After this past week’s SmartCamp Kickstart event in Istanbul, where six innovative startups competed and sports analytics company Exa-Tech was named winner, we wanted to know more about the entrepreneurial landscape in Turkey. We asked A. Mete Cakmakci, General Secretary of TTGV (Turkish Technology Development Foundation) and our sponsor Partner for SmartCamp Istanbul, to give us some insights into the environment for startups in Turkey.
What are the opportunities as a growth market in Turkey?
Located literally “where east meets west,” Turkey today is a fast-growing dynamic economy in a very dynamic part of the world. Over the last 10 years Turkey has gone through a very strong-paced development, almost tripling its GDP per capita. It has a very young population with the largest manufacturing base in its vicinity. With increasing wealth, an expanding middle class offers a deep domestic market. Turkey offers one of the better infrastructures in its region, and is on its way to become a logistics hub and regional center for skills-intensive services. Turkey hosts a dynamic private sector since the 1940s and has an open free market economy since the early 1980s.
A fast-growing economy and a fast-changing society present many challenges in areas like health, education, environment, urbanization, and security. Both public and private sectors in Turkey have been very receptive to technology to aggressively embrace advanced solutions such as in e-government and e-banking. Today, challenges we face also provide unique opportunities for a fresh breed of entrepreneurs.
Turkey owns an extensive system of higher education which provides an ample supply of talent and creativity into the economy. Most universities operate well-maintained infrastructure which is starting to attract international talent to Turkey. A new generation of business leaders appreciate the global forces of competition and, to seek efficiency, are becoming more and more receptive to acquire value from new and creative business models and ideas. All of these create the fertile grounds for smart growth in market.
What is the sentiment towards entrepreneurs in Turkey?
These are the lands where the first-ever coins were used. During the days of the Silk Road an Anatolian tradesman’s cheque was honoured all the way to China. I believe this society always cherished entrepreneurs. Creating wealth while providing for many others has been a respected lifestyle. Today we are seeing the last barriers to entrepreneurship disappearing with wider acceptance irrespective of social status and education. More and more people value the independence of entrepreneurship to less flexible steady employment. More and more parents are couching their children to pursue entrepreneurial careers.
Many large corporations see the entrepreneurship-related activities as part of their social responsibility. The government, through many different programs, has been aggressively promoting entrepreneurship. More universities are introducing courses, programs, and facilities towards entrepreneurship to attract better students to their degree programs. Through various structures and interfaces young entrepreneurs are granted better access to policy making. In the overall, the outlook for entrepreneurship is as bright as ever.
Who is partnering with Turkish entrepreneurs?
Over the past 2-3 years the entrepreneurship ecosystem in Turkey has been steadily improving with new initiatives and models. Most noteworthy in this development is the fact that many of the new initiatives are privately led. We are gladly observing some entrepreneurs to move to more catalyst roles, such as designing and running accelerator programs. Some big companies are quicker than the rest to capitalize on this development in order to have an earlier claim in the social capital emerging in the space. Some of the emerging accelerator programs are sponsored by some large Turkish corporations. Unfortunately, large multi-nationals are moving much slower. IBM might be a precious exception though.
Management companies of the university technoparks are also introducing new activities to support development of entrepreneurs. Started with METU’s yfyi competition, business plan competitions are typical, however there are new and advanced designs such as Özyeğin University’s GirişimciFabrikası and METU’s ATOM Game Development Pre-incubator. Many other universities are establishing new programs and offices to work with entrepreneurs.
We are seeing more and more competent investors working with the entrepreneurs. The market is hosting new and dynamic early-stage teams and active business angle networks, which provide a valuable learning platform for new entrepreneurs in addition to the possible investment opportunities.
Lastly, the public programs are introducing new schemes to work with the entrepreneurs. However, many of the designs still lack the “partnering” angle –a solid alignment with the interests of the market.
How does the business infrastructure support it Turkish entrepreneurs?
Though recent influx of public program funding mobilized a hyper-entrepreneurship activity in Turkey, the infrastructure for entrepreneurship is still in its infancy going through a healthy but slow development. It is very easy to open and register a new business, yet it takes many years to decommission an existing business. The procurement system heavily favors bigger competitors. Bank loans to fund a fast-growing business are almost impossible to score. Access to quality smart finance is still very limited.
Further advancement of entrepreneurship depends on the skills to develop new and creative ideas and business models. Many information asymmetries exist in the market though most entrepreneurs develop their own devices to overcome the issue. It is still difficult to talk of a globally connected ecosystem outside a limited part of Istanbul.
Many providers, including the banks and consultants are designing their outreach activities to build early access to emerging enterprises. Though not extensive as elsewhere, these provide valuable resources for many new ventures.
A few business leaders are starting to work with entrepreneurs as part of their personal brands. Consequently, some global networks such as Endeavor have visible and successful operations in Turkey.
Lastly, many large companies are looking to develop new providers to compete more effectively. What has started in the telecoms sector is now slowly moving to other sectors. We are now seeing more advanced organisational structures in some companies to handle the fragilities of working with young and small companies.