In the wee hours of the morning, you’re up with more energy than your entire life summed up. You’ve got this great startup idea that you just can’t shake off. It’s brilliant and it’s got all the right ingredients to become a successful million-dollar venture.

While you’re grabbing a notepad and writing down all the possible points required to launch your startup, you come across a question that doesn’t seem important now, but you write it down anyway. And the question is —

Where should I relocate to? To stand the best chance of launching my startup.

If you think a location is just a place and it doesn’t mean much.

We’d like to invite you to rethink this through by reading further and finding out what you’ve been missing out on.


A location is a big deal to consider when first sketching out your plan for a startup. After all, this place is going to be your headquarters if your business decides to take off.

You don’t want the pain of stopping operations altogether and finding out that you lack an important feature that isn’t available to you in your planned city.

In fact, starting out in the right city can mean the difference between success and failure. Do we have your attention now? Great. By reading further, you’ll understand why a startup location is critical to shaping the future of your business.

Why starting in the right city is an extremely crucial factor

If you were a budding young actor in the United States, you wouldn’t launch your acting career in the middle of Texas, now would you? You’d first find your way to the city of dreams — Los Angeles.

Next, you’d find an agent and audition your best acting chops. Finally, you’d try until your feet fell off and one day you’ll see the world from your shiny new limousine.

But what if you were swinging pickaxes in your backyard where there isn’t any gold to mine? Then you’d just be wasting all your efforts only to find out you’ve been doing it all wrong. Fortunately, you’re in the right place and choosing the best startup friendly cities in the world can provide you with —

  • Excellent availability of candidates with top educational qualifications to work for your company and make it a roaring success
  • A strong ecosystem within the city to help with networking — Mentors, professional services, investors, social organizations, etc.
  • A city with a strong link to other local businesses that your startup can take advantage of by gaining their services.
  • A location with a strong infrastructure and the best of facilities such as high-speed internet, 24/7 water and electricity, and a local community with a demand for your services.

The above are just a few reasons to consider moving into a city that is startup-friendly.

Some of the biggest companies in the world — Intel, Google, Apple, Facebook, and Twitter have made their homes in startup-friendly cities that include the San Francisco Bay area and the world-famous Silicon Valley.

Do you think it’s a coincidence that these companies all decided to choose the best startup friendly cities in the world to set up their headquarters? We think not.

To further back this evidence, The Startup Genome Project wrote a report based on the data of 11,000 companies and interviewed over 200 entrepreneurs. The cities in this article were among the top cities chosen based on talent pool, venture capital, broad ecosystems, strong infrastructure, and abundance of a startup community to exchange ideas with.

The cities in the report were ranked according to innovation, access to technology, and collaboration to other startup-friendly endeavors in and around these locations. In the next section, we will learn of the starting troubles faced by an entrepreneur and how a startup-friendly city can help solve these issues.

Steps to Consider When Choosing the Location of Your Business

Obviously, just because a city is startup-friendly, it doesn’t mean it’s going to provide you with access to all these resources for free. In fact, some of these resources can be incredibly expensive due to the demand for resources in these cities.

But don’t let yourself shy away from choosing these cities as the success rate of your startup is incredibly high when starting from them.

Without further ado, let’s begin with the most important factor in starting a business.


Budget is one of the first things to put on paper before you begin to draw out your plan. Without knowing your financial position, it’s impossible to accurately gauge just how well your business can thrive in the long run.

Analyze the quantitative factors

The term quantitative factor refers to a numerical outcome that can be defined on paper and can be measured for analysis. To help you understand this let’s use examples —

  • Labor hours — The number of hours you expect an employee to work in your company to complete a task
  • Material cost — Cost of materials measured at a per-unit basis.
  • Product returns — If lower quality materials are substituted to construct a product, what is the cost that is saved.
  • Interest cost — If a loan is taken, how much additional expense is added to the overall cost.

The above are examples of how to create a quantitative analysis which is extremely important if you want to consider choosing a startup city. Once you’ve got the numbers on paper, it will allow you to calculate an estimated budget.

Type of Business

Are you going to launch your startup by yourself? Or are you going to add another partner to help ease the burden of risk? Will there be multiple partners joining you in your business venture?

