Its great to see this guy try to find talent outside of SV. Minneapolis-St.Paul probably has a lot of hidden talent because of their outstanding universities. It'll be interesting to see what comes of this.
That said, both Google and Microsoft are opening offices here and the CS dept. is accepting more people into their program.
We've also recently gotten a Kauffman grant for UW-Madison, and student orgs like the UW Entrepreneurship Association and Collegiate Entreprenurs' Organization have been gaining popularity to allow for lots of different types of business ideas to develop if you're not looking for web based software. That's not to say there aren't any (We're one), but there are definitely fewer than SF/Boston/Twin Cities.
@incomethax, like Wisconsin though, VCs around UM are skewed more towards biotech-related startups. And, like Wisconsin, Ann Arbor also lacks the financial resources of a S.V/Boston