An increasing number of brave souls are standing up and saying that they aren’t content with corporate jobs, nine-to-five grinds, current technology and products, and listening to the boss man. They’re staring their own companies and going their own way, but it’s not always easy. Startup Genome, a resource for tracking and building startups, gathered data from the over 50,000 startups that use its analytics for its 2012 startup city report.
Startup Genome tracked eight factors to determine its rankings: total activity of entrepreneurship in the region, amount of active and comprehensive risk capital, total performance and performance potential, how many risks founders took, ability to adopt new technologies, quality of support network, talent, and differences between Silicon Valley.
Take a look at the top 20, plus one surprising city that didn’t make the grade.
1. Silicon Valley
According to Startup Genome, Silicon Valley raised 32% more capital across all stages of development than other global hubs. It also had 35% more serial entrepreneurs, or people who go on to found more than one company, and mentors. Entrepreneurs there tend to work longer hours daily, but are wary of niche markets—they’re 30% less likely than other areas to jump into those. Nevertheless, SV is the paragon to which all other cities are compared.
Pictured: The San Jose skyline is seen from City Hall in San Jose, Calif. Next
3. Los Angeles
“A sudden proliferation of technology and Internet-based startups as well as angel investors interest in them has reinvigorated entrepreneurship with less stress on traditional risk factors,” Startup Genome’s report proclaims. It also showed that L.A.’s entrepreneurs are rather well trained to begin with: 63% had previous experience in the market their startup targeted. Their risk tolerance, however, is lower than their counterparts in Silicon Valley—they’re 10% less likely to work full time before successful product market fit. Next
According to Entrepreneur.com, Seattle’s median tech wage is $96,197—a comfortable middle slot when compared to other big US tech hubs. It ranked seventh on Startup Genome’s funding index, which means that tech startups there are doing relatively well when it comes to capital. One of its greatest weaknesses, however, is in adopting new technologies and setting trends. It ranked especially low—19th—in startup output index, a measure of entrepreneurial activity in the city as a whole. Next
5. New York City
Ladies, New York is your startup city. Startup Genome reported that 18% of its tech entrepreneurs are women, making it the global capital for female entrepreneurs. When it comes to financial capital, however, there’s a major gap: startups have 70% less funding than Silicon Valley before product market fit and 16% fewer mentors to look up to. Next
Boston may have scored behind NYC in Startup Genome’s rankings, but locals know that its startup scene is still piping hot. More and more startups are choosing Davis Square for their HQs, and Kendall Square houses contingents from Facebook to Vee24, a British startup basing its US operations there. Unsurprisingly, Startup Genome reported that Bostonian entrepreneurs are 50% more likely to have PhD degrees that those in Silicon Valley. Next
London’s output of startups is 63% lower than that of Silicon Valley, but it’s still the biggest producer in Europe. Of the startups surveyed, 50% rely more heavily on PHP and other old technologies to get themselves off the ground.
“Despite various encouraging developments to encourage more angel investment, via the Seed Enterprise Investment Scheme, a lot more needs to be done to improve access to early stage financing,” suggested Rajeeb Dey, CEO and founder of Enternships.com. Next
8. Toronto, Canada
Toronto’s startups are similar to those in Silicon Valley in all of the right ways. Both have high levels of ambition, technology adoption, and mentor support. Toronto, however, employs fewer people per stage and outsources almost twice as much of its product development. It’s also seriously lacking in capital, with 71% less than Silicon Valley. Startup Genome recommended that policy makers help close the funding gap by instituting tax breaks, incentives, and other investor-friendly policies. Next
9. Vancouver, Canada
Vancouver, like Toronto, significantly lacks late-stage funding when compared to Silicon Valley, according to Startup Genome. GeekWire.com reported that the city is planning to spend up to $30 million on its tech economy to fix that bug. Startups there are more likely to tackle niche markets, however, and have a similar tech adoption rate to SV. Vancouver’s startups are also 76% more focused on mobile enterprises.
Pictured: Canada Day fireworks over downtown Vancouver. Next
In 2011, Chicago saw a 97% increase in the number of startups launched from the previous year, according to TechFaster.com. Groupon’s home city ranked a respectable 7th in terms of mentor support on Startup Genome’s rankings, but was relatively low when it came to garnering funding and talent. Next
Parisian entrepreneurs recently visited Kendall Square to get a sense of what makes a booming startup center. Paris’s startups outsource as little as those in Silicon Valley and have comparable work hours, similarly sized markets, and as many employees at each stage of development. Where Paris falls short, however, is in funding.
