Why we relocated from San Francisco to Los Angeles

WRITTEN BY Rasty Turek
Mar 28, 2017
Packing up our old office

Last month, Pex turned 3 years old. But instead of celebrating with a big party, we were busy packing our office and homes, and moving to Los Angeles. I got many questions about what triggered the sudden move, so I decided to share our reasoning publicly.

1. Better access to highly skilled talent

Pex is a very tech heavy company. These days, we’re operating on 25-30k servers, processing over 32PB of multi-media content every single month, covering more than 4B videos, while adding 50M new ones every single day.

We manage all this with a lean team of just 12 people. As you guessed, not that many people can actually build systems running at this scale. The Bay Area is perhaps the one place that actually has no shortage of these talents. So why move away? Because in SF, we can’t afford them.

Engineers suitable for the role are being fought over and we’re almost always on the losing side. Most companies solve this problem by hiring remote talent, but this just doesn’t work for us. I’ve tried it for 7 years, across multiple companies. We always ended up spending more time on clearing up misunderstandings than on working to solve our customers’ needs.

Being in SF required fighting over talent, not only with the biggest tech companies in the world, but also with thousands of well-funded startups. And of course we came up short in this equation.

LA isn’t yet perceived to be a very high tech city. But for decades it’s actually been the epicenter of the space industry. LA (and surrounding cities) are also home to many popular media tech startups – Snapchat, Oculus and others. For us, this means access to people with complementary skills.

To make sure we can attract, compete and retain talent, we also decided to keep our SF salaries. Of course, higher salaries won’t always guarantee better candidates, but they gives us a fighting chance. We’re already seeing the benefits. In the last couple of weeks, we received resumes from candidates that we would never get a chance to talk to in the Bay Area.

2. A cheaper (and better?) life

San Francisco and surrounding cities are incredibly expensive. There is no point in writing any more about this here, just go read the news.

Even though I love San Francisco and will miss it greatly, I have lost hope that this situation will get better anytime soon. I feel responsible for my colleagues, especially those that we moved from the other side of the world. I don’t want them to have to live with five roommates and be in constant financial stress.

LA allows us to do better. Even though some areas are getting as ridiculously expensive as SF, the rest of the city is far from it. Every single person at the company is doing better in terms of either housing or personal savings. By relieving the financial stress, they can focus more on the job at hand and live happier lives.

3. Being closer to our clients

Our primary customers are content creators, rights holders and brands. A majority of those are located in LA. By being near them, we can be more hands on with their teams, we can attend sales meetings in person and we can gradually educate the market. Being here helps us to understand our clients better. We’re building the service for them, so being able to meet them on their turf and listen carefully to their feedback helps us to do better.

What we didn’t anticipate though was the reaction of the customers. Once we settled in, we started letting people know that we have moved. We especially focused on companies that, for one reason or another, weren’t interested working with us before. We didn’t expect any miracles. But as they learned about our relocation, they warmed up. When I asked why, I was told that by moving to LA, we’ve shown dedication to the business.

Even after few good signs, it’s too soon to judge if our expectations will be met in the long run. I will be sure to report back on our progress once we get settled in and have time to dig around a little bit more.

Oh and yes, we’re hiring.

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