When it appeared last year, the Startup Genome Project attracted a lot of attention by shining the spotlight on the startup ecosystem and the characteristics that made them successful. It was an ambitious project that shed some fascinating and much-needed insight into the thriving startup landscape.
In a blog post today, new data has been released, including 22 insights on how startup communities around the world compare. While it is not surprising to see Silicon Valley, New York City and London rank as the most popular ecosystems, it is encouraging and exciting to see that Toronto ranked fourth.
Here are the report’s characteristics of the Big Three:
Silicon Valley: Biggest throughput. Strong early stage funding ecosystem. More mentors. Most Ambitious. High Risk.
New York City: Diverse. Niche Focus. Marketplace and Social Network focus. High risk.
London: Well educated. Bet big on perceived proven winners. Project Management / E-Commerce Focus. Low Risk.
So how would Toronto be characterized? I would suggest the following:
Toronto: Well educated. Enthusiastic. Collaborative. Low Risk. Scarce capital.
To me, there have been major changes to Toronto’s ecosystem over the past five years. It wasn’t that long ago the landscape was chock-a-block with what I called “digital hobos”, people who drifted from event to event talking about they would like to be startup entrepreneurs but they couldn’t due to a lack of capital, high costs, lack of good people, blah, blah, blah.
In other words, they talked the talk but walked the walk.
But this is no longer the case. With lower startup costs and a burgeoning can-do attitude, Toronto’s startup ecosystem is booming. There are still lots of events in which people get together but they’re more about collaborating, networking and sharing war stories than talking about startup dreams.
What’s interesting and troubling is the gap between the high level of activity and enthusiasm among entrepreneurs, and the low level of startup financing available. Yes, there is more capital slowly dripping into the market such as Communitech’s new “Hyperdrive” fund and MaRS’s new $30-million clean-tech fund, but it’s still from being what’s needed to give the ecosystem the support it needs.
That said, Toronto’s ecosystem seems to be thriving in spite of the lack of capital. The number of startups being launched is impressive, and there is far more talk about growth, finding good people and driving revenue than whining about the lack of capital.
All in all, there is plenty to be encouraged about Toronto’s startup ecosystem.
What do you think? Is Toronto’s ecosystem thriving and, if so, what needs to be done to jump-start even more?