Depending on the type of business, the budget for your startup city increases. You’ll have a well-informed decision when you understand the type of business you’d like to start. Here we list the various advantages and disadvantages of the different types of startups.

Self-owned Business
Usually, in a self-owned business, you gain the freedom to change things the way you want to, and the business truly emerges the way you want it to without outside interference.

The simple biggest advantage of going at it alone is your commitment and resolve for your business is strengthened and in the long run, you’ll be less distracted and achieve more goals. You’ll also savor all the profits yourself as there is no partner to share them with.

The downside to a self-owned business is the fact that you handle all the risk and need to make payments to your employees on your own. You’ll also depend on loans if things don’t go well in your business or outside investors to fund your startup.

You won’t know when you’re going overboard with your decisions as you are the boss and there is no one to stand up against you. If you decide to pull the plug on the company, there’s no one to question you.


Beginning a startup with a friend or colleague can be a wonderful experience. Especially if this is your first startup, it can serve multiple advantages. It allows you to learn without the need to handle all the risk and you can spread the risk with your partner.

You’ll also be guided in every direction and split the working hours of the company with your partner. Two minds mean more ideas and distinctive expertise that can broaden the scope of your business.

The fall back to a partnership-style business is if you take a decision on behalf of the company, it won’t pass until your partner signs on the dotted lines. There’s always going to be several key decisions that will cause both of you to lock horns and cause the company to halt operations.

If the decision goes against your wishes, you’ll suffer from demotivation and similarly, your partner is likely to suffer from a lack of motivation if the decision goes from your point of view. In the end, the company is likely to take a hit.


A company is when several investors and partners take charge of a single startup idea. While originally, it was your startup, by going public and allowing shareholders to enter, the decisions of the company will have to go through them. The advantages are straightforward in a company —

  • Lots of funds to start a company among the best startup city locations in the world
  • Large budgets allow you to expand to more locations at a faster pace
  • The risk is extremely minimal. You lose next to nothing if the company fails
  • With so many shareholders investing, the chance of your company’s growth is huge

The disadvantages are just as straightforward —

  • Every decision you take will have to be passed on to your investors and shareholders
  • While there is low risk, there’s also a relatively low share of profits
  • You could be voted out of the company if the board deems your decisions as careless
  • Your company will likely never see the end goal that you realized due to so many individuals onboard

Location is a Major Factor

Setting up a business in a bad location is one of the worst mistakes for business owners to do. Think of a location as the railroad tracks and the train as your business, if the railroad tracks aren’t sturdy, the trail will derail and crash causing irreparable loss.

We don’t want a train wreck.

So, here’s a host of reasons as to why a location is such a critical factor.

1. Security

Did you know that the higher the crime rate of a city, the higher the insurance you pay?

That’s why startup-friendly cities are carefully scanned for their crime rate index to ensure the city is safe to conduct business operations without facing unnecessary trouble. The UK government recently released statistics related to crime rate and a site has since come up to inform people if their area is secure or not. You can access “Casinopedia’s crime detection tool by clicking the link.

It’s fair to say, security is important for everyone and having the intuition of not starting a business in a high crime infested area can save the future of your business.

2. Recruitment

Every business is defined by the employees that work in it and by how productive they are. Startup-friendly cities usually have great recruitment agencies with access to the best graduates coming out from universities. Education is a core requirement for businesses to recruit talent.

Another factor is the ease of employment rates. If a city has a high record of unemployment rates, it usually means there aren’t any companies or accessibility to educational institutes in the vicinity. Also, if your company happens to be in any of the startup-friendly cities, it immediately becomes a hot listed job for interested candidates looking for work. This solves the problem of quickly filling up the job ranks in your business.

3. Massive Expansion

The growth potential in a startup-friendly city is huge. The reason companies make their base in these cities is due to their success rate. If a city can’t accommodate much demand or spike in growth, then your business will fail along with it.

For example — Let’s say you start a glass factory in a town with a moderate supply of liquid sand and limestone. Your business begins to grow, and you suddenly have an influx of orders to produce more glass. Unfortunately, there ends your profit-making strategy. Due to the low quantity of liquid sand and limestone, your business is directly proportional to the town’s ability to produce these raw materials.

