Why Working at An Expensive Tech Hub City Matters for Explosive Career
More opportunities.
I was talking to my friend the other day about his journey in technology. He was a Staff Engineer at a FAANG and has countless years of experience. However, he started at humble beginnings - in the Midwest.
He told me that his best decision in his tech career was to take a job in Silicon Valley and continue trying different things. He said that it was really hard at first because the cost of living in the Bay Area is drastically higher than in the Midwest, and a six-figure salary in the Bay Area seems like a 50K salary in the Midwest.
However, without moving to the Bay Area, he wouldn't have been able to advance his career to Staff Engineer at a FAANG, and he wouldn't even have had the chance of having some successful exits create a huge amount of wealth for him.
You always hear people griping about how expensive it is to live in expensive cities and often discourage other engineers from moving to expensive tech hubs. They will starve their wallet and lifestyle by eating ramen noodles and beans. They also say that buying houses in expensive cities is absurd and houses are always in a bubble.
But expensive cities are expensive for a reason.
Opportunity, opportunity, opportunity
More career and investment opportunities.
Getting a 6-figure Salary job in San Francisco is much easier than getting a 6-figure salary job in Hawaii. San Francisco is the center of gravity for tech, so you can have a much bigger network that leads to more opportunities.
Bay Area has been the center of gravity when it comes to tech. It operates in a constellation of big tech and startups.
When you work closely with a group of individuals who share your interests and motivation in technology, you tend to be exposed to the latest and greatest news about tech. This exposure can help you become a stronger engineer.
Paul Graham, the founder of Y-Combinator, says, "Ambitious people are rare, so if everyone is mixed together randomly, as they tend to be early in people's lives, then ambitious ones won't have many ambitious peers. When you put people like this together with other ambitious people, they bloom like dying plants given water."
In addition, most company headquarters (HQ) are located in the center of tech hubs. This is because the HQ typically houses the most important people and projects. If you work in Silicon Valley, you are much more likely to meet important people in your company—formally and informally. By working in the HQ, you can deepen your relationships with these people and build trust, leading to more important and impactful projects that accelerate your personal growth.
How about startups? The Bay Area is still the best place to start a startup because of the high talent density. The number of potential investor cofounders you can meet in the Bay Area is much higher than in other places worldwide. You want to have a startup located where you have a high density of people in your network who are in that area because those people will lead to the next opportunity, more learning, and more growth.
The chances of increases in your income are higher as well
Higher-cost cities also offer higher salaries compared to lower-cost cities. You can increase your cost of living to the millions if you want to. However, if you don't splurge every single day, there is a maximum ceiling on how much you can eat in a year. However, tech hubs' opportunities and career progression can also increase in the long term.
Some of my friends are lucky enough to have "made it." They have ridden a good wave by joining a startup that has successfully IPO'd or been acquired. Their salary went up tenfold, and their brand also went up.
Playing Offense instead of Defense with Your Career
If you are starting out and want to build wealth or grow your career, the best advice I received is to play offensively instead of defensively.
Don't take a job for its short-term monetary value; instead, take the job that will ladder you up or be a stepping stone to your next job.
Playing defense in your career means taking a job that is safe from layoff and has a good work-life culture. Although I don't discount the importance of these benefits, they may impede career growth.
The same goes for building wealth. You will have unlimited upside in the amount of income you can make and a limited number of ways to protect yourself. You can't really save your way to wealth, just like you play safe your way to find opportunity.
If you're seeking career growth and wealth opportunities, don't let the cost of living discourage you. Try living in a big city for a couple of years, build friendships, network, and see if it takes off.
That’s it for this week! There will be no issue for two weeks as I will be on vacation. I hope this article sparks thoughts on the benefits of living in expensive cities and helps evaluate if it's a suitable option. Have a great weekend.