I believe it is the major factor in determining startup success.
This may be a demoralizing and repugnant thing to hear for the Type-A "control my own destiny"-style of people who tend to populate Silicon Valley, but I think it's true. Many a mediocre team has stumbled onto something lucky and many a talented team has gone nowhere despite great execution. Most languish somewhere in the middle.
Luckily, it seems that Silicon Valley's startup ecology has a couple mechanisms to subvert/harness this unfortunate truth:
1) Startups tend to fail fast. Within about 18 months it is usually easy to tell if a startup is going to go somewhere, and it is culturally okay to just give up, close down shop, and try something else. This means it's possible entrepreneurs to roll the dice over and over again until luck hits.
2) The industry is good at spotting lucky breaks and exploiting them. VCs and other experienced industry veterans have, over time, become pretty good at spotting a success story in the making, and are usually ready to help pour resources (money, people, experience) into a startup that's hit a lucky break. A lucky founder doesn't have to already have a perfect team in place or be the perfect executive - if they have enough of that elusive x-factor (usually it's "will and determination") to grow with the company, the Silicon Valley ecology stands ready to provide them with funding, top-notch talent, and the experience of others.