You can start a failed company in a lot of cities. Congrats on living in sf on the cheap but it really isn't useful information to help aspiring startup founders.
You could pull something like this off in Vegas and live a lot more luxuriously. Yeah, you're stuck in the middle of the desert, but some folks in the startup community really seem to dig it out there.
i would say that running out of money is the only way for a startup to die. I haven't heard of a company earning loads of money closing down (except when being bought out or something).
There's a lot of room between running out of money and earning loads. Say I was earning $15,000 per year from my startup. Costs were low and I could take most of that home but revenue wasn't growing. The business hasn't run out of money but it's not making enough to support me and I have to shut it down. Unless there is significant growth opportunity that I'm missing it's also unlikely to get bought.
