Launching a new business is never easy. Where you choose to set up shop, however, can make all the difference. Some cities are a mess of red tape, while others are practically a recipe for success.
Compass -- a company that provides metrics software for start-ups around the world -- has compiled an exhaustive ranking of the best start-up ecosystems globally. Does your city rank? Slide through the gallery to find out.
Compass -- a company that provides metrics software for start-ups around the world -- has compiled an exhaustive ranking of the best start-up ecosystems globally. Does your city rank? Slide through the gallery to find out.
Silicon Valley —
"Silicon Valley is the poster child for ecosystems," says Bjoern Lasse Herrmann, Compass' chief executive. The area dominates in terms of its access to technical talent, availability of investment and the valuation of start-ups on the scene.
"The climate in Silicon Valley is second to none," notes Amit Garg, a venture capitalist at Samsung.
"Searching for capital at the seed level, you will find somebody who believes in your idea," he adds.
New York —
New York jumped up three places in the global rankings since the 2012 report, partly as a result of the fact that the city is the most popular destination for non-U.S. start-ups to open a second office. "New York City has made an incredible run from being a small ecosystem to just about outgrowing everyone," says Herrmann.
"It's probably the biggest contender to match Silicon Valley in the future."
Los Angeles —
Though lesser-known than Silicon Valley for its start-up culture, Los Angles has produced some massive companies: most notably SnapChat and Tinder. Its proximity to Hollywood may have something to do with the creativity that drives the start-up scene, notes Yohei Nakajima, program manager at Techstars LA:"Perhaps the most exciting thing about L.A.'s start-up ecosystem is that the founders have such diverse backgrounds, many of them creative," he says.
According to the report, one of the main things holding the city back is that funders are too risk adverse (a lot of new ventures, for instance, rely on family and crowd-sourcing to raise capital).
Boston —
Boston is an exceptionally educated city. With Harvard, M.I.T. and several other high-performing universities on its doorstep, it's no wonder that Boston entrepreneurs are 6% more likely to have a Ph.D. than in Silicon Valley. Access to some of the brightest minds on the planet make it well-primed for some high-concept start-ups, particularly in biotech, medical devices and robotics."We solve real hard problems," notes Kyle Judah, program director at the Martin Trust Center for M.I.T. Entrepreneurship.
"We don't do consumer well. Some people think that's a weakness. I actually think that's a strength. Let the Bay Area do flashy mobile stuff while we focus on big problems, and companies that are backed by hard science."
Tel Aviv —
For a young country with a relatively tiny population (7 million), Tel Aviv is a major player in the global tech industry. It has the highest density of tech start-ups in the world, according to the report. An entrepreneurial spirit seems to make up part of the cultural identity, according to some experts."Two out of every three Israelis are newcomers, or the children or grandchildren of newcomers," notes Orit Mossinson, general partner at Globe International Holdings VC.
"Immigrants are natural risk takers, since they were willing to uproot themselves and start over."
London —
London is currently Europe's tech hub. It produces the most start-ups in the European Union, and, say experts, is one of the easiest places to start a business in the world."A company can be registered online within five minutes and VAT (tax) registration takes another 10 minutes," says Rahul Ahuja, CEO of Taskhub. He adds that the city's commitment to the sharing economy also helps bring costs down.
"Renting traditional offices can be expensive, but with the prevalence of shared work spaces and tech incubators, it's not hard to find a reasonably priced office."
Chicago —
Chicago, according to the report, is both one of the fastest growing regions for tech start-ups, and one of the most undervalued by venture capitalists. The city, however, is one of the more progressive, and is an especially good spot for female businesswomen -- 30% of business founders are female in Chicago, compared with 18% globally.
Seattle —
Though Seattle has fallen down the list due to a slow-down of growth, it still attracts serious funders (venture capital available doubled since 2012). "We are the cloud computing capital of the world, with many additional thriving tech sectors," says Brett Greene, CEO at New Tech Seattle.
Still, Seattle falls behind in homegrown talent, with much of it important from other regions.
Berlin —
Berlin is considered a bit of a newbie when it comes to start-up ecosystems, and like a newbie, it is rated for its vibrancy and fresh ideas (the global headquarters of SoundCloud are located in Berlin, after all). The city has grown by leaps and bounds -- that is to say, exit value has sourced by 20x since 2012, and there has been 12x the number of venture capital available.
"The city operates very much on a mantra of 'going your own way', a counterculture mindset that embodies the start-up spirit of looking at the world differently and trying to do something better," says Alexander Ljung, founder and CEO or SoundCloud.
Singapore —
Singapore is blessed with great geographical positioning. Its location helps it bridge the markets of China, India, Indonesia and Malaysia. "Being a Singapore start-up forces us to think globally from day one," notes Alvin Yap, founder of The Mobile Gamer.
Singapore also attracts an incredible amount of capital.
"A lot of South East Asian companies, like those based in Kuala Lumpur and Bangkok, tend to move to Singapore because the funding they get there is so much better, or they open a second office there," notes Herrman.