However, if you were to open your glass factory in a startup city that were able to procure limestone and liquid sand from other nearby cities, thanks to advanced logistics and operations. Your business profits will grow exponentially and scale according to the demand in the market.

4. Accessibility

If your business can’t connect to the end customer or you are using expensive modes of delivery options by 3rd party vendors, in time your business will run into a loss. Transport links are one of the biggest worries for a business owner.

How will I be able to deliver my product without paying too much logistics fee to my customer?

If I make my customers pay the delivery fee, will they stop buying from me as my competitors are able to offer free deliveries?

Questions such as these can creep into your head and with good reason. Startup-friendly cities usually have a streamlined delivery service and charge a reasonable fee as they have a running business model with other companies in the neighborhood.

5. Utility Rates

Rent, electricity, and deposits are costs that are familiar to a business owner. While it’s true that startup-friendly cities are some of the most expensive cities when it comes to utility rates, in the long run, you’ll end up seeing the positive side of paying these costs to run your company.

You could also end up bartering with a real estate agent and get a great price on the rent. Electricity is nominal in most cities and doesn’t really go up or down. Deposits are on the higher end, again negotiation is the key here. It’s a good idea to ask for plenty of parking space for your employees and customers before starting your business.

6. Competition

And of course, startup-friendly cities are filled with competitors and for good reason too. You’ll learn much more in a competitive environment than by yourself. You’ll learn the industries best secrets much better in a city that is known for hosting businesses.

If you’ve got a unique selling proposition in an already ripe market, you’ve just hit the goldmine by beating out your competition. All it needs is a great execution and a steady plan to keep it together. Establishing your presence in a startup-friendly city shouldn’t be hard with plenty of resources such as advertising and digital marketing agencies.

Now that we’ve understood the factors behind launching a business. Let’s look at all the smart cities that are ranked in the world for their great business hosting features.


Every entrepreneur dreams of starting their business in these cities. In the past, a good selection of the global population would migrate to the western horizon or popularly known as “The United States of America” for a slice of good living.

The business scene has changed a lot since the dawn of the new millennium. Many countries around the world have started to arise as the “beacon of hope” for business owners.

The top qualities that all startup friendly cities should have are —

  • Amazing community support
  • Low-to-average cost of living
  • Infrastructure support (especially for IT businesses)
  • Access to a great work-life balance
  • Exceptional nightlife
  • Ability to recruit top talent

While these are some of the qualities listed, there are other critical qualities that businesses keenly scour the world map for. We’ve provided one city from each continent to give you a diverse choice to choose from and to compare the type of living. All prices listed for the cities are as per USD (United States Dollar). So, without further ado —

1. Berlin, Germany

Berlin’s startup scene is so exceptional that a new startup is founded every 20 minutes. In fact, by the time you’re done reading this article, another startup would have popped up. According to a report, Berlin is said to produce over 100,000 employment opportunities before the end of 2020. Now that’s what we call a startup city!

Let’s explore what makes Berlin such a great place that attracts businesses.


The city is home to over 12,000 restaurants and a wide range of culinary delights from all over the globe. Berlin is famous for its bohemian trends that is reflected by its friendly and welcoming community.

The city has managed to keep up appearances of a modern city yet has managed to withhold the flavor of its traditional influences.

Living & Transport

According to expatistan, here are the costs of living in Berlin —

  • Monthly rent for a 900 sq. Ft house costs $1500
  • A dozen eggs cost $4
  • Average electricity and gas bill for a home is combined at $230
  • 8 MBPS of internet costs $28
  • A cup of coffee costs $3.50
  • The price of a movie ticket is $12
  • A month’s gym membership is $47
  • A taxi trip of 8 km (5 miles) will cost you $24

Berlin is connected by various transport systems such as ferries, trams, buses, trains, metro, and taxis. Berlin enjoys a low crime rate and is especially safe for people to walk even during nightfall.

Why choose Berlin as a startup city?

