Well, since I started, might as well get all the controversial opinions out now. :-) Remember, advice is limited experience + overgeneralization.

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Building a startup is about leverage. Leverage is the ability to magnify your efforts. The bay area reduces your leverage. Especially compared to somewhere like Seattle, or Portland, or Boulder, or Salt Lake City, etc.

11. Everyone is rude. It's like living in New York or LA. The laid back california of the 70s is no more. Maybe Eureka or Weed or Barstow are good places, but the bay area is harsh. Some relish the challenge, others just want to be left alone so they can be productive. Being productive on your product increases leverage...

10. California looks so run down. This is because it is. The quality of life is declining rapidly. There's nowhere to go to escape urban sprawl-- not close anyway and getting there is hours in gridlock. Being unhappy decreases focus which decreases leverage.

9. The population density is so high, everyone is on prozac. (I'm not kidding.) Being depressed reduces leverage.

8. After spending 2 months there, I knew the business plans of 70+ companies in stealth mode. Everyone knows what everyone else is doing. Thus getting an edge on your competition is difficult, they may get your employees, and they do know your ideas. You have less leverage.

7. Every resource is in high demand, thus time spent finding real estate, finding equipment, is higher. The local and state government levels of regulation are very high, and thus time spent dealing with the burocrats is much higher. All these are distractions you don't need.

6. The availability of good startup quality employees is lower in the Bay Area. Because startups per capita is much higher there, there are more startups competing for the same employees.

5. Office rent is expensive, Gas is expensive, Taxes are high, everything you could want to buy costs more. Your burn rate is going to be much higher.

4. You can't find a place to live. Your employees can't either. Both you and your employees need more money to cover basic cost of living... your burn rate is much higher.

3. Being in the bay area means being on the VC treadmill. This is the opposite of working for yourself, you are working for the VCs, and unless you triple their money in three years, you get nothing. This forces bad decisions and much less leverage.

2. Long frustrating commutes reduce employee productivity and morale. They also reduce the length of the workday.

1. The state taxes capital gains like income! So, even if you win, you lose.

The upside... what rocks about the bay area:

10. Better S&M clubs. Much. Better.

9. You can fantasize about one day getting a boat and sailing out under the golden gate bridge.

8. Skinnier (but more expensive) women who want to date geeks.

7. More plastic surgery.

6. More networking events.

5. Better parties.

4. More founders to commisserate with when you're forced out of your company.

3. You can TP Arringtons house if he gives you a bad review, or doesn't invite you to a party, or says something particularly slimy about someone. Hell, just do it anyway.

2. A lot of the good conferences are there, and if they aren't, Las Vegas is closer than to other cities.

And the number one good thing about the bay area:

1. Well, at least its not Los Angeles!