#Seattle and #Bangalore: An early comparison of #startup cities

I spent a good few weeks in Seattle meeting entrepreneurs, investors (VC’s and a few angels) and visiting local accelerators.

While, still early, I formed some opinions based on my interactions and impressions. I initially thought I’d make a very comprehensive post on the pros and cons of both cities, their entrepreneurial talent, their support for startups and their investor biases. I felt though, that I had not given myself enough time to understand the Seattle area, so I will look at the two startup hubs more objectively in this post.

My impression though right now is that Bangalore is WAY ahead in all metrics and by a wide margin.

I am not comparing the Indian ecosystem to the NorthWest, just Seattle to Bangalore.

There are 7 categories of data points I want to highlight.

1. Events, meetups, support groups and inclusiveness of entrepreneurs. Support for entrepreneurial success stories with startup media will also feature in this category.
2. Support for early stage (seed) funding with angel investors and accelerators
3. Ability for entrepreneurs to attract talent to their ventures – both availability of talent and their willingness to join early stage ventures, access to good local universities who can keep providing great talent for startups
4. Growth support with Venture capital
5. Availability of mentors – entrepreneurs who have been there, done that and later stage company CEO’s who can guide new entrepreneurs
6. Early adopters – small businesses, consumers and larger businesses who are willing to try and then pay for new products
7. The X-factor – things that attract smart folks to be here – quality of life, infrastructure, food options, night life, commute, weather, etc.

1. Events & Meetups. It is no secret that I attend many events. Most on the weekends – Hackathons, meetups, technical review sessions, show and tells. Anything that’s remotely entrepreneurial attracts my attention. From Design Day (hosted at the Accelerator) to Construkt and from NASSCOM Product conclave to The Fifth Elephant. I love meeting entrepreneurs and learning about technology of all forms.

In this area, Bangalore is way ahead by a mile, primarily because of the grassroots efforts by some . I am very impressed with Kiran Jonnalagadda and the Has Geek, Shubhendu and VentureSity, Prashant and the folks at Startup Saturday and the multiple daily events for startup entrepreneurs.

The Seattle ecosystem has its share of events, most are technical as well, with visiting folks from the Bay area and other locations meeting every week and many adhoc meetups for entrepreneurs both on the east side of Lake Washington and the West side (Seattle city).

Bangalore though, has over 54 hackathons each year and the Seattle area has fewer than 30. Seattle has Startup Weekend though, which does a great job locally. Bangalore just has way too many entities helping organize Hackathons.

Startup press in Bangalore used to be dominated by online publications like YourStory and Pluggd.In, but I see the Economic Times, Times of India, Business Standard, Live Mint and Financial Express increasingly doing at least 2-3 stories daily on startups.

Seattle has Geek Wire and a few local publications, but the number aside, (which would be less than 1/2 the total blogs and press in Bangalore), the ecosystem at the earliest stages is just small.

Since Seattle has a population of about 3.5 Million people, compared to 8.5 Million in Bangalore, it is expected to be much smaller. If you look at the technical talent, Seattle has around 500,000 folks in the tech area, compared to close to 1 – 1.5 Million in Bangalore.

2. Early stage funding. Talk to any entrepreneur in Seattle (I met with over 30 in 2 events) and the familiar concern you hear is – there are too few risk-takers, few early stage investors willing to fund pre-revenue companies and a dearth of high net worth investors in tech.

That’s the same story you hear in Bangalore as well, but there’s a huge difference. I am sure the entrepreneurs in Bangalore dont realize how good they have it here, until they look at other ecosystems (the familiar comparison is to Silicon Valley).

It is very surprising to hear that Seattle has few risk takers, since over 50,000 millionaires are in the Seattle area – ex-employees of Microsoft, Amazon, Isilon, F5 networks, Expedia, Starbucks, and others. The only challenge is that most of them are fairly conservative and have stayed away from investments in early stage startups.

Bangalore has about 10,000 $ millionaires in contrast from Infosys, Wipro, etc., but many more from old school businesses. They tend to be largely conservative as well.

If you look at the angel groups, Indian Angel Network and Bangalore Angels, although folks that move slowly and demand a lot of entrepreneurs, both in terms of milestones and % of the company, they do get deals done, and dont charge entrepreneurs to pitch their ideas.

In contrast of the 11 angel groups in Seattle, 8 of them seek payments between $200 to $800 to pitch, with no guarantees of funding.

The interesting thing is that having been in a few funding presentations at Bangalore, I get a sense that folks are interested in funding companies, but in Seattle I got a sense (from the 1 meeting that I attended, so take it with a grain of salt), that there was lots of skepticism.

