Even if I lived in SF I'd be reluctant to commute an hour to work if I could just as well work from home.
The same pitfalls that apply to outsourcing to low-cost-of-living countries should apply to hiring American remote workers: communication overhead, lack of context and understanding of what the product should be, etc. If a projects works well with remote workers in developed countries, consider that it's probably irrational and a borderline violation of fiduciary duty to pay extra for them rather than equally skilled workers in India/China/Eastern Europe.
Most people who work in a multi storey office communicate the same way with the people on a different storey as they would with people in a different city.
You could look at the growing number of layoffs at post-seed stage companies[1].
Or you could look at startups that voluntarily publish financial information. Take, for example, this one[2], which, as of June, was spending $525,000/month on payroll (equating to an all-in cost of $146,000/year per employee) when it had less than $300,000 of monthly bookings revenue.
A lot (perhaps the majority) of venture-backed Bay Area startups are entirely dependent on investor money to sustain their workforces at their current sizes. Even some of the tech companies in the area that have gone public aren't profitable. FireEye and Marketo are two that come to mind.
Everybody has been trading profitability for growth, and that's a game most will eventually lose.
For tech companies, it doesn't really matter. They have unlimited money (relative to the cost of an employee). For startups, it does.
