[Phanuthier]

Relevant reading:

http://www.quora.com/Silicon-Valley/...ficult-to-copy

Why has Silicon Valley proven difficult to copy?

Factors mentioned so far:

Unique history
Government spending
Talent concentration
Universities
Weather
Mature financial sector
Culture
Positive feedback
Old world established order

http://www.quora.com/Silicon-Valley/...till-THE-place

Is Silicon Valley still THE place?

Yes, it is still the place.

Yes there are more startups than anywhere else, so there are more investors, more potential employees, more partners, more events, more of everything. That is what makes it what it is.
Yes it is hard to stand out, but standing out is a problem no matter where you are. You aren't trying to stand out at a cocktail party. You are trying to stand out with your users. All your users care about is whether you are building something they want. They probably don't even know where you are headquartered.
Office space has gone up in price but is still widely available. Only downtown Palo Alto has a critical shortage.
Yes there are a lot of startup CEOs here, in the same way there are a lot of dollars in Warren Buffet's pocket. You might not feel unique, but are you more interested in feeling unique, or are you more interested in building a successful business?

But is it the right place for your company? I don't know. A few things to consider:
Where do you want to live? Presumably you are building a company to build yourself a better life, and where you live is a big part of your life. Where are your family and friends? What are your hobbies? Don't move if you won't be happy. Being successful in business and miserable in life is pointless.
How long do you want to do this? If you want a long career in startups, you want to be in a hub. If you just want to do this one startup, maybe not.
How many employees do you need? If you want to build a 10-person company you can do it anywhere. If you want to hire several thousand people like Facebook or Google did, you'll need to be in a major startup hub.
Where are your partners and potential acquirers? Being close to them is a major advantage.
If you are a B2B company, where are your customers? You will want to be close to them, especially the larger ones and ones you want to work with when you are doing customer discovery.
Do you need to raise a lot of money? If so you want to be near investors. If you are starting a lifestyle business or a professional services business, being near investors is less important.
Is your company unique? If you are starting a "me too" company it is true you'll have trouble standing out in Silicon Valley, but you'll have trouble succeeding anywhere anyway.