Choosing a city to base your travel tech startup can be tough. You want plenty of smart developers as a talent pool. You also want affordable rental space.
Proximity to a well-connected airport can be vital, too. Oh, and the small matter of access to local funding programmes and, if you’re really lucky, plenty of cash-wielding investors.
But not all cities make the grade. Venture capitalist Paul Graham, whose Y Combinator investment fund has bootstrapped Airbnb, Hipmunk and other startups, has said:
“If you look at a list of US cities sorted by population, the number of successful startups per capita varies by orders of magnitude. Somehow it’s as if most places were sprayed with startupicide.”
Zoltan Acs, director for the Center for Entrepreneurship and Public Policy at George Mason University in Virginia has found something similar while studying US government data on small business survivorship.
Acs says start-ups are more likely to survive, on average, in cities with many other startups.
Below, find our short-list of the best cities to set up a travel tech startup, in alphabetical order:
1. Bangalore
Pros: The savviest city in the second biggest country on earth, home to not only countless call centers but a pool of highly qualified engineers, programmers and, increasingly, investors.
Cons: Non-tech infrastructure, such as transportation and other basic services, plus regular government interference in business protocols. As ex-Yahoo exec Sharad Sharma also says: there is no climate of respecting failure.
2. Berlin
Pros: Enough digital startups for locals to start talking about “Silicon Allee”. Magnet for Europe’s most creatively minded youth, with 150,000 university students.
Cons: Is not a hub (yet) on the global air route networks, also has to fight against its noisier, British rival.
3. Boston
Pros: Lower cost of workspace and utilities than many other US metropolitan areas. Relative lack of competition for talent pool from MIT and other area universities.
Cons: Reasonably far from the venture capital social circle.
4. London
Pros: Creation of a government-subsidized tech hub in a former Olympic venue post 2012 may lead to competitive pricing with Shoreditch’s vaunted TechCity. Good location time-zone-wise to appeal to markets in both Asia and the Western Hemisphere.
Cons: Economic turbulence in the local economy is possible in the near-term due to struggle’s in the city’s largest industry, finance.
5. Moscow
Pros: Local players have strong technical teams. Being local can give a deep understanding of local suppliers, as Tnooz has noted before. High internet penetration among local market and new payment methods.
Cons: Moving money in and out of the country can be sluggish.
6. New York City
Pros: Closeness to the the beating heart of American finance. For a who-knows-whom industry, it helps to be known locally.
Cons: Cost of renting space and paying tax can be outrageous.
7. San Francisco
Pros: The most optimistic city in possibly the most optimistic country in the world, probably because it has the highest number of thriving start-ups per capita on earth. The optimism can be infectious and provide the pep needed to survive the dark days of starting a company.
Cons: An echo chamber of ideas. You may end up creating products and services to appeal to the latest fad among the locals instead of to your target market elsewhere in the world.
8. Paris
Pros: Increasing openness to the tech scene, thanks to the growth of the Le Web conference and the last government’s creation of beneficial rates and paperwork status for entrepreneurs.
Cons: Endless calls to monopolies and state run institutions to set up basic services. Having to constantly explain why you don’t have a normal job at a normal company.
9. Singapore
Pros:Â Large supply of skilled labor. The local population has embraced next-generation technology faster than much of the rest of the world, allowing for helpful local test cases for new products and services.
Cons: The city state isn’t politically liberalized.
10. Sydney
Pros: Sunshine and a relatively strong economy. Three times as many international destination reachable by the local airport than rival Australian city Melbourne. Being within only a couple of time zones of 60% of the world’s population.
Cons: Technical talent pool said not to be as large as elsewhere in APAC.
Summary
We’re the first to admit that none of the factors we mentioned above are set in stone. As travel technology changes, so does the list of cities that are the best for setting up shop.
But the best cities adapt and change like their residents. The worst kill newborn companies.
Pick your top three cities:
[poll id="14"]
If we have missed a city, tell us about it in the comments below…
NB: Modern city at night image via Shutterstock.
