There is a reason why Silicon Valley is and will remain the leader for -startups, innovations, entrepreneurship, talent and technology. The valley is a culmination of all these factors and beyond. Its a place where every small idea can have astronomical potential, where people mentor the young and the inspiring and where the government and policy makers join hand to ensure such a spirit thrives in perpetuity. Taking cues from the valley and other major hubs, lets look at the top 6 factors that constitute a great start-up hub.
1. The Location Ecosystem :
The best start-up hub in the world happens to be the Silicon Valley. Some statistics about the Silicon Valley cements the reason why start-ups thrive in this place. The valley is an ecosystem in itself with a cult of some of the top investors, VCs, angels and entrepreneurs constantly networking amongst each-other and the future unicorn founders. The place is never short of inspiration, advice and commitment. Budding entrepreneurs have made it a point to start their ventures here even if it means failing multiple times. The ecosystem lays a lot of emphasis on the spirit of entrepreneurship rather than passing judgments and injunctions. The physical infrastructure is another important element why ideas transform into raging businesses. An ecosystem of IT, cloud services, consulting, F&B, bio-tech majors alongside coffee shops and convention centers have made it into a start-up haven.
2. Capital Flows:
The relative ease with which capital is raised for start-ups is one of the core reasons why every entrepreneur in the making aspires to make it to Silicon Valley. One of the ethos in the valley of entrepreneurs is the “spirit of giving back” and the same is done through a systematic capital allocation system through VC’s, angels, accelerators and private equity firms. To give a perspective what that means, Silicon Valley on a average accounts for a 3rd of all the venture capital in the US.
And while the VCs and the angels continue to pump in capital, the governmental bodies have done their part to implement policies and regulations that allows the eco-system to thrive
3.Platform based Value :
Product based solutions while having shown considerable success in the past have lost their sheen and the new kids on the block are platform based value creations. The concept of such a system lies in the fact that no defined boundaries are constructed to predict outcomes rather the concept gives way to possibilities and what can become. Unlike products, platforms are a cluster of technologies or products delivering on a business goal. Platforms, as per McKinsey, function as independent entities bringing together business, technology, governance, processes, and people management to move quickly.
If there is one competitive advantage that the valley enjoys more than any of the start-up hubs elsewhere is the availability of thriving talent. The talent is a perfect blend of home-grown and outside population including the migrants. The sheer pace and the tenacity of the valley has imbibed these very qualities in the talent available most of whom have left their countries and loved ones to make it big here. Technology today is driving value and profitability for firms across the world and the valley has the highest concentration of hi-tech workers in the United States.
5.Opportunity for All :
Perhaps the most important advantage that the valley provides is equality of opportunity. An article in Forbes indicated that more than 50% of the start-ups founders in the US were immigrants and Silicon Valley is at the center of this opportunity. As per Fortune, 51% of all unicorn founders are immigrants and contribute significantly to the progress and prosperity of the nations as a whole.
The place is also a hub where government, private sector and academia interact and intersect to form a powerful triad influencing policies, regulations and protocols.
6.Government Support :
If one was to look at the success of the top startup hubs of the world, the government plays a vital role in formulation of policies and regulations that enable start-ups to thrive. In Beijing, the incubators and accelerators have been a joint effort of the governmental bodies and the private investors, the rise of New York by beating Boston to its own game is one of the finest examples of political will and private ambitions working in unison.
In Beijng, Innoway, a government backed start-up village has been teaming up with universities and other bodies to have successfully incubated 2900 start-ups and will play a key role in the ascension of Beijing to the top.