What’s Special About the Bucharest Tech Ecosystem?
StartupYard has embarked on a month-long, 8 stop tour of Central European tech capitals. We’ve already visited Slovakia, Poland, and Kosovo, and will be stoping in Romania (Bucharest and Cluj), Bulgaria, and Slovenia.
But before visiting each ecosystem for StartupYard FastLane, we wanted to get to know the ecosystems we will be visiting even better. While we’ve met a lot of startups from these countries, and accelerated some of them as well, we wanted to hear from local accelerators, investors, and entrepreneurs what they thought was special about their local ecosystem. Since we’re asking startupers to come to Prague, which we think is pretty special, we wanted to see what our neighboring ecosystems really have to offer, according to some of their biggest fans.
We asked a group of entrepreneurs and influencers in the countries we’re visiting to tell us their perspective on their own ecosystem, and we will share that learning with you in a series of blog posts, starting with last weeks post about Poland, and Slovakia Today, we’ll explore what makes the Bucharest tech Ecosystem unique, ahead of our upcoming visit to TechHub Bucharest on Monday, September 19th.
Our Respondent: HowtoWeb Bucharest
How to Web is one of the most important startup oriented events, dedicated to innovation, technology, and entrepreneurship in South East Europe. The conference targets technology innovators, startups, startup founders, web entrepreneurs, tech product developers, outsourcing companies interested in innovation, investors, as well as all tech and web lovers. Startup Spotlight is a deal-making program for the best early stage tech startups. The program offers the participants valuable connections, mentoring, investment opportunities and cash prizes.
How to Web will kick off on November 1st 2016 in Bucharest
Register for How to Web 2016 today.
What’s Special about the Bucharest Tech Ecosystem?
What do you see as the greatest advantage of your tech ecosystem, particularly for young technology startups and entrepreneurs?
Bucharest and other cities like Cluj-Napoca, Timisoara, Brasov and Iasi are important cities in the region in terms of the availability of tech talent, with amazing software engineers, marketers and product people.
Bucharest also offers many advantages when it comes to company establishment procedures, particularly in terms of taxes and legal aspects. Consumer prices, including rent in Bucharest are much lower than in other big cities in Western Europe, as well as commercial property, energy, and utilities. Adobe, Intel, Microsoft, Electronic Arts and Amazon all have development offices in Romania, next to Bitdefender, a Romanian based company and the number 1 security product in the world.
Add to this a well-developed internet infrastructure, and you’ve got every reason to start your company in this city.
What about its most important current weaknesses? How would you like to see them addressed?
Romania lacks business and product skills. Although in the past years we have seen a significant development of the marketing and product development skills, Romanian entrepreneurs have yet a long way ahead to acquire business skills, sales principles, and the capacity to raise investment on their own.
Romania still lacks business and product acumen, makes up for it with engineering talent: @how_to_web Click To Tweet
What specialty would you say your ecosystem is most famous for, in terms of technology or business?
The Romanian tech ecosystem is particularly famous for its wealth of intellectual capital. We also have a large number of companies in the field of cyber security, and gaming and entertainment.
Would you say the local ecosystem is dominated by more copycats, or by original, innovative solutions?
The local tech ecosystem is definitely dominated by original solutions, most of them in SaaS in the first years. Starting around mid-2014, we noticed the advent of startups in hardware, Machine Learning (Artificial Intelligence), Neural Networks, 3D printing, and Virtual and Augmented Reality.
What would you say your locally grown entrepreneurs are best at? What is their greatest strength in international business?
Because of their well-developed technical skills, Romanian entrepreneurs have the capacity to iterate fast, and develop products with global potential. They are also early adopters, with great team management skills, which turns them into valuable assets for a startup success.
In your opinion, does the local ecosystem look abroad for opportunities enough? Too much? What would you encourage local entrepreneurs to change in their approach to global business?
As funding is hard to find, startup founders usually target international investors. Romania is a big enough market to test products, although the customer behavior is different sometimes from the ones in a bigger market, and this has to be taken into consideration when launching a new product.
Of course, this depends on the business type and goals. As an ecosystem, we need to grow more on the product side as this is a better path towards developing global businesses. IT outsourcing companies and corporate development centers contributed a lot to the ecosystem development, but now it is estimated that this will reach a plateau, so we need to develop other connected branches, such as our own product development, and leverage our technical skills in this area.
Romania needs to pivot to a product oriented startup environment: @how_to_web Click To Tweet
What does your ecosystem offer that others can’t? What is your local “killer feature?”
Our “killer feature” is the technical know-how, the expertise of software developers. Based on that, we’re now witnessing a shift towards product development which will take up more space and importance in the years to come.
How would you describe your government’s relationship to startups and tech? Is the government helpful or is it out of touch?
There is a gap, but it is reducing bit by bit. It’s not a short-term process and it takes a lot of effort, but it’s going in the right direction.
The government is increasingly paying attention to the tech industry and tech entrepreneurs, particularly in the last few years. The fact that IT produces more than 6% of Romania’s GDP has raised awareness in the public administration and opened doors for support and innovation programs. There is still a long way to go in assuring good implementation, but the good thing is that there is a lot of proactivity and effervescence among the local actors, adding to the administrative pressure to improve things in this respect.
What about Angel investors? Do you have an active community? What types of people are doing angel investing in your ecosystem?
There are a few organizations clustering angel investors, especially in Bucharest, as well as other angels who are not affiliated to an investment structure. Doing investment syndicates is also a practice which is often met when it comes to raising more consistent sums. They are usually active at a pre-seed/seed level, doing investments which average around 500k euro in a year.
In your opinion, what have been your greatest local successes, and in what areas do you think the ecosystem has the most potential to grow in the next few years?
In the past 4 years, we have counted 15 exits, totaling up to 1 billion euros, to private equity funds and international companies like Twitter, Facebook, Naspers, Ringier, or Francisco Partners. The most notable ones were Avangate, LiveRail, Skobbler, UberVU, eJobs, and Imobiliare.ro.
The most developed verticals are cyber-security, e-commerce and gaming, due to thecompanies active in these areas and the expertise accumulated over time.
In the past year #Romanian #startups have seen 15 exits worth a total of over 1 Billion Euros! re: @how_to_web Click To Tweet
What would you say to an entrepreneur or a startup thinking about relocating to your city? Any Warnings? Hidden advantages? Quirks?
A model that we saw more and more often is to have a development center here and the business development side in the bigger markets targeted by the startup. We’ve witnessed as well foreigners looking for Romanian co-founders and forming joint startups. The advantage of the ecosystem is a good balance regarding costs, the expertise available and tech talent, in comparison with Western countries.
HowtoWeb: Romania is an ideal development platform for western #startups @how_to_web Click To Tweet
Can you highlight 3 startups to watch for 2017 from your local ecosystem? Why would you highlight them?
TypingDNA – typing biometrics that allows the user to login based on his typing pattern, innovative product with huge potential.
Symme 3D – multifunctional Delta platform for 3D printing, PCB milling, laser engraving, pick and place – innovative product that has grown fast over the past years.
Axosuits – medical exoskeleton for people with disabilities, could disrupt the entire industry.Romanian Startups to watch via @howtoweb: @typingdna @symme3d & @axosuits Click To Tweet