The top startup ecosystems in the world. Seattle ranks 13th

I have mixed reactions to the Startup Genome Project’s new report analyzing the top 25 startup ecosystems in the world. On the one hand, it is nice to see Seattle make it on the list, ranking at a respectable 13th, ahead of Boston, Austin and Vancouver, B.C.

But at the same time, as many in the community know, there’s plenty of work to be done. After all, five or 10 years ago, I doubt New York City would have ranked in the top 10. It is now in second place, behind Silicon Valley.

New York certainly has a lot of momentum, from city officials to venture capitalists to the media. But, at the same time, I don’t think I’d trade Seattle’s technology community for New York’s.

Which way is Seattle headed? Photo: Bigstock

As I’ve noted in the past, I am hard pressed to name one technology juggernaut that’s located in NYC. (Seattle, on the other hand, boasts Amazon.com, Microsoft, Expedia and branch offices of Silicon Valley giants such as Facebook, EMC and Google, not to mention one of the strongest video gaming ecosystems in the world).

Given those anchor tenants, it is somewhat surprising that the wealth generated via those companies has not recycled into the community in the form of venture capital or angel investing. During the fourth quarter of last year, just $88 million  was invested in the state, the lowest total since the third quarter of 2003. (See story: “Ugh, this doesn’t look so good: Venture capital investing in Washington state plummets.”)

Call me old-school, but I am still of the belief that money matters. And even though it is far cheaper to start a software or Internet company today — given the rise of Amazon Web Services and other cheap infrastructure — venture capital still is the lifeblood of the next-generation of big tech companies.

Seattle needs more of it — not to mention big-swinging entrepreneurs — if the next Instagrams, Facebooks and Twitters are going to be born here. The Startup Genome Project actually laid a bit of a blueprint of what makes up Silicon Valley, New York and London, analyzing 22 defining characteristics that comprise the markets.

Here’s one of the tidbits that caught my eye:

“The Silicon Valley ecosystem has proportionally 22% more companies that make it to the scale stage than in NYC and 54% more than in London,” the report said. It also found that Silicon Valley companies raise two to three times as much capital in the first three-stages of development, the critical early stages when risk is the highest.

Despite a number of technology incubators, massive amounts of wealth and the efforts of angel funds such as Founder’s Co-op, Seattle just doesn’t have enough of it. But Seattle will need to figure this out if it wants to stay in the top 25.

Here are the top 25 cities, according to the Startup Genome.

  • Silicon Valley (San Francisco, Palo Alto, San Jose, Oakland)
  • New York City
  • London
  • Toronto
  • Tel Aviv
  • Los Angeles
  • Singapore
  • Sao Paulo
  • Bangalore
  • Moscow
  • Paris
  • Santiago
  • Seattle
  • Madrid
  • Chicago
  • Vancouver
  • Berlin
  • Boston
  • Austin
  • Mumbai
  • Sydney
  • Melbourne
  • Warsaw
  • Washington D.C.
  • Montreal

[Photo of sign via Bigstock]

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Comments

  • http://www.starrhorne.com/ Starr Horne

    This is fascinating. My developer friends and I joke that you can raise $2 million for anything in silicon valley, no matter how hare-brained. But it stands to reason that such a large disparity in capital is bound to have real-world consequences. 

    • http://profiles.google.com/clive.boulton clive boulton

       Yes. Seattle feels way down the list for raising seed rounds. The disparity is tugging away Series A company’s to the SFBA and NY for funding. 

  • Mike

    Nothing out of China?  Interesting.

  • David

    While it’s easy to pick apart any list…. this is nonsense. As someone who has spent a lot of time working to build company presence in most of the cities listed in this report but also talking to and working directly with the entrepreneurs in those cities, they are missing a lot of context. I won’t question the Bay Area, NYC and London (although there are plenty of unique challenges to starting companies in NYC and London), I will question a conclusion that ranks LA, Sao Paulo, Moscow and Paris as places favorable to Seattle, Boston (and even Austin,TX)…While Seattle might benefit from more Venture Capital and “swinging entrepreneurs”, all places will benefit from building more businesses on solid financial models and delivering value to customers that recognize it and are willing to pay for it.

  • N_enigma

    Ugh!  Static map… Good data… Where is Tableau when u need it?

  • Guest

    Congratulations to Seattle on being one of the world’s top 1% cities for startup companies! We are truly in rarefied air.

  • Jasal Shah

    Good to Bangalore there ……hope to move up the chain…..

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