Tel Aviv, L.A. Right Behind Silicon Valley in Startup Genome Rankings

11/20/12Follow @wroush

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Buenos Aires, Cape Town, Copenhagen, Dallas, Denver, Dublin, Helsinki, Istanbul, Johannesburg, Madrid, Mexico City, Milan, Montreal, Mumbai, Philadelphia, Portland, Rio De Janeiro, San Diego, Warsaw, Washington, and Zurich.

Now, it’s clear that the spread of the Internet, rising standards of living, improved access to education, the globalization of capital, and other factors are fostering entrepreneurship in many new corners of the world. But the overall rankings probably need to be taken with a grain of salt.

For one thing, they’re based on self-reported data gathered over a period of months from companies that were using the Startup Compass website to see how they measure up against their peers. It’s unclear whether there was any independent check on whether the information they reported was accurate, or whether it may have been subject to regional biases.

Also, based on the limited information shared in advance with journalists, it’s unclear how certain cities were assigned their ranks in the subcategories. For example, Silicon Valley, Boston, and Tel Aviv tied for first place on the Startup Genome’s “Funding Index,” but other datasets show big discrepancies among these cities. (Data from the National Venture Capital Association shows that Silicon Valley startups have collected some $8.2 billion in venture funding since 1995, for instance, while New England companies have collected only $2.4 billion.)

And there’s much more in the report to stir up discussion, which may have been the main goal. A case in point: The report’s assertion that Boston and Seattle are over the hill.

In addition to ranking cities’ entrepreneurial bona fides, the report assigns each city to one of six “ecosystem lifecycle stages” including “1—Seed,” “2—Hype,” “3—Independence,” “4—Integration,” “5—Expansion” (further divided into “5.1—Sustained Expansion” and “5.2—Ossified Expansion”), and “6—Contraction.” In general, the farther a city has progressed in its lifecycle, the higher it ranked in the study. Silicon Valley was the only region judged to be at Stage 5. The report asserts that three of the top-ranked startup hubs—Tel Aviv, Seattle, and Boston—have passed their prime and arrived at stage 6, the contraction stage.

For entrepreneurs in those cities, them’s fightin’ words. We’ll be watching what kinds of reactions the Startup Genome report actually provokes.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • clarisa

    can you tell me what is the source when you mention “the next 20 cities”, because i can not find that information in the study, thanks