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Ask HN: What does a region/city need to encourage startups?

4 points by teapot01 ↗ HN
What do you think the key drivers are that encourage start ups - particularly technology based to form and grow. I.E if you were developing a strategy to encourage a startup community in your city what would you do?

I think one of the key factors is the availability of funding.

What Else?

4 comments

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kristjanlepik
Good question! Lots of cities all over the world are trying to find an answer to that. And it is much more complicated than it looks at the first glance - there are many different problems that need to be solved for startups to grow.

Surely, funding is very important and existing startup ecosystem (meetups, incubators etc) is crucial as well. But since we at Teleport are helping smart people move, we are also hearing from them what are the most important issues for them. This is the top4 and it has some surprising elements:

1. Low pollution 2. Low living costs 3. Low crime 4. Tolerance

While low costs and crime are very understandable, pollution and tolerance could be a bit surprising. But that shows that startups want to grow in cities where their employees can live a good life - it's safe, it's green and the level of tolerance is high. So focus needs to be much wider than just the capital.

Different cities have very different challenges, here is the comparison of London and Berlin: https://teleport.org/compare/berlin-and-london

While the level of startups and capital is surely higher in London (the best in Europe), the environment and living cost are better in Berlin - every city must find their own marketing story.

teapot01
Thanks! I live in a western country so 2 or 3 of the following are covered. The more people I talk to the more I find that funding is the biggest risk - that and people will not risk their current secure job for a venture that will not be backed by investors without showing strong traction.
brudgers
It's not just the availability of funding, it's the type of investors and their expectations. Outside of Silicon Valley, local investor communities tend to be focused on consistent performance across the companies in their portfolio. In Silicon Valley, investors seek companies with the potential for wide variation because that's what the unicorns are [sure they'd like everything to be a unicorn, but they know that it won't be].

The reason this works in Silicon Valley there is a critical mass of companies (and hence deals) financially structured to "go big or go bust." Hence a portfolio can be diversified. It is unlikely that a random city will have sufficient companies built this way to support an investor community optimized for startup investing.

teapot01
Thanks, I think this really hits the nail on the head - and it's exactly what my country and city struggle with.