5 things we learned toring startup ecosystems

5 Things We Learned About Startup Ecosystems With #StartupAddVenture

After spending the last several years building entrepreneurship communities from the ground up in Ukraine (Vitaly), Baltics (Mike), and Balkans (me), this year we decided to box the best ingredients and moving parts of those efforts into a package and distribute it across Central/Eastern Europe and the Middle East. The result is Startup AddVenture, which on the surface of it is a series of events, but deeper inside a community of like-minded individuals, who are committed to helping each other build globally relevant tech and ventures.

CCC Startups partners: Vitaly Golomb, Mike Reiner and Max Gurvits (Photo: Startup AddVenture Facebook)
CCC Startups partners: Vitaly Golomb, Mike Reiner and Max Gurvits (Photo: Startup AddVenture Facebook)

As we embarked on Startup AddVenture, kicking off with a big conference in Kyiv in 2013, then through a series of five smaller #FTW events in 2014, and now with 10+ Startup AddVenture events this year, we learned a couple of interesting things about startup communities and (future) ecosystems:

1. Geography IS important

You often hear how with the internet and scalable platforms and distribution channels like Google and the App Store, it doesn’t really matter where you run your company. You could be sitting on a mountain in the Balkans and still run a globally relevant company.

That’s true, and theoretically possible. However, every system, mechanism, and channel has its own laws, rules, and best practices. It is very HARD to understand how to beat everyone in online marketing, or how to iterate towards the best user interface on the planet, if you can’t learn from the best or see them at work.

One of the biggest problems of emerging communities, like Croatia, is that there is still an insufficient amount of local market skills. Yes, there are good engineers and they are plenty. But product and business development experience is still rare. To succeed, founders have to network in London, New York, or Silicon Valley, attracting talent and learning the basics themselves.

2. Money IS NOT important

Probably the most-heard excuse in small and underachieving startup communities is “we just need money”. Just-Add-Money is probably the most ridiculous excuse for not overachieving, not hustling, just having an excuse for doing nothing because no investor is ready to tell you “shut up and take my money”.

One of things I’ve learned is that capital is incredibly fluid and very passive: it will follow the opportunity. A startup that is solving a significant enough problem will get funded by investors that are interested in solving the problem and believe in the team.

3. It’s all about bridges, not more valleys

Usually fueled by mainstream media, who don’t understand how technology communities grow and evolve, many local players in cities across Europe and the Middle East talk about creating a “Silicon Valley” in their hometown, often adding a local characteristic after the word “Silicon”.

In reality, innovation ecosystems take decades to build and need a number of completed business and technology cycles and many generations of successful entrepreneurs to really become a hub for innovation.

The biggest opportunity in creating innovation hubs today is to leverage the vastly expanding connectivity of our world, by helping emerging, ambitious entrepreneurs connect with experienced people elsewhere. There is a need for more international networking events, more transnational teams, and more people should go somewhere else with their experience and add to it.

Startup AddVenture is touring Europe this April, and the next stop is Zagreb, on April 20.
Startup AddVenture is touring Europe this April, and the next stop is Zagreb, on April 20.

4. Ecosystem is a mentality

If you look at successful entrepreneurial communities like Silicon Valley or the Tel-Aviv/Herzliya area in Israel, the biggest reason they became what they are is because of a culture of sharing and giving upfront value. This is engrained in the way Silicon Valley does things. There, it can be traced back to the academic traditions on university campuses, which were the beginnings of Silicon Valley, when universities set up research centers near San Jose to develop weapons systems for the US government.

In Israel, the local culture of perseverance and survival gave the entrepreneurs the cultural background to share and support each other. In Europe, we often see entrepreneurship communities spring up from small business backgrounds, with founders of family businesses and consultants running the show.

While there is nothing wrong with that, it is harder to create the culture of openness and upfront giving with that background, and it is important for local players to mindfully work on instilling these values.

5. Creating startups requires sacrifice

One of the things that stands out in Europe when comparing to Silicon Valley, is that startups are often perceived as a free level-up for those who engage in them. With low wages and high unemployment, being a founder is often an acceptable and even lucrative CV entry, and when an investment from a local fund or accelerator is involved, even a hefty material level-up.

This is not right and automatically leads to wrong incentives. Building a startup requires taking risks; leaving a job, living off a very limited budget for a while, having a clear deadline by which the money will run out and you have to go back to a job.

When everyone does this, it creates a culture of understanding and appreciation of effort. When startups are seen as a way to learn without paying the price for it, people are automatically incentivized to remain in the early-founder stage, instead of making earnings with what they do.

Overall, startup communities in Europe in the Middle East need to grow up, learn to network with their peers globally, and encourage each other to take bigger bets, higher risks, and to learn to support those who are taking those risks. With Startup AddVenture, these are the values that we are working to instill with ambitious local founders and community leaders.

You can attend the conference with a special 55% discount using the code “netokracijaspecial”. The speaker lineup is available at the Startup Addventure web page.

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