Startup ecosystem

Short description: Type of business ecosystem

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A startup ecosystem is formed by people in startups in their various stages, and various types of organizations in a location (physical or virtual) that are interacting as a system to create and scale new startup companies. These organizations can be further divided into categories such as universities, funding organizations, support organizations (like incubators, accelerators, co-working spaces etc.), research organizations, service provider organizations (like legal, financial services etc.) and large corporations. Local Governments and Government organizations such as Commerce / Industry / Economic Development departments also play an important role in a startup ecosystem. Different organizations typically focus on specific parts of the ecosystem function and startups at their specific development stage(s).[1][2][3]

Silicon Valley, NYC, Singapore and Tel Aviv are considered examples of global startup ecosystems.

Startup ecosystem

## Contents

* 1 Composition of the startup ecosystem
* 2 List of organizations and/or organized activities with startup activities
* 3 External and internal factors
* 4 Role of employee diversity
* 5 Global Startup ecosystem and ranking
* 5.1 Top Cities in Startup Genome GSER 2024
* 6 Further reading
* 7 References
* 7.1 Notes
* 7.2 Further reading

## Composition of the startup ecosystem

Startup development phases Startup ecosystem dynamics

* Ideas, inventions and research i.e., Intellectual property rights (IPR)
* Entrepreneurship Education[4]
* Startups at various stages[4]
* Entrepreneurs[4]
* Start up team members[4]
* Angel investors[5]
* Startup mentors[4]
* Startup advisors[4]
* Other business-oriented people
* People from other organizations with start-up activities
* Startup events
* Venture Capitalists[6]

## List of organizations and/or organized activities with startup activities

* Universities[7]
* Students

* Advisory and mentoring organizations
* Startup incubators[7]
* Startup accelerators
* Coworking spaces
* Service providers (Consulting, Accounting, Legal, etc.)
* Event organizers[7]
* Start-up competitions[7]
* Startup Business Model Evaluators
* Business Angel Networks[7]
* Venture capital companies[7]
* Equity Crowdfunding portals
* Corporates (telcos, banking, health, food, etc.)
* Other funding providers (loans, grants etc.)
* Start-up blogs and social networks[8]
* Other facilitators

Investors from these roles are linked together through shared events, activities, locations, and interactions. Startup ecosystems generally encompass the network of interactions between people, organizations, and their environment. Any particular start-up ecosystem[9] is defined by its collection of specific cities or online communities.

In addition, resources like skills, time, and money are also essential components of a start-up ecosystem. The resources that flow through ecosystems are obtained primarily from the meetings between people and organizations that are an active part of those startup ecosystems. These interactions help to create new potential startups and/or to strengthen the already existing ones. There are a few common mistakes that entrepreneurs make[10][11] that end up costing them their business, like inability to secure adequate funding, sudden market downturn and a poor scaling plan.[12]

## External and internal factors

Startup ecosystems are controlled by both external and internal factors. External factors, such as financial climate, big market disruptions, and significant transitions, control the overall structure of an ecosystem and the way things work within it. Start-up ecosystems are dynamic entities that progress from formation stages to periodic disturbances (like the financial bubbles) and then to recovering processes.

Several researchers have created lists of essential internal attributes for startup ecosystems. Spigel[13] suggests that ecosystems require cultural attributes (a culture of entrepreneurship and histories of successful entrepreneurship), social attributes that are accessed through social ties (worker talent, investment capital, social networks, and entrepreneurial mentors) and material attributes grounded in a specific places (government policies, universities, support services, physical infrastructure, and open local markets). Stam[14] distinguishes between framework conditions of ecosystems (formal institutions, culture, physical infrastructure, and market demand) with systematic conditions of networks, leadership, finance, talent, knowledge, and support services.

Startup ecosystems in similar environments but located in different parts of the world can end up doing things differently simply because they have a different entrepreneurial culture and resource pool. The introduction of non-native peoples' knowledge and skills can also cause substantial shifts in the ecosystem's functions.

Internal factors act as feedback loops inside any particular startup ecosystem. They not only control ecosystem processes, but are also controlled by them. While some resource inputs are generally controlled by external processes like financial climate and market disruptions, the availability of resources within the ecosystem are controlled by every organization's ability to contribute towards the ecosystem. Although people exist and operate within ecosystems, their cumulative effects are large enough to influence external factors like financial climate.

## Role of employee diversity

Employee diversity also affects startup ecosystem functions, as do the processes of disturbance and succession. Startup ecosystems provide a variety of goods and services upon which other people and companies depend on. Thus, the principles of start-up ecosystem management suggest that rather than managing individual people or organizations, resources should be managed at the level of the startup ecosystem itself. Classifying start-up ecosystems into structurally similar units is an important step towards effective ecosystem managing.

## Global Startup ecosystem and ranking

Multiple cities and hubs have been described as global Startup ecosystems. Startup Genome publishes a yearly ranking of global startup ecosystems.[15][16] The study does yearly reports ranking the top 40 global startup hubs.[16] In addition, StartupBlink, also releases an annual Index ranking global startup ecosystems, which evaluates over 1,000 cities worldwide.[17][18]

### Top Cities in Startup Genome GSER 2024

Rank  | Change

from 2025

| Hub

|
|

1  | 0

|  San Francisco Bay
2  | 0

|  New York City
2  | 0

|  London
4  | 1  (1)

|  Tel Aviv
4  | 0

|  Los Angeles
6  | 0

|  Boston
7  | 1  (1)

|  Singapore

Beijing
9  | 3  (3)

|  Seoul
10  | 5  (5)

|  Tokyo

Shanghai

Washington D.C
13  | 1  (1)

|  Amsterdam-Delta
14  | 4  (4)

|  Paris

Berlin
16  | NA  |  Miami
17  | 2  (2)

|  Chicago

Toronto-Waterloo

San Diego

Seattle

## Further reading

Startup genome report (2024)

