Is it easier to find programming talent in Boston than Palo Alto and New York?

Hiring talent is one of the most challenging things facing a startup. Hiring the best programming and technical talent is even harder. Taking data from The Entrepreneurs Census, which I wrote about yesterday, we can get a glimpse into how hard it is to hire programmers in Boston, Palo Alto and New York.

It may be easier for startups in Boston to hire programmers than startups in Palo Alto

Startups in Boston may have a better time hiring programmers, as measured by how long it takes to fill an open position and by the percent of startups that have open positions.

Hiring Programmers in Boston vs Palo Alto

Hiring Programmers in Boston vs Palo Alto

The two thirds of startups in Boston were able to fill open positions in under three months – verses about half in Palo Alto and 63% in New York City. (OK, the difference between New York and Boston is probably statistically insignificant.) Three months is a lifetime for many software and web startups; being unable to add a critical developer in that period of time could derail product launches and critical feature updates. Heck, a lot of startups are out of business in 6 months to a year, so if you can’t fill your positions by then who knows if it’s even worth still looking…

The data collected by the study would fit with¬†anecdotal evidence that I have heard from friends starting companies in Palo Alto. Many people have told me that it’s impossible to find talent in the SF Bay area… especially at a reasonable price. I know it is hard to find good people in Boston as well, but this study would suggest it is a bit easier here than in Palo Alto.

Compensation of programmers in Palo Alto is higher than Boston and New York

And of course the other important part of the equation is how much it costs to hire talent. From the study:

Compensation for Programmers Palo Alto Boston

Compensation for Programmers Palo Alto Boston

Doing some really crude math, it looks like programming talent in Palo Alto is 13% more expensive than Boston and 36% more expensive than New York. (I very roughly calculated that the average comp in Boston was $66.85k, Palo Alto 75.65k and New York $55.75k; I assumed the comp for each salary range was in the middle of each range for my calculation. Again, the numbers are small so the difference may not be statistically significant.)

The other data point in the above compensation chart that I’m trying to get my head around is low end and high end. The high end is easy enough to understand; you have to really pay up to get good talent in some cases in Palo Alto (and NYC). This doesn’t surprise me too much, but it is interesting that the high end is zero for Boston. Maybe due to a small sample set? I just don’t know enough.

The low end is also pretty intriguing. I’d bet that most of the sub $50k programmers are working for equity. It looks like regions OTHER than Boston have more programmers working for a pittance, trying to get equity. Does this mean that Boston has less of a founders culture???

Pretty ironic and not really very important, but Gmail decided to add in this little advertisement to the top of an email conversation that I’m having with someone about this post… it looks like Google is hiring developers in Boston!

somewhat_ironic_adwords

Author: Healy Jones

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4 Comments

  1. Interesting take. A few clarifications: the compensation numbers include the value of the equity provided. I may also may be leary to make hard calculations on the compensation for programmers, as the numbers are ranges. Love the chatter though. One way to encourage more talent in all markets is to promote entrepreneurial loan forgiveness to the colleges of the these cities. I detailed the concept in the study, available at http://www.bit.ly/entrecensus.

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    • I liked take on loan forgiveness, but I am still struggling to figure out how it would actually work. You propose a few ideas that have potential. However, assuming that it is a specific city/area that is trying to promote entrepreneurship, it's not clear to me why an academic institution, say Yale, would see value helping Boston's entrepreneurs afford their loan payments. Secondly, I would be pretty surprised if the school actually broke even on shared earnings. All that being said, if a school or graduate program wanted to really make it clear that they were aggressively helping entrepreneurs loan forgiveness would be a strong signaling factor.

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  2. Very interesting data. There is a lot of talk (particularly on Venture Hacks) to the effect that start-ups need to move to Silicon Valley. The principle reason given, as I understand it, is that that is where the talent is. I have had a client get a term sheet from a West Coast VC that required the client to move to the Bay area as a condition of the investment. Do I take it that you would say these numbers suggest that there is plenty of talent in Boston and that it is more readily available here than in Silicon Valley?

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    • It may be harder to find that special hire in Silicon Valley than in Boston. But again, the sample set is pretty small.

      I think a lot of VCs like to have their companies nearby because they can add more value if the company is close – in particular, I would bet that most VCs have their network of VPs of Engineering, Marketing, etc mainly within 50 miles of their office. So it's pretty standard for an early stage investor to ask for the company to be headquartered close by.

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