Silicon Valley’s Startup Strength by the Numbers

Entrepreneurs Bjoern Herrmann and Max Marmer have taken a comprehensive, data-driven dive into what makes tech startups successful. By collecting information from 16,000 startups and running analysis on their local environments, they’ve attempted to figure out how (and at what rate) the world’s top entrepreneurial hubs are evolving, and which are leading the way.

How’s the startup ecosystem in your neck of the woods? Tell us by posting a comment below.

Herrmann and Marmer uncovered numerous insights into the strengths and weaknesses of the world’s startup ecosystems. As the study progresses, 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 policymakers who want to make their entrepreneurship ecosystems flourish.

So, how do these ecosystems stack up? It depends on what you’re looking at.

  • Startup Throughput: The Silicon Valley ecosystem continues to lead the way, but the gap is shrinking. It’s currently three times bigger than New York City, 4.5 times bigger than London, 12.5 times bigger than Berlin, and 38 times larger than Boulder, Colo.
  • Startup Success Rate: Proportionally, Silicon Valley has 22 percent more companies in the “scale stage” than New York and 54 percent more than London.
  • Job Creation: In the efficiency and scale stages, Silicon Valley startups create 11 percent more jobs than NYC startups and 38 percent more jobs than London startups.
  • Product Types: Compared to New York entrepreneurs, Silicon Valley’s are 2 times more likely to build games, 50 percent less likely to build marketplaces, 23 percent more likely to be build social networks, 3.5 times more likely to be build infrastructure and 2.5 times less likely to be build financial tools.
  • Product Development: London and NYC companies outsource 34 percent more of their product development than Silicon Valley companies.
  • Mentorship: The Silicon Valley and New York City ecosystems have more helpful mentors than London. Silicon Valley companies have 46 percent more helpful mentors than the Brits.
  • Work Ethic: Companies in Silicon Valley work 35 percent more than those in New York City. Teams there work 9.5 hours a day on average versus eight hours in London and seven in New York City.
  • Founder Gender: New York City has almost double the number of female founders compared to Silicon Valley and London (80-20 vs. 90-10 ratios, respectively).
  • Founder Age: The average age of founders in all three ecosystems is about the same, with an aggregate average of 33.5.

Among the top 25 areas for startups according to the research (besides Silicon Valley, New York and London): Toronto, Tel Aviv, Los Angeles, Singapore and Sao Paulo.

No Responses to “Silicon Valley’s Startup Strength by the Numbers”

  1. I’d like to see them look at “community integration” factors; this derives from my opinion that TRUST is crucial for business relationships. Silicon Valley is like a gold mining town; men come here from all over the world to make a big strike. There is no real community here; its all about the money. As someone from the Klondike said in a presentation made here, “A gold mining town is a town composed of men with only two things on their mind. It is really the womenfolk who knit a town into a real community, and in a gold mining town the presence of women is felt only in the saloons and in the brothels.”