Talent density works like this: high quality engineers prefer to work with other high quality engineers. The result is that good engineers typically be found in clusters. This is true for the companies for which they work, and the technical communities in which they engage.
Or put more succinctly by Steve Jobs in the The Lost Interview:
“I’ve built a lot of my success off finding these truly gifted people and not settling for B and C players, but really going for the A players…I found that when you get enough A players together, when you go through the incredible work to find five of these A players, they really like working with each other. Because they’ve never had a chance to do that before. And they don’t want to work with B and C players and so it becomes self-policing and they only want to hire more A players. And so you build up these pockets of A players, and it propagates.”
Being an above average engineer at a company with high talent density means more to me as a hiring manager than being the best engineer at a company with low talent density.
If you’re the smartest person in the room, you’re probably working at the wrong company.