A good idea is important of course, but much of the success of a start-up enterprise relies on it setting up in the right place. That means finding somewhere with things like local staff availability, access to funding and the relevant infrastructure.
Berlin is currently the best city to launch a start-up, according to data compiled by the European Start-up Initiative (ESI).
The ESI asked business founders: where would you start up if you could begin all over again?
Berlin is the founder’s hotspot, closely followed by London, with 14% of the vote compared to Berlin’s 15%. Both are firmly established start-up hubs.
Innovators are drawn to Berlin as one of Europe’s most international cities, where start-up costs compare favourably to some other cities.
London is known for its friendly ecosystem. There is good access to capital - lots of investors are based here. Taxation schemes for investors are also favourable, but start-ups have to grapple with the high cost of office space. London ranked highly on a recent list of most expensive office spaces.
Amsterdam received 10% of all votes and placed third, with Barcelona next on the list with 7% of the vote. Lisbon, Dublin, Stockholm, Munich, Copenhagen and Vienna also place highly.
Lisbon is a particularly interesting entry on the list given that it's only a matter of years since Portugal was mired in an deep financial crisis.
According to Reuters, Lisbon is becoming popular for its low-wages, and the availability of technical talent. Monthly rents for prime Lisbon offices are also favourable. The city will be hosting this year’s Web Summit tech marketplace which has been held in Dublin for the past seven years.
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What makes a good start-up location?
It’s not all about money. According to the ESI report, access to capital is the least important factor. Access to highly qualified talent is the most important factor for founders, followed by a good quality ecosystem. Costs were third highest on the list of priorities, with access to capital last.
The Startup Heatmap Europe is based on an online survey opened to founders from November 2015 to April 2016. A similar survey by Wired UK also listed London as a hotspot, but not Berlin. It also included Lisbon on its top 10 list.
Others are catching up
Berlin and London are more established, but their ranking is threatened by “challengers”, according to the ESI ranking.
Stockholm, Milan, Dublin, Copenhagen, Munich, Vienna, and Manchester are all seen as potential rising stars - “That hidden gem, the regional champion, or even the local underdog, which may become the next big thing in the European start-up landscape” says the report.