The current San Francisco influx is unsustainable. If you're somewhere else in the world and thinking about coming here to do a startup, I wish I could convince you to change your mind.
San Francisco is incredibly expensive. Rents have shot up by ~50% since 2008, office space is following the same trend, and competition for (even mediocre) programmers is intense. Worse, a lot of the cultural diversity that made San Francisco interesting has been driven out by the high prices -- it's a much more homogenous city than a few years ago, where mom-and-pop shops and other neighborhood amenities have been replaced by places selling $10 "artisinal grilled cheese" sandwiches and "mixology" bars where you can buy your choice of $15 cocktail. SF feels increasingly like a city for wealthy yuppies, because...it is a city for wealthy yuppies. Living here on anything less than a good engineer's salary is becoming a tall order.
Which brings us to a very important point for all the young programmer dudes: when you all crowd into the same tiny city and bid up the rents into the stratosphere, your available dating pool shrinks to a puddle (yet another consequence of the skewed gender balance in tech. sigh.) All the pour-over coffee in the world doesn't make you happy when you can't get a date, and those artisan cocktails are far less cute when you're jockeying for position at the bar in a crowded room full of guys. If you're a 20-something male programmer looking for a date in SF, I feel badly for you. Hope you like BART, because you're going to Oakland (if you're lucky!)
Once upon a time it was only a mildly bad decision to locate your startup in San Francisco, but you could justify it with the appeal of a diverse, cosmopolitan city. Right now, there's a very real financial penalty (rents, salaries, taxes), and the cultural benefits are waning. There are a lot of great cities in the US, and on the internet, you can work from anywhere. Try those instead.