  • Berlin has a great potential for tech-based jobs and startups with the Berlin Senate opening a lot of support
  • Berlin attracts a lot of youth from around the world to its universities. The presence of youth is a great sign for companies to do well
  • Successful businesses from Berlin include — SoundCloud, 6Wunderkinder, and ResearchGate
  • Berlin has a splendid community that’s ripe with regular meetups, seminars, workshops, and everything a business needs to grow
  • Berlin’s work-life balance is extremely relaxed. It’s not odd to see entrepreneurs cycle their way to work
  • Berlin has a rich mix of traditions and cultures from various countries. Don’t worry if you don’t know any German words, the community is well versed in English
  • Berlin is well-known for beer, football, and hard-working employees. All the things that make for a successful business!

2. Istanbul, Turkey

Istanbul is a fascinating city that is the only one of its kind that’s located on the European and Asian continents. The unique geographical location provides the city with a vibrant and diverse culture.

The last decade has seen Istanbul rise the ranks as a startup-friendly city and as a hotbed for success for new businesses. Turkey has over 40 angel networks and 20 venture capitals.


Istanbul has a rich tradition dating back to the 19th century, into the Ottoman period. The city is filled with modern art museums, auction houses, and seafood restaurants.

With the recent increase in foreigners coming into the city, the Turkish people have welcomed them and included various international traditions as part of their own.

Living and Transport

According to expatistan, here are the costs of living in Istanbul —

  • Monthly rent for a 900 sq. Ft house costs $673
  • A dozen eggs cost $2
  • Average electricity and gas bill for a home is combined at $80
  • 8 MBPS of internet costs $11
  • A cup of coffee costs $2.50
  • The price of a movie ticket is $3
  • A month’s gym membership is $35
  • A taxi trip of 8 km (5 miles) will cost you $5.50

Istanbul has various modes of travel —Metro, bus system, underground rail system, trams, ferryboats, sea bus, and aerial lifts.

Why choose Istanbul as a startup city?

  • Low business rates and lower cost of living compared to Europe, Asia, and the USA
  • According to IMF, Istanbul is one of the fastest growing and untapped market opportunities in the world
  • More than half of the population of Turkey is under 30
  • The country has great access to mobile and a high social-media usage
  • All foreigners get access to start a private limited company if they wish to
  • Top startups from Istanbul are — Teleporter, Scorp, and Sinemia
  • Due to its phenomenal location between Europe and Asia, the city makes for a great access point for trade
  • Very easy to receive a permit as a foreigner to live in Istanbul

3. Bangalore, India

Bangalore is known as “India’s Silicon Valley”. It received this title after hosting a vast number of IT companies for over 2 decades. The city has proven a success for both — startups and large companies. According to the Economist Intelligence Unit, Bangalore has raced ahead of San Francisco and Tokyo as the best financial environment to grow and innovate.


Bangalore is called as the “Garden City of India” due to the presence of many botanical gardens. The landscape of Bangalore combines urban technology and a green cover to plenty of wildlife including birds and animals.

The people of Bangalore enjoy various cuisines from all over India and other countries. Bangalore is famous for its nightlife and its distinct music scene.

Living and Transport

According to expatistan, here are the costs of living in Bangalore

  • Monthly rent for a 900 sq. Ft house costs $380
  • A dozen eggs cost $1.13
  • Average electricity and gas bill for a home is combined at $44
  • 8 MBPS of internet costs $14
  • A cup of coffee costs $2.83
  • The price of a movie ticket is $12.45
  • A month’s gym membership is $30
  • A taxi trip of 8 km (5 miles) will cost you $3

Bangalore has a varied transport system with buses, trains, metro, auto rickshaws, and taxis available through a network of applications.

Why choose Bangalore as a startup city?

  • The city has some of the youngest entrepreneurs in the world with a rich pool of recruitment opportunities
  • Bangalore has access to education, retail, technology, healthcare, and IT sectors making it a diverse city for starting up a business
  • The city is home to plenty of venture capitalists and angel investors. Funding your startup isn’t a problem
  • It provides startup owners with coworking spaces and plenty of mentorship courses as assistance
  • Top startups from Bangalore are — Flipkart, Swiggy, and Ola
  • Nicknamed the “pub capital of India” for an amazing nightlife and plenty of cuisine options
  • Connected by a leading international airport to all the major hubs around the world

4. Melbourne, Australia

Melbourne is home to several technological behemoths over the years. With plenty of market for sizeable industries to grow and flourish, Melbourne offers the right kind of living to its people and a supportive business culture with a penchant for community and accessibility.

