Bursts of Color - Where to Hire the First 10 Engineers
Much has been written about remote work over the last few years. I'm not going to litigate that large topic here, but will address a much narrower sub-topic: where, geographically, should a startup hire its first 5-10 engineers?
(For simplicity, I’m using the term “engineer” here to mean anyone focused on building the product - including actual engineers plus product managers, designers and so on.)
We all know the backstory: Prior to 2020, almost every startup hired early teammates in its home city. Times have changed. Now it's often easier and cheaper for founders to recruit technical talent elsewhere... but many of you have wrestled with whether that is a good idea.
First, Assume There Are Only 3 Options
Of course there are many permutations for where and how to build a team. But to keep it simple, I suggest limiting this menu to three relatively-distinct choices:
HQ City (e.g., CEO in NY / 10 Engineers in NY)
City #2 (e.g., CEO in NY / 10 Engineers in Austin)
Remote-First (CEO in NY / Engineers in 10 different cities)
Option #1 - HQ City
This is the classic model and I recommend it as the default for most startups, especially if the CEO is not technical. The key advantage is that the CEO will get to know all of these early teammates and can be closely involved during the early days of product iteration and company culture development.
Option #2 - City #2
This model of a "product and engineering center" can work well, but should only be pursued if both of these things are true:
The company has the right technical founder-type who lives in City #2 and is capable of building & leading this team for several years to come. Note that for the first few years, this person will be a single point of failure.
City #2 offers some significant advantage for the company's talent pipeline (better talent, closer to your network, much lower cost, etc) compared to the HQ city.
Option #3 - Remote First
This clearly can work, and seems best when the CEO is highly technical and/or the company mostly hires experienced, senior engineers who do not need close supervision or training. Also, this can be a bit of a one-way door... so I would only go down this path if the founders are convinced they want remote-first.
Related Comments and FAQ
Q: Is there a fourth option, where we do a mix of all these (e.g., 3 in NY, 3 in Austin and 6 remote)?
A: Sure, though I tend to believe that these “a little of everything” approaches give you the downsides of all three options without much upside.
Q: I would like to do Option #1, but engineering salaries in my home city are much higher than in remote cities or abroad. Shouldn't I care about expense?
A: Certainly cost is important. But I think the relevant measure here is "cost per unit of quality output" rather than "cost per person," and these are not always correlated. Sometimes we see that one great engineer sitting next to the CEO gets more done than 8 people sitting offshore somewhere.
Gen AI also seems to be changing the game here; I’ve heard a few founders mention that their early engineers can be 2-3x more productive than they were just a year ago.
Q: I would like to do Option #1 (or even Option #2), but I'm worried that the city’s talent pool is not big enough. Don't I need to cast a wider net?
A: For companies based in any major metro in North America, I believe there are plenty of large employers and universities from which you can find 10 engineers. Sure, if you keep growing and need a much bigger team, that's a different problem and may require a wider net. By all means, please bring on that high-class problem :)