Devils advocate time :) 1) This leads to increased competition like the one we have seen with multiple companies competing in the same growing market. The one(

Devils advocate time :) 1) This leads to increased competition like the one we have seen with multiple companies competing in the same growing market. The one(s) with venture backing can often muscle out companies with a more compelling product, which will maintain the importance of being proximal to capital (i.e. SV). An example of this is Balanced Payments vs Stripe, imo. 2) My parents moved to SV in the 70's and were shocked at how expensive apartments were and how high the cost of living was (they moved from the Northeast). I had a converstation with my dad about prohibitive housing costs here in 2005. It's not readily apparent to me if things really will ever come to a true breaking point. (also population dynamics wise, many baby boomers are going to perish within the next 20 years) 3) Related to #1, when many teams can build competing products for cheap, what will separate them will frequently be their sales and marketing muscle. This in turn is often backed by capital in a short-term-unsustainable manner than drives out competition. 4) Building is often the easy part, other than the small number of truly exceptional viral consumer products. Having written all this, I don't really disagree with any of your points, though I think that you exhibit egalitarian idealism often found in hacker types :)