But it is absurd to say that it can only be done in the valley. Did Microsoft go to the valley when HP and Apple had a huge presence? No. People came to them.
Still, if I were 22 and single, I'd start my start-up in the valley without a moments hesitation.
Oh yes, and as for Microsoft--the rules are different for them. (When your revenues dwarf the GDP of some small countries you get a little more latitude.)