The global startup ecosystem rankings at out. Since we had a chance to partner with the team putting together this research I had a chance to learn the methodology a lot more this time. There are three observations I have regarding he overall report and a follow up to an early comparison of the 2 startup ecosystems I have the most experience with – Seattle and Bangalore.
First, the two ecosystems are not that different in many aspects – the criteria used by compass were:
1. Performance (exits, valuations, etc).
2. Funding access
3. Market reach
5. Startup experience
and finally Growth index.
1. Growth: Bangalore is growing dramatically, at 2.5 times Tel Aviv’s growth and more than 3 times Seattle. It will be a matter of time before the total number of startups from Bangalore will be more than that of Tel Aviv or Seattle combined. Likely in 2018.
2. Spread: Seattle’s ecosystem of startups is more broad based – a few eCommerce (Zulilly, Expedia and Amazon), some cloud and a few SaaS companies. Bangalore’s ecosystem of startups is fairly shallow – eCommerce rules, followed by a few in Ad tech and B2B.
3. China: I am shocked that Beijing and China were out of the top 10, much less not even on this report. My first hand knowledge of Seattle and Bangalore and secondary knowledge of China, indicates that they will be #2 even higher than where LA is.
I would agree that market access / reach and startup experience, expertise will put Bangalore slightly behind Seattle, but that’s more than made up for with Bangalore’s better funding availability and overall acquisition track record.
Here is my unofficial top ecosystems ranking, which I believe will reflect a more accurate ranking of the top ecosystems for startups.
1. Silicon Valley (Separate the valley and SF and you will have the #1 and #2 positions)
3. New York
4. Los Angeles
6. Tel Aviv
The rest of the ecosystems dont matter. Either market access, funding or performance in terms of acquisitions.
The other parts of the ecosystem that should be measured include news and media involvement, hackathons, events, training and education – early indicators of where the ecosystem is headed and I think those will show a few other cities – Tokyo and a few middle eastern countries as well.