This strikes me as terrible advice. Local remains wide open for new ideas. Some of the very brightest current startups are local-driven (eg groupon, square). Local is far from "done". Entrepreneurs who can crack the local nut will be rewarded handsomely.
Groupon = very bright startup? You might want to check up on those guys, as things like their burn and churn rate in expenses and customers are more than enough to give one pause.
Square = credit card processing. Sure, a local businesses can use them but calling Square is a play in the "local" space is a stretch.
Please do share some of these "new" ideas. The only ones I've seen are Groupon clones and each seems to get worse than the next. (Not to mention SMB's hate Groupon after using it.)
Off the top of my head: Ness, TinyReviews, FourSquare, Stampt, Perkville, Giftly, MotionLoft, Savored, Gobble, Farmigo, Rewardli, Prism Skylabs, Zaarly, Local Hero, Red Beacon, SeatMe, ZeroCater.
