“densities of excellence” is used to describe group of people / companies / businesses in a close proximity, which creates an innate pressure on each participant to perform efficiently and output the highest quality of work. This is true for cluster of restaurants known for being the best (in Paris for example) or a group of people (engineers at Microsoft after Steve Ballmer joined, or at Netflix when they laid off 1/3rd of their workforce to stay afloat after dotcom crash)
High performing people can exist and function efficiently only in a workplace where they get enough challenge and the pressure to perform, otherwise things get boring very easily.
So while hiring the best thing you can do to keep your team motivated and happy is to hire only exceptional people. This is arguably better than free lunches, chef Amy or even fat bonuses. If the bar of entry is set high enough, every team member would keep on pushing, and progress towards a better self, and also help the company grow faster, and attract exceptional people, completing the loop.