There is a (somewhat hidden) point 2a) in there: interesting people don't work on dull problems.<p>You should create a tight-knit team of highly competent people in an environment that favors productivity. This will attract the best people. Then share the profits with them (i.e. pay them well) to make sure they stay.<p>Of course, this may be easier said than done, and ignores the fact that not all work is interesting.