How Entrepreneur Friendly are the Top 10 Startup Hubs?

Silicon Valley, Boston, Los Angeles, and New York's Silicon Alley can all boast about their status as top startup hubs for venture capital investment. But when it comes to ease of launch, some of these top cities were found wanting.

We examined the "2013 Thumbtack.com Small Business Friendliness Survey," which focused on ease of starting a business and compared it to National Venture Capital Association's annual ranking of the U.S.'s top cities for investment deals completed. The Thumbtack survey, which was conducted in partnership with the Kauffman Foundation, polled 7,766 small-business owners across 57 cities and evaluated the areas based on a number of criterion including overall friendliness, ease of starting a small business, tax code fairness and licensing regulations.

Here's a look at the top 10 startup hubs and how they fared on a scale of entrepreneurial friendliness. 

1. San Francisco

Overall Grade: C
Part of the Silicon Valley region, venture capitalists invested more than $5.6 billion last year in startups like Pinterest and closed 636 deals. While San Francisco remains the top dog and mecca for investors, it doesn't fair as well when it comes to launching your business.  The city came in a disappointing 41th place, due to low friendliness scores in overall regulatory issues, hiring regulations, taxes and licensing. On a positive note, San Francisco scored a B+ for training and networking programs.

2. San Jose

Overall Grade: D+
The other counterpart to Silicon Valley, San Jose, reaped the benefits of being in close proximity to a multitude of investors, mentors, universities and huge companies like Google. In 2012, the city closed 415 deals, with $4.07 billion invested in the community. Sadly, when it comes to starting a business in San Jose, it echoes the fate of neighbor San Francisco. Coming in 46th place, San Jose got low marks in overall small-business friendliness, the ease of starting a business and zoning requirements. The city's silver lining is ease of hiring new employees, where it scored a B+. 

3. Boston

Overall Grade: C+
With a bevy of universities on its doorstep, including the prestigious Massachusetts Institute of Technology, Boston is also home to many entrepreneurs. While raking in $2.82 billion and securing 381 deals last year, the interest in Boston did little to counter its friendliness towards small businesses. Ranked 35th, hiring was the main issue for Boston. It received a D+ for ease of hiring and a C- for hiring, labor and employment regulations. The highest it scored in any of the 11 categories was a B-. Yikes. 

4. New York City

Overall Grade: C
Dubbed Silicon Alley for its similarities to Silicon Valley's ecosystem, a plethora of entrepreneurs migrate to the Big Apple to launch their startup. And rightfully so. Besides nabbing 302 investment deals last year and businesses securing more than $1.7 billion in equity, Mayor Michael R. Bloomberg is looking to take NYC to the next level with the recent We Are Made in New York program and the upcoming Cornell tech campus. Yet, it ranked only 37th for friendliness towards small businesses. The reasons why were all over the board with entrepreneurs finding it difficult to start a business in the city, not satisfied with health and safety regulations and unhappy with labor policies, to just name a few. On the bright side, the city scored high in environmental regulations and networking opportunities, receiving an A- and A, respectively.

5. Los Angeles

Overall Grade: D
Last year, investors poured $919 million into the City of Angels' businesses, leading to 181 closed deals. Besides having investor Ashton Kutcher on hand, LA is home to hot startups like social commerce conglomerate Beachmint. With all this hype, you might think Silicon Beach would be a great place to start a business. You would be mistaken. Landing in the 53rd position, it is obvious people are struggling when it comes to small-business issues. Getting D's in nine of the eleven categories, entrepreneurs were dissatisfied with everything from labor regulations to taxes to licensing. The only place it scored an above average B was in ease of bringing on new staff.  

6. Washington D.C.

Overall Grade: B

Home to huge startups like LivingSocial and up-and-coming ones like SocialTables, last year Washington D.C. managed to snag $475 million in investments and close 116 deals. Among the top 10 startup hubs, Washington D.C. ranked the highest in small-business friendliness landing in the 22nd spot. While entrepreneurs were disappointed when it came to ease of launching a company,the city received eight A's in everything from overall favorable regulations to friendliness of tax codes to zoning regulations. 

7. Seattle

Overall Grade: B- 
The Emerald City landed 111 deals last year with $885 million invested into its startup ecosystem. Heath tracking startup EveryMove and TechStars alum Sandglaz were among the companies that got a little slice of the investment pie. Seattle scored relatively high on the friendliness survey, coming in at number 28. Entrepreneurs rallied behind the city when it came to ease of starting a business but gave average C marks on other matters like tax codes, employment regulations and overall regulatory friendliness. 

8. San Diego

Overall Grade: F
In 2012, sunny San Diego secured 101 deals and scored more than $1.1 billion in cash from investors for companies like analytics startup Anametrix. Too bad its small-business friendliness score was on the stormy side. Among the top 10 startup ecosystems, San Diego scored the lowest, coming in at a pitiful 54th position (three spots from being dead last). The city received five F's and no grade above a C. San Diego failed when it came to policies concerning zoning and the environment. Entrepreneurs also weren't too keen about how difficult it was to start a business and the city's overall friendliness towards startups.

9. Philadelphia

Overall Grade: D+
While Philadelphia only secured $338 million in equity, it did manage to reel in 98 deals thanks to investments in companies like appRenaissance and its popular accelerator DreamIt Ventures. But when it comes to small businesses, the City of Brotherly Love can be stingy. Getting six D's and two F's, entrepreneurs were dissatisfied with its networking opportunities, licensing regulations and overall policies, to name a few.

