As I noted last month, Seattle appears to be losing a bit of momentum when it comes to venture capital financing deals. (Especially as it relates to other regions of the country like New York and Massachusetts).

But it’s not all about the money, and great companies can get started on a shoestring or with very little outside capital. (For example, two of the biggest successes in Seattle in the past year — Double Down Interactive and PopCap Games — pretty much bootstrapped themselves to success).

A new set of charts compiled by Feefighters puts the nation’s startup hubs in some perspective. And the picture isn’t all that bad for Seattle, depending upon how you slice it.

Using data from Startup Data Trends, the researchers determined that Seattle has the fourth most startups in the country per 100,000 residents. (Behind Silicon Valley, Boston and Atlanta).

But what really caught my eye was average valuation of those startups, which in Seattle was second to Silicon Valley. Now, that could be a good or a bad thing.

After all, it could signal that things are a bit frothy around these parts. But, on the other hand, it could indicate that investors here are bankrolling companies with very big ideas. (As Zillow co-founder Rich Barton noted yesterday, fishing in a “big pond.”)

Seattle startup guru Joshua Maher (of TechCafe fame) was lamenting in a Tweet about another aspect of the survey in which Seattle ranked 7th in terms of raw numbers of startups. (Just behind Boston and Chicago).

That, to me, wasn’t as problematic as those are much bigger cities. Granted, having more startup companies in the mix is a good thing, as you never really know who will become the next super star or dud.

But the numbers in the charts do tell a bit more of the story when it comes to various startup hubs. The authors write that the data is a bit inconsistent, since it doesn’t show that having more startups in a city leads to more startup success. They conclude:

“So before you pack up your bags and join the flock down the yellow brick road to Silicon Valley, take a minute to consider whether or not you actually need to surround yourself with other startups, because the data seems to suggest your startup success doesn’t necessarily depend on your proximity to other like-minded individuals.”

Feefighters made the entire data set available here.

Comments

  • http://www.joshuamaher.com/ Joshua Maher

     

    I think it
    is all about the startup community vs. the density. Connecting with people to
    build startups is a key problem that a lot of people have. If there are more
    opportunities to connect with people to build products with, there is likely
    more good products that will be built. The connecting can happen at
    Universities (Boston), at tech events (SV), or even at other employers.
    Regardless though if co-founders aren’t meeting one another it is hard to get
    the products moving. It would be interesting to see startup longevity/success
    in these cities as well as the number of community events in these cities.

    Part of that
    is people have a hard time pursuing their ideas (see my last post http://joshmaher.net/2012/02/13/the-difficulty-of-pursuing-your-ideas).
    Overcoming the difficulty of pursuing your ideas is a lot easier once you are
    working with someone else on the idea (of course this is why bad startups go
    further than they should some times as well).

    Regardless,
    the interesting thing about the data set is that Boston and Seattle have nearly
    the same number of residents (~600k), yet Boston has twice the number of
    startups as Seattle. “Silicon Valley” isn’t really a city so it is
    kind of hard to say what the population and density is there. If we counted the
    greater Puget Sound area (to be more like “silicon valley”) we would
    likely have a lot different story in regards to this data set
    (Bellevue/Redmond/Bothel) as there are a fair number of startups on the
    eastside that aren’t really counted here.

    Perhaps we
    should look at re-branding the Greater Puget Sound area to something more
    indicative of the startup culture that permeates both sides of the pond.

  • http://www.feld.com bfeld

    John – did you look at the underlying data? 

    While you linked to https://docs.google.com/a/foundrygroup.com/spreadsheet/ccc?key=0AtNK9X3nfl3AdGtDbklTNkN0N2lSbHhSN245YW9UOWc&hl=en_US#gid=7

    it doesn’t look like you went the next layer down to see the actual underlying data. That data (http://startupdatatrends.com/?tags=1680) seems to ONLY include AngelList as a data source.

    If that’s true (which I think it is) there is massive selection bias in this analysis as to render it basically useless.

    • johnhcook

      Thanks Brad. Yes, it is a pretty limited data set, since it is pulled largely from Angel List. Perhaps not the most comprehensive data set, but I thought it was still interesting nonetheless. Thanks for the comment.

    • http://engag.io/ William Mougayar

      I agree. It didn’t make sense to me that Wash DC, LA and Austin were higher than NYC. 

  • http://www.feld.com bfeld

    John – did you look at the underlying data? 

    While you linked to https://docs.google.com/a/foundrygroup.com/spreadsheet/ccc?key=0AtNK9X3nfl3AdGtDbklTNkN0N2lSbHhSN245YW9UOWc&hl=en_US#gid=7

    it doesn’t look like you went the next layer down to see the actual underlying data. That data (http://startupdatatrends.com/?tags=1680) seems to ONLY include AngelList as a data source.

    If that’s true (which I think it is) there is massive selection bias in this analysis as to render it basically useless.

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