If you were a 300 employee, €200 mil annual budget national institution tasked with building a support system for enterpreneurs then how would you go about getting an international tech startup accelerator off the ground? You’d probably want someone with international experience and network to lead the effort. Someone who’s built a few successful businesses in this sector themselves.
There are probably few things you’d want to avoid. Things like:
- Deadline from announcement – 4 weeks. This includes getting commitment from a list of world class mentors and investors who put in the first seed money for startups that get accepted.
- Bid documents only in obscure language spoken by… let’s say 1 million people.
- Not announcing it on any public website plus making noise in news sites that focus on all things startup.
- Require minimum 3-person team where 2 of them have to have intimate knowledge of that obscure little language.
- Require the winner of the bid to have annual revenue of €500k for three years running
Unfortunately this is exactly how Enterprise Estonia is tackling this challenge. The way they announce it (or non-announce it) together with the language requirements pretty much ensures that no world class guy/gal/team will bother to take part.
Some local guys will “win” it and run it and that’s a hell of a long shot to hope they nail an amazing list of mentors willing to fly over long or often enough to inject world class quality into the whole accelerator. I seriously hope that EAS has been lobbying and networking this for months by now so all the right people are already in the know and prepared…
I’d link to the documents but the site hosting them is undergoing maintenance and down. Ironic.
For context: Startup Chile seems to be the closest to this model. Could anyone who’s participated in it (I’m looking at you Jens) offer a point of view on the factors that make it successful (or not) there?
Inspiration for this blog post came from something Toivo Annus (one of the original Skype engineers, now a partner at ASI and occasional angel investor) posted on Facebook.
It’s good to hear that something cool is happening in Estonia with such freezing weather out there.
It’s true that I’m participating in StartUp Chile (http://startupchile.org/), which is similar concept but only on the other side of the globe. They (Corfo, which like local EAS) started planning this in 2008, year and half later (end of 2010) they did first tests and in 2011 launched it to wider audience. Ok, you can argue that Chile is bigger country and things take time, but in some areas there are less of bureaucracy than in Estonia.
Despite Chile is Spanish speaking country, whole project (except some paperwork and language classes) is in English. Lots of team members are not chileans at all, but all of them speak Spanish. Would not be very possible situation in Estonia I’d say if foreigners need to speak Estonian. English is anyway default language in “industry”, so why even restrict it.
As I understand, whole project has lots of paperwork behind all decisions but they hear what participants and mentors suggest and make changes to programme all the time. Agile.
My concern would not be if Estonia needs this kind of initiative or not, but what they need at all. There are already hundreds of “incubators” around the world, everyone copying each-others tweaks. We should not copy concept from others (at least I got that feeling while reading some requirements) but instead invent something totally new. Tiger, wake up!
We should think globally, why on Earth anyone would want to come to Estonia, here are painpoints:
Lack of connections from outside of Europe. Travelling there is such a pain and far too expensive (Estonia Air should give BIG discount for startuppers ;)
Weather, it’s nice on pictures, but if you have possibility to choose between Chile, Singapore, London, Silicon Valley etc, why you should go there
• Mentors, one of the main things we need to cover, there are just not enough talented and exprerienced people in Estonia. Bringing mentors from other countries mean travelling (read pt. 1) and motivation for them.
No infrastructure: not enough universities, science parks, manufacturing facilities etc. Or lack of cooperation between them (it’s moving to better way, but still …)
It’s not (only) about getting investment, it’s about changing world, helping customers to solve their problems etc. Joining incubator means moving closer to your clients, market. If you have such a small local market as Estonia, it’s hard to assure to participants what’s the benefit to their product here.
Finns had almost similar discussion ca month ago about their startup scene, worth reading some comments and articles to understand how it’s possible think outside of the box in almost similar situation as Estonia is now.
It’s good that somebody started the discussion in public, which actually has been somewhat active for the last ~9 month. Tõnis, who runs the Startup Estonia program in EAS has been reaching out to many Estonian startups leaders, Startup Leaders Club, most of Estonian ecosystem plus also talking to many European and US incubators.
As far as I know, the main idea behind the accelerator bid was that it’s better todo something, interate and improve. Rather than not doing anything. The points Jens has raised are mostly correct, but “startup people are crazy” and usually they do not think like “this is not realistic” … but the opposite, how can we make it work?
So I am in general positive and lets see what is the outcome of the program in 12 or 18 month.
Plus, if you guys have good ideas how to make Estonian accelerator better or how to “wake up the tiger” you are very welcome to share your ideas, participate in discussions and come join hands-on!
Unfortunately, I shall agree with the post above. The whole point of setting up international tender is to get international players to apply, isn’t it?
This requires a short 2-pager or 10 slides in English, not 38 pages in Estonian locked behind mandatory sign-up to one of the worst-designed governmental websites.