Melbourne offers new startups with the right venture capital to thrive and existing startups with the scale to grow.


Melbourne’s culture draws heavily from local traditions as well as international cultures. Melbourne has always supported recreational games and sport as a way of life for its people. The city is famous for its visual arts and literature along with political activism.

Melbourne has been voted as the best city to live in the world among the list of “World’s Most Livable Cities” for many years in a row.

Living and Transport

According to expatistan, here are the costs of living in Melbourne

  • Monthly rent for a 900 sq. Ft house costs $1900
  • A dozen eggs cost $4.46
  • Average electricity and gas bill for a home is combined at $200
  • 8 MBPS of internet costs $47.50
  • A cup of coffee costs $3.20
  • The price of a movie ticket is $14
  • A month’s gym membership is $56
  • A taxi trip of 8 km (5 miles) will cost you $16.36

Public transport in Melbourne includes a host of commuter rail services, world’s largest tram network, rapid transit, buses, taxis, etc.

Why choose Melbourne as a startup city?

  • Melbourne recently took the spotlight from Sydney as “Tech capital of Australia”
  • One-fifth of businesses in Melbourne have received a “Series A” funding
  • Knowledge-based jobs have grown by 60,000 jobs since the last decade
  • The city is home to plenty of co-working and entrepreneurial communities
  • Top startups from Melbourne include — Flippa, 99designs, and Adioso
  • Melbourne boasts of lower office rates and cheaper development rates than most of the cities in Australia
  • Melbourne has achieved huge strides in software companies such as Eventbrite and Thales making their launch in the country

5. New York, USA

New York City has a special bond with female entrepreneurs and supports females of all age groups to start a flourishing company in the heart of this grand city. Recently, NYC has been the go-to city for all tech startups and Silicon Valley is no longer the most preferred city in the USA.

The city took the 2nd spot in the Global Startup Ecosystem report. The amount of immigrant founders with their companies in the city demonstrates the city’s love for diversity.


New York City was famous for various cultural movements that first emerged in the USA. Today, the city is home to some of the biggest fashion and art movements in the world. The city is home to various sporting centers and supports various forms of music such as Jazz, Rap, Hip-hop, and R&B.

NYC offers immigrants and locals with plenty of cultural arts and a stylish way of life for those that can afford it.

Living and Transport

According to expatistan, here are the costs of living in New York City

  • Monthly rent for a 900 sq. Ft house costs $3568
  • A dozen eggs cost $5
  • Average electricity and gas bill for a home is combined at $114
  • 8 MBPS of internet costs $47
  • A cup of coffee costs $5.14
  • The price of a movie ticket is $15
  • A month’s gym membership is $94
  • A taxi trip of 8 km (5 miles) will cost you $29

NYC has a vast selection of transport options for its commuters. One can take the bus, taxi, train, or subway to work. Other unconventional modes of travel include pedicabs, cruise ships, helicopters, and ferries.

Why choose New York as a startup city?

  • Has arguably the best workforce in all of USA, according to The Verge
  • Fashion and finance happen to be the biggest company startups in New York
  • Beat San Francisco in receiving the most venture capital funds in 2017
  • Top startups in New York include — theSkimm, Mic, and Maple
  • New York supports gender diversity. It was ranked the best city in the world for female-led companies
  • New York is home to plenty of diversified workforces and venture capitalists
  • The city has cultural offerings that attract tourists and people from across the world. It attracts demand and supply for various sectors


Consider your budget, the accessibility of the city, cost-of-living, and other factors before you pack your bags and be on your way.

Do realize that a startup city doesn’t automatically make your business a success, that factor will entirely depend on how well your strategies are.

A startup city is to make your life convenient and help you focus on your business alone without the risk of outside factors meddling in.

Planning to Launch a Startup? Here Are the Top 5 Cities with Reasons

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