MACEDONIAActionable Startup Ecosystem Report 03/2016
by Franck Nouyrigat
Entrepreneurship Program
PLANPLAN
I ECOSYSTEM
II ACTION PLAN
PLAN
I ECOSYSTEM
1. COMPARATIVE ANALYSIS
We can compare Macedonia to similar startup ecosystems. We are
using geographic, population and GDP references. The data is
gathered using angel.co.
We are defining startups here as potentially high growth ventures
who have been looking for funding.
COUNTRY MACEDONIA ESTONIA ICELAND SERBIA LATVIA SLOVENIA
POPULATION
Million2 1.3 0.3 7.1 1.9 2
GDP/Capita
k$13.3 27.8 43.3 13.3 23.7 29.9
# Startups
on angel.co52 333 65 241 235 175
Startup Index
(#Startup /
pop)26.00 256.15 216.67 33.94 123.68 87.50
DATA
STARTUP INDEX
Potential
Macedonia is far behind similar countries in terms of startup activity.
Slovenia, a country comparable in terms of geography and
population demonstrate that Macedonia should be able to
produce 3 times more startups.
The purpose of this report is to help foster a more dynamic
grassroots entrepreneurial community. Ultimately this should
lead to job creation and increase of GDP per capita.
INTERPRETATION
TALENT POOL
#Grad student per year : 9863 (source http://www.stat.gov.mk)
Qualitatively, we observed generally low motivation for
entrepreneurship among university students. It seems like most
students of computer science end up working for a local company
doing outsourcing work for abroad.
An informal survey confirmed almost 20 to 25% of the students are
looking to leave the country to work abroad as a result of the wage
gap.
SUCCESS PATTERNSConsistently, all success stories that we heard started with
very little capital - $5k - 15k! None of the current high
growth startups we met used Venture Capital (VC). Some
went to international accelerators for funding.
Overall this is coherent with what is observed in the USA
where most high growth companies (95%) did not take
Venture Capital at an early stage.
We also observed that numerous founders were inspired
by local events like Startup Weekend.
2. HIGH LEVEL MAPPING
We used the Entrepreneur’s Journey (EJ) as a base for the
Ecosystem mapping exercise.
During a workshop we asked 15 participants who lead the community to
map the current ecosystem. We asked them to add what is missing on
the left side of the graph.
RESULT
The current ecosystem is focusing on helping existing
startups, but lack the structure to foster them.
We recommend to focus primarily on inspiring students
and young professional as well as supporting pre-
acceleration and entrepreneurial educational programs.
INTERPRETATION
WHAT MAKES A GREAT ECOSYSTEM?
There is very little Angel investment in the region. Most startups we interviewed
started with less than $5k of capital. The lack of exit and M&A also limit the
development of a classic venture capital structure.
While incorporating a company is easy, closing one is more complex.
Public institutions are currently working on easing business closure
procedures.
Access to high skilled technical talent is not an issue in Macedonia.
Qualitatively what is missing is a more international business culture
There is an opportunity to celebrate current startup success stories to inspire the
youth to start more companies
Overall the startup density is low in Skopje, but seems higher in Ohrid. There is a
need to expand the start-up community in depth and geographically.
According to Brad Feld, one of the founder of TechStars,
you need to develop a 20+ years vision at a community
level.
Startups ecosystem are by nature grassroots initiatives.
It is important to help the local entrepreneurial leaders.
WHAT MAKES A GREAT
ECOSYSTEM?
3. SWOT ANALYSIS
3. SWOT ANALYSIS
HarmfulHelpful
AGILE (SMALL)
LOW COST
EUROPE
TECH TALENT
HIGH QUALITY DEV SHOPS
LOW STARTUP DENSITY
LACK OF ENTREPRENEURIAL
“LEADERS”STUDENTS ARE NOT ENGAGED
SMALL LOCAL MARKET
LACK OF M&A / CAPITAL
LOW STARTUP ACTIVITY
ATTRACTIVE / FOREIGN
TALENT
DIASPORA
QUALITY OF LIFE (FOOD /
LOW COST …)
Strenghts Weaknesses
Opportunities Threats
BRAIN DRAIN
STARTUP ACTIVITY STAGNATION
HIGH DEPENDANCE TO EXTERNAL
HELP
STRENGTHS
Macedonia’s strength rely on the quality of its tech
agencies, developing at low cost ($20-40 per hour) for
European / Israeli / US corporations.
The country being small, should allow for fast changes of
policies.
WEAKNESSES
As observed, the main weakness is the size of the local
market associated with a low Startup Index. The natural
remedy would be to increase risk capital and startup
support structures.
However, as observed, the current ecosystem needs help
prior to the startup phase. This should be addressed
through educational programs, inspiration and local
grassroots events.
THREATS
Macedonia is currently behind in terms of startup activity.
Stagnation, mixed with brain drain might lead the country to
a slow growth.
It is important to re-align the efforts of donors/government
with the needs of the local community in a bottom up /
support approach lead by entrepreneurs (leaders) versus a
top down approach lead by non-entrepreneurs (feeders).
