The first 30 months of a first time startup founder in a new ecosystem

(Originally written and published in 2015)

The city

For most of the world, Athens (capital of Greece, home to nearly 50% of Greece’s population) in 2012 was synonym to words like crisis, debt, IMF, austerity, corruption and unemployment. The economic and social reality on the ground was/is harsh and it affected everyone one way or another. Everyone talked about the cuts, bankruptcies, new taxes, lack of political leadership, insecurity and so on.

The Greek business community was very ill prepared for such a hit and had nothing to hold on to. Athens (and Greece for that matter) had and still has no headquarters of multinationals or globally leading tech businesses that would spur growth/innovation around them. It has only a handful tech focused entrepreneurs.

So if you combine the above with the fact that in a country of 11 million inhabitants, 95%+ of the private sector workforce was employed by very small companies with under 20 staff (2013 stats) and 10%+ of the country’s population is unemployed… the tech ecosystem starts with huge disadvantages.

In addition to that, on the consumer side, only 59% of Greeks use the Internet (2014 stats) putting Greece below Albania and Argentina on the global ranking. In other words: not the new “tech eldorado” if you ask me…

The first legacy

By 2012 the first few Athenian startup founders had already moved forward with the creation of the first products. They were the only examples of people starting in this chaotic Greek environment and creating something that had some value.

So we all wanted to learn from their mistakes. (Some leading examples being: DailySecret, BugSense with an early exit to Splunk [NASDAQ: SPLK], TaxiBeat who closed a 4M EUR round and others).

The start

We are in Q4 of 2012 and it’s time for the second generation of Athenian startups to surface. We find our selves in Colab (photo below), the first co-working space of Greece in order to be around other founders. We rent a desk or an office and start meeting the people…we soon realize that only a tiny % was actually creating a (real) startup, the majority of who we met were kind of confused on what a startup really is. (Yes there is a definition…) But that didn’t stop us from feeling like we were on a joyride.

Some founders had read Ries’ book, many people also bought Blank’s other books, some had also designed their idea on the Business Model Canvas, but anyhow everyone was convinced that their idea (including me) was the next billion dollar idea.

We all kept reading everything on TechCrunch, TheNextWeb and the like, and all teams had this excitement in their eyes, when we would all meet on every pointless event that the Athens startup community was going to.

The ecosystem

We reach 2013, the gates have opened and Athens flooded with “startups” & startup-related professionals. New co-working spaces, incubators, accelerators, private equity funds, VCs, angels, meetups, private meetups, networking events, media, advisors, mentors and basically anyone who could convince he or she was worth having a startup-related title also came along.

That brought unbelievable levels of bullshit in the air, making it difficult for us newbies in the beginning to distinguish those who had value from the rest. It quickly became obvious though.

The assumptions

Yey! we have an alpha (fail) version! It’s not fail because it’s alpha, it’s fail because we have no idea what exactly is the value we want to create and for whom, how to do it etc.

None of the founders had any prior experience in developing a global tech product (no ex-Google or ex-Apple employees here), putting it to market and testing it, so we didn’t even realize what we needed to do for testing or how we could do an MVP, this is why I used the term alpha.

Eric Ries’ lean startup model is great when you read it, but when you try to apply it, all your perceptions and preconceptions mess it up, and you end up asking the answer in the question. Yet, you don’t see it.

The popularity effect

As months passed the ecosystem bullshit has grown. Before having achieved anything, simply for starting up in the chaotic environment of Greece, the Greek and global media portray us as “The ones who went against the crisis and won”, “The hope for reducing unemployment” generating a very confusing image and making us look like if we achieved something when we haven’t.

At that point the ecosystem’s dilution with startup-wannabes (in my humble opinion) has hit an all times high.

Being presented in the media became something of a hobby. Every week or two, some of us either independently or together with other founders would be on TV, on major radio stations, on national newspapers and news websites/blogs you name it! And we became also frequent speakers at events taking place in Athens (for no particular reason).

Later on in 2014, we were even invited to speak at events of the two major political parties and to meet Angela Merkel (the German Chancellor and most influential European politician) at a private session with our Prime Minister #what_ever!

