I've been saying this for years but sometimes it takes someone deep in the thick of Silicon Valley, who has succeeded, to come out and make it plain. Mark Zuckerberg, and no one will argue this, has found huge success in Silicon Valley yet even he says that if he could do it all over again - he wouldn't have built Facebook there.
Not because there isn't talent in Silicon Valley. Not because the weather isn't agreeable. It is because of the culture that has developed for software companies there. That culture is one of building products or services that you have no intent on supporting for years or even decades... but that you simply plan on selling.
Here is [what Zuck said](http://www.justin.tv/startupschool/b/298692604):
>"If I were starting now I would do things very differently. I didn’t know anything. In Silicon Valley, you get this feeling that you have to be out here. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me."
Steve Jobs was recently quoted as saying that he was impressed by Zuckerberg's resolve to not simply flip Facebook but to build a real business.
Silicon Valley was not always the place to build a company that you simply want to sell off. Hewlett Packard, Apple, Intel, etc. etc. were all built there and they're still around today - still examples of sustainable companies that everyone envies.
If I were starting a company today I'd stay right where I am. I wouldn't do it virtually either. I'd hire local. Grow organically. And work hard to build a company that has adds value to its customers, has a sustainable foundation, and has a killer team of dedicated people.