Things are, at last, starting to look up for Greece. There are still issues of course – important ones – but it’s been a long journey and the progress that has taken place is immense if one considers where it all started from. Five years ago, when I was starting to explore the ecosystem, the country wasn’t on the start-up map owing to to its desperate financial crisis. Entrepreneurialism was an unknown word, treated with hostility.
Pretty much the only thing that was going on in terms of starting up – especially online – was a few people talking with lots of enthusiasm and occasionally misguided visions of what all this could become. Anyway, fast forward: here’s the good, bad and ugly about the current state of play.
Initially an early community of enthusiasts coalesced around meetings. First up it was the OpenCoffee community with its well-known format of start-up presentations sandwiched between networking sessions. Just a handful of people turned up in the beginning and each time meetings took place in a different, usually WiFi-less cafe.
Most will agree that in those early days presentations were usually representative of the immature ecosystem – mostly half-baked university projects and pre-alpha sites with little in the way of an actual business plan.
But the community grew – and so did its quality. Steadily, the type of start-ups presenting on the Open Coffee podium improved, meetings expanded to other cities and other specialized communities (each with its own series of events) started cropping up.
Critical for progress are coworking spaces, physical locations where office space with necessary facilities are offered at a competitive price. The perks and the rent were not the real advantages when these spaces began to appear, though. For one thing, such initiatives attracted like-minded individuals and companies in a single place where they exchanged practical information and collaborated.
For another, coworking spaces have served as the go-to place for any community hosting its meetings. Essentially, coworking spaces have turned out to be makeshift self-organised clusters. Currently, there are at least five such active places in Athens with coLab, the most important one, expanding outside the capital.
Talent and experience
Furthermore, more “traditional” or established companies (i.e., those that have been standing on their own feet for more than 5 to 10 years) have also caught up on the new way of doing things and the new digital landscape, either by better integrating social media campaigns in their communication efforts (e.g., Papaki, the principal domain registrar for Greece) or by involving state of the art software technology and superior design in their products.
This is important. Experienced professionals have been created this way and are involved either in their spare time or even on company time with the broader tech community. Some of them have actually left their day job to pursue their dream, building their own start-ups.
There are also a few second- and third-generation entrepreneurs who have had significant (or at least some) success with their previous ventures and are becoming interested in investing both their hard-won capital or their experience into the younger and more promising members of the community, with BugSense being a good example of the latter. It has $100,000 in funding secured and Samsung, Skype and Meebo as clients.
Such people are the Greek version of angel investors, coming either from the tech sector, and as such offering the so-called precious smart money, or from other industries entirely.
And of course there are certain start-ups – one might call them outliers – which against all odds and with little actual help have managed to create a product and business with user traction and revenues despite little support by the community. Those such as Megaventory, which was essentially developed out of a Greek island, or Anlock, which out of the blue has started creating chart-topping educational smartphone apps.
As of recently, most entrepreneurs claimed the biggest problem with the Greek ecosystem was lack of funding. Indeed, most investment into Greek entrepreneurs has occurred at small levels and abroad. The largest investments so far, DailySecret, secured $1.85 million and fleksy, developing fast touchscreen typing, raised $900,000 from US backers.
This is no longer the case. A few weeks ago, the creation of no less than four funds aimed specifically at Greece were announced. Across them more than €60 million will be spent in pre-seed and seed startups and this is bound to have a profound effect on the ecosystem.
Apart from the actual opportunities which will be given to fund-raising startups, significant activity will take place on the side: teams will be formed, individuals will be intrigued to ride the wave, to be educated and to have a shot with their own project. Jobs will be created.
A mere month after launch, Openfund II has already announced investment into two start-ups. Openfund II originated and essentially evolved out of the initial OpenCoffee meetings (its predecessor, Openfund, has already invested in 8 startups, the most successful of which, Taxibeat went on to raise $1 million) has announced they will be investing €600,000 euros in WorkableHR and €100,000 euros in Incrediblue.
