18 months ago I relocated from my home town of Glasgow, to London, just 400 miles away. An important reason for the move was because I had just started working on my new startup, Teamly, and I know that location matters, even when running an internet business. Don’t kid yourself otherwise, your chance of success is seriously improved when you’re in a startup hub.
18 months later and moving to London has proved to be a smart move, for all the expected reasons, as well as the unexpected recognition by the UK Government of London’s startups with the launch a year ago of “TechCity“.
I don't think you can really say that moving to London to operate your business there versus operating in Glasgow was a "smart move", as you have no way of knowing what level of success your startup would have had in Glasgow (since you never experienced this alternate reality).
Sure you made a lot of great connections as a result of your move, but it is impossible to know what connections you never made because you weren't in Glasgow during those 18 months. There is no way of knowing whether you missed out on something (a chance meeting/encounter/coffee, etc) which, while it may have been less probable, would have been of more value to the success of your startup.