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

Brace for some surprising news. As a place to build a startup, Tel Aviv, Israel, outranks every other major startup hub in the world except Silicon Valley.

That’s according to a report set to be released today by Startup Genome, a San Francisco-based R&D project.

All right, you say; surely the No. 3 spot after Silicon Valley and Tel Aviv must go to Seattle, New York, Boston, or some other classic startup hub. Nope. The third best location for startups is Los Angeles, according to the study.

The creation of entrepreneurs Bjoern Lasse Herrmann, Max Marmer, and Ertan Dogrultan, the Startup Genome project collects statistics from companies around the world in an effort to give startup founders a way to benchmark their own performance against that of similar companies. In today’s report—the latest in a string of studies released by the project since its inception in early 2011—the Startup Genome guys have churned through that data and pegged Toronto, Sydney, Moscow, Melbourne, Bangalore, and Santiago as some of the world’s strongest startup ecosystems.

If the rankings sound a bit eyebrow-raising, they’re probably meant to be. The Startup Genome analysts believe that the top centers of innovation, such as Silicon Valley and Boston, are losing their once-exclusive grip on new startup creation. They say there’s “global explosion of entrepreneurship” bubbling up from a number of alternative hubs.

“We created this report…to put a spotlight on the emerging high tech startup ecosystems that will be responsible for powering a majority of the world’s economic growth in the future,” Hermann said in a statement announcing the study.

The report (which can be downloaded here) was published in cooperation with Telefónica Digital, the new-business wing of the Spanish telecom giant. The division operates a network of startup accelerators in nine countries, aimed at developing “future Silicon Valleys in the countries where Telefónica is present.”

The full results of the ecosystem study were not available before press time, nor were the exact details of the method used to rank cities according to how well they foster entrepreneurs. But the group said the study was based on data contributed to the project’s Startup Compass website by more than 50,000 startups.

Startup hubs were assessed according to 50 variables, such as the output and performance of local startups and the availability of venture funding and infrastructure support, as well as less tangible factors such as “entrepreneurial mindset” and a “trendsetter index” (how quickly companies adopt new technologies and business models).

Here’s the list of the world’s top 20 startup hubs, according to the report:

1. Silicon Valley
2. Tel Aviv
3. Los Angeles
4. Seattle
5. New York City
6. Boston
7. London
8. Toronto
9. Vancouver
10. Chicago
11. Paris
12. Sydney
13. Sao Paulo
14. Moscow
15. Berlin
16. Waterloo (Canada)
17. Singapore
18. Melbourne
19. Bangalore
20. Santiago

And here’s a graphic illustrating how each city ranked in eight subcategories (green is highest, red is lowest; click and then click again for a larger, more legible version).

Startup Genome ecosystem rankings

The next 20 cities on the Startup Genome list (in alphabetical order, not rank order) were Amsterdam, Atlanta, Austin, Barcelona, … Next Page »

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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One response to “Tel Aviv, L.A. Right Behind Silicon Valley in Startup Genome Rankings”

  1. clarisa says:

    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