Related posts:
About Sean O'Neill
With companies large and small (Travelport, Sabre, Mapquest, Exclusive Resorts, Inspirato, Evolve, Next Great Place, UsingMiles, Everlater, Flextrip, etc) in the area, I’m surprised the Denver/Boulder area was left out. Especially when you consider some of the factors above, for example, a major airport hub that’s about as central as you get, an extremely pro-startup climate all the way from the state down to local government (Jared Polis, Boulder’s congressman, co-founded Techstars), the highest per-capita pool of engineers in the US (Boulder) and a quality of life that’s hard to beat, it’s difficult to ignore this area.
From the point of view of any non-American: Where is Denver/Boulder? Remember that this is a global list while Denver/Boulder are third tier American cities.
But looking at the headline of the article, it says, “What are the best cities around the world for travel tech startups?” It doesn’t ask what are the biggest cities or the most well-known. I think Alex gave some very good and specific examples (and there are many more) of travel tech startups in the Boulder/Denver area. The fact that Boulder isn’t a huge metropolis makes it even more incredible that it has such a dense concentration of travel tech companies.
Hey Alex,
Thanks for the insightful comment. Excellent points all around.
you forgot Barcelona.
http://www.wired.co.uk/magazine/archive/2011/09/european-startups/barcelona
great link. thanks for the Barcelona info!
Sean,
A good list. I have to disagree about one thing about Boston. It IS a thriving travel start up area, with roots as a major force in traditional travel as well. However the competition for tech talent in INCREDIBLY competitive and the costs for good developers is incredibly high, equivalent to New York. There are currently 8 open positions for each developer available/looking in the greater Boston area.
Kevin,
Great point. The scene is clearly expanding beyond Route 128, out to Waltham thanks to Bentley and other schools, too. I was basing that comment about competition on Hopper’s experience
http://servicesangle.com/blog/2012/06/28/hopper-brings-big-data-as-a-service-to-online-travel-planning/
but what you say is extremely useful to know for other readers. Thank you!
Howabout non-cities!
I rather like working in locations where there are NOT too many startup meetups / conferences / drink invites etc….. in order to maintain focus on what you are building.
I live in Southampton, a couple of hours out of London…. .close enough to go in for events when they meet a high quality criteria….. and far enough away to not be tempted to go to every event / invite on offer
So perhaps the article should be what REGION is best for startups rather than the focus on the city…
Alex
@alex – so are you saying the Solent area is one of those Meccas for UK startups?
I’ll have to give Dublin a +1
I have to agree with Alex too – lots of work gets done wherever the laptop is open: whether it’s in a city or between them.
We our missing our lovely city Amsterdam!
International oriented city, good (and very cool) start-up facilities and places to rent.
http://www.wired.co.uk/magazine/archive/2011/09/european-startups/amsterdam
And of course a great place to live!
@ patric thanks for your comment. one of my best buddies is a startup programmer in Barcelona and I totally second that emotion, i mean, motion. though personally, i would be too distracted by the gorgeous beaches, great museums, tasty foot, lovely nightlife, financial crisis, and gorgeous locals.
@Olery Thanks of the shout out about Amsterdam!
Where are the Canadians?
+1 to Dublin, too. educated workforce and dirt cheap real estate at the moment.
@alex your head is in the Cloud, and rightfully so. location independence is legit for so many types of businesses. glad you mentioned that.
My vote goes to Reykjavik/ Iceland a land of startups! They have the highest number of startups and inventions per capita. CCP, Moda Operandi, Sigur Ros, Bjork, OZ.com all come from there.
@kevin you overlooked one major start up powerhouse. Israel and specifically Tel Aviv. I’d venture to say that we have more travel start ups per capita than many of the cities mentioned.
Acquired
-Farechase (acquired by MSFT)
-Neat (acquired by Orbitz)
Funded
-Gogobot
-TripBoard
-YooGuides
-Superfly (full disclosure I am the founder)
Soon to be funded
-Roomer
-SeatID
to mention a few.
@Jonathan,
Little problem in Tel Aviv as well as Shanghai and Moscow is the IP protection and…violations.
This is certainly something that comes to mind when a new startup, mostly based on innovative tech and lacking an army of lawyers want to get started.
Thoughts?
