Last year, we covered an ambitious and ongoing collaborative R&D project called “Startup Genome” created by two young entrepreneurs, Bjoern Herrmann and Max Marmer. The goal of the project was to take a comprehensive, data-driven dive into what makes tech startups successful — and not so successful. Out of this research came Startup Compass, a free benchmarking tool that enables entrepreneurs to evaluate their progress compared to other startups in their space. The product’s goal being to allow founders to make more informed product and business decisions by “utilizing a data-driven feedback loop,” the mission statement reads.
While part of the team split off to focus on Blackbox, an educational program and startup accelerator, Herrmann and Marmer have continued toiling away at Startup Genome, collecting data from thousands of startups signed up for Startup Compass and beyond. The entrepreneurs now believe that Startup Genome has crossed the threshold, reaching a critical mass of data on the world’s top entrepreneurial ecosystems.
With the data collected, they have begun to compare those ecosystems in an effort to give startups a glimpse into how (and at what rate) the world’s many entrepreneurial hubs are evolving — and who’s leading the way.
Over the last five years, the web (and its accompanying digital technologies) have succeeded in bringing down the costs associated with starting a business. This has caused an explosion in the number of software companies being created (an element inherent to Marc Andreessen’s argument that software is eating the world) and, as a result, new ecosystems are popping up all over the globe to help grow these companies, help jumpstart those that follow in their footsteps, as well as overall regional economic growth.
And the ecosystems that blossoming startups create is obviously not to be discounted, as they become the engine of job creation. In the U.S., companies less than five years old created 44 million jobs over the last three decades and, over that time, accounted for all net new jobs created in the U.S., says the White House. This is why we saw uncharacteristic bipartisan support for the JOBS Act.
The economic effect catalyzed by healthy startup ecosystems, Herrmann agrees, can be a democratizing force. Typically, startups have planted themselves close to extant networks of support, be it financial capital, human capital, or technology. Startups have gone where the money is — and historically, that’s been Silicon Valley, with Boston and New York City being mentioned in the conversation. Today, that’s changing. Companies are being started everywhere.
Entrepreneur Magazine claims that this was the overarching theme of SXSW this year — that entrepreneurs don’t have to be located in Silicon Valley to build successful tech or consumer web businesses. Given the choice, it’s become increasingly important for entrepreneurs to be able to answer questions like, “What are the advantages and disadvantages of the various ecosystems?” and “What are the characteristics that differentiate entrepreneurs across those ecosystems?”
Herrmann and Marmer believe that there has been a wealth of qualitative reporting about the benefits of each ecosystem, but that, to date, there’s been very little data to support our intuitions.
As the team has compiled data, it has begun to uncover valuable insights into the strengths and weaknesses of the world’s startup ecosystems, and as the study progresses, the founders say they hope it will continue to “yield insights for entrepreneurs deciding where to start their company, investors deciding where to allocate their capital, large companies looking for acquisition targets, and policy makers who want to make their entrepreneurship ecosystems flourish.”
Tapping into the collective idealism of all those invested in the success of these startup ecosystems, we know that the world is desperately in need of an economic revival, and thus we all hope that unleashing an “entrepreneurial renaissance” as Herrmann puts it, will help drive that evolution forward.
Today, Startup Genome is sharing some of its findings on startup ecosystems and how they compare, starting with what the project has found to be the three most active startup hubs: Silicon Valley, New York City, and London.
Below, you’ll find some 20-odd insights into how they compare, what’s working, and what isn’t. Readers can find more on how the report defines its terms in our coverage here or on the project’s blog here. And more on how it defines “Types” here.
Startup Genome is also offering a new ranking for the world’s top 25 startup ecosystems, ordered by their average throughput:
Startup Genome has already brought on the support of a number of entrepreneurial enterprises across the world, including Endeavor, Mamstartup in Warsaw, Startupi in Sao Paulo, sgentrepreneur in Singapore, Metavallon and Loft2work in Greece, and Startup America in other cities around the US.
The founders are looking to find local support for each of these ecosystems, and readers interested in learning more or that have any suggestions, can contact them at firstname.lastname@example.org. And to sign up for the next full, in-depth report, navigate over here.
This Startup Genome continues to be an awesome “Startups helping startups” enterprise, and the more data the group collects, the more founders and entrepreneurs across the globe stand to benefit. So, if you run a tech company, check out Startup Compass, as it will not only help you gain insights into your own business, but also contribute to the project’s data set and to amassing more quality comparative data on the world’s startup hubs.
What do you think?