Why are we seeing growing number of startups?
1. Moore's law has made computers (hardware) effectively free.
2. The internet has made promotion free.
3. Programming languages have gotten more advanced, enabling smaller number of engineers to create a lot more output. Founders no longer need to hire in order to get the first version out.
As a result, it has become significantly cheaper to start a startup, and young and mobile founders are able to move to any city that would offer them a good deal.