## References

### Notes

1. ↑ "The $3 trillion global start-up economy ... where and how start-up ecosystems are driving new growth" (in en-GB). 2019-10-18. https://www.peterfisk.com/2019/10/the-3billion-global-start-up-economy-where-and-how-start-up-ecosystems-are-driving-new-growth/.
2. ↑ Deeb, George. "How To Build A Startup Ecosystem" (in en). https://www.forbes.com/sites/georgedeeb/2019/04/04/how-to-build-a-startup-ecosystem/.
3. ↑ Hannigan, Timothy R.; Briggs, Anthony R.; Valadao, Rodrigo; Seidel, Marc-David L.; Jennings, P. Devereaux (November 2022). "A new tool for policymakers: Mapping cultural possibilities in an emerging AI entrepreneurial ecosystem". Research Policy 51 (9). doi:10.1016/j.respol.2021.104315. ISSN 0048-7333.
4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 Empson, Rip (2012-04-10). "Silicon Valley, London, NYC: Startup Genome Data Reveals How The World's Top Tech Hubs Stack Up". TechCrunch. https://techcrunch.com/2012/04/10/startup-genome-compares-top-startup-hubs/.
5. ↑ Sreeharsha, Vinod (2008-12-25). "Fiscal Chaos Aside, Start-Ups Bloom in Argentina". The New York Times. https://www.nytimes.com/2008/12/26/business/worldbusiness/26peso.html?pagewanted=all&_r=0.
6. ↑ Raza, M. Tanzeem; Natarajan, P. (January 2023). "Factors Driving Venture Capital Investments in India" (in en). Journal of Entrepreneurship and Innovation in Emerging Economies 9 (1): 62–79. doi:10.1177/23939575221139944. ISSN 2393-9575. http://journals.sagepub.com/doi/10.1177/23939575221139944.
7. ↑ 7.0 7.1 7.2 7.3 7.4 7.5 Zimmerman, Eilene (2013-07-17). "Austin's 'Silicon Hills' Builds on Its Infrastructure". The New York Times. http://boss.blogs.nytimes.com/2013/07/17/austins-silicon-hills-builds-on-its-infrastructure/?_r=0.
8. ↑ Markoff, John (2008-02-08). "Seattle Taps Its Inner Silicon Valley". The New York Times. https://www.nytimes.com/2008/02/08/technology/08nation.html?_r=0.
9. ↑ "Quick Facts about Startup Ecosystem in India" (in en). 18 July 2020. https://aatmnirbharsena.org/startup-ecosystem.
10. ↑ Fakih, Abdulmuhsen. "10 Common Mistakes Entrepreneurs Make—And How To Avoid Them" (in en). https://www.forbes.com/sites/forbesbusinesscouncil/2023/12/15/10-common-mistakes-entrepreneurs-make-and-how-to-avoid-them/.
11. ↑ "Common Mistakes Entrepreneurs Make.". June 27, 2021. https://www.empat.tech/blog/4-real-life-lessons-from-running-a-startup.
12. ↑ Kronenberger, Craig (2021-03-29). "What Startup Model is Right for You?" (in en). https://medium.com/startup-studio-insider/startup-studios-vs-accelerators-82b8545aba0a.
13. ↑ Spigel, Ben (2017-01-01). "The Relational Organization of Entrepreneurial Ecosystems" (in en). Entrepreneurship Theory and Practice 41 (1): 49–72. doi:10.1111/etap.12167. ISSN 1042-2587. http://journals.sagepub.com/doi/10.1111/etap.12167.
14. ↑ Stam, Erik (2015-09-02). "Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique" (in en). European Planning Studies 23 (9): 1759–1769. doi:10.1080/09654313.2015.1061484. ISSN 0965-4313. http://www.tandfonline.com/doi/full/10.1080/09654313.2015.1061484.
15. ↑ Genome, Startup. "Startup Genome" (in en). https://startupgenome.com/report/gser2024.
16. ↑ 16.0 16.1 Wrobel, Sharon (10 June 2024). "Tel Aviv moves up to 4th place in annual ranking of global tech ecosystems". https://www.timesofisrael.com/tel-aviv-moves-up-to-4th-place-in-annual-ranking-of-global-tech-ecosystems/.
17. ↑ "Entrepreneurship and Sustainability Issues" (in en). Entrepreneurship and Sustainability Issues 12 (1). 2024-09-30. doi:10.9770/jesi.2024.12.1. ISSN 2345-0282. https://jssidoi.org/jesi/issue/45.
18. ↑ "StartupBlink | Uncover the Global Innovation Economy Winners" (in en). https://www.startupblink.com/.

### Further reading

* Elatab, Mac (2012-02-14). "A Beginner's Guide to the Nordic Startup Ecosystem". https://www.forbes.com/sites/truebridge/2012/02/14/a-beginners-guide-to-the-nordic-startup-ecosystem/.
* Knowledge commercialization and valorization in regional economic development. Chesterham, UK; Northampton, MA: Edward Elgar. 2013. ISBN 978-1-78100-407-4.
* Nager, Marc; Nelsen, Clint; Nouyrigat, Franck (2012). Startup Weekend: how to take a company from concept to creation in 54 hours. Hoboken, N.J: Wiley. ISBN 978-1-118-16023-7.

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