“Entrepreneurs are almost solely reliant on self-funding, friends and family, and incubators for capital,” Startup Genome reported. Parisian entrepreneurs are three times more likely to create a “clone” of an already successful company, with a few tweaks to fit the local scene, than entrepreneurs in Silicon Valley. Next
12. Sydney, Australia
Startup Genome reported that while Sydney is the largest startup hub in Australia, its influence has little, if any, effect outside of the continent. That might not be surprising, given that they’re 57% more likely to focus on small markets compared to startups in Silicon Valley. They’re also less likely to outsource product development, keeping all but almost 6% for themselves. The city boasts little early stage funding, however, and more and more entrepreneurs are taking off to San Francisco or Asia. Next
13. Sao Paolo, Brazil
Startup Genome reportedthat Brazil’s economic future is promising, but for now entrepreneurs are struggling. They have fewer mentors and less funding, and are less likely to try mobile platforms or adopt new technologies. Startup Genome predicted that Sao Paolo will grow by attracting local talent and capital, becoming “a large home-grown market to test ideas before global expansion.” Next
14. Moscow, Russia
Russian entrepreneurs are kids compared to Silicon Valley’s: on average, they’re about 28 years old, compared to SV’s 34 year average. The startup economy picked up in 2010 when the government began funding more accelerators and incubators and the amount of seed capital dramatically increased. That year, deals site Darberry was purchased by Groupon as well. Moscow still has the 19th lowest funding index, especially in the early stages of development.
Mentors are also in short supply, but Startup Genome reported that founders in Moscow don’t think that either is a major problem. “It’s all about people and their mindset,” said Internet entrepreneur Jane Smorodnikova. Next
15. Berlin, Germany
Berlin, like a new company itself, is slowly evolving. “Berlin is an up and coming community,” said Matthew Brimer, co-founder of General Assembly, in Startup Genome’s report. “If you look at where New York was a couple of years ago, you can see a parallel to where Berlin is now.”
According to the report, startups don’t at all rely on outdated technology like Java or .Net. Funding mostly comes from banks or advertisers, not accelerators or venture capital, and startups tend to tackle smaller markets. Despite this funding gap both before and after product market fit, entrepreneurs that have hit it big are more likely to give to fledglings in terms of both capital and advice. Next
16. Waterloo, Canada
This northeastern Canadian city is emerging as a startup powerhouse, but its proximity to Toronto could be cause for concern if its talent flees. So far, however, Waterloo’s startup workers spend just as much time in the office as those in Silicon Valley and have a similar technology adoption rate. Most rely on accelerators rather than angels or VCs for capital. Only 33% were launching businesses in fields they actually had experience in, a stark contrast to Silicon Valley and other successful startup cities. Next
Singapore’s central location poises it to become the startup hub of Asia. Its entrepreneurs are just as educated as those in Silicon Valley, and they rely more on incubators and self-funding than angels or venture capital. But funding isn’t necessarily an issue to Singaporean entrepreneurs: Startup Genome reported that building a team is considered a bigger challenge. Nevertheless, the city’s infrastructure “has everything to get to the next level,” according to the report. Next
18. Melbourne, Australia
Only 22% of Melbourne’s entrepreneurs have PhD degrees, compared to Silicon Valley’s 42 percent. They have plenty of mentors, however, to learn from, similar to Silicon Valley. Funding is difficult to come by, but entrepreneurs work about as many hours per day (almost 10) as those in SV. Next
19. Bangalore, India
India may not seem like the ideal place to start a company, but it’s got one of the biggest markets on the planet. Entrepreneurs who do brave it are often highly educated and skilled in what they do. They work almost a full hour more than entrepreneurs in Silicon Valley (10.86 hours compared to 9.95) and are about three years older on average than SV’s entrepreneurs. Technology, however, is outdated, and there’s an overall funding gap at all stages of product development. Next
20. Santiago, Chile
Chilean entrepreneurs, like their Russian counterparts, are starting young. The average age of entrepreneurs is 28, compared to Silicon Valley’s 34. They’re just as ambitious, however, and rely heavily on incubators and accelerators. Startup Genome touts Santiago as “an example of how policy makers can help to kick start a startup ecosystem,” with initiatives like Startup Chile attracting entrepreneurs from all over the world. The city’s biggest issue, however, is funding: Santiago’s startups raise 96% less funding overall when compared to Silicon Valley’s. Next
Interestingly enough, Austin couldn’t break Startup Genome’s top 20 list. The city, however, has become known as a startup boom town in the US. In March, startups competed to have their companies moved to Austin for free. The city’s South by Southwest festival, a unique combination of music, film, and technology, attracts thousands more entrepreneurs hoping to learn about the latest startup secrets. With a low cost of living and already thriving industry, it’s easy to see why entrepreneurs might set their sights on Austin. Back to the beginning
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