If it's so bad, why aren't people moving out of the valley?
I think the parent commenter paints a gloomy but somewhat realistic picture - it 'works' because there's a high volume of people looking for success, but it can be very stifling for some (such as myself).
I've worked here in SF as a Rails consultant for the past four years. It's quite obvious that the work force skews younger. My best friend just became a CTO and his bosses are both 20. He's 41. :-0
When you look to start a family, the pressures of working in the valley are going to bubble to the surface. You can either endure a 60 minute drive (that should really only be 20 based on distance) to a child's dr. appt for which you endure wall-to-wall traffic with a screaming child, you try to ride bart with a child in stroller and packed cars, or you shuttle a car seat to and from an Uber.
Or, you pay 30-60K for a nanny and let them handle those headaches.
It's hard to live in SF with a family. Really hard.
Hmm, seems like a business opportunity here, for Uber/Lfyt etc. to offer a car seat as an extra (in which case the car arrives with seat all set up and ready).
1) lots of other stuff rocks, so you don't want to leave and you can downgrade your living space to something smaller that is more "affordable" to get most of what you want
2) people are leaving, but at a slower rate than they are coming. Basically, come here, work hard, burn out, and go somewhere else. Or maybe you get a job on the periphery, like say san jose, and then you live way out in Morgan hill or gilroy or in the cheaper parts of san jose. Or you get a job in Dublin/Pleasanton and then live in like antioch/pittsburgh/tracy.
Anecdotally, it seems like they are moving out of there and moving in here. (Disclaimer: there's an alarming number of people here that are opposed to that. I'm not one of them.)
Thing to consider, though. There still isn't nearly the concentration of VCs (and thus networks) here as there are there. Depending on where you're at with your project/startup/company, that's got to be a sizable consideration when thinking about moving to/moving from the valley.
Also anecdotally, I moved to the Bay Area, my parents moved (back) to SoCal after 40 years in the Northwest grey. Plus, I have 4 dot-com era friends who have moved from the Seattle tech boom to the Bay Area tech boom, all in their late 20s/early 30s (so not just-out-of-college types), and I know a few others who are considering the same. And I don't know a soul from here who moved north, except for people who came down here for college and then returned home.
I guess it's like they say, "the plural of anecdote is not 'data'".
There'll always be new blood that offsets people leaving. I think the housing shortage is so bad that even if people were leaving it wouldn't decrease pressure right away.
If there is any constant to the Valley over the decades it's the old fashioned American pioneer success story; strike it rich and take the money home.