I spent nearly 10 years working in the bay area. I worked at a number of startups and most importantly I worked with some amazing people. And I worked with those same amazing people over and over again in different companies.
My experience was hardly the exception. Many great companies in Silicon Valley have teams that have worked together time and time again.
When I moved back to Boston I forgot all about non-competes. I was frankly surprised that employers not only require them but they actually enforce them. This means that if you leave a company, you are not allowed to work for a competitor. The definition of a "competitor" is often broad and confusing.
As a result Boston startups have a real disadvantage from day 0. Boston entrepreneurs have one arm tied behind their back compared to their west coast counterparts. Imagine if Mass. didn't have a non-compete. What could the successful alumni from EMC, Lotus, Lycos, Akamai, DEC, Avid, Sonus, Groove, etc have possibly created after leaving those companies?
Or think about the reverse? What if CA had a non-compete. We might not have seen Intel, AMD, Apple, Oracle, SalesForce.com, Adobe, , develop the way they did (those companies were started by entrepreneurs that were at "competitive" companies prior).
Scott Kirsner has a post about last weeks NEVCA lunch where Paul Meaeder from Highland Capital calls the non-compete a "silent killer"
There are many reasons why the east coast vs west coast debate continues. There are some complex issues at work and it might take some time.
Getting rid of the non-compete should be an easy one though. Let's do it.