I don’t know about Tel Aviv, but since I’m Russian who is working in Shanghai, I want to say, that IP protection, internet control and etc. – not is a big issue here in China. They exist, but solve-able
Here is a nice article about foreigner startup in China and common issues in this market: http://www.china-briefing.com/news/2012/06/27/creating-a-web-startup-in-china-the-yunio-way.html
@freddy,
Israel, a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada and the UK. Read more in “Start Up Nation”
I do not think travel innovation requires a different set of conditions to flourish.
Agree that Israel has a crazy successful history of innovation and startups, like nothing else anywhere near it. They’re also showing their strength by investing in emerging markets around the world. Lots of Israeli companies outside the travel industry, especially in computer science and security.
Thanks for the ideas on Iceland and Israel! Good ones!
I’m going to more or less repeat what I said on a similarly-themed VentureBeat post: http://venturebeat.com/2012/06/05/tell-us-why-your-town-should-be-the-next-silicon-valley/
Istanbul should be a magnet for tech startups of all types, and is already beginning to come into its own. Labor costs are among the lowest in the world (lower than Malaysia and Poland), and 12% of university students study engineering. Infrastructure is superb, as is the weather. Society is dynamic. You can rent a 2 bedroom penthouse apartment in the best part of town for less than what you’d pay for a studio in Silicon Valley, a shared room in New York, or a closet in London. The city’s two airports have direct connections to nearly every major city from LA to Tokyo. While the country’s deep-pocketed investors have traditionally looked abroad rather than investing in the tech scene at home, this is changing rapidly.. and lucky are the startups who are here to take advantage of this!
Great point, G. Istanbul truly has many advantages for being a startup hive.
More on that point in this Quora thread:
http://www.quora.com/Startups/What-is-the-startup-scene-like-in-Istanbul-Turkey
This is never going to be a “which city is best”. There are many factors which make up the ideal environment. I would suggest that the best city of all is Seattle as it has had the highest success rate in spawning Travel Related startups in the past 20 years. If you are counting startups that have yet to make a profit – then I would suggest the Bay Area wins. So perhaps we should consider what is the ideal metric for the definition of “best”
Running an accelerator for Startups is a new focus for me and my team and we are putting footprints down in multiple cities not just a single one. Why? Because we believe that location is only a part of the story.
Having worked on more than 17 startups over the past 14 years, I can personally attest that it comes down to the usual things. People, ideas, and a good degree of luck. There are few places which seem to be awash in luck. So perhaps we should consider Dublin as the ideal place. Even Bishops Stortford seems to qualify! The list at present looks a little paltry. However I do hope that Sean remembers where his true roots lie!
Cheers
Thanks for your insightful comment! I agree, it’s never going to be a “which city is best.” Your extensive experience validates your argument that it’s all about “people, ideas, and a good degree of luck,” and I hope entrepreneurs listen to what you’ve learned the hard way.
That said, I think Paul Graham is on to something is suggesting some cities are definitely “worse.” So maybe this post should be re-titled “Least worst cities to launch a start-up in”
Is it true that, per capita, Seattle is ahead of Silicon Valley for producing profit-making startups? I didn’t know that. Sadly, the George Mason researcher declined to be quoted.
I love Dublin. Been there a dozen times, and I have dual citizenship with Ireland. There are lots and lots of small businesses, entrepreneurship, brains, talent, and hard workers. But home-grown digital businesses with local hackers? And starting one with the ever-worsening financial crisis? It would take a braver man than I, but that’s the point, I guess. You have to be brave to start a digital business, and that’s the part of making your own luck.
So much thoughtful input! Thanks for taking the time share.
Yeah, what about Tel Aviv and greater Asia (China, Japan, Hong Kong, Korea)?
That’s another vote for Israel. Thanks for getting the word out. It’s traditional hospitality sector
Greater Asia clearly has many potential spots. Kyoto has lots of digital companies; Fukuoka, too. Seoul feels like it’s already 5 minutes into the future with the widespread early adopter culture, though I wasn’t under the impression that it’s the same vision of entrepreneurship that’s popular in Silicon Valley. There are others, of course…
Beijing is a startup capital of China. There is also growing community in Shanghai. And Shenzhen too.
