I agree in general, though it's not so all-or-nothing.
Being able to live and work cheaply
I find the key to be in the above, where the focus is on ability. Two cities may have very similar overall costs of living on some generally accepted scale, yet still have significantly different costs of "living" for entrepreneurs.
Perhaps point 1 should really be "low minimum cost of living." Does anyone provide CoL spread information for the bigger cities?
It's not cheap if you live in a trendy neighborhood, eat out a lot, and own a car. But it is cheap if you live in a safe working-class neighborhood and rely on the CTA. In 2003 I lived in an apartment in Pilsen with 2 startup founders and lived off of $800/month - that was my share of the rent, utilities, internet, and company cellphone plan along with food. And I probably could have saved $100/month if I didn't go to bars.
1. Low cost of living.
2. Nearby colleges and universities.
3. Community of experienced entrepreneurs.
4. Large national airport.
5. Plethora of professional service providers.
6. High concentration of consumers
I think bullet points 3 to 6 make point 1 impossible.