One of the myths in Silicon Valley is that it's somehow super-cheap to build a company. Much of that theory is based on the fact that you can get a lot of very high-quality software very cheap or free, thanks to open source and cloud computing. But getting beyond a prototype of a product takes a lot more cash.
To build a quality, sustainable product and have a business that scales, you will sooner or later have to hire people, and in the Valley that usually means engineers. And engineers aren't cheap these days.
The infographic below from Riviera Partners, a high-tech recruiting firm, shows that engineers are actually quite expensive. The infographic data is based on year-to-date 2011 and encompasses engineering developer placements across the United States.
I spoke yesterday with Riviera's founder and managing partner Michael Morrell who told me that the firm has seen developer salaries increase 7 percent to 10 percent over the past two quarters and that senior engineers are finding themselves with multiple offers. This is a change from the past several years where salaries have been stable within 2 percent to 4 percent.
According to Morrell, the past three quarters have also seen high-end developers focus more on salary and less on equity; they're willing to take more stable positions at later-stage companies to have a guaranteed income.
Overall, Morrell said he believes it's a great time to be an engineer looking for a job but also cautioned that becoming a sought-after resource means that you show commitment to your work and not jump around positions without reasonable cause.