Berlin v. San Francisco: Which is better for startups?

Berlin v. San Francisco: Which is better for startups?
Berlin: Thomas Wolf/Wikimedia. San Francisco: kropic/Depositphotos
There's already quite a bit of an exchange between Silicon Valley and Berlin's so-called Silicon Allee, but which city is truly better for the startup scene? Graphic design marketplace 99designs shares with The Local how the two compare.

Berlin is already gunning to become Europe’s startup hub in the wake of Brexit, with hopes that London will become less relevant.

SEE ALSO: London v. Berlin: Which is truly Europe's startup hub?

But will Berlin ever be able to compete in the same league as the San Francisco Bay Area’s tech scene?

Online design marketplace 99designs did some research on the subject to compare the two cities side-by-side. Here’s a look at how they match up.

Starting a startup

According to 99designs’ findings, Berlin seems to have slightly better benefits for entrepreneurs. It takes less than seven days to launch a business at the cost of €700, compared to San Francisco’s seven- to ten-day time frame at the cost of €788.

Source: 99designs
As far as taxes go, Berlin's rates are higher with sales tax at 19 percent compared to San Francisco's 10 percent, and the corporate income tax rate in Berlin at 15 percent versus San Francisco's 9 percent.
Living and working
But while Berlin's taxes might be higher, its cost of living is certainly much lower. Internet services are €23 monthly in the German capital, compared to twice that at €47 in San Francisco. Berlin's far superior public transport – which this San Franciscan turned Berliner can attest to – is also much more affordable, at roughly €63 per month compared to €79.
Going out and enjoying life outside of work is also much less expensive in Berlin – just €3.20 for a beer at a bar beats San Francisco's €5.40, while the money you'll save on a €2.50 cappuccino compared to a €3.90 in California could almost buy you a second one. Lunch in Berlin might set you back €8, but that's much less than San Francisco's €13.50 meal.
And we haven't even gotten to rent yet. You could rent four separate one-bedroom apartments in Berlin's city centre for €749 each per month before you'd reach the €2,936 necessary to afford just one in central San Francisco.
Perhaps that's why Mercer rated Berlin much higher in its 2017 quality of life rankings – 13th place for the German capital and 29th place for San Francisco.
Still, it's probably a good thing Berlin is so cheap since software engineers there make about half as much as what those in San Francisco do – €49,000 compared to €100,000 per year.
Source: 99designs
The people
The overal demographics of the startups scenes in both places are fairly similar. The average age of founders is 32 in Berlin and 31 in San Francisco. Both cities also have relatively few female entrepreneurs: 13 percent of Berlin founders are women while 16 percent of San Francisco founders are women.
They also have fairly similar rates of immigrants becoming business starters, with 43 percent of Berlin's startup launchers being non-German and 46 percent in San Francisco being non-American.
But Berlin also has a much more international focus: 42 percent of startup customers there are foreign, versus 30 percent in San Francisco.
Source: 99designs
99designs is an on-demand design marketplace for freelance designers and businesses of all sizes. To see the full infographic and research by 99designs, check it out here.