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Our Data and Methodology

The Startup Heatmap tracks the development of startup ecosystems over time. We map ecosystems along 5 dimensions: International connectivity, strength of the entrepreneurial community, their perception and trust among founders, performance as well as long-term impact on job and business creation.

Our research is driven by an annual survey as well as the collection of a range of indicators measuring ecosystem dynamics. We guide founders, investors, and ecosystem builders in their search for startup destinations as well as in making strategic choices.

A particular interest lies in the exploration of success factors for cities that aim to grow their startup community by attracting international founders, investors, and collaborators.

Founder Opinions

Cities Tracked

Connections Mapped

Accelerators

The exploration of businesses´ competitive resources relies on the ability of the ecosystem to attract a differentiated set of resources and to enable sustainable synergies between them. The canonical indexes are still not able to capture the magnitude (*) of entrepreneurial ecosystems in which companies grow and develop their business. Renewed cross-sectoral and spatial relations are constantly redefining this magnitude. In this regard, single metrics, related for example to innovation and business performances, but also infrastructure availability, are not able to outline a consistent picture about the most favourable conditions triggering entrepreneurial development and featuring virtuous entrepreneurial ecosystems.

Focusing on startups, our approach combines different data sources and investigates entrepreneurial ecosystems at two different levels: the accelerators and the cities. These are our unit of analysis, whereas our unit of observation is multilevel.

 * Magnitude refers to the environment’s attractiveness for new players, such as foreigners in a city, new creative talents in a co-working space, new members in a social association etc.

1. The structure of our dataset

To define and describe the structure of our dataset, we propose five composite variables:

 

  1. Connectivity
  2. Community
  3. Perception & Trust
  4. Performance, and
  5. Impact.
Unit of Analysis Composite Variable Metric Source Sample size
Accelerator Connectivity Origins of founders (CEOs) of startups participating in accelerators by city / country / regions Primary data collection of origin country and city of the CEOs of accelerated startups since 2015 by social media monitoring, forums, blogs and websites > 5.000 companies
Community Accelerated startups per year Primary data collection since 2015 from accelerator websites and portfolio overviews on secondary sources > 5.000 companies
Community Accelerator specialization Primary and secondary data collection on company descriptions of accelerated startups and extraction of industry keywords since 2015 by social media monitoring, forums, blogs and websites > 5.000 companies
Perception & Trust Trust Score SHM annual survey since 2018 on preferred accelerators of founders in Europe (“Which accelerators would you recommend to an early-stage founder?”) > 3.000 responses
Performance Funding raised by participating startups Secondary data collection since 2015 by social media monitoring and websites > 5.000 companies
Performance Follow-on funding rate of participating startups Secondary data collection since 2015 by social media monitoring and websites > 5.000 companies
Impact Jobs created by participating startups Secondary data collection since 2015 by social media monitoring and websites > 5.000 companies
Impact Follow-up investors Secondary data collection since 2015 on investors who invested at least €100k in companies after acceleration based on social media monitoring and websites > 5.000 companies
City Connectivity Regional reach by country and region based on founders´ preferences Regional breakdown of founder responses on their preferred startup location, based on their current location via SHM annual survey since 2015 > 6.300 responses
Connectivity Share of foreign-born founders Identification of foreign-born founders based on their responses to the question of origin (“Where did you spend most time growing up?”) and their current location, via SHM annual survey since 2015. > 1.400 CEOs
Connectivity Share of international investors among early stage investments (€100k – 5 mn) Pitchbook investment database in 2013-2016 > 4.000 deals
Connectivity International conference participants Primary data collection on origin country of Facebook followers of leading tech conferences in Europe (last sample from 2018) > 35 conferences
Connectivity International accelerator participants Primary data collection since 2015 on origin city and country of CEOs of startups participating in leading tech accelerators in Europe > 5.000 CEOs
Connectivity Presence of international leading startups Primary data collection on office locations of the top 100 startups in Europe identified by Startup Europe in 2018. Since 2020, primary data collection of the office locations of the currently active unicorns as identified by CBinsights. > 700 offices
Perception & Trust Trust Score SHM annual survey since 2015 on preferred startup hubs of founders in Europe (“If you were going to start a company in Europe tomorrow, where would you like to do it? Choose up to 3 cities, in the order of your preference.”) > 6.300 responses
Perception & Trust City future outlook Perception of local founders on the future development of their city´s startup ecosystem, via SHM annual survey since 2015 > 6.300 responses
Perception & Trust City visibility Primary data collection on visibility of cities based on mentions of the cities in connection with startups on Twitter > 1.200.000 tweets
Perception & Trust Category ratings

Qualitative assessment of cities´strengths and weaknesses based on the ratings of founders in various categories (funding, talent, regulations etc.), via SHM annual survey since 2015. The percentage indicates how many founders gave positive ratings.

