Startups Anywhere and Everywhere

This decade is about the growth of emerging startup ecosystems

Author

Mark Birch
May 04, 2023

When I started out in the tech industry as a young software engineer, my sights were set on the Bay Area. Everything cool and new that I was hearing about from the tech industry was coming out of Silicon Valley. It was the place you went to pursue your Internet dot com millionaire dreams.

I had first visited San Francisco in 1996 where my company was exhibiting at a tradeshow. Being in the midst of the capital of innovation, I was instantly sold on relocating to start a new life there, which I finally realized the next year. Had life events not intervened, I would mostly likely have stayed in San Francisco.

Years later I was fully embedded in NYC with a wife, kids, and job. I had jumped head first into the startup world in NYC and not considering for a second about where we were launching. Everything was going well until I started hitting the funding trail to raise capital for our early startup.

“You have to move to the Bay Area first before we can consider funding you.” This was the phrase I heard time and time again. This was in 2008 when raising VC money was already difficult due to the financial crisis. Not being near Sand Hill Road made the process impossible.

“You have to move to the Bay Area first before we can consider funding you.”

We never got VC funding and while I was bitter at the time, I understood why. The Bay Area was a super dense network of startup activity. It was the hub of startup talent, tech media, capital, and ecosystem supporters. This meant that launching a venture backable startup was much easier.

Conversely, this meant that starting anywhere else was a much harder journey. Even though NYC had money, talent, media, and abundant resources, the network for startups was less well-connected and had fewer people. I remember asking myself during that time where all the other founders were. I even co-hosted a monthly event called Third Thursdays just to meet other founders.

As we fast forward a decade later, the narrative has changed. In my work as Global Startup Advocate at AWS, I see in my travels that startups are succeeding in many places across the world with vibrant and fast-growing startup communities. There is still this belief however that the Bay Area is still the only place for startups to succeed, something I saw highlighted in a recent tweet:

Some still believe Bay Area / SF is the only game in town for startups

To be clear, I love the Bay Area. It has been a juggernaut of startup success and tech innovation for decades. It has the longest history and deepest network of startup talent and capital.

But you can also say this for NYC, LA, London, Singapore, Tel Aviv, and Bangalore. Each of these cities has built strong startup ecosystems and seen their fair share of billion dollar exits. I am also seeing how quickly cities such as Miami, Saigon, Lagos, and others have become rising startup ecosystems that are spawning the next generation of leading startups.

Here are five factors that contribute to the rise of an emerging startup ecosystem:

  1. Passion - the crazy few that believe

  2. Talent - builders willing to try & fail

  3. Tools - lowering the barrier to build

  4. Market - a sizable customer base

  5. Capital - to enable global scale

Each of these factors was a factor in the growth of the NYC startup ecosystem. Starting in the mid-2000’s after the dot com 1.0 bust, a few of the believers gathered around small groups such as the NYC Tech Meetup that was a magnet to draw in others interested in startups. NYC already had a lot of talent, which accelerated during the financial crisis when many smart people were laid off or sought better opportunities than what legacy companies offered. This was also the rise of the cloud with the launch of AWS as well as new languages and frameworks that made building software much easier. NYC is a bigger consumer market alone than many countries but also a huge B2B market. And lastly capital, which took a while to build, but accelerated when startups like Etsy, Yext, DataDog, and MongoDB went public. This released more talented builders into the market, more market interest in the solutions developed by these startups, and more capital to keep the flywheel spinning.

Growth of NYC startup community from bar to auditorium

I see a similar flywheel developing in places like all of cities I mentioned above and across many other emerging startup hubs. In spending time in Cairo earlier this week, I see the same dynamic happening across Africa in countries from Egypt to Kenya to Nigeria to South Africa, known collectively as the "Big Four". the most active startup ecosystems on the continent. According to data shared at the recent AfricArena Summit, startup ecosystems are also rapidly emerging in Ghana, Senegal, Tunisia, and other nations.

Panel in Cairo on supporting African startup ecosystems

These nations are beginning to see how startups are drivers of innovation, job growth, economic prosperity, and global competitiveness. Governments are starting to pay attention, invest in their ecosystems, and adopt startup friendly policies. The secret formula though for these emerging startup communities to blossom into full-fledged ecosystems is to grow beyond a small band of believers into countries that can attract talent and capital to fuel startup success.

This is why the Bay Area is still the top destination for startup activity. They have all five of elements of the flywheel in place. The depth and connectedness of the ecosystem is why top accelerator programs like YC remain in the Bay Area.

If you find the Bay Area and San Francisco compelling for you and your startup dreams, I say go for it! But you should also know that you can build anywhere and still be successful. This is what we have seen across the globe at AWS and why we continue to build out team globally so we can be there in the trenches with startups wherever they are building.

Let me know your experiences as a startup founder in an emerging startup ecosystem. And if you are a startup ecosystem builder, let’s talk and see how the AWS team can help you.

Mark in the White Desert, Egypt

The big travels continue for the Startup Advocate team! Come say hello if you are also attending any of these events, or ping us if you are interested in joining any events that we are participating in:

We will be sharing more events in next week’s newsletter looking ahead for the next few months. If there are any events you wish to share, please let us know.