Would love to see the math behind this. How does this add up to $5M/year??
Is this that unreasonable? He comes from a Google background and he did clarify good engineers.
If (almost) everyone is working remotely, you can probably get by without office space and also with lower salaries.
Leasing office space in such highly productive areas might be worth it. (I don't know exactly how the mechanism works, but I'm just assuming that at least some of the companies there know what they are doing.)
Of course, the author of the original piece also seems to implicitly assume Silicon Valley?
If there's no highly productive part of the world where you want to concentrate people, you might be better off spreading out your startup and taking advantage of lower labour costs around the country and around the world.
There's lots of smart people in eg the flyover states, or in South America, who for one reason or another can't or don't want to move.