Which does not diminish the original point. Everybody says they will only hire genius top-1% programmers and that's usually ridiculous. For the vast majority of products, you don't need 20 great developers to build it and make it great. You can do it with 20 mediocre developers and one or two great leads who can mentor and help them perform at their best.
If that's true, then it should be easy to name some startups that fell into technical mediocrity and recovered. Are there any?
I saw the opposite happen firsthand: a company that was about to get steamrolled by a competitor, and they knew it. There was nothing they could do, even though they had over two years to prepare. The reason they couldn't do anything was because their team was mediocre. Last I checked, that company no longer had any job listings.
How many people here have similar stories? It's tempting to believe that mediocre programmers can be mentored, but it doesn't seem that simple.
I would say your statement is predominately false. Great developers can be found in most places, and even more if you don't require that everyone be together.