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You would assume that with a lower cost of living and lower taxes you’d be able to hire software developers in Dallas for less than you can hire them in San Francisco. Surprisingly, in my personal experience this just isn’t the case. I’ve had software developers on my payroll in both cities for years and without exception I’m able to recruit and retain developers in San Francisco for less money than I can in Dallas.

On a per capita basis, there are a lot more developers in San Francisco as the city attracts coders and hackers like flies. When we’ve advertised openings for iOS and Android developers we typically get three to four times the number of qualified applicants than we do in Dallas. The software developers that flock to the Bay Area tend to be young and single with fewer fixed costs like cars and houses. They’ve bought into the same startup dream that Larry Page, Sergey Brin, Steve Jobs, and Mark Zuckerberg have made so famous. They are motivated by building great things and potentially striking it rich. You can’t lure a great developer away from a project that he believes in for twenty or thirty thousand dollars in San Francisco, it just doesn’t happen.

On the other hand, great developers in Dallas tend to be harder to find. Don’t get me wrong, there are plenty to choose from, but you have to look harder and longer than you do in San Francisco. The developers we’ve hired in Dallas tend to be a little older, married with children with lots of fixed costs like cars and houses. Many of them have the same startup dreams as their San Francisco brethren, but these dreams are tempered by the realities of marriage, children and the fact that there just aren’t that many examples of software developers making a dent in the universe and striking it rich in Dallas (this is starting to change btw). Near term cash is far more important to someone who is considering whether or not they can afford the extra $25,000 a year in private school tuition, a new BMW or a new house in the suburbs. This fact, more than any other, has led to wage inflation here in the Dallas area.

Don’t misunderstand my post. I am not saying there aren’t great developers here in Dallas. Nor am I saying they are too expensive. I’m simply sharing an interesting reality that impacts startups here in Dallas.

Interesting Stats:

Median House Value:
Dallas = $150,000
San Francisco = $700,000

Venture Capital Investment:
Texas = $1B
California = $14B

Cost of Living (100 average):
Dallas = 96
San Francisco = 164

Salary of a .NET Developer:
Dallas = $100,000
San Francisco = $85,000