> 6.300 responses
Perception & Trust City brand perception Founders´ impressions about foreign startup ecosystems based on a list of word associations to choose from via SHM annual survey since 2019. > 500 responses
Community Meetups Primary data collection from startup-related internet calendars since 2019 > 33.000 events
Community Availability Developers Number of full stack developers registered on Stack Overflow by city since 2017, as listed by Atomico > 30 cities
Community City specialization Primary data collection on technology focus of cities based on trending keywords on Twitter > 1.200.000 tweets
Community Meetup Participants Variation Secondary data on number of tech-related meetup group members per city provided by meetup.com since 2014, as listed by Atomico > 20 cities
Community Salary Level Developers Median salary levels of senior software developers provided by Teleport > 80 cities
Performance Sum of funds raised Secondary data collection from Dealroom since 2014 > 50 cities
Performance Sum of exits realized Secondary data collection from Dealroom since 2014 > 50 cities

 

The five different composite variables are investigated by looking at a multitude of units of observation. We have privileged the startup giving us information about intangible resources spread out from the entrepreneurial ecosystem where the startups are embedded.

2. Multilevel dataset description

Our dataset is based on primary and secondary data collected by a tracking system and an annual survey. These elementary variables, at different levels, are at the core of the composite variables explored by the touched upon metrics.

The tracking system

Primary and secondary data is collected since 2015. At the core of our tracking system there is a composite data team that collects the qualitative data by monitoring social media, forums, blogs, and websites. The data collection results from double-checked processes implemented by different data analysts at the same time. Data is updated at least quarterly.

For Accelerators:

Tracking system maps more than 155 European accelerators since 2015.

Elementary variables are: Total funds raised by Alumni; follow-on funding, defined as the number of startups having participated in an accelerator who have closed more than one funding round and having reached a total equity funding amount higher than 100.000 USD; number of employees of startups having participated since 2015.

For Cities:

Tracking system maps startups, startup founders and CEOs, events, and related topics.

Elementary variables are: number of tweets mentioning at the same time the name of the city and the word “startup” (and variations thereof); number of startup related meetups per city; sum of VC (Venture Capital) funding; sum of realized exits; median salary of a senior software developer; directional data of investments between 100.000 EUR and 5.000.000 EUR from 2015-2018; sum of offices of leading startup companies in the city.

 

The SHM Annual Survey

The main goal of the survey is to measure the intangible resources of an environment, the so called “atmosphere” (Marshall, 1919). The survey focuses on understanding founder mobility and the perception of the quality of startup communities in the eyes of founders as a proxy for their future development potential. The survey is mainly based on categorical variables covering the recognition of startup places in Europe, their rating in the main categories (access to capital, access to talent, ease of doing business, industry connections and quality of the ecosystem) as well as the qualitative assessment of the brand image via associative questions (“What do you think of when you hear “Berlin startup scene”?). Further questions cover the actual mobility and transnational connectivity of startup founders in Europe, asking for the movement history as well as connections their startup has built, including opening international branches, attracting foreign investors, hiring international talent or also just frequent business trips.

These questions are paired with impartial variables measuring the number and topical focus of startup community events, investment activities or visibility of a startup hub in startup media.

The survey’s units of observation are: the tech founders, ecosystem experts, startup team members, employees or persons interested to join a startup, investors, startup community builders or service providers. It has run annually since 2015.

 

3. Our Indexes

We have implemented two indexes for investigating some of the composite variables touched upon.

The Specialization index:

For both accelerators and cities, the words cloud is created by applying a content analysis to the SHM dataset.

For accelerators, the analysis is based on self-descriptions provided by startups and a list of buzzwords maintained by the Startup Heatmap team.

For cities, the analysis is based on a text database of more than 1.5 million tweets continuously collected on startup cities and the count of mentions of buzzwords grouped in categories (e.g. “fintech” includes blockchain, crypto, payment, insurtech, etc.).

The Trust Score index:

The Trust Score index at both the accelerator and city level shows the relative position of a city or accelerator in the ranking. The term “trust” indicates both a high level of “brand awareness” among founders as well as a positive attitude towards the selected destination, as survey participants are asked to provide a “recommendation”. Data is collected by SHM Annual survey.

The index is defined as: 

where r is the rank. Since r depends on the SHM Annual survey representativeness of the sample, ranking is a weighted value. The weight is based on the share of population represented in the survey at the regional level (here, we don’t refer to NUTS 2. We refer to the touched upon European partition).

N is the total number of accelerators or cities.

4. Our Graphs
The Startup Heatmap Trust Score describes the perception and trust of a city-level startup ecosystem. Since 2016, we ask startup founders in an annual survey in which city they would prefer to start a new company. The total number of respondents is over 700.
This graph shows how the Trust Score of a city changed annually.
This word cloud shows in real time which topics are currently being discussed in the startup ecosystem (city-level). Larger font size means more mentions.
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Santini, E. (2020).  Our Data and Methodology. Startup Heatmap Europe. Available on https://www.startupheatmap.eu/methodology.