Which is the best city in the world to start up in?

All this month we’ve been travelling from continent to continent, in search of the best city in the world to start a business. It turns out, we’re not the first ones to embark on such a mission...

You are reading an article from The world's best start-up hubs series, to read more about this you can visit the series homepage.

Bowei Gai of World Startup Wiki recently undertook his own globetrotting, start-up adventure, travelling the world for nine months, with the aim of documenting global start-up culture. Having taken in a total of 29 countries and 36 cities, we figured Bowei would be a good port of call when trying to decide which city is best suited to starting-up in.

What is the most surprising place you’ve come across a thriving start-up hub?

Having visited 36 cities around the world last year, Kathmandu (Nepal) was definitely the most surprising place to find a thriving start-up hub. It is surprising because this city only provides 12 to 16 hours of electricity per day, and internet is prohibitively expensive (~$100/1Mbps). Nonetheless, the Nepalese founders overcame all of these issues and still managed to build great companies. I visited Nepal because a local Nepalese start-up recently acquired a San Francisco start-up. How cool is that!

Would you advise a start-up to wait until their business has a certain level of stability before expanding or moving to a different country?

It is always a good idea to build a good company foundation before expanding into new markets. But in contrary to most beliefs, I am a firm believer that not every company needs to internationalize. Expansion is popular in Europe because the countries are small, but if we take a look at some of the biggest companies in the world, more than half of them are built without ever having to step foot outside of their country. 

If you were starting-up, which city in the world would you most like to do business in?

After visiting 29 countries and 36 cities around the world, there were a few places that I considered settling down. I liked Sao Paolo for its key influence over the massive Latin America market. I liked Bangkok because of its potential and friendliness toward foreigners. I liked Berlin because it is central to Europe and its rock bottom costs. 

In the end of the day, I decided to pick a small town called Cebu in the Philippines because I fell in love with the challenges here. People are extremely optimistic to you even though 60% of the country lives under extreme poverty. As a Silicon Valley entrepreneur, I feel like I can do a lot to improve the lives of these 100 million people. 

If you were starting up, which city in the world would you least like to do business?

There are on-going conflicts in Ukraine so I would probably avoid Kiev for the time being. Also some parts of Africa are not suitable for me because the infrastructure is not yet at a level where I can start making an impact.

What was the most cost-effective start-up hub you came across?

In Western Europe, Berlin is by far the most cost-effective start-up hub in the region. In Eastern Europe, most of the countries are fairly cost-effective, as long as you are not in Moscow. 

In South America, Argentina is by far the cheapest place to live (think $5 for a big steak & wine cheap). Buenos Aires is also a great city to hire amazingly talented engineers on the cheap, as long as you don't mind dealing with four salary raises in one year just to cope with hyperinflation. 

In Asia, Bangkok has the best combination in terms of costs and good infrastructure.

What was the least cost-effective start-up hub you came across?

For start-ups, San Francisco, New York, London, Sydney and Melbourne were some of the most expensive cities to live and to hire talents. However, the high price tag usually justified by their level of talents. The one exception to this rule is Sao Paolo, where start-ups are paying for unreasonably high price for average talents. 

There are three factors to blame for this high cost. For one, Brazilian tax law essentially doubles the salary for every employee. Second, Brazilian labour law demands that no one works more than 228 days a year, with 30 days paid vacation and an additional month of pay at the end of every year. Third, there are far too many start-up opportunities and not enough local talents to supply it. You can read more on this topic in our latest Brazil Startup Report.

What tips would you give to a start-up looking to relocate abroad?

If someone is interested in working abroad, I would highly recommend that they visit the country prior to making the decision. Every city could look great on paper, but you won't know if you are a fit until you spend some time in the country. 

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