Thank you!
India is “the second biggest country on earth”? According to what criteria? It’s the 7th, Canada is
the 2nd biggest.
I thank you.
@alex – you are joking, right?
1 – China – 1.3 billion
2 – India – 1.2 billion
err
35 – Canada – 35 million
Guys, stop it one. One is talking about population, another about territory size
haha
Looks like Alex is talking size as in land mass, where as this article is referring to population. So you are both right!
Yayyyyy – everyone wins
First – It’s encouraging to see that most of these cities listed (except for Moscow, and Singapore) have established Travel Massive groups (www.travelmassive.com) that can help connect startups with industry
Sydney is a great place to live, and I’ve created two startups here so far (www.travellr.com and http://www.getflight.com.au). Living here is not without its challenges… we aren’t in the USA timezone and we aren’t considered “part” of Asia. With a population of 24M and a struggling local tourism industry, it’s a difficult place to start out depending on what your market is. That said, I think more people should come out here and build a startup in Sydney!
Thinking more broadly, I think the biggest challenge for online travel start ups everywhere is to improve the synergy with established travel companies in their home towns. Why? Because new travel startups typically lack distribution, mentors, and knowledge of the industry. If we can encourage existing travel companies to take a local startup “under their wing” then we could create stronger travel startups and more opportunities for both entrepreneurs and existing businesses.
Hi, Ian,
Excellent point about Travel Massive groups (www.travelmassive.com)!
That’s a great case for Sydney! The annual average of 2,500 hours of sunshine is a plus, too.
You’ve really touched on something here with: the biggest challenge for online travel startups everywhere is to improve the synergy with established travel companies in their home towns
That’s one of my concerns with a couple of the cities that have been mentioned in the comments. While they have thriving entrepreneurial cultures, our hackers creating synergies with established travel companies in their home towns?
We’re based out of Cambridge, Uk and occasionally out of Tech hub.
There’s a decent startup community here, though it’s still aimed more towards traditional hardware and university spin offs than sites and software. On the plus side, you can have an office surrounded by wildlife and old buildings.
Sounds ideal! Thanks for your comment!
We have also some sunshine and a Marseille Travel Massive
and can tell French are quite good at “transmedia” and other digital stuff around culture and tourism!
excellent points, Claude. viva france!
i meant, Vive la France!
St Petersburg takes on Moscow as Russia’s tech capital
http://venturevillage.eu/city-spotlight-st-petersburg
cheers, thanks for the link. interesting read.
Is it just my imagination or is the town of Boulder, CO becoming a rapidly rising center for travel startups? It seems to be an especially hot incubator for Adventure Travel and Active Travel startups.
not your imagination. (see Alex’s comment on Boulder w/ Techstars, etc, above)
thanks for your comment!
Great post!
In the category of mid-sized cities, NICE in the South of France pretty much rocks it IMHO –
- 20,000 IT engineers / 1 million total population in the area
- Europe’s largest technology park 20km away (Sophia-Antipolis), mostly consisting of large companies, but with great opportunities for startups
- Several very good schools including IT- and Design-focused schools (eg Epitech)
- Community of IT / Design freelancers and students, and travel professionals
- France’s 2nd largest airport
- Everything cheaper than capital cities (goes without saying!)
- Similar points above as Paris…
- Not a shoddy quality of life!
thanks, Alexis. Brilliant case for Nice!
Positives and negatives as with anywhere
… but working pretty well so far
Good to hear!
@Kevin, when I told you we have something to do in France, Paris, Marseille, Nice…some news soon
India- Bangalore!
thanks for representing!
Mmmm. Jakarta?
I live here and work on a travel industry. Almost every month we have a new travel start-up.
List some examples?
I’m seeing more interesting tech travel startups coming out of Chile than anywhere else… so… none of the above?
Dublin was voted by Fortune last month as one of the best 7 cities in the world for start-up’s. Please see the following blog article for more information: http://www.companyformations.ie/blog/dublin-ireland-voted-one-of-the-7-best-cities-in-the-world-for-start-ups/
Thanks for letting us know!