Being a native speaker and generally interested in Estonian startup sphere I tried to read this document but gave up.
I understand there might be requirements set by the law but this does not mean you couldn’t market the tender properly.
Martin, I did not say it’s not realistic, I said it don’t make sense to do similar programme as others are doing already. On the same time we can do something else and gain advantage in the game. You can grow bananas in Estonia if you want. Try different soil, different fertilizers etc, with good luck and lots of “iterations” you’ll get small green bananas. Is that what we want? Or do we want to sell our untouched nature to japanese tourists? Yes, I just compared apples to oranges. Maybe we should look on things from different angle. There are some things we are good at and what is good in Estonia, let’s use these things as key factors. Or are we just lousy copycats.
Maybe there’s already some other discussion going on and some other programmes in the pipeline that solve these questions, but we all would like to hear about them, before launch.
As mentioned on Twitter discussion today, one of the main keys is to get investors and mentors to Estonia. We have to differentiate us from other countries/incubators. How, that’s THE question.
Tax reductions, talented engineers, infrastructure as we know them might not be enough.
For Finnish speakers there’s great article on the same topic:
http://www.zengestrom.com/blog/2011/09/tekes-elintarkea-muttei-ikuinen.html
One observation from Chile — dealing with government owned incubators / support programs is quite easy for participants, at least applying to programme in the beginning. After that comes some paper filling and reporting. And then some more. In Chile you have to be responsive for report requests for 5 (!) years. This is scary for some people and for the reason, we all have had bad experience with governmental institutions.
If upcoming accelerator can reduce all that to minimum and be “cozy”, that might be small but important factor for some startupers.
Oh dear!
I’m reading it and trying not to believe it. Absurdity! Estonia turning back.
Jaak Ennuste
Seems like classical conflict between public and startup sector. I have been working in the “system” and have some knowledge about how different those two worlds are. I agree with Martin – it takes time to see how it really will work out and it’s better to do something instead of doing nothing.
I made a post almost a year ago, when they were looking for the leader for the startup programme: http://www.mehisparn.eu/2011/02/programmid-start-up-eesti-vs-america.html (only in estonian unfortunately) and seems like I was right: Enterprise Estonia is not the best place to host that programme. I believe they made a good choice and Tõnis is doing good work, but I do not envy him because of the ecosystem around him. (Been there, done that.) Hope that he has patience enough to run the programme and it won’t end before the real start.
Thank you for the feedback. We have been working with this from August 2011. Everybody who wanted, had possibility to participate in discussions. Many did.
The model we try to implement here is not very common. Usually this kind of accelerators are established by investors. Estonia had some attemts to make this happen through investors but not succesfully. Startup Estonia program decided that it can accelerate the accelerator by covering operational costs during two years only and step away then.
At the same time we came to conclusion that this must be also learning exercise for Estonian ecosystem. Not only participating in accelerator but also making it happen. Therefore the minimum team requirement was set, that there must be at least one person from Estonia who must be tightly involved in everyday management of this accelerator and who’s role is learning. Second Estonian person is just administrator. Three people all together is absolute minimum we believe it can work. More people is allowed in the team.
English is definetely the working language in accelerator and it is clearly set in requirements.
Using public money can go only through public procurement. As this model of building accelerator using public money is new for community as it was also new for EAS. Therefore it took time to prepare the tender documents which are in line with meaning of the accelerator and rules of public procurement law. Therefore we made preannouncement in public procurement register on Nov,24 that we will announce the accelerator tender. This was to make it clear, that despite of delay we are serious and you keep going with networking.
And partnership is the key element of this tender. We want to see, that there is somebody from Estonia who cares about this accelerator and wants it. Therefore those strange language requirements for the team. We believe, that Estonian startup ecosystem should participate in this from the very beginnig.
Having estonian people in team we thought tehere is no problem with delayed translation. We were so happy that the tender documents preparation process ended last Friday after many months fight with wants and musts so we announced it immediately as it was approved. Then translation started and will be ready soon.
And this 500k€ reqirement question in post I just don’t understand. The budget of this accelerator is much over this and asking lower financial background limit is not very clever thing. Financial background requirement is coming from the public procurement law and we can’t do anythig with that. Only limit can be chaned in line with procurement budget. Be aware that when discussing with potential suppliers I found that many international accelerators don’t have companies involved who can present annual reports at all. Hopefully Estonian partners can help them out then.
Those were just few remarks and this is much wider than listed here in post and comments. It is sure we are based on some hypotesis here but so are you. We made maybe some mistakes here but at least we made those and we can go on and correct if something is not working out.
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“Do we have too much / crappy accelerators?” Do we have too many entrepreneurs /companies? I guess there is always room to +1.
Start-Up Chile is a failure because fewer than 10% of the participants have attracted funding. I also discussed the underlying reasons why the program is unlikely to pay off:
http://brophyworld.com/category/chile/start-up-chile/