OPPORTUNITIES
The country could be extremely attractive to digital
nomads and international entrepreneurs due to a low
cost of living associated with high quality commodities.
The Macedonian diaspora is equally important.
The opportunity relies on strategy to communicate the
country’s opportunities internationally.
PLAN
II ACTION PLAN
NEW PROGRAMS
RECOMMENDATIONSSuggested Objectives and Key Results (OKRs)
STARTUP DIGEST
There is a need to connect the ecosystem. Startup Digest is a weekly
curated newsletter shared between actors in the ecosystem. It allows
anyone who subscribe to it to get a list of upcoming startup events in the
region.
Launching a Macedonian or better even a Balkan newsletter regrouping all the startup related
events in the region, allowing for a more connected community. Grassroots and leader initiative.
objective
Key Results
Recruiting a local leader by June 2016
Growing the mailing list from 0 to 3,000 by end of 2016
Mapping existing events
STARTUP MACEDONIA
Like Estonia and Chile before, Startup Macedonia should be a brand attracting
digital nomads and external entrepreneurs.
Attracting foreign entrepreneurs to stimulate economic activity and startup cultural exchange. The
goal is to put Macedonia on the Startup Map and increase awareness of its startup friendly
environment.
Objective
Key Results
Invite two influencers (Active on social media) by 2016
Communicate in 2 international startup events about Macedonia startup ecosystem by 2017
Launch a program to attract 10+ startups to stay for 3 months by 2017
Launch a e-residency program for entrepreneurs (like Estonia) by 2018
Create a Startup Balkan brand to celebrate local success by 2017
Launch an English only website for communication by end of 2017
FIND YOUR TECH CO-FOUNDER
This program focus on bringing business talent with business ideas and/or
designers, to work as a team with local tech talents …
Brings awareness about Macedonian tech talent and startup friendly culture to Europe & USA.
Allow for Macedonian to capture foreign investment funding.
Objective
Key Results
Launch the program in 2017
Communicate in France / UK / Germany / USA and recruit 30+ biz founders by end of 2017
10 Startups launched with Macedonian founder having substantial equity (20%+) by end of 2017
PRE ACCELERATORS
Pre-accelerator allow to take potential startup teams to the next level. The outcome
of the Pre-accelerator programs should be teams accepted at international top accelerators etc..
The goal is to send Macedonian startup team to some of the best accelerator in the world.
Objective
Key Results
5 teams accepted to top Accelerators by 2017
100 Teams pre-accelerated through the ecosystem by end of 2017
The pre-acceleration programs will all be 100% in English
LEADERS QUARTERLY DINNER
Successful startup community are inclusive and grassroots driven,
led by entrepreneurs (leaders) while programs sponsored by government
agencies and donor funded organisations play the role of support and are called
feeders according to Brad Feld’s ecosystem nomenclature.
Connect the community leaders defined by success and volunteer involvement with the community
objective
Key Results
Recruit 5 founders / leaders by October 2016
Host 1 dinner by end of 2016
Invite 1 foreign successful entrepreneur’s leader to the dinner
Invite 1 Macedonian successful founder who moved abroad (Diaspora)
Document each dinner and produce a recommendation report for each
DIASPORA CONNECTION
Successful startup community are inclusive and grassroots driven,
led by entrepreneurs (leaders) while programs sponsored by government
agencies and donor funded organisations play the role of support and are called feeders
according to Brad Feld ecosystem nomenclature.
Launch a Macedonian Startup online community
objective
Key Results
Launch a Facebook / LinkedIn group by July 2016
Recruit 50+ diaspora entrepreneurs
Conduct a survey to understand how to get more Diaspora entrepreneurs involved with the
startup community
RECRUIT MORE VOLUNTEERS
To run external / international programs … might give a grant to support existing
ones (300$ / month)
There is a need for more events in the community, we need to actively identify and recruit more
volunteers to launch them.
objective
Key Results
Select 3 events that are missing in Macedonia to help inspire and educate entrepreneurs (see
ecosystem map)
Setup a global sponsorship program to give $500 to $1000 to local program leaders
Launch 3 new events by end of 2016
A $3k MATCHING GRANT
So many potential entrepreneurs we met are stuck at work, they will not take the
risk to leave their day job. And they are not looking for a 50k+ Grant.
Meanwhile so many successful startups started with less than 5k!!
Lend a small matching grant to startups or entrepreneurs, get them coached by a mentor and allow
them to work from anywhere. In case of failure the money is not asked back.
objective
Key Results
Get 50% of the entrepreneurs to give the money back within a year.
Associate each startup with a mentor.
CONCLUSION
Macedonia needs to move faster! It has the potential to have an
amazing startup community!!
By increasing the number of programs such as suggested in this action
plan we believe we can multiply by 3 the startup community in the
course of 2 years.
BOOKS TO READ
BIBLIOGRAPHY / SOURCES
http://microdata.worldbank.org/index.php/catalog/1991
http://castleventure.com/wp-content/uploads/2014/04/SW-White-Paper-Entrepreneurs-
http://www.paulgraham.com
http://www.startupschool.org
https://www.udacity.com/course/how-to-build-a-startup--ep245