The accelerator scene is pretty comparable. We have the Microsoft Accelerator, Kyron and the Target accelerators in Bangalore, and the Bootstrap center (J P Nagar) as well helps entrepreneurs. I went to 2 accelerators of the 3 in Seattle – TechStars Seattle, 9 Mile Labs and Eastside Accelerator.

I would still (I am biased) rate the type and maturity of entrepreneurs in Bangalore that come to the accelerator as higher than those in Seattle. I should do a more detailed fact based, data driven comparison on this later.

Finally the co-working space in Seattle run by We Work is awesome. I loved the space and its location is excellent. It is fairly central in the city and has easy access to investors, media and other potential partners as well.

Comparably The NASSCOM Warehouse with its one location is smaller and less fancy, but it has currently more startups than WeWork in Seattle. I know that the NASSCOM 10K program is looking to expand with another accelerator, and that will place Bangalore further ahead again.

3. Type and accessibility to talent. The talent pool in both places is fairly good, but both have their own challenges. Similar to Bangalore, most folks prefer to work for Amazon or Microsoft and any number of larger companies in Seattle and value their work-life balance. Of the 17 entrepreneurs I spoke with, most of them claimed that getting talent from places outside Seattle was impossible, but I know most Bangalore entrepreneurs can easily attract great talent from Delhi, Mumbai and other cities in India.

In terms of educational institutions, the largest University in the Seattle area (UW – or Univ of Washington, uDub) is a hotbed of some great research in the areas of IoT, big data and other nano technologies. Bangalore does have IISc, IIM Bangalore and many (over 50) local great engineering colleges, but entrepreneurs still have a hard time recruiting talent for startups.

4. Venture Capital Scene: I had a chance to meet folks from Voyager Capital, Madrona and Silicon Valley Bank. Ingnition is another well known local venture capital firm in Seattle. The investors were smart, very plugged in and very keen to get Seattle up and running among top startup capitals in the world.

Local to Bangalore, I rate Sequoia, Accel, Kalaari and Helion higher than their Seattle counterparts. I know there are more VC’s in Bangalore including Nexus, SeedFund and Inventus, but they have a  larger presence in other cities where most of their partners are.

The investor community in Bangalore is a lot more accessible, and frequently is spotted at events, looking to meet and learn from entrepreneurs. Seattle entrepreneurs love their VC’s as well, but they have smaller teams for sure, so meeting them is rare and most likely in panels at local events.

5. Availability of Mentors: There are between 10-25 names of entrepreneurs and founders whose names kept popping up at my meetings in Seattle and the number of “well known” mentors and startup founders were the usual suspects after my 5th meeting. Local favorites include ICanHazCheeseBurger, SeoMOZ, Apptio and others. The mentors (as expected) are very widely sought after and have very little time as well. They are mostly the role models for entrepreneurs in Seattle and so they are held in reasonable reverence.

In Bangalore as well, you will get the same 25-30 names, including folks a Flipkart, InMobi, and other successful entrepreneurs, but the depth here of the ecosystem and the diversity of activity is larger is my sense. There is large abuse of the advisory relationship and there are many “fake” mentors, but there are enough awesome folks like Ravi Gururaj, Sharad Sharma, Sanjay Anandram and others who are willing and able to help.

6. Early Adopters. I did not have enough time to observe the consumer part of the early adopters, but I think both ecosystems need a lot of work in this area. While most Seattle folks have a smartphone and they probably adopt new technology sooner than Bangalore folks, I think the very early adopters in both communities are limited and far-and-few between.

7. X Factor elements: This is a tough one. Lets peel the layers a little. I am sure I will miss a few categories, but lets try anyway.

1. Climate: Bangalore wins by a wide margin. Except for 3 months of the year, it is sunny, cool and wonderful. Except for 3 months of the year Seattle is raining all the time.

2. Food, Nightlife and Entertainment: Cant say. I dont know actually. I am not a big Nightlife kind of person, so I could not say. Suffice to say that local attractions in Seattle are a LOT better than Bangalore. With its many parks, hiking trails, lakes, etc. it is an outdoor person’s paradise. Bangalore has limited options for world cuisine compared to Seattle for sure. There are better attractions in the city of Seattle as well, with a great football club, a good basketball club and a decent soccer team. Bangalore has Royal Challengers and that’s pretty much it.

