Employees are more aware now that the startup they work for isn't going to be the next facebook or google so perpetrating that myth and offering below market comp with some equity isn't attractive to top employees anymore. As many have stated, competing on comp and benefits is a tall order so looking for other ways to compete would be useful. Focusing on location, an enjoyable work environment, and quality of life (not fake unlimited time off) would entice those who want to work for a startup but can't justify the tough work hours combined with low pay.

Most startups are located in the Bay Area and the cost of living there combined with lower salaries make it an unattractive proposition for early employees. Encouraging remote work is a great way to attract employees who may not want to live in SF, NY or Seattle and are happy to work for less than those in the major hubs. Or move the startup HQ out of the valley if remote just won't work. Competing for workers in places where the big players aren't will give them an edge and greatly increase the value proposition they offer to early stage employees. This combined with proper quality of life focus and increased autonomy and responsibility that startups offer would change my mind about working for a big firm and make me consider a startup job.