I think the physical location is kind of a fallacy. For example, there are so many super smart and talented developers in DC working for government contractors because they may not be exposed to the startup option. Most people now have to move to Silicon Valley to focus on long term compensation, but often there is a stronger force of their local network (friend, family & significant others) who keep them stationed near by. Having quality startups in new geographical areas is probably the key ingredient to bringing in talent and capital, not the other way around.
> so many super smart and talented developers in DC
As one of those developers working in DC I can tell without a doubt that the majority of us do it because we get paid a large amount of money.
I make more here than I ever could in Silicon Valley. Plus the cost of living is around half. Last I checked a one bedroom in SF was around $4k per month. I pay just over $2.5k here in DC (with a parking spot!).