3. Infrastructure: Commutes are shorter in Seattle, Options for public transport are better and quality of life for most people is better than Bangalore. But the biggest challenge is Seattle is competing with Silicon Valley and New York / Boston and Bangalore competes with Delhi and Mumbai. Seattle cannot compete as well, but Bangalore is a much better attraction for folks who are not from this region.

So, there you have it. Comparing the two cities, I can confidently say the startup scene in Bangalore is at least 2-3 years ahead of Seattle.

Look at it another way: I believe Bangalore is about 10 years behind Silicon Valley (at the minimum) and Seattle is about 12-13 years behind, so practically speaking, we should not be comparing the two cities at all, because they are both way behind the leader by a wide margin.

I just wanted to do it because I got many questions from entrepreneurs from both locations wanting to know which city is further ahead.

15 thoughts on “#Seattle and #Bangalore: An early comparison of #startup cities”

  1. Excellent post Mukund! Would love to read a follow-up post after another couple months.

    Another thing that I realised was that, paradoxical as it may sound, early adopters themselves display a early majority behavior. You will see a lot of early adopters in Silicon Valley because there are so many other early adopters in Silicon Valley! Similarly for investors. It seems less risky to work with startups when everybody else around you is doing it and succeeding from it (by and large).

  2. Great Read! I agree that there are some great events in Bangalore that have completely charged up the scene in the last 2 years alone.

    One factor that does ail our dear ol’ Bangalore is the fact that most folks incline to an idea that has succeeded in the US and not yet available in India, versus radically new ideas. This could be looked from early adopters lens as well to say that it is hard to get early adopters to very new ideas. We do have a ‘US/Valley’ hangover 🙂

  3. Nicely laid out. Loved it!

    Question – How do you think Bangalore will fare if you fast forward to 5 Years on all the aspects compared above? What do you think is getting stagnant and what is picking up?

    Just trying to see it from a bird’s eye perspective.

    Thanks,

    1. Mani, Cant say for sure since I dont have a crystal ball, but I think given all the grass roots efforts here, we are in good hands to continue to be ahead.

  4. Hmm… Support for pre-revenue or small revenue funding is better in Bangalore? That’s surprising to note. I should say that I personally have not had any serious interest shown by Angels / VCs to even look at the product before taking a call of whether or not to consider seed stage funding.

    1. Amrudesh, I personally know at least 12 companies, that are pre revenue, with some product that have gotten funded in Bangalore. In Seattle before revenue, god help you.

  5. Hi Mukund,

    I am a management trainee working in Bangalore and perusing my MBA (Finance and Banking) from NIIT university, Neemrana.

    As a part of a current assignment I am doing a research on the business pain points and challenges faced by recent start ups in the e-commerce industry in and around Bangalore. The research and market study revolves around understanding the lifecycle of processes undertaken and the role banks can play in the lifecycle. Inputs from the industry would not only help design customized banking solutions for start ups and SME industry sector but also become a forum to put forth the challenges faced by firms.

    Together, with your valuable inputs we can strive to come up with better solutions and avoid hiccups in the future so that ecommerce as a sector grows at a faster pace and catapults economic growth.

    Kindly let me know if we can set up a meeting in the coming week/weeks as per your feasibility to discuss on the same.

    Chetan Mehra
    chetan.mehra@st.niituniversity.in
    9686800992

  6. I’ve lived in Bangalore and Seattle, while I agree with most of your points except perhaps the following:

    X-Factor- Seattle does get a bit of rain throughout the year – I will give you that. But I can’t imagine how that translates into a negative if you’re going to be traveling around in a car, working indoors you’re fine.

    The gloomy days can be a bit bothersome, and yet you’ve got natural beauty outside every window and multiple treks on the I-90. Talk about driving down the long avenues with Mt. Rainier at one end. Wow! Does add up. I’d mention that.

    Seattle isn’t that well connected with public transport.

    Seattle doesn’t have the volume that Bangalore does, but it does have the depth. Their tech-entrepreneurship lineage goes all the way back to Boeing, Microsoft, T-Mobile, Amazon and other pioneers. I think in the evaluation of any tech eco-system begs that we look at that picture and not just what the entrepreneurs claim are challenges, right? Where do those ideas and people come from?

    For startups that can directly benefit from the Microsoft eco-system, I think Seattle is a great place to be. Also, didn’t Jeff Bezos move to Seattle for the book publishers? I think nuanced arguments like that do make a difference.

  7. Hi Mukund,
    I am assuming Hyderabad doesn’t even figure in the list trailing Bangalore and Seattle? Don’t think Bangalore can be that easily replicated. Any thoughts?

    Thanks, Sudhir

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