Our Data and Methodology

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

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 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 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

Santini, E. (2020).  Startup Heatmap Europe Data and Methodology. Available on https://www.startupheatmap.eu/methodology.