When I visited Cincinnati I met with a company called General Nano - they manufacture a carbon nanotube material that can be used to make planes more resistant to lightning strikes. The U.S. Navy is an investor through the Office of Naval Research. The military comes through Cincinnati in part because G.E. Aviation, which manufactures airplane components, is in the city.
General Nano is an example of a company that would be unlikely to be founded in, say, New York. If you look at the latest wave of New York startups (e.g., Rent the Runway, Warby Parker, Foursquare, Gilt Groupe, Etsy, Kickstarter, etc.) they tend to capitalize on New York's existing industries (e.g., fashion, retail, etc.). Cities tend to produce startups that are either solving their problems or building on existing strengths.
Other companies in Cincinnati include The Brandery, a startup accelerator that emphasizes brand building, and Blackbook HR, a software solution to help corporations integrate employees into the community and help them feel more rooted. Both of these were born in the shadow of Procter and Gamble, the consumer products giant that is perhaps Cincinnati's most prominent corporate anchor. In this case, both branded innovation and employee satisfaction are issues of interest to the established organizations of the region.
You can see the same phenomena in other cities. New Orleans is a haven for education reform as the only city in the U.S. where more than half of all public school children attend charter schools. Also in New Orleans are 4.0 Schools, a design lab for education innovation, and Kickboard, an analytics and student tracking software company for teachers.
Baltimore, the home of Johns Hopkins University, has a cluster of innovative health tech companies such as Reify Health, which uses mobile technology to improve and measure medical treatments. Reify Health was started by four Johns Hopkins medical and graduate students who left school to start the company. Baltimore also has cyber security start-ups, like Riskive, that benefit from the city's proximity to Fort Meade and US Army Cyber Command. Cleveland has companies like Linestream, which provides next-generation motor controls to save energy and money for appliances, and Maker Gear, which sells 3-D printers, in sync with the city's robust manufacturing base.
There's an overly simplistic notion that Silicon Valley is the only place for technology companies to thrive. We all remember Facebook moving out West in 'The Social Network.' But even Mark Zuckerberg said in 2011, "If I were starting now, I would have stayed in Boston" and advocated "You don't have to move out here to do this."
The problems that you see startups tackling are dramatically different in different cities. Silicon Valley is unlikely to produce the same set of companies as New York or Cleveland because the region has a different set of strengths and defining institutions. We need people building companies all over the country to innovate in aviation, consumer products, education, health, cybersecurity, biotech, manufacturing and everything in between.