Undoubtedly, when it comes to launchıng a startup, the place of establishment plays key role. The Silicon Valley has become byword for startup ventures and it has all the reasons for this. But many new places, not only in the USA, but also in Europe and Asia, have taken the attention of numerous startup enthusiasts, which raises the question what does a city need to become the next Silicon Valley or at least to get closer to it?
Many cities around the world are trying to evolve their global status and strengthen their economic positions and attracting startups, especially the tech ones, looks like one of the most successful moves to establishing and growing strong economy. Creating a startup ecosystem in a city is an ongoing process that requires investment not only in infrastructure and business environment but in people and education as well.
To understand what a city needs in order to attract more startups, we need to focus on what does a startup in general need to secure its success. The main purpose for every startup, besides sending a message and innovate, is to achieve financial stability and to become profitable. Startups often jump from the startup status to full-sized company after the moment they go public. So in order to be chosen by entrepreneurs, a city needs to offer IPO markets and a way for a company to go public. It seems like we start from the end to the beginning, but looking at the big picture is the best way to calculate future success and the possibility to complete the mission of the business venture.
Knowing from the beginning that there is a way to grow brings up more questions that require answers. Raising a capital through investment is fundamental for most of the startups, so it is important to know that in the city there is a big community of venture capitalist and angel investors that are ready to invest. With the purpose of attracting more startups the attention needs to be concentrated on improving the whole entrepreneurial ecosystem by attracting investors as well.
The success of Silicon Valley is unequivocal and the reasons are many, but the one that interests us now is the fact that there the startup network is really strong and one of its kind. In every business networking is fundamental, especially when it comes to innovation and generating new ideas. For a city to stay strong and be competitive with other Silicon Valley-like places is required to have strong network of entrepreneurs that can keep the feeling of cohesion.
No startup can survive and grow without the right employees. The hiring culture of a company is very important and the place where the business is situated has great impact on implementing this culture. It is essential for a startup to be able to find qualified, creative and talented people to hire, that’s why big cities with top universities and good educational programs are preferred, because it becomes easier for entrepreneurs to find the right employees.
Other important factors are the cost of living, infrastructure, transportation in the city. For example, a city that doesn’t offer free Wi-Fi automatically loses points. To become a center of tech startups, the Internet access must be like the access to water.
The organization and security of the business environment of the specific place also have great impact. In some leading cities that have all that it takes often the entrepreneurial ecosystem is not working well because the process of establishment of new company is too complicated, taxes are too high, bureaucracy is slowing the work down. The city and in general the whole country needs to have flexible politics when it comes to hiring foreigners, because the startup venture is believed to be a business that goes beyond borders.
Being a startup-friendly city brings more benefits, definitely has more pros than cons, but it requires a lot of investment and time. But it is definitely worth it.