Bingo. The businesses see the critical mass of necessary talent in SV and just go there because. But the reality is that there's a critical mass of people willing to work at startups there, not overall talent.
I did a stint in SV, got pitched at by lots of startups and refused some jobs at some pretty big name companies. It was definitely an eye opener of expected long droughts of no pay, low pay, really long hours, super high cost of living, etc. I have an exciting, yet stable job with lots of hours, but a manageable work/.life balance, good salary in a low cost of living place. No one could give me a good reason why I'd go to SV or be in a startup. You don't get many startups here because we don't have a huge pool of people looking to work 80 hours/week for peanuts and the hope of a lottery payout. We have stable family people that just want to be productive and have a good work-life balance. Stable, solid businesses.
One employer's pitch was that I'd be the first person on earth to see another person on Mars, being the lead of the group that handled the mission downlinks. Pretty damn good job incentive. For a while there I was really pumped about the possibility. But you know what's cooler than that? Seeing my daughter's face every morning when I get her up for school, and enjoying my wife's company while we hang out in the evening. Being able to kick off work in the afternoon because it's a beautiful day to go to the lake or for a hike. Why would I give that up just for that one bragging right? I know some people would, just not me and honestly not a lot of other people. If that job could offer a balance between the two, I'd be there in a heartbeat and do a kick-ass job, likely better than the person willing to work 80 hours/week....but that's not the culture, so I'm off enjoying stability, nature and family instead.