Funny, my comment was going to be "I bet there's zero users in Houston" :-)

Given the sheer number of startups that only "launch" locally, even if I were in SF, I think I'd launch somewhere else, to get outside what is a vortex of innovation, especially if your app is dependent upon a network effect.

Launching locally in SF is an extremely good idea. I've worked in lots of other places and nowhere have I found a collective group of people who are willing to beta test your product. Better yet, if it sucks, they'll tell you why it won't' work and what should be improved - that's a good thing. Is there more noise in SF? Absolutely - but it's less of a turf war than people think it is. If your product is better than the competition, people will adopt. Entrepreneurs bring products here to prove their ideas knowing there is a rich cashpile waiting to fund them when they need to scale.