A Field Guide to The World’s Greatest Startup Ecosystems

The lore of Silicon Valley has startup culture in its very genesis, when Bill Hewlett and David Packard started their now venerable company in 1939 in David Packard’s Palo Alto garage for $538.

800px-HP_garage_front

The garage in Palo Alto where Hewlett and Packard began their company.

[SOURCE: © BrokenSphere / Wikimedia Commons, used according to Creative Commons License]

Since that time, multiple generations of high technology companies have spawned as startups, grown at meteoric rates, been acquired or disrupted by the next generation of would-be technology kings. The founders of the greatest or most infamous companies, nearly all multi-billionaires, are exalted around the world.

Other regions around the world have done their best to create their own Silicon Valley startup ecosystems, either in chips and software, or other technology sectors such as biotechnology, green energy, or materials science, with varying degrees of success. None, however, has yet reached what Silicon Valley has achieved in terms of available investment capital, successful growth, and generated innovation. Silicon Valley’s startup ecosystem is an example of success breeding success. Yesterday’s successful entrepreneurs become venture capitalists and angel investors for tomorrow’s new startups.

I recently ran across a fascinating report comparing the top 20 “startup ecosystems” around world by Startup Genome.

startup-ecosystem-ranking-2012

Ranking and benchmarking the top 20 startup ecosystems around the world.

[SOURCE: © 2012 Startup Genome]

Reading the summary might sound a little Silicon Valley-centric, given that SV rates #1 in every single benchmark category, and the differentiation index at the end is based on “how different an ecosystem is from Silicon Valley since it’s the #1 ecosystem” – different being a good thing here in order to have its own unique strength. However, the report makes some important points including the fact that these other ecosystems have made significant strides versus Silicon Valley in the last 5 years.

The report has some wonderful details in the metrics it uses to benchmark ecosystems:

  • Startup Output – total entrepreneurial activity vs. population
  • Funding – activity and comprehensiveness of early investment capital
  • Performance – actual and potential growth of startups
  • Mindset – how visionary and hardworking founders are (I presume this refers to willingness to take on world changing opportunities as opposed to niches such as last mile solutions of big established companies)
  • Trendsetter – how quickly startups take up latest engineering and management techniques
  • Support – availability of mentors, consultants, alternative funding
  • Talent – age, education, prior experience of typical founders
  • Differentiation – how well is an ecosystem playing to its own strengths rather than trying to be another Silicon Valley

The real gold is the benchmarking behind the report – the source of data for the metrics used in the rankings. Just reading through the questions is an entire MBA course in how to manage your startup. I highly recommend everyone to take the benchmark. If you aren’t actually benchmarking your own startup, be kind enough to answer the questions saying “I’m just looking at the questions.”

It can take a while to get through the questions, but in addition to learning a lot on the way, you are rewarded with a results page with a classification of your startup, comprehensive graphs of challenges and needs for your class of company, and a wealth of resources for additional in depth study. Trust me, this is well worth your time.

Trackbacks

  1. […] Silicon Valley, which has weathered several downturns over its history, the most recent in the post dot.com bubble when not only consumer Internet companies crashed, but simultaneous bubbles in enterprise software, and chips also popped. Some might say that Silicon Valley is just another Detroit waiting to happen, but I would argue The Valley isn’t just a single industry, but a several, with a prolific tendency to disrupt old industries and create new ones. […]

  2. […] Silicon Valley, which has weathered several downturns over its history, the most recent in the post dot.com bubble when not only consumer Internet companies crashed, but simultaneous bubbles in enterprise software, and chips also popped. Some might say that Silicon Valley is just another Detroit waiting to happen, but I would argue The Valley isn’t just a single industry, but a several, with a prolific tendency to disrupt old industries and create new ones. […]

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