I feel like they're riffing about an imagined startup culture that died out in 2001.
Mike was being coy when he described himself as a "former Microsoft employee", but dismissing him as a "random investor from Texas" is silly.
http://people.forbes.com/profile/michael-j-maples/49137 http://query.nytimes.com/gst/fullpage.html?res=990CE2D81038F... http://www.alibre.com/corporate/management.asp
On the other hand, there is some truth to your comment. Aside from the guy who lives in China, there wasn't anything that suggested the authors had even been to California.
There are real disadvantages to living in Silicon Valley, and they didn't mention any of them. Instead, they brought up things like work culture and being showered with VC dollars, which actually aren't the big problems.