For many startups, one of the most difficult decisions to take is where to start. Which city provides the best environment for a budding company?
Once you’re up and running, taking the step to expand internationally is an even bigger decision; despite the growth of technology startups all over the world, only a few places offer the opportunities for real growth.
According to Marco Villa, co-founder of Blue Spark Hub, the key question that entrepreneurs should ask themselves is twofold: Where should I form my tech startup in order to maximise my chances of building a global success? And once up-and-running, where should I open a second office and move a company function, taking advantage of another ecosystem’s strengths and compensation for the weaknesses in my original place?
Speaking at the Blast tech conference in Rome last week, Villa said:
“Deciding where to move for a startup is one of the most crucial decisions you will ever take as a company. If you keep waiting to go global, you will never be ready – just do it!”
According to statistics, the most powerful place to build a startup is, unsurprisingly, Silicon Valley. Following that are New York, London, Beijing and Boston.
London is still the leader in Europe but, in the wake of the Brexit vote, has seen confidence flag; in terms of attractiveness for startups, within Europe London now lags behind both Berlin and Amsterdam.
China, however, is thriving; Beijing is home to between 4800 and 7200 startups, marking it the third largest ecosystem in the world. Beijing alone has produced 24 unicorns – the second highest unicorn output in the global landscape. Shanghai also has a strong record for startup performance, with the fourth highest number of unicorns and is the fifth most valuable ecosystem in the world.
Even in the relatively early stages, having international ambition is important for a startup. A recent study published by Group & Organization Management found that startups that decide to operate overseas don’t face any larger challenges than new businesses that focus on building their brand only in the US, or wait to expand globally until they are more established.
“Many new firms remain domestic, regional, and even local,” the study’s authors wrote. “Increasingly, however, digital marketplaces and social media provide even the youngest firms opportunities to operate on a global scale.”