april 17th, 2019

17 Best Cities for Launching a Startup

A list of technology hotspots that facilitate early businesses the best. Explore the ranking that is based on a fusion of numerous factors such as taxes, cost of living, demographics, and more.
The business is truly global. No longer do we have to roam through vicinities to find a proper place to launch a company with its own office. You may still recall the time when you finished university and had to apply your knowledge somewhere close to your dwelling. But now there are no barriers when you decide to receive a job, or instead, launch your own business. Even so, you don't have to look at Silicon Valley or another high-profile hub - the tax burden, workforce cost, and crazy rent prices can make you think twice.
So picking less advertised places becomes a choice, but you can't simply throw a dart on the map and blaze a trail towards it. Some places are better than others, and there are objective parameters that make certain cities come on top when compared to their competitors:

  • young, active inhabitants: 25 to 34 range is the ideal demographics for conceiving new ideas for startups;
  • higher education: how many of these people have a bachelor's, professional, and graduate degrees is another great display of how potent the workforce is;
  • employment rates: it's great to hire from a city that has close to no jobless people;
  • salary to rent ratio: try to get people from cities that don't require their inhabitants to pay a fortune for just living there - this inevitably raises their salary with no real benefit for you;
  • startup surges: you need to be sure that a city has at least some legacy in succeeding for startup, it's not a good sign when lots of businesses fail there - stay away from these places.

Here's the list of both established and uprising places across the world that fit the best for launching a brand new startup and facilitating its growth.

#17 Boulder

What may seem like a generic small city in the center of the US is actually an interesting venue when it comes to details: it has six times the national average of startups density and is on a top 20 list of productive metro areas in terms of GDP.

Also, according to Gallup, Boulder, Colorado was proclaimed the " happiest city" in the US, and you would prefer to have employees who feel great about their lives and have a relatively low 5.4% unemployment rate. Speaking of which, around one-third of city residents are university students, which will make high-quality hiring even easier.

#16 Santiago

Long gone are the times when Chile was a synonym of turbulence, as it is now the most flourishing Latin American country: its Economic Freedom Index is in the top 10, the travel risk is on par with the EU and Australia, and the Global Peace Index holds an honorable 24th spot.

The Start-Up Chile initiative was made to attract entrepreneurs and provides a $40k grant plus a visa for those who wish to stay and grow there. Having a population of more than 5 million gives a solid edge when hiring staff, and traditionally affordable rent prices are another reason for picking Santiago from the list.

#15 Seattle

Surely, not the cheapest city, but it often tends to pay off—it holds third place in a best-reviewed list of small businesses; fifth place in relying on computer software and service types of businesses; fourth place in businesses that rely on Facebook pages; and sixth in businesses that rely on digital currency.

With more than 825 companies planting their roots in Seattle, including Amazon, Microsoft, and Valve, the city has gained a reputation and special climate for facilitating businesses and uses the full potential of the local tech talent, 54% of which hold a bachelor's degree or higher and 92% having a high school diploma or equivalent.

#14 Tel Aviv

Not often do you view Israel as a tech heaven for startups, but why is this so? If anything, Tel Aviv has the highest tech startup density in the world, mostly focusing on mid-size projects and markets.

Moreover, Israel hosts the biggest number of engineers per capita who mostly focus on programming, marketing, and product development, which has resulted in more than $5.24B being invested into 620 Israeli startups in 2017 alone. Being the city to stand out the most, Tel Aviv can boast its low unemployment rates of below 4%, which only adds up to the business city's reputation.

#13 Taipei

A small, yet proud island of Taiwan is rightfully associated with technological advances. Whether it's HTC's legacy of Android development or BENQ being among the tech leaders, the country is fit for developing products that rely on vast technological expertise.

Once again, co-working spaces are affordable, and the number of tech-meetups is impressive as well. Having the second lowest labor costs in Asia is also a strong argument for choosing the city; meanwhile, great food is what many may also see as a plus.

#12 Buenos Aires

Despite Argentina being one of the most developed Latin American countries, its capital stands out as having more than affordable coworking places. On top of having quite a few local universities, it is a magnet for all sorts of tech talent from across Latin America, which is also complemented by a number of established startups, such as Descuentocity, Mercado Libre InvertirOnline.com, Plataforma 10, Restorando, and Pickmebus putting down their roots in this city.

#11 Austin

Not having to pay state taxes is not just a dream, it's the reality for startups in Austin, let alone affordable housing, which greatly reduces a paycheck when you want to launch your startup there.

You can also add the University of Texas that serves as a well for generating a tech-savvy workforce, and there's no surprise that there are more than 4,700 high-tech companies complemented by almost 50 incubators and accelerators. The Austin Chamber of Commerce is probably what stands out the most—this company has introduced numerous companies to Austin's business life and convinced to start their businesses there.

