San Diego is one of the best places to live in the US. Cost of living, homelessness, and failed neighborhoods are no worse in San Diego than in Seattle or Austin. Benefits are perfect weather, proximity to Silicon Valley VCs, recruiting from the University of California system, and a willingness from talent to relocate to join your startup.

Everywhere has challenges. Attracting real talent in the midwest is challenging. Cost of living in industry hubs is also challenging. There's no perfect location to start a startup.

Source: 7 years at startups in the midwest, the south, Seattle, and now San Diego.