There’s lots of competition for top engineers in SIlicon Valley fueled by the giants such as Google, Facebook, Zynga, etc.

Connie Loizos at PEHUB reports:

"Right now, startups are either having to pay more, relocate people [to work for them], or go the [H-1B] visa route [allowing companies to temporarily employ foreign workers]," says Chuck McLoughlin, who heads up the tech practice at SVS Group, a 14-year-old recruitment firm based in Emeryville, Calif.

The salary increase for software engineers is still quite modest: an average of about 10% but its on an upward trend.

So what should startups do? This increases startup costs and that can be tough because most startups want to bootstrap themselves before they take on investors so that they can raise their valuation. Less capital means a shorter runway.

I recently met with Andrew Volk, an ex-Yahoo product manager who has been consulting and working on his own startup ideas. He says he spent about 6 months teaching himself basic coding in Java and how to use various online development platforms.

"I kept meeting entrepreneurs who spent many months revising their business models when they could have used that time to learn some coding and pull together a prototype of their service. That’s what I do. I’m not the best programmer but I’ve learned enough to be able to do quite a lot."

That’s great advice. I’ve taught myself a variety of different coding skills, I’m not an expert but at least I know what I’m talking about.

This also helps in terms of talking with developers and specifying the work you want done. It stops them from pulling the wool over your eyes with technical jargon or stretching out development times. When you know how things are done it puts you in a much better position in regard to effectively working with your team, in-house or out sourced.

Knowing what the various technologies can and cannot do also means you are better able at creating new services and figuring out new types of applications.

This all made a lot easier today because development languages and tools are increasingly sophisticated, which means they are easier to use by people who don’t have formal training. In the same way small business groups within an organization can now pay for cloud based IT services out of their budgets without waiting for the IT department, they can also develop the basic skills to prototype app development.

The beauty of cloud computing is that there are many aspects of development and deployment that can now be done without the need for an IT department.

[Please see my interview with John Dillon CEO of Engine Yard.]

[Cross Posted at Silicon Valley Watcher]