> Instead of paying employees half market rates, those employees can go and work on creating a VR app that could be used by millions of people, or some other opportunity. And they could receive full pay.

Yes, you're right. But does a photo sharing service really need those kind of employees? Is there a need to be located at a technology cluster like the SV where developers are expensive and a scarce resource?

Services like Everpix are - in terms of technology - pretty trivial. They can be built anywhere in the world by average developers. No need to hire expensive Stanford PHDs to do a job a kid from the local community college in Kentucky could do.

Who says they had to work on Everpix full-time? Again, you miss what I'm saying.