Well, part of the "do it in the Valley" advocacy is social or VC-oriented. All those alpha geeks in one place make a lot of connections, work together, recommend each other, go to similar events during rare non-work hours, and some even hire each other or found 2nd startups with partners they met working for their previous employer. For me, it's easy to grant the truth of this because the history of how these startups began is public record. I'd rather not try to deny that such connections have great value.

I tend to take a more romantic view, one that says that it doesn't matter so much if you don't live in SV or Cambridge, MA even if the current metrics show that your startup will be more successful in those places.

I wonder whether SV/Cambridge will lose a little pull since VC has dried up a lot. Also, buying a home is going to get a lot cheaper in rural places. Of course, not all cheap places are equal, but what if it truly, really didn't matter where you located? There's crucial things to research like infrastructure, high speed network capability, the reliability of the public utilities. The Midwest US could be a great place to found a startup.

It seems to me the desire to reach ramen profitability by operating cheaply can outweigh the cachet of advice and networking in the meatspace.