Hi, I can't speak for Lloyd. But, as someone else who's building a funded startup here in Austin--and who sits about 10 feet away from Lloyd and OwnLocal every day!--I can answer it for me/my startup.
I ran my last company in the Valley and did really well--I exited for 7 figures. I am building my current company in Austin because I see here what the Valley was in 2002-2004. Growing fast, retooling itself as a startup hub, and building real businesses with real revenue.
Developers are (somewhat) easier to hire here. Salaries and cost of living are lower. No state income tax saves you some good money, too (matters more once you get acquired and/or start pulling down a larger salary.)
Weather is less great, but you do have seasons here, which I can appreciate, having lived in California most of my adult life.
Funding is available, though not quite as easy to get as in the Bay Area. However, I will say, once you figure out who the investors are in Austin, they love to invest in local companies with traction and revenue. And there are venture funds here, as well. In addition to local funds, 500 Startups makes several trips through Austin a year and funds the most promising startups here.
Plus, Austin is a fun city that has a lot of fresh, young energy. Thriving culture, bike- and scooter-friendly, and did I mention you can actually afford to buy a house here? I suppose that's more important for us "old fogies" who are already in our 30's. ;) Oh, yeah, and you can drink beer at the movies thanks to Alamo Drafthouse. Also, if you're a foodie, Austin is epic. I still can't believe the Bay Area doesn't have an equivalent to Central Market.
I wrote a more in-depth blog post before I left for Austin: http://www.erica.biz/2011/california-im-leaving-you/ And I can safely say that moving here to run a high-growth, B2B tech startup was one of the best decisions I've ever made.
The short version is that we work with small newspapers, and small newspapers sometimes like the idea of working with people from Austin instead of San Francisco. (Yes, I realize how crazy that sounds.)
It also suits me better personally, and it seems to be easier to raise a relatively large (and young) family.
I made a go of it in the valley for a year, and it was a lot of fun, but we're happy to be a part of the Austin Tech community now.
Simply curious, why did you decide to build the company in Austin, TX?