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Ask HN: How do small/new startups survive in the SV?

3 points by theredbox ↗ HN
I always wondered how do small companies survive in the SV when they need to offer ridiculous salaries ? Lets say you get an investment of 3m$. How do you even pay for all the stuff, offices and equipment, accounting before even starting recruiting ?

I know that co-working offices are a thing but do these small startups heavily optimize their costs when in such financially constrained environment ?

If they offer relatively subpar salaries compared to medium sized companies is it even worth it to stay in the SV? Or do they always aim for the mythical 10x engineer and offer similar salary like everyone else in the valley ?

Do they think that getting a mythical 10x person in SV is better than recruting more people somewhere else ?

1 comment

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nostrademons
Don't hire employees. If you must, hire remote or part-time. (There's a whole ecosystem in Silicon Valley of folks and/or apps who are willing to be your part-time lawyer, part-time accountant, part-time admin for a much lower fee than a full-timer, and then they work maybe 1 week/year for you and have 50 other clients.)

Most of the tiny startups that actually make it start with an initial product built entirely by the founding team. Once you've got something people like, use, and ideally pay for, then you seek investment and get your $3M or so, which pays for an initial team of ~5-10 employees for a year. By then you'll have many more customers, which justifies a higher valuation and more investment, and so on. And you'll often have actual revenue to extend your runway further.

The track record of companies with entirely non-technical founders that take $3M and try to hire a bunch of engineers to build the product is pretty abysmal. I can't think of a single company that this has worked out for - it's mostly just dumb money being thrown at dumb startups because it worked out for other people, without realizing everything that went on behind the public facade to make it work out.