11. July 2013–
Recently, Alex Barrera – CEO of startup PR matchmaking platform Press42 – wrote a blogpost about "riding a reality-distorting startup bubble". He was referring, largely, to ex-Goldman Sachs types who were now going through the motions of building startups, when all they were doing was actually pitching fake projects to their rich investor buddies while drinking champagne at conferences.
Here, Forbes Croatia columnist and Startup Island organiser Ivo Spigel responds to Barrera's post and illustrates a different kind of startup bubble in Croatia and its surrounding region...
In Croatia and the area that surrounds us, we don't get many ex-Goldmanites. I'm pretty sure that in the gleaming Goldman Tower over in Manhattan, I'd have a difficult time finding someone who has ever heard of Croatia, much less know where it is. So – this type of "bubble" is somewhat less of a concern in my community.
Another bubble we have no problem with here is an investment bubble. There are no VCs in Croatia or its neighbours to the south and east. There is one VC in Slovenia and that's about it for ex-Yugoslavia. So, another problem solved: no VCs means no investment bubble to fear.
There is, however, a reality-distorting startup bubble
This is the bubble where our community lives. In this bubble, young entrepreneurs are removed from the real world. Ask a couple of Bosnian, Croatian or Slovenian founders to name three ministers in the cabinets of their respective governments. Chances are they will have trouble responding. Now ask them to name three successful tech entrepreneurs that they admire, look up to, or at least know about – no problem. Quite likely the names they list will be American, but that's a topic for another day.
All of the ex-Yugoslavia countries are in deep shit. Even Slovenia, which used to be the small, magical darling of Europe, has a ton of problems. Do startup founders need to be acutely aware of these problems? Do they need to be "in touch with reality"– going through morning papers everyday to read about the latest political scandal? Should they be watching the evening news religiously every day (as I used to do when I was their age)? Of course not. In fact, the last time I watched the news on TV was so many years ago I don't even remember.
Will the Croatian economy sink by one per cent this year – or will it in fact be two per cent? If your startup wants to help autistic children, track trucks or produce speakers based on ultrasonic technology – who cares?
Yeah – we totally want startups to have a distorted reality field around them. By "we" I mean all of us who are working to build startup communities, in Croatia, in Slovenia, in Spain, Chile, the US – everywhere. We need to insulate them from the "macro crap" happening everywhere so they can focus on what they are doing and be awesome without worrying about governments, politics or macroeconomics.
Startup projects are their lifeboats
If they are successful, they can continue living in this strange, distorted world. And that, of course, is the best chance they have of not being yet another statistic, of not being one of the 40 to 50 per cent of unemployed young people. A statistic, by the way, which Croatia holds a proud third place in Europe, behind Spain and Greece.
There is, of course, the small issue of customers. Customers don't live in startup bubbles – they live out there in the real world. Croatian startups' customers, however – like those from Lithuanian, Hungarian, Slovakian and other startups from small countries – don't live in their native lands.
They might, for a while, in the early days when business models need to be validated. But after that, it's goodbye Croatia, hello US, UK, Turkey, Indonesia or wherever else people need to take care of autistic children, track trucks or use ultrasonic speakers.
So, yeah, we are not only living in a startup bubble – we're doing our best to keep creating it. We'll rely on our mentor networks to be our ambassadors to the outside world.
And that's a good thing.
For related posts, check out:
The Top 10 Croatian startups set to smash into Europe in 2013
Welcome aboard the EU, Croatia – why only the strong startups will survive
Start me up, Sofia – A beginner’s guide to South East Europe’s rising tech hub