There are enterprises in Europe and the US that are inclined to invest in a startup in Greece as long as it fulfills their investment criteria. This is the message sent by Neil Rimer, founding partner at Index Ventures – possibly the biggest venture capital fund in Europe – who is encouraging young Greek entrepreneurs to innovate.
The Covid-19 crisis and the European Union stimulus package could become an opportunity for a complete rebooting of the Greek economy. Could Greece become a startup/high-tech hub?
We have often seen times of crisis become catalysts for entrepreneurship and innovation – partly because founders have less to lose by taking a risk but also because the crisis exposes what products and services have been lacking and the opportunities to address these needs become clearer and more actionable.
Greece was in the process of recovering from the last major financial crisis as well as the consequences of its own debt crisis before Covid-19 hit. Thanks to some excellent leadership, the health impact of the pandemic was minor; however, the economic repercussions will be painful – largely because of Greece’s dependence on tourism. While tourists will eventually return to the country in large numbers, it is vital for Greece to reduce its dependence on this sector. Making it easier for entrepreneurs to start ambitious businesses that leverage technology and innovation to offer new products and services will be critical to making this happen.
What are the essential requirements for achieving such a goal?
Entrepreneurs are uniquely creative, resourceful and driven. They do not need help from the government other than not having them be in the way. Streamlining and digitizing the processes of incorporation, raising capital, issuing stock options to employees and hiring and firing staff are essential requirements. The most important ingredient to building a successful business is talent. Making it easier for startups to attract, retain and reward talent is probably the most important thing the government can do.
What are the main sectors with true potential?
What are the limits of Greek ingenuity? Beyond that – what are the limits of human ingenuity? The cultural and ethnic diversity of Greece’s big cities has broadened the talent pool and made Greek entrepreneurs more connected to the rest of the world. Greece has excellent engineers, designers, coders and businesspeople. The most ambitious among them will choose a problem that needs solving and build a solution that can leverage the internet to reach a global market – not just Greece or the Balkans.
Could the brain drain diaspora play a role in this? Are there models (e.g. Israel or others) that Greece can follow?
Israel is a good example of a country that has bet heavily on entrepreneurship and innovation. When I first visited the place as a teenager in the 70s, I remember thinking that everyone was a taxi driver or a farmer. Today, technology is a major driver of their economy. Greece offers a tremendous quality of life, decent infrastructure, and a stable democratic government with the rule of law. A large number of talented and ambitious young Greeks leave the country for their education and end up pursuing careers at leading tech companies abroad.
Today there is not a critical mass of interesting companies offering attractive compensation for them to consider returning to Greece or not leaving in the first place. If the country were to implement best-in-class conditions to allow these businesses to flourish, this could change within a decade.
We don’t have a strong venture capital basis in Greece, not even in Europe. How easy would it be to raise money for new ventures?
Honestly, I don’t think access to capital is the problem. There is a growing number of savvy venture investors in Greece and if that is not enough, there are firms in Europe and in the US that would be happy to invest in a Greek startup that met their investment criteria.
My firm invests across Europe and we’re always looking for ambitious entrepreneurs. Whether you are from Greece or Germany, if you are a talented founder with a bold idea that solves a real problem for many people and improves the way we live and work, we will invest. I’d personally love us to do more in Greece.
The great thing about being an entrepreneur in 2020 is that the platforms and tools that are available to you on a purely rental basis are very powerful. This means that most internet businesses we see, for example, have been able to build minimum viable products that demonstrate the value of their service and allow them to get early data on how customers use it, what they like and don’t like, before ever having to speak to a VC.
You know Greece well. Are there institutional obstacles that need to be dealt with beforehand?
I have often met Greeks who have told me that the government needs to do more to support startups by investing in them and giving them contracts. I don’t believe that is the right approach. The government needs to study what is needed and what has worked well in places like the UK, the US and smaller countries like Finland, Israel and Estonia and then implement the changes that are needed and step out of the way.
We lack a risk-taking culture in Greece. How important is it for building a new entrepreneurial culture? What is the average rate of success for new business ventures?
I don’t believe that Greeks are risk-averse. Most Greeks have lived with a great deal of uncertainty for many decades. In some sense, being born in Greece is already a risky proposition – and that is a good thing! Sure, some will look for the security of a government position, but the more ambitious and resourceful are open to taking risks.
However, they want to take smart risks, not ones that are doomed to fail because there are dozens of artificial obstacles placed in their way. Entrepreneurship is built on a willingness to take risks worth taking and being willing to learn from failures, adapt and try again. Naturally more ventures fail than succeed, but the success of Silicon Valley is built on the small number of massive successes that have created jobs and prosperity for millions.
What is your advice to the Greek government? And what would you say to young Greeks who want to try out new business concepts?
I’m very impressed and encouraged by the government’s leadership and pragmatism. I believe that the prime minister really appreciates the value of entrepreneurship – probably more than many other European leaders – and I’m hopeful that his government’s efforts to modernize many institutions will make Athens and Thessaloniki great places to start exciting businesses. To Greek entrepreneurs I can only say, έλα παιδιά, πάμε!