10. Oakland

Overall Grade: D
Oakland closed 95 deals last year, amounting to more than $1 billion in investment equity. While Oakland's investments were higher than Philadelphia, the city didn't secure as many deals. In fact, the city has been in a downward spiral since 2008, a time when it was raking in 150 deals. How entrepreneurs view the city probably isn't helping either, as it is in the 51st spot. People are disappointed in everything from health policies to environmental and zoning regulations.

This story originally appeared on Young Entrepreneur

Google Chairman Eric Schmidt Raps Apple on iPhone Maps, Floats Yahoo! Search Pact

Google’s executive chairman Eric Schmidt was in Tokyo Tuesday, and he used the occasion to express his frustration with Apple’s decision to yank Google Maps off the new iPhone 5. That move prompted a minor furor in the tech world, because Apple’s map application is inferior to Google Maps, which is generally viewed as the gold standard for mass-market mobile mapping products. Schmidt, who served on Apple’s board of directors until 2009, when Steve Jobs kicked him off over the obvious Android conflict-of-interest, asserted that Google would like to remain partners with Apple on a variety of mobile fronts, including web search, but acknowledged that the ball remains in Apple’s court. Schmidt also made some eyebrow-raising remarks about the possibility that Google, the undisputed web search leader, might link up with its erstwhile competitor Yahoo!, which is now run by a well-respected Google alumna.

The iPhone 5 maps dustup is just the latest front in an epic battle between Google and Apple for supremacy in the mobile computing market. Apple’s late co-founder Steve Jobs went utterly ballistic when Google launched its Android mobile operating system. He was convinced that Android was ripping off Apple’s iPhone features. So he kicked Schmidt off the board, launching an increasingly bitter rivalry between the two tech giants that continues to this day. Apple’s worldwide intellectual property (patent) campaign against Samsung, HTC, and other Google partners (including the search giant’s newly acquired Motorola Mobility division) is really a proxy fight against Android, which Tim Cook continues to wage on behalf of his departed mentor.

Apple and Google’s mobile models are diametrically opposed. Apple has succeeded with end-to-end control over the iPhone process, from hardware to software to mobile apps. Google’s model is to unleash the Android system for free to the hardware and developer community at large, in order to leverage the power of developers and builders worldwide. The result is that Apple makes vastly more money on each iPhone it sells, while Android has chalked up astonishing market-share gains, growing to lead the global mobile OS market in just 5 years.

Apple’s decision to yank Google Maps off the new iPhone is a classic Apple maneuver — using its market power to favor its own products. Unfortunately, in this case, Apple’s map product is inferior to Google’s, which has caused significant agita in the tech community. Speaking to reporters in Tokyo Tuesday, Schmidt’s frustration with Apple’s map decision was palpable beneath the surface of his relentlessly wonky demeanor.

“We think it would have been better if they had kept ours. But what do I know?” Schmidt told reporters in comments cited by Reuters. “What were we going to do, force them not to change their mind? It’s their call.” Indeed it is. This map flare-up is a consequence of Apple’s ironclad control of its flagship iPhone product. At the end of the day, Apple CEO Tim Cook is responsible for his own company, but the decision to boot Google Maps off the iPhone 5 in favor of its inferior product has triggered a sour reaction from the tech community, because it comes from a company — Apple — that ostensibly values the user experience above all else.

Schmidt went on to say that Google hopes to remain a partner with Apple on mobile web search, but admitted that he has no control over the Cupertino, Calif.-based tech giant’s decision-making process. “I’m not doing any predictions,” Schmidt told reporters in comments cited by Reuters. “We want them to be our partner. We welcome that. I’m not going to speculate at all what they’re going to do. They can answer that question as they see fit,” he said. Google has somewhat more leverage on this front, because it dominates the web search market. What is Apple going to do? Strike a deal with its mortal enemy Microsoft to make Bing (which powers Yahoo! search) the default iPhone mobile web search provider? I don’t think so.

Schmidt also took a dig at Apple’s mobile strategy, and chastised the tech media for being ”obsessed with Apple’s marketing events and Apple’s branding,” and ignoring Android’s success. He added that his rival’s world-beating publicity machine is ”great for Apple but the numbers are on our side.”

Finally, Schmidt made some rather startling comments about the possibility that Google might link up with its one-time rival Yahoo! on a web search partnership, as picked up by Eric Jackson over at Forbes. This is not going to happen — regulators would never allow it. Jackson, who is a smart tech-watcher (and Yahoo! shareholder), seems to think this is a plausible idea, and he makes a good point. Times have changed: Yahoo! has largely exited the web search market, thanks to its deal with Microsoft. But it’s not going to happen. Google controls 70% of the web search market. The Federal Trade Commission (FTC) will never allow a company with that kind of market power to assume control over the search business of the number three player in the space. (At least I hope not.) But the fact that Schmidt raised the possibility of a Google-Yahoo! pact is a reflection of how quickly the big-tech ecosystem is evolving.

Ultimately, we’re watching an epic war between two tech icons — Apple and Google — over control of the smartphone market. Everyone agrees that the locus of competition in the Internet space is shifting to mobile devices. This is the next great battle in the war for the Web. The recent iPhone maps flap is just one front in this conflict. Intellectual property is another. Competition between these two powerful tech companies has been a huge boon to consumers — innovation in the mobile phone and tablet market is proceeding at break-neck speed. This fight is incremental, global, and increasingly bitter, as Schmidt’s thinly-veiled jabs at Apple illustrate. Both companies are sitting on massive stockpiles of cash, and pouring billions of dollars into research and development. As we head into the fall, the war between Apple and Google is the hottest game in town.