Building a tool for programmers? The valley might be your place. Building a fashion startup? Go where people are fashionable.
Building a search engine? There are a lot of search people here. Building a service startup that requires warehouses, inventory and/or logistics expertise? Go to the places where logistics people are running warehouses.
Building a streaming video site? Many of the best network engineers in the world live in the valley. Building a two-sided marketplace for used children's clothing? You might want to go somewhere that people can afford to have children.
Building yet another on-demand, Uber-for-X service where the value proposition is weak/nonexistent for people who aren't workaholic techno-utopians? Yeah, OK. You could probably only do that sort of thing here. San Francisco is the world capital for people who have more disposable income than incredulity.
That's kind of the heart of it for a lot of people. Say you're a young engineer with a great idea. Now what? You don't have the experience or connections to build your company, so you absolutely need to raise money. That kind of money may exist elsewhere, but only as a fraction of the SF money. "Silicon Alley" talks a big game, but their numbers aren't even close (especially when you talk about exits).
I personally strongly support living in an affordable city that gives you great access to your customers. Bootstrap something that has the potential for early revenue. Fail fast or succeed, and then, when you're post-exit someday, do your Next Big Thing in SF.
I'm just surprised at what people go to to be really in downtown SF. That money could arguably be better spent making sure that the founders/employees eat more than cup noodles for the first 6 months, if it means driving 90 minutes to go to meetings or events.
They tend to be in lots of different places, most of which are not expensive places to live.
Where I am in my life, I actually find that much more appealing than the typical bay area startup, although I don't feel the need to be 'against' VC fueled startups either - they're capable of doing some things that bootstrapped companies can't.
In my own experience in Gifu, the fact that ~$3k a month not only supported me but paid roughly market wages was enormously helpful. Had I started in SF or NYC or Tokyo, the need to have $120k a year in profit to have the same standard of living would have probably kept me tied to a desk at AmaGooBookSoft forever. (I can afford to live here in Tokyo these days, but man, $3k in rent is an awful lot of bingo cards.)