Sunday, January 22, 2012

Top 10 cities to launch a tech startup


My team and I gathered data from numerous cities around the World and we proceeded to rank the top 10 cities to launch a tech startup. We've ranked the top 10 cities and their 5 runner-ups based on the following criteria: a/ Availability of talent ("it's all about the startup team"), b/ Availability of infrastructure, c/ Availability of capital ("yes, this minor factor"), d/ Legal environment (labor law, corporate law, tax), e/ Entrepreneurship spirit ("Yes, people who are looked upon favorably to leave secure jobs and pursue an entrepreneurial journey).

Top 10 cities to launch a tech startup:

  1. Palo Alto (Silicon Valley)
  2. Los Angeles (Silicon Beach) [Read Forbes' Tara Tiger Brown]
  3. Boston (Route 128 corridor)
  4. London (Silicon Roundabout)
  5. New York (Silicon Alley)
  6. Dublin ("2012 City of Science")
  7. Munich
  8. Vancouver
  9. Paris [in French]
  10. Amman [Read Bloomberg's William Cohan]

Top 5 runners-up

  1. Madrid 
  2. Buenos Aires
  3. Toronto 
  4. Helsinki 
  5. Dubai


How the scoring was done: This ranking was done on relative terms, and NOT on absolute terms. Indeed, it is clear that the amount of capital available in certain cities is far greater than that of many cities in this ranking. The weight given the above five criteria was computed to the ratio of each factor as a % of the whole data set for that city from our sources below. The goal of computing a ranking based on relative terms, rather than the easy absolute terms, was to attest to the vibrancy of each city's entrepreneurial community, no matter how small. Using relative terms, a city with $200M in seed and venture capital may achieve a better ranking than a city with more capital simply because other human, legal and infrastructure factors scored higher.

Sources: GEM, HBS, SBS, IMF, HDI, NVCA, EVCA, PwC.
Special thanks to my team and to our hardworking data-crunching interns