Programming shops in certain cities: Does it matter?

Question

As a new entrant into the job market, I've been looking through Authentic Jobs, SO Job Board, Craigslist, etc, and I've noticed that 75% of the postings are in San Francisco and New York. Now bear with me, this is a real question:

What tangible benefits does a company receive by being in a certain "well known" city beyond "reputation by association"? Surely not all the clients are there, so face-to-face meetings is not a universal benefit (and perhaps Skype has obviated these to a certain extent). What are these people getting in those cities? Code meetups? Cheap offices? (Yeah right!)

Information is notoriously non-location specific, so you'd think lower rent/higher quality of living areas would collect the talent, like Dallas or Boston (high buying power), but that's certainly not the case.

Can folks elucidate the forces in play here?

Thanks!

Answer 1

Information may not be location-specific, but people are. If you're a tech startup, and you want to play ball with the big boys, that means meetings, schmoozing, and staying on top of cutting-edge technology. That kind of stuff can't happen over the internet. If you hear about a technology on the internet, you've missed the boat, because someone else has already done it.

Business is business, and money and power tend to find a focus. If you're next door to Microsoft or Google, you can have a meeting whenever you want, and you won't need a plane ticket to do it.

Answer 2

Its sort of the post chicken and egg problem. People will move there to do software because there are a lot of companies/jobs there, and more companies will start there because there are a lot of software people there.

There will also be more infrastructure there. For example they'll be more datacenters, faster internets, more foosball stores.

Answer 3

While email, voice and video conferences certainly improve communication they still aren't as simple as face to face "Hey let's go to Starbucks and talk about this idea I had" conferences. It's much easier to collaborate and network with colleagues and keep an eye on the competition if you're in the same physical area.

Answer 4

Silicon Valley was built up due to the proximity of Berkley and Stanford, as well as other factors, but those schools and the area attract a certain type of person.

NYC, due to it's size has a large workforce and so many people are pulled there.

You will find the same in Seattle, WA, the DC Metro area and other large areas.

Each area will tend to attract certain types of people and due to that there is a critical mass that will enable companies to continue to grow and some will be able to develop new ideas and start new industries.

People go where there are jobs, these large companies won't move their headquarters away from the critical mass of people that they need, as many of those people won't follow.

Answer 5

This essay by Paul Graham discusses what made Silicon Valley Silicon Valley and how it could be reproduced elsewhere. I think it touches on a lot of the factors you are asking about.

Answer 6

This is a favorite theme of Paul Graham's 'essays'. A couple that deal with this specifically: "Cities and Ambition" and "Can you Buy a Silicon Valley? Maybe"

Answer 7

Yeah, avoid SF and NY. They tax the living shit out of you (especially NY), and the cost of living is insane.