They then continued inviting us in closed door meeting with Ambassadors from 50+ countries to Greece, and special missions for Greek exporters…along with orange and olive oil producers #wtf.

The funding

Back to 2013, funding time has come and we are looking to raise funding in order to move forward. Most of us are running on borrowed or personal money which is ending soon and there is quite some anxiety.

Some of us manage to raise early funding from the two Greek tech startup funds of that time (OpenFund and PJTC), together with some angels that were interested to take part in this Athens startup hype, and we move forward.

It was a new weird thing, both for us and for the people at the funds.

Looking back it, I think we all tried to simulate the “Silicon Valley best practices and standards”, while neither of the two had any similarity to the Valley’s equivalent. We are so far from the Valley in so many ways, and it was just weird…

The two funds mentioned above are financed 70% by the European Investment Fund in Luxembourg and 30% by private mainly Greek investors.

So it’s largely public money they were investing in us. That didn’t make any of us happy, but for the first time it was being given as equity through investment and not for free via pointless EU programs as it happened until now.

Greece has had a tragic experience with EU programs and financing, as well as regional and local “Funds for Development”. Wrong political decisions and wrong implementation at EU level, combined with record high Greek corruption and incompetence, led to a chaos. That started from 1981 when Greece joined the EU and probably is still happening until today, although I don’t know the details, I only hear what is being said by people who are involved in such activities.

The networking

By now, around 6–7 startup founders — among the funded ones — have formed the Early Startup Circle where we share in private our product & business problems, and we exchange ideas on how to implement solutions.

The credit for this goes to the founders of Locish (It failed. The founders now started Weengs in London) who started this idea. It was a great initiative as in this chaotic situation, we needed to speak with each other, and share our ideas, as it generated more than just suggestions for solving our business problems.

Although we didn’t care how other saw us, we were an integral part of the startup hype for few months. We were the first wave of multiple (small) investments that happened in Greece in a short period of time and with all the publicity, it made a splash.

The business

We are now in deep beta and we are super happy as we are getting early traction. Some of us with more robust beta products, others with much less, anyway the numbers are not yet that important.

As time passes product & business decisions become harder and harder. Our skill sets start not being enough, and the beta success for those of us who had it, makes us feel like we jumped from a plane and we are trying to create our parachute while falling…as Reid Hoffman has said about the startup journey.

The learning curve

Funded founders (seed and above) generally tend to be fairly clever & skilled people. Some more, others less, but in general they have what it takes to build something and convince someone to give them an important amount of money for it.

This is why funded founders represent a tiny % of the population of developed countries. (Note: This is now growing in developing countries with social entrepreneurship but the numbers I estimate are probably still very low)

In Greece, what most people lack though is what I would call “context”. For building a great tech product you need to understand how products are built, I mean the tools, methods, techniques and approaches everyone uses in the world’s leading tech companies, when trying to build a tech product.

In an ecosystem like Greece where basically no one (apart from… 4 people) has done it, no one has the slightest idea of how it can be done, so being a new startup founder in this ecosystem is like if you are…trying to learn how to drive (for the first time) at the F1 Grand Prix Final Race.

The year 2014 and beyond

With all this push, and massive new programs supporting startups, new startup awards (we also won a 5.000 EUR award — Get In The Ring competition), still the new Greek startups that I hear about are as lost we all were.

If the Greek (or any other) startup ecosystem which lacks 100% “context”, hopes to succeed (=exits & IPOs), it must first of all understand it will take 20 years of failures, and that the stats about startup success rates won’t represent 15% of all companies started, as most people say in tech.

It will be more like 0,1% or 0,5% for the first 10–15 years and this should be seen as normal. It won’t solve the unemployment problem, it will need to attract foreign talent and it may push several companies to relocate some or all of their resources at some point outside Greece.

It can’t be done only from within (i.e. only Greeks in Greece without global tech experience) as we all need external input from people who have done it before.

Having said all that, if you are planning to start in any place apart from the Valley, London or maybe Berlin, may the force be with you :-)

If you think others should see this, please share it. I really appreciate it 🙏