American west coast became a definite model of the perfect entrepreneurship ecosystem for the whole world a long time ago. The most ambitious developers run away to California in hope of settling their startup in the Silicon Valley and then going global. The biggest concentration of investors, venture funds and startuppers alongside with obvious proofs of their success – billion-dollar exits, so-called unicorns and world-famous brands – all this is about the Silicon Valley. All the other ecosystems are often trying to copy that American business spot, European countries always compare their achievements with those belonging to the Silicon Valley members. This is also something to dream of for post-USSR countries, situated in CEE region, where there is even more work to be done in order to reach the heights.
At the moment Moscow is one of the most prosperous startup communities among other USSR countries. At the same time, other states occupy good positions in world ratings concerned with business and economics, among which are Kazakhstan and Belarus. All these countries have some common problems to solve, which can also be common for other Central and Eastern European countries. It is commonly recognized that CEE countries possess great numbers of talented developers, especially in tech, but there is no enough business infrastructure to promote their innovative ideas. So what should be done on post-USSR lands in order to grow their own Silicon Valley?
No need to copy the Silicon Valley
Most young ecosystems have their own strengths and weaknesses. And they should develop basing on those individual factors. Let’s be honest, the Silicon Valley is still something unreal for most of the CEE countries.
Captivate international investors
Quality education and loads of innovative ideas are not enough to attract investors. What is really necessary to do in all CEE countries is to make legislation clear and protective – both for investors and entrepreneurs. Plus minimum bureaucracy and maximum value for entrepreneurs. Finally, the whole system should be created for private capital to work in: angel community, early-stage venture funds, mature startup funds and strategic enterprises, considering acquirement of small innovative companies.
Special atmosphere for ideas and investments
This is all about business infrastructure. The main goal for any government should deal with building an encouraging environment, where brilliant ideas get financial support and promotion. Encouraging environment also indicates political and financial stability, sales market and people’s intellectual potential.
Attract foreign co-investors
Partnership with foreign investors can be considered as smart investments, since it’s a great opportunity for local capitalists to learn about certain investment nuances and get acquainted with the best world practices, get involved in international investment circles. The government can also contribute to international cooperation by attracting foreign investors to some global-level projects.
Still count on local capital
It is essential both for startuppers and investors to fully participate in project development. In other words, investors should control the project implementation, while startuppers must be sure they accepted the ‘right’ money. The easiest way to keep these conditions is to trust the local investors first. So before going for foreign capital bringing your startup to the global scene, it is worth trying to find the local partners. Long distances make some negative point even in the 21st century.
Coffeehouses for startuppers
Stanford University researchers found a correlation between the number of quality coffeehouses in the city and local startup development. The explanation of such math result deals with general quality of business environment created in the city: in case there is necessary infrastructure built, there won’t be lots of difficulties to launch a full-power incubator there. In addition, non-financial support (for example mentorships, free learning environment) is usually better appreciated by entrepreneurs in comparison with financial help. This is a good soil for government thought, since CEE governments should start thinking about creating state accelerators, which would definitely become popular among the local youth.
Start with ordinary market niches
Quantity sometimes works better than quality. Some CEE countries should reach a certain competence level in elementary industries before trying to succeed in extra-innovative fields. For example, they could concentrate on mobile development now and acquire enough tech expertise before massively getting involved in fintech, big data and VR. It is important for local incubators to educate as more tech specialists as possible, so that they can work locally and globally. But that is not possible if they start with some complicated subjects at once.
We strongly believe in CEE success, because local developers and startuppers really have a lot to offer. We should just learn how to risk and how to use our culture as our main advantage.
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