#10 Denver

Pure math here: the city is not that different from many competitors inside the US, but the living index number (82.64) is too good to ignore when you consider relatively affordable living in Denver.

TechStars startup accelerator became the first step in the right direction of turning the city into a techno-bay, followed by both the mayor of Denver and governor of Colorado to proclaim startups as the number one priority for Denver. This resulted in special taxation conditions and formal easing when launching new companies so that they can strive for further success.

#9 Kyiv

It's no secret that Ukraine has become a prominent hot spot for outsourcing shenanigans, but it's also good for having a dedicated office there. The tech talent pool is vast, given the largest number of local universities in the country and roughly 2.9 million inhabitants. Both the rent and cost of living are arguably two main advantages: when it comes to price/value ratio, you can't find a better place other than the capital of Ukraine.

There are also opportunities to get funded: according to Angel.co, 99 capital investors are presented in Ukraine to enable mostly early-stage funding. When it comes to overall engagement in the IT sector, Kyiv stands out in a good way: tons of technical courses and business events like iForum, IT Weekend, Kyiv Outsourcing Forum, and many-many others attributed to making this city a powerhouse for launching startups.

This city has already been a starting point for many unicorns, including Ring, GitLab, Grammarly, and Sixa.

#8 Mexico City

Latin America is still considered not one of the safest places to have a business, and although it's true to a certain extent, Mexico City pits itself against this notion by being a place with low crime rates, therefore safe for startup activities.

Rental spaces are affordable; meanwhile, the workforce is vast (9M), and tax rates are lower when compared to their neighbors from the southern hemisphere. Having staff with knowledge of both Spanish and English is another great asset when approaching larger audiences for the product.

#7 Montreal

Located in the province of Quebec, this Canadian city is a special beast inside its own region, but that's for the best: two official languages and relatively low taxes give them an edge when launching a startup there. Fairly priced coworking rent is also among the advantages if you decide to have business in this area, not to mention the overall tendency of VCs gravitating towards this city.

On the other hand, the rather cool climate is what can distract many from visiting Montreal, therefore, it's certainly not the best place for resort activities.

#6 Melbourne

Why pick Melbourne over Sydney when Sydney is responsible for about 35% of startups, and Melbourne represents only 14% of them? While posturing roughly the same technological and business potential, Melbourne comes out on top thanks to a lower cost of living—the same goes about the cost of rent.

Almost 5 million inhabitants are at their disposal, so hiring a solid English-speaking team becomes a non-issue, while maintaining roughly the same culture and work ethics as their US counterparts.

#5 Amsterdam

When companies like Tesla, Uber, and Netflix all of a sudden decide to flee to Amsterdam, you begin to ask yourself: what the actual hood? Well, the reason behind that is rather plain—numerous initiatives such as StartupDelta, StartupAmsterdam, or a StartupVisa program, which allows entrepreneurs to stay for 1 year to develop their idea, are among those that spurred businesses to move to the Dutch capital.

For the newer ventures, tech incubators and accelerators serve as a great foundation for growing fast: Rockstart and Startupbootcamp are well known for helping startups; meanwhile, VCs also show their interest in playing their role in Amsterdam-based businesses.

#4 Boston

Being in many ways a counterweight for San-Francisco, this Northeastern analog has a great advantage: more than 60 universities produce a huge number of tech-savvy professionals. Places like MIT and Harvard or such names as Mark Zuckerberg and Bill Gates are often associated with Boston's education.

Fairly loyal pricing in recent years, the overall comfort of living, and overly high investment numbers are some other factors that serve as a magnet for all types of companies to conceive their path there.

#3 Warsaw

This capital city is a great display of a place with low tax rates (15%), high population (1.8M), low overhead costs, and some vibrant technological community. As a result, it's ranked fourth lowest in terms of renting a coworking place and second lowest when it comes to the salary.

The technical expertise won't also be a concern: Warsaw holds the second place when it comes to a number of developer meetups—the engagement level is truly stellar.

#2 London

Being the most populated city in Europe is a solid factor, which made London not only the capital of the UK but also the biggest startup venue on the continent. Although rent prices are somewhat dragging it back, almost 4.5M of the English-speaking labor force is no joke, which allows you to pick any kind of talent that flock from all across the British Isles.

More than 150 co-working spaces are available for everyone, and the accelerator programs are there to enable all sorts of activities that the aspiring entrepreneurs want to implement.

#1 Berlin

What used to be a city bruised by a huge fence is now a hub for breaking these very boundaries, and rightfully so, as Berlin is now the second biggest city for startups in Europe, and there's plenty of reasons for that matter: both geographical and economical. It's located in the center of Europe and the proximity of western VCs and eastern affordable workforce made a great fusion for a myriad of ventures that have already taken advantage of it.

In fact, you can often come across various charts of top Berlin-based startups that took the best of only a 7.7% unemployment rate and 3.6M inhabitants, backed by fair rent prices.

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