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Why do developers who could work anywhere flock to the world’s most expensive cities?



Politicians and economists lament that certain alpha regions — SF, LA, NYC, Boston, Toronto, London, Paris — attract all the best jobs while becoming repellently expensive, reducing economic mobility and contributing to further bifurcation between haves and have-nots. But why don’t the best jobs move elsewhere?

Of course many of them can’t. The average financier in NYC or London (until Brexit annihilates London’s banking industry, of course…) would be laughed out of the office, and not invited back, if they told their boss they wanted to henceforth work from Chiang Mai.

But this isn’t true of (much of) the software field. The average web / app developer might have such a request declined; but they would not be laughed at, or fired. The demand for good developers greatly outstrips supply, and in this era of Skype and Slack, there’s nothing about software development which requires meatspace interactions.

(This is even more true of writers, of course; I did in fact post this piece from Pohnpei. But writers don’t have anything like the leverage of software developers.)

Some people will tell you that remote teams are inherently less effective and productive than localized ones, or that “serendipitous collisions” are so important that every employee must be forced to the same physical location every day so that these collisions can be manufactured. These people are wrong, as long as the team in question is small – on the order of handfuls, dozens, or scores, rather than hundreds or thousands – and flexible.

I should know: at HappyFunCorp, we work extensively with remote teams, and actively recruit remote developers, and it works out fantastically well. A day in which I interact and collaborate with developers in Stockholm, São Paulo, Shanghai, Brooklyn, and New Delhi, from my own home base in San Francisco, is not at all unusual.

At this point whether it’s a good idea is almost irrelevant, though. Supply and demand is such that any sufficiently skilled developer could become a so-called digital nomad if they really wanted to. But many who could, do not. I recently spent some time in Reykjavik at a house AirBNBed for the month by an ever-shifting crew of temporary remote workers, keeping East Coast time to keep up with their jobs, while spending mornings and weekends exploring Iceland – but almost all of us then returned to live in the Bay Area.

Economically, of course, this is insane. Moving to and working from Southeast Asia would save us thousands of dollars a month in rent alone. So why do people who could live in Costa Rica on a San Francisco salary, or in Berlin while charging NYC rates, choose not to do so? Why are allegedly hardheaded engineers so financially irrational?

Of course there are social and cultural reasons. Chiang Mai is very nice but doesn’t have the Met, or steampunk masquerade parties, or fifty foodie restaurants within a fifteen-minute walk. Berlin is lovely but doesn’t offer kite surfing, or Sierra hiking, or California weather. Neither promises an effectively limitless population of people with who you share values and a first language.

And yet I think there’s much more to it than this. I believe there’s a more fundamental economic divide opening than the one between haves and have-nots. I think we are witnessing a growing rift between the world’s Extremistan cities, in which truly extraordinary things can be achieved, and its Mediocristan towns, in which you van work and make money and be happy but never achieve greatness. (Labels stolen from the great Nassim Taleb.)

The arts have long had Extremistan cities. That’s why aspiring writers move to New York City, and even directors and actors who found international success are still drawn to L.A. like moths to a klieg light. Now it is true of tech too. Even if you don’t even want to try to (help) build something extraordinary – and the startup myth is so powerful today that it’s a very rare engineer indeed who hasn’t at least dreamed about it – the prospect of being where great things happen is intoxicatingly enticing.

But the interesting thing about this is that it could, in theory, change; because — as of quite recently — distributed, decentralized teams can, in fact, achieve extraordinary things. The cards are arguably stacked against them, because VCs tend to be quite myopic. But no law dictates that unicorns may only be born in California, and a handful of other secondary territories; and it seems likely that, for better or worse, Extremistan is spreading. It would be pleasantly paradoxical if that expansion ultimately leads to lower rents in the Mission.



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