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Cape Town trumps San Francisco for tech start-ups

Written by Guest Author · 1 min read >

Cape Town trumps San Francisco for tech start-ups

By: Guest Author

That’s a ridiculous thing to say, isn’t it? I mean, it’s Silicon Valley! The geographic incubator of some of the most interesting tech companies, as well as home to behemoths like YouTube and Google, must surely be the right place to build a tech-business?

Well, while it may have the greatest concentration of the IP by square kilometer, it’s also the most expensive city in the US to live in… And property prices there aren’t exactly the kind of leach you want on your (rather limited) budget.

So, how expensive? Well, a recent article in MarketWatch reckons you’d need an annual salary of US$148, 000 to afford an average home, which is US$97k more than the American average, or about R2.18Mn. That equates to about 3 senior executive salaries or about 3 shares in LinkedIn…

If you can afford it – super. The chances are you’re not in the business of building a tech-start-up from scratch. Early stage companies need to be incredibly savvy about where their limited funds go – overspend too early, and you won’t even hit MVP. So, what is it about Good Ol’ San Fran that’s makes it so worthwhile (a supportive LGBT community, the chance to run into Larry and Sergey and that big bridge thing)?

The obvious plus is the brain-power. Thousands of people all in the same head space, incredibly talented, and all at the top of their games – something’s gotta give! In fact the proximity to success can often be a leading contributor to your own.

But is it worth the astronomical expense? We say no. San Fran may be the poster-boy for ‘innovation’, but it’s not the only hub on our planet. Beijing, Oslo, Amsterdam and Warsaw are only a few of the new tech hot-spots. And, close on their tail? Cape Town, South Africa.

With nicknames like ‘Silicon Cape’ and ‘Digital Gateway to Africa’, Cape Town has been ranked the biggest start-up hub on the African continent. With more than half (59%, to be exact) of all the start-ups in South Africa growing here, and 75% of all the Venture Capital access too, it also has a culture of nerdy, tech-infused smarts. Thankfully its price-tag doesn’t reflect the value: to afford an average place in Cape Town, you’d need an annual salary of about R200, 000 – which is 1/10th that of our older, more established American cousin.

For all these reasons, Cape Town is a smarter call – access to intellect, culture and capital, in one of the most beautiful cities on the planet, at a fraction of the cost. Where you can still make sure your money flows through to the right arteries: your business, and your future in this crazy, tech-crazed world.