These numbers may seem like peanuts by other countries’ or Silicon Valley’s standards but in a country which has seen essentially zero funding in the sector just 2 years back, they are big.
Important events such as conferences and expos which have the potential to attract significant (at least regional if not international) attention is still something of a missing component in the Greek ecosystem. Although there are remarkable efforts – most notably TEDxAthens with its world-class speakers – other than that there is definitely an opportunity for growth.
Ironically, two quite successful start-ups with Greek founders focus on events: Eventnow, with more than 2000 events matched with vendors per month in New York and California, and Eventora, an invitation management system with considerable recent growth.
Still there is progress on that front too. A short while ago, TechCrunch held a meetup in Athens which was overall considered a success (you can watch a video here). The event was sold out and attendance exceeded expectations with further such events hopefully scheduled for later in the year.
In general, international interactions either by traveling abroad individually, securing booths in international conferences and expos or even inviting attendants and speakers from abroad is something that’s sorely missing currently from Greece.
And given the natural beauty of the country – especially in the summer months – it’s a no brainer what should happen next. And in fact it has been happening already – WPP is already organizing its yearly Stream unconference just outside Athens…
The level of university education Greeks get is of a very high standard, even if this does not always show in global rankings, and there is an above-average percentage of entrepreneurs with postgraduate degrees. However, studies usually offer highly academic knowledge in courses in relevant university departments and this is an obstacle when it comes to implementing a dynamic, modern education.
This coupled with an education system that is rather disassociated with the market means resources and potential that have remained untapped. The Greek education system is gradually modernising but significant resistance is met and progress is slow.
Greece has traditionally been in a difficult situation thanks to geography and this shows when it comes to software start-ups. Stuck in the corner of Europe – but also with an inefficient mentality – traveling abroad and mailing products costs more and takes longer.
These are difficult obstacles to overcome. They often limit Greek start-ups to a small local market. At the same time, access to emerging markets such as China, Russia or the Middle East is not something that has been explored systematically either, leaving the country somewhat stranded. Ironic, really, when you consider our shipping history, but there you go.
A stateless state
Funding aside, the second most serious problem raised by entrepreneurs is state intervention in pretty much all the wrong ways. A high taxation system (regardless of profit), high insurance costs and high levels of bureaucracy all form a difficult framework in which to operate a company.
There are workarounds, of course, which usually have to be learned the hard way and slowly things are being modernised, but progress is slow here.
Although we’re still early in the ecosystem’s evolution, some signs of the counter-productive side of Greeks are showing. Entrepreneurism is, to some extent, considered something of a fad, with certain people and events turning to “lifestyle entrepreneurialism” only because it’s cool and not because they actually want to create or contribute.
Also, the generally high cost of living is prohibitive for most that run a start-up. Just securing an adequate income for a decent living is a struggle for most these days and this leaves practically no time or margin for experimentation with something high-risk. People are more positive to the idea of not working for the civil service or a large multinational and instead starting something of their own, but usually they simply can’t afford the start-up lifestyle.
Finally, start-up efforts suffer from the usual “do it on my own” Greek approach. This is fine when you are indeed alone – as you manage to survive and prosper despite everything. But when some critical mass has been achieved, like now, it’s time for companies to start collaborating. And unfortunately, working as a team with a common goal is not something we are usually good at.
It would seem that all the pieces are more or less in place. The community is organised and ready, there is talent and adequate experience spread across it, funding is already rolling in to support the effort and some events to keep an eye out for are cropping up.
Surely, there are obstacles as well: there is the notorious Greek tax and legal system, which can seem unbeatable, a change of mentality is also required and gradually happening and it would seem an even more structured collaboration effort across all above fronts is necessary. Also, a few real success stories (i.e., more world-class valuations) will turn heads.
Greece will not soon become the next Silicon Valley. It may also not be the next Israel or even the next London or New York (which have similar size ecosystems). But it’s finally on the map and interested parties should be paying attention.