemed to me you'd be better off setting pay regardless of location, but as soon as I contemplate the details of it (taxes, possible perverse incentives) at anything more than an early-stage startup, my head hurts.

Best of luck with your company!

We pay more based on experience and value brought to the team. Location doesn’t really factor into it. People tell us what they want (and we also publicize a range) and then we try to find something that works (typically it’s more than what people ask for).

The entitlement part really goes beyond the free lunches. That was just an example. It’s hard to articulate succinctly. Another example is having to tread carefully to avoid people quitting on a whim because there are so many options. So people get pandered to all the time even when it’s not in anyone’s best interest.

Thanks for sharing your perspective!

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