Atlanta Startup Community Challenge: Low Cost of Living

If you’ve read some of my previous posts you’ll know that I’m a big proponent of Atlanta, especially the low housing costs. At lunch today with two successful entrepreneurs I threw out an idea that I could tell neither one agreed with: one of Atlanta’s startup community challenges is that you can have a great lifestyle for common technology positions (e.g. programmer, sales rep, etc). Paul Graham wrote about similar idea a while back. The theory goes like this:

• Smart programmer or sales rep gets a job out of college in technology making $60,000 per year.
• He/she is good at what they do and progress quickly making $70k – $90k/year by their mid-to-late twenties.
• Now, with minimal expenses (e.g. no spouse and kids), they live like a king in a great, low cost city by buying a new, fancy high-rise condo for $200k, a nice sports car for $30k, and doing whatever else they please.

Why leave the nice lifestyle for more risk a low/no pay in a startup when you’re already doing something you love?

In Silicon Valley, rent is 2x – 2.5x more expensive for a comparable place in Atlanta, but part of that is made up in the higher salaries. The major difference actually comes when you get married and want to buy a house. Right, that nice little three bedroom, three bath ranch house in Palo Alto in the good school district. Wait, that simple house costs $2 million. In Atlanta, in a good school district, you’re looking at $500k ITP and in the $350k range OTP. That’s quite the difference isn’t it? Combine the outrageous housing costs (to buy, not rent) with the technology eco-system (e.g. everyone else is doing it and tons of success stories) and you have strong reasons why they are so successful.

Thinking through this, I don’t want Atlanta to be Silicon Valley. I do want a vibrant startup community in Atlanta and I want people to start thinking through how to get entrepreneurial people involved in startups when they already have such a great lifestyle, partly because Atlanta has such a low cost of living.