Industries tend to cluster. Automakers in Detroit, investment banks in New York, country record labels in Nashville, movie studios in Hollywood. If you start

Industries tend to cluster. Automakers in Detroit, investment banks in New York, country record labels in Nashville, movie studios in Hollywood. If you start a startup in SF, you get a built-in talent pool that you wouldn't necessarily get in Miami. Yes you pay higher salaries due to the cost of living, but you get a bigger selection of candidates (to whom you'd have to pay relocation fees to move them elsewhere). Plus, SF is just a cool place...walkable, great nightlife, culture. You don't get these things in a place like Phoenix.