An infographic showing the top 10 places to launch your startup holds a few surprises. Richard Madison of The Brighton School of Business and Management used various criteria for the infographic, which first highlights best startup countries, and then drills down to their most outstanding cities. It was recently published by Seedstars World, a Swiss-based company holding competitions in emerging markets to help grow ideas and businesses, identifying the most promising startups.
I asked SeedStars founder Alisee de Tonnac for her take on what makes each city one of the best places launch a startup.
Beijing
The culture in China does not foster entrepreneurship. Today’s youth have a life that is strictly controlled by their parents, and traditional jobs are still very highly valued. However the situation is changing very quickly and with the rising number of success stories, entrepreneurship is slowly becoming a desirable career path. China is also increasingly focusing on higher-end, higher-margin advanced manufacturing. “Made in China” no longer means cheap and low-quality.
China has a tax relief program for startups with annual tax deductions of up to RMB9,600 (US$1,500) to businesses established by previously unemployed workers and recent college graduates.
Early this year, China set up a USD 6.5B VC fund for startups. Focus is on seed stage startups. The country now runs at least 1,500 incubators under the Ministry of Science and Technology’s 27-year-old Torch Programme, a nationwide initiative that provides policy, financing and consulting services for hi-tech firms.
*Seedstars Shanghai winner of 2015 is Bitnexo, which is a Bitcoin-backed Cross Border Commerce Payments between China - Latam.
All the trials and triumphs of building a business – delivered to your inbox.
Kuala Lumpur
Malaysia is much cheaper in terms of cost of living than Singapore. So we’re seeing many startups living in Thailand or Malaysia, but incorporated in Singapore, where there are a lot of private & public institutions that are investing in startups & it is easier to incorporate there.
Startups tend to also prefer Malaysia because it is a good test market (larger than Singapore) and you have three different nationalities present. So if you make it in Malaysia, you have a good sense of potential markets like the Chinese, Malay/Indonesian and Indian.
*Seedstars Kuala Lumpur coming up on the 2 of December.
Warsaw
Poland is considered stronger than Czech Republic and Slovakia because it has a bigger internal market & stronger entrepreneurial history. Warsaw has several success stories such as Allegro (final exit to
Moscow
Entrepreneurship is really valued nowadays even though failure is still feared and condemned in the business world (however we have witnessed this in all ecosystems apart from Silicon Valley & Tel Aviv). Due to their Soviet heritage the pool of quality engineers is high and so is the number of hardware companies. There is a strong emphasis on IoT (Internet of Things) these days. Unfortunately, due to political tension & currency devaluation there has been clear brain drain where entrepreneurs tend to leave the country for Silicon Valley, SE Asia and Europe in order to build their ventures. The ecosystem, compared to its neighbors is the most mature both on the startup side as on the investor side (still not enough VCs) and you can easily find several events per day.
*Seedstars Moscow winner of 2015, Texel is the world's first engaging 3D scanner.
Bangalore
Entrepreneurship is booming, especially in Indian cities like Bangalore, Mumbai, Pune, New Delhi or Chennai. The market is huge and the number of engineers graduating per year in the country is impressive. Traditionally, Bangalore's startup scene is very focused on engineering and tech development, so founders in the city struggle to find good business development or design counterparts. The corporate tax level is 30%, plus surcharges. There are no incentives for startups and it can take several months to set up a business, the cost is not prohibitively high.
In Bangalore there are at least 10 startup events happening every week, starting from DemoDays, targeted hackathons, startup meetups, conferences, and competitions, many organized by corporations.
*Seedstars Bangalore winner of 2015: Strike, which helps email power the users research of people inside their Gmail app on mobile (basically a rapportive for Mobile).
Sydney
Being an entrepreneur in Sydney is well regarded, but people still tend to aim for the more comfortable lifestyle of corporate employment. We see many startups focusing only on their local market but there is a shift in mindset where they think more and more globally from Day One. The ecosystem in Sydney is growing & maturing quickly. There are several collaborative co-working events, organised by Muru D, Fishburners and open houses, networking events, and fireside chats.
Government does not really allow for special tax incentives for entrepreneurs. There is a 45% discount for R&D projects, and any capital expenditure up to 20,000 AUD ($14, 500) is tax deductible, otherwise not much has been seen. Also, there is a new incentive to change the current system, where employees are taxed on the expected valuation.
*Seedstars Sydney winner, eora 3D is a 3D Scanning and Modelling powered by a smartphone.
Tunis
Tunis is still a very young ecosystem where finance, coaching & mentoring is just beginning. The Arab spring was a turning point for the entrepreneurial mindset of the population: the focus shifted towards civic entrepreneurship. Here, startups often use and create tech products to mobilize communities, often engaging them in political discussions and working for a collective good. In order to better support the local growing ecosystem, policy makers are implementing new strategies and programs to boost incubators, accelerators, and education program. One of these programs is the Regional Development General Commission’s Integrated Development Program, which aims to collect feedback from local actors and beneficiaries on priority projects, target locations, and best options moving forward.
*Tunisia's most pioneering startup is Tunisia Live, an English-language news portal set up to transmit live images and report breaking news during the Arab Spring.
London
In the first quarter of 2015, investors pumped a record-breaking £459m of venture capitalist funds into London’s digital sector, a rise of 66% on the same quarter last year. Seed enterprise investment schemes (SEIS), the British Business Bank, R&D tax breaks and government startup loans all add up to one big picture. Tech is now viewed as the innovative lifeblood powering Britain’s economic recovery. Britain’s fintech players are estimated to be worth around £20bn in annual revenues collectively, with over £342m invested in 2014 alone.
Cairo
The mass of young, educated and enlightened graduates in Egypt are now turning out an array of startups. Despite challenges, entrepreneurs are figuring out new ways: they are exploiting the birth of many new accelerators and crowdfunding campaigns. Among them, some are already gaining some traction such as accelerator Flat 6 Labs. They founded Instabug, an in-app feedback for mobile apps.
Cairo is also home to some of the best engineering talent in MENA, and that has to do with the quality of universities they have there.
*Seedstars Cairo to happen on the 13th of December.
Sofia
It is still not well known, but Sofia actually has one of the lowest income tax rates (10%) and has one of the fastest internet speeds in the world. There are some successful companies coming out of the region such as VRay - rendering 3D that nearly has a monopoly in the architectural space. Sofia has also become a strong regional hub (attracting top entrepreneurs) as they've been able to access the EU investment funds. This allowed the creation of three funds: LAUNCHub, Eleven Startup Accelerator and Neveq, a later stage investor.
*Seedstars Sofia Winner 2015: Tickey Mobile Solutions, a Mobile ticketing solution for public transport, using proximity sensors and mobile payments (the "Uber for public transport").
