Is your city a startup ecosystem?

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Is your city a startup ecosystem?

My good friends from Startup Compass strike back with a new fascinating report called: “The Startup Revolution: The Global Rise of Startup Ecosystems And How They Compare“. I just got a glimpse at the report and it’s definitely going to be huge for a lot of governments. I must say I’ve been skeptical of this list before, but the new data is way more comprehensive, based on 50.000 startups and the key performance indicators make a lot more sense than the previous list I read about.

Without any more delay, the top 20 startup hubs worldwide are the following:

  1. Silicon Valley
  2. Tel Aviv
  3. Los Angeles
  4. Seattle
  5. New York City
  6. Boston
  7. London
  8. Toronto
  9. Vancouver
  10. Chicago
  11. Paris
  12. Sydney
  13. Sao Paulo
  14. Moscow
  15. Berlin
  16. Waterloo
  17. Singapore
  18. Melbourne
  19. Bangalore
  20. Santiago de Chile

There are some surprises in this list, with cities like Paris or Sydney being in the top 20. But overall, most of the hubs make sense to me. The ranking has been based on seven indexes:

  • Startup Output Index: Total activity of entrepreneurship in the region, controlling for population size and the maturity of startups.
  • Funding Index: How active and comprehensive the risk capital is in a startup ecosystem.
  • Performance Index: Total performance and performance potential of startups.
  • Mindset Index: Degree to which founders are visionary, resilient, with a high appetite for .
  • Trendsetter Index: Speed of adoption of new technologies, management processes, and business models.
  • Support Index: Quality support network, including mentorship, service providers and types of funding sources.
  • Talent Index: Founders’ age, education, startup experience, industry domain expertise, ability to mitigate risk and previous startup success rate.

Here you can see the table with each index weighted against each city and the ecosystem stage (1 – Seed, 2 – Hype, 3 – Independence, 4 – Integration, 5.1 – Sustained Expansion, 5.2 – Ossified Expansion, 6 – Contraction.)

 

Some interesting insight into each ecosystem, specially the European one. With these numbers you can easily pin point both Berlin and London against each other. London is still ahead in terms of Startup output than Berlin, as well as in funding. The performance though isn’t that different, being London slightly ahead. Berlin shines in trendsetter and differentiation, which clearly marks it as a very young ecosystem that is growing fast. The interesting glitch is Paris, having the top score in the Europe scene when it comes to performance. I wonder what my French friends have to say about this.

Some of the in depth data is fascinating, the average entrepreneur’s age in Silicon Valley is 34.12, London 35.98, Paris 33.21 and Berlin 31.86, shattering the old fashion cliche that to be an entrepreneur you need to be 20. The gender gap is also astonishing, a topic that should be discussed in depth after the last Global Gender Report by WEF. Silicon Valley has a 10%|90% (F|M), London a 9%|91%, Paris 7%|93% and Berlin %3|97%. There seems to be a slight correlation between the gender gap and the maturity of each ecosystem, Silicon Valley at stage 5, London stage 4, Paris stage 3 and Berlin stage 2.

There is a goodie in the report, I’m guessing courtesy of my friends at Telefonica, with some data about the Madrid startup ecosystem, one of the runner ups to the list, which shows an average entrepreneur age of 34.69 (only slightly above Silicon Valley), a 3%|97% gender gap, a 1:8 ratio of dropouts vs collage education (nearly 3 times more education than in Silicon Valley) and an incredible 6.75 working hours vs 9.95 at the Valley. This doesn’t surprises me at all, being life style the hardest problem against startups in Spain. Kids, less soccer and more startups 😛

All in all, a must read report for everyone in the startup community that is going to through many insights into each hub, how to grow it and what needs fixing. Looking forward to read the official statements of many cities.

As always, fantastic job by the Startup Compass team, it’s a pleasure to have some real data about such ecosystems. I wonder if they can project where the next one will happen or what needs to be built in order to make them happen. Interesting food for thought!

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  • Adam Mason

    Being in a startup hub can certainly help, but it can also hurt. Living in San Francisco or New York or other prime locations for talent increases your living expenses tremendously. Given that many startups die off because they run out of money too quickly and don’t give themselves enough runway, it might be wise to consider a non-startup hub if that allows you to last long enough to get traction. There’s no right or wrong answer here I think

  • Adam Mason

    Being in a startup hub can certainly help, but it can also hurt. Living in San Francisco or New York or other prime locations for talent increases your living expenses tremendously. Given that many startups die off because they run out of money too quickly and don’t give themselves enough runway, it might be wise to consider a non-startup hub if that allows you to last long enough to get traction. There’s no right or wrong answer here I think