The virtual world is great but it doesn't replace the physical world. Location still makes a huge difference to tech startups in terms of getting talent, finding venues and events to pitch your idea, getting investor attention, and all that.
No matter how good our video streaming technology these days, it still makes a big, big difference to be with the right people in person.
If you were in middle-of-nowhere Nebraska you'd have a hard time finding co-founders, programmers, or investors within a 100-mile radius. Not to say it's a bad place, but it's really not the best place to be for a tech startup (unless you're completely set on a one-person startup, it's your parents' home and you just need a few months offline to churn out code on free rent and free food, or that place is your target market, in which case it might make some sense).
That said, I don't think the bay area is the only place. I'm working on an idea and I'm planning to stay in Boston for a while since the environment here is just starting to become awesome.
If you were in the middle of nowhere, Nebraska, you could move to Omaha or Denver, and you no longer have those problems created by not being in close proximity to a metropolis. You retain the advantages of being in an environment where housing and office space are cheaper, commutes are less onerous, and taxes are more affordable. The talent pools are smaller, but they are also less competitive. The investment pools are smaller, but their funding stretches further. Pitch opportunities will be rarer, obviously, so you would need to go farther afield to find them, and mid-continental businesses are far more conservative with new ventures than coastal companies.
The only real advantage to SV is that it has more money sloshing around, desperately trying to spill out onto the next profit opportunity. By comparison, everywhere else has already tightened their belts by at least two holes, and will look on your blue-sky babbling with extreme suspicion.
But if you don't need outside investment, and you don't need to be physically close to customers, any metropolis in the U.S. (and quite a few in Canada) will do. Some are better than others, obviously, but none will be so bad that they will cause your business to fail--not even the declining Rust Belt cities, like Detroit.
No matter how good our video streaming technology these days, it still makes a big, big difference to be with the right people in person.
If you were in middle-of-nowhere Nebraska you'd have a hard time finding co-founders, programmers, or investors within a 100-mile radius. Not to say it's a bad place, but it's really not the best place to be for a tech startup (unless you're completely set on a one-person startup, it's your parents' home and you just need a few months offline to churn out code on free rent and free food, or that place is your target market, in which case it might make some sense).
That said, I don't think the bay area is the only place. I'm working on an idea and I'm planning to stay in Boston for a while since the environment here is just starting to become awesome.