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Ranking Startup Cities
The debate about the top hubs of startup activity continues. Paul Graham kicked it off with this excellent post in which he made some slightly negative comments about New York City.
I responded with this post in which I asserted that NYC was clearly the number three startup center in the US.
Tim O'Reilly follows with this post in which he cites (and graphs) the work of Roger Magoulas, the head of O'Reilly Research. In Tim's post, he asserts that Seattle/Tacoma is number three and New York City is number four.
Well that's what Tim gets for using data from Simply Hired (I am joking here, we are investors in Simply Hired's competitor Indeed which is the leader in the job search vertical).
But interestingly, we did the same search back a month or so ago when I was having my initial debate with Paul. Here are the stats we got out of the Indeed job index for "startup" jobs.
San Francisco, CA 2,288 jobs
Boston, MA 1,815 jobs
NYC... 1,625 jobs jobs
Seattle, WA 1,126 jobs
Austin, TX 372 jobs
I guess we'd have to reconcile our methodologies to understand why the difference in the results. I am guessing its probably due to definition of the geographic region but who knows.
What is clear though is that by any measure, New York is one of the top four hubs of startup activity in the country. And that continues to surprise a lot of people, but not me.
Comments (11) | Posted June 12, 2006 in Venture Capital and Technology
Comments
How is a job tagged a "startup" job? If it is tagged because the word "startup" is used in the job description, then that wouldn't be a very accurate count for any city.
Also what's considered a "startup" here? A conventional, venture-capital-funded technology/e-commerce type firm? Or any new company looking for hires (say, a new fashion or record label).
Etc., etc.
Seems to me that absent any further explanation of what is meant by "startup" and how a job opening is labeled a "startup" job that the numbers you provide don't really tell us much.
Posted by: Dave | Jun 12, 2006 9:41:39 PM
The aggregate # of jobs should also be divided by the total population or total jobs in the metro/DMA region.
While start-up jobs per region isn't the only important criteria, it does show the importance of start-ups to the local economy and is one measure of vibrancy of the start-up culture.
By this measure, I'd say Seattle is #1. (of course - I'm biased...I live and have started companies in Seattle)
Posted by: Jeff Schrock | Jun 12, 2006 9:48:18 PM
I'd be interested in seeing a top ten or twenty list, for fun.
I'm surprised what a big drop there is from #4 to #5.
Posted by: Jonathan Ellis | Jun 12, 2006 10:19:26 PM
Shouldn't it be measured relative to the total population. innovation per person would be more concerning to me.
Posted by: Bradley Twohig | Jun 13, 2006 12:18:28 AM
I assume the Indeed search is in fact a text search for "startup" as there was a link to that search a couple months ago for folks who want to work in startups. I subscribed to it, but found it useless as a significant number of the jobs were manufacturing positions that had to do with machinery "startup".
So the difference between Indeed and Simply Hired is either in the way they are handling keywords or in the breadth of jobs listed (i.e. Simply Hired might also be nothing but dumb keywords, but not actually be picking up manufacturing jobs).
Both are very nice services, but the job world is broad enough that single keywords are often shared in disparate industries. For instance RSS is Really Simple Syndication, but is also Retail Store Services, EDO Reconnaissance and Surveillance System in plant engineering, and some type of nurse.
Posted by: Jonathan Peterson | Jun 13, 2006 8:41:36 AM
PwC puts out its Moneytree report on VC investing activity every quarter, and I spoke at the Los Angeles panel 3 weeks ago.
The summary from Q12006 on investments for the top 5 regions:
Silicon Valley $2.05 billion, 245 deals
New England $872 million, 98 deals
Southern California, $679 million, 63 deals
NY Metro, $348 million, 58 deals
Pacific Northwest, $314, 38 deals
Hope this helps the debate!
Posted by: Todd Jerry | Jun 13, 2006 10:05:08 AM
Todd
those survey results are here
http://www.pwcmoneytree.com/moneytree/nav.jsp?page=region
SoCal numbers were $360mm and 32 deals, not $679mm and 63 deals.
Fred
Posted by: fred | Jun 13, 2006 10:20:54 AM
You have to take population -- or at least total jobs -- into consideration. And when you do, the effect of entrepreneurship & startup activity is just much more significant in smaller cities than in NYC.
I just moved from the West Village to the West Coast (to do a startup). Here, entrepreneurship is a fundamental part of the local ecosystem. In New York, there are plenty of startups and entrepreneurs, but they are small in number, relative to Wall Streeters.
In SF, Seattle, and Austin, the startup mindset is pervasive in a way that it, sadly, cannot be in NYC. And I say that as someone who has lived most of my adult life in NYC and loves the place.
Posted by: Gordon | Jun 13, 2006 4:42:10 PM
gordon,
you are correct that the startup mindset is pervasive in SF, Seattle, and Austin.
but i think that's a disadvantage in many ways.
those markets are echo chambers.
you can't keep good developers or good marketing and product people.
you can't have a dinner conversation without worrying that someone is listening to you.
there is no diversity of thought.
here in NYC, you can do a startup, but you don't have to live it 24/7. you can have friends in the media business, the entertainment business, wall street, real estate, retail/restaurants, etc.
i think its healthier in many ways.
fred
Posted by: fred | Jun 13, 2006 4:50:41 PM
Fred,
I think the data in O'Reilly and your studies support your claim. I've lived the startup scene in Austin for the past nine years. It is active, but I've always felt the hype outweighed the substance in terms of its comparative position. I make that claim here too:
http://brian.magierski.com/2006/06/what_enables_a_.html
Read the comments in O'Reilly and some Austinites and former Austinites will support this anectdotally too.
Posted by: brian | Jun 23, 2006 2:06:20 PM
Reading this late but need to violently disagree that total jobs/population should be taken into consideration. Clearly we are looking for absolute, not relative, activity.
Posted by: pwb | Apr 8, 2007 4:47:03 AM
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