If the startup is successful, it probably won't have made a difference which of the two cities it started in, because the product/service offered and the people behind it are going to be the deciding factors. Unless you're doing something like self-driving cars or helping the homeless, which city picked won't make much difference to the product/service. The city will make a difference on what employee candidates will be available, though a good startup in either city can attract talent from both locations. Housing is less of an issue the further you get from San Francisco. The contiguous communities stretching from San Francisco to San Jose (San Mateo, Redwood City, Mountain View, Cupertino, etc.) are essentially one giant tech valley. Also, counting on a source of students is a weak argument; I went to Stanford and believe me, when you come out of college you know WAY LESS than you think. You need a much longer checklist of all the important pros and cons before you decide between the two cities, but don't worry, even if you make the wrong initial choice it isn't too hard to relocate if you always keep in mind that you may have to move (and a good startup that grows fast WILL have to move).

Thanks! And yes, I tend to agree that both are great options.

Doesn’t sound like a well-thought-out plan, at least not from the info you’ve provided. Update with reasoning for the move, it’ll make advice germane. Even the “20-minute drive from Sand Hill Road” trope would be one archaic reason, and would answer the question right away.

Startup is growing quickly. Founder needs to find both high-potential engineers and experienced engineers. Hence the move to the Bay Area.

They've been having a lot of success recruiting graduating-students out of the university in their current town, so the Palo Alto option takes that playbook to Stanford.

Good luck competing with Google and FB. Once you’re in the sloppy seconds and paying SV costs, you may as well have stayed home. So many high caliber grads in other schools. They’re all going to work from home anyway.

Experienced engineers will already be working from home.

This is untrue in my experience. The people who want to work at FB & Google are often just not going to be a good fit for early stage startups.

Unpopular opinion: neither, unless you're looking for a very specific skillset. There's so much talent outside of Bay Area, why limit your pool?

Because the Bay Area is the best and most concentrated English-speaking tech network on the planet. There is nowhere that comes remotely close, except for the Internet itself (full-remote-work).

Friend wants to build in-person company, so remote-work is off the table.