California is not very employer friendly and has strict over time laws not to mention outrageously high taxes and rents.
It does not make business sense to start there.
Detroit, Austin, Kansas City, and even Fargo have universities, other tech companies. I dream of starting a business but I do not have 1 million dollars a year to pay for a tiny crappy office in San Fransisco. If I did get shareholders I am sure they do not appreciate all their savings going to pay rent rather than for product development. Not to mention your employers could leave in a hearts notice with Google and Apple offering 6 figures on the fly.
I know I sound conservative right now but when you start out no OT, taxes, friendly business laws, can mean you make it or die at the end of the year.