We looked at this as well. Here's a research brief appropriately titled "Chicago is not going to be the next Silicon Valley". If you like graphs and data, the brief illustrates why -- http://www.cbinsights.com/blog/trends/chicago-venture-capita...
- People want to live here. Not everyone of course, but if you're young, like a diversity of entertainment options and people, good food, culture, etc (yes - there are downsides). Very few people in the world say "I'd love to live in Boston, Seattle, Portland, etc for a bit to see what it's like". NY has that effect on people.
- Major companies and industries which are being disrupted or enhanced by technology are HQ'd there. Advertising, financial services to name two. If you roll in CT and NJ, you have insurance, pharma, etc.
- Lots of people so if you're doing something on the consumer side, many guinea pigs.
- Lots of money and influential folks here. The whole 1% thing.
- More and more VCs are setting up shop here as well. I think they see a good ecosystem here, and I think many of them don't mind having an excuse to visit NY for business.
Oddly, Portland has become an extremely popular and attractive place to a lot of people in the startup community. I know many people in the tech business that have moved there from Silicon Valley and NYC (e.g. Simple, which moved from NYC to Portland). It is an incredibly livable and active city so I understand the attraction. Seattle is also experiencing similar growth and is more cosmopolitan than Portland for people that want more of the international big city experience than you'll get in Portland.
The Cascadia region (Portland, Seattle, Vancouver) has been undergoing a bit of an urban renaissance that has been seeing those cities attract a steady stream of tech talent from other top startup cities in the US. I personally moved there (Seattle) three years ago and it is hard to argue with the quality of life compared to many other cities in the US.
Nonsense.