Off the top of my head I'm thinking Portland, Seattle, Boston, Austin and Chicago in no particular order.
The annoying part is that there's so much talent concentrated in the Bay Area that it makes going elsewhere very difficult, especially if you have specific senior talent in mind that have already established their lives there.
Hopefully telepresence tech gets so good that one day it won't matter.
Depends on what viewpoint your coming from, but from that of a software developer there are many alternatives that have been much better than San Francisco for years, especially Seattle https://www.codementor.io/blog/best-cities-software-engineer..., which is also set up for future success as it keeps building http://www.spur.org/news/2017-06-15/keep-building-oakland. Honestly, I think what we are seeing, is a shift from technology companies, to technology simply being in everything, reducing the usage of such an odd concept as "Silicon Valley". For example: the biggest "Technology" company recently in Seattle is Amazon, a store first - that leverages technoloy. Even the recent things coming out of Silicon Valley have been similar (uber - taxi company that uses technology for efficient trip planning with customers, all the food delivery startups, etc). As we move more and more in this direction, where the startups are X (with technology!) it makes sense for the product to be developed where X is best instead of where technology is best.
There simply aren't enough engineers in Seattle, especially what I will call "startup" engineers. You're competing against Amazon, Google, and Microsoft (Facebook to a lesser degree) and the engineers in Seattle tend to prefer these established companies over startups. A large chunk of the Bay Area engineering community won't work at Amazon (Facebook and Google are another story) and came there to do startups. It's a bit of a self-fulfilling prophecy of course.
I worked at Twitter when we opened our Seattle office and we were trying to hire maybe 50 engineers the first year. This was before the IPO, trying to hire the ideal skillset for the area (backend) and it was still hard. Meanwhile we had more than 50 offers a week in SF.
The employee base is just so much bigger, it's no wonder companies feel like they have to have offices here.
What your describing is not a lack of engineers, it's a low uneployment rate. There are enough engineers for 100s of new startups. The only thing that excarbates more than San Francisco, is that there is much less a culture of jumping ship here, which is good for companies long term. Also, it's much easier to convince engineers to move to Seattle than San Francisco, which is probably why we are growing at over 3x the rate.
How does this jibe with the complaints of "talent shortages" in the Bay Area? How does a concentration of engineers benefit you if you need to woo them away from someone else?
Also, why are you looking exclusively at the local market? I spent years trying to leave Dallas for greener pastures, only to be ignored by almost everyone out-of-hand except Amazon and Google.
This is all about perspective. Now that's definitely the case with AWS and service first design etc. But from the beginning it was trying to be a bookstore, an online one, for sure. But not pure technology, as say a search engine or an operating system - that don't require much integration with existing physical infrastructure.
In each city, you have amazingly talented folks and wonderful opportunities to build against common everyday problems without a ton of competition. You can net the same amount that you would in Silicon Valley or San Fransisco if you play your cards right.
NYC? It's not as expensive as people say, especially if you have a tech salary (which is about twice the median household income). If you have a family I think that changes things, though.
Off the top of my head I'm thinking Portland, Seattle, Boston, Austin and Chicago in no particular order.
The annoying part is that there's so much talent concentrated in the Bay Area that it makes going elsewhere very difficult, especially if you have specific senior talent in mind that have already established their lives there.
Hopefully telepresence tech gets so good that one day it won't matter.