Problems of Polish startup ecosystem

Next years of Polish tech industry will be key ones for our development in the future. We’re standing before a great opportunity and challenge. Poland has all necessary features to become a leader of innovation in its region, though we still fight with basic-level problems.

What are they? Let me share with you my thoughts on this.

1. We have no idea what we’re talking about.

While pitching about Polish ecosystem to Israeli investors, entrepreneurs and government representatives I’ve been always asked about the scale of Polish startup ecosystem and I had no other choice but to admit, that we have no any measurability tools.

Startup Poland prepared Report in 2015 but it was wrong in it’s very basic assumptions, e.g. including to startups all the subjects that got financed with 3.1 PO EU programme “Initiating innovative activities”. If you’d look into details, you’ll see that many of them are either not existing today or they’re simply not startups.

We need to work on tools, that would help us to define how big is our ecosystems. Those information are critical to bring key investors to Poland.

2. We don’t think big.

One thing that always hits me while talking to Israeli entrepreneurs is that they think globally. It definitely comes from geopolitical position of Israel – their market is too small to earn money and they’re surrounded by enemies. They are forced to think about American or European market from the very beginning.

Poland? We have a good ideas, though most of young startupers (at least those that I’ve met) think on a country scale (sometimes European). It’s not big enough, if you want to give a revenue most of investors want.

3. Smart money and investors.

“Smart money” is still a new thing in Poland. We need to learn how to invest money and help startups after money transfer. The financial side is many times not a key value startup can get from investors, way more important are knowledge, experience or network of an investor.

Looking at investments in Poland I often have an impression, that we  invest in startups that won’t work. I guess it’s partly because investors have money from public sources that they have to invest. That’s a closing circle, seriously. We invest stupid money in stupid ideas only because we need to spend money. It makes entrepreneurs more lazy to think of a good ideas and investment managers to look for next unicorn. Higher bar from investors can give a profit, not only to them, but to the whole ecosystem.

A good example of VC in Poland is Arkley, which decided on the beginning of this year to focus on hardware startups only. A great decision supported with great startups in their portfolio. The important thing about Arkley is that they invest only private money, so they’re not spoiled with public ones’.

4. The flow between public and private sectors.

Yes, we do have 3.1 and other programmes in which public money mix with a private one, but that’s the only part where I see any collaboration between country and a private sector. (And I don’t think it’s a great model of collaboration ^ look at point 4).

Does any entrepreneur get a help with building a network from Polish government? Nope. Does Polish government talk with startup ecosystem about what should be done? Nope. If yes – then they’re doing it behind closed doors, and nobody knows about it.

5. We don’t know, that we don’t know. And we don’t trust.

OMG. Working with startups is such a pain in the ass sometimes. Especially when we have a typical polish type of owner of the company. Their biggest and most important rule is: do not trust anyone. Do not let anyone decide. Do not hire professional to allow him to do his job: you hire him, because you know better.

I mean – why do you decide to collaborate with an agency or freelancer if you never take it’s advice seriously? That’s ridiculous.

6. Law.

That’s another topic, but we all know this: Poland has extremely complicated tax system.  We’re simply messed with new rules. And we keep going in a wrong direction inventing new types of companies instead of repairing current ones.

If you’d look into investments made in 2014-2015 most of them were made with the support of public money managed by, on first level PARP (Polish Agency for Enterprise Development), and on second level by venture capitals or regional incubators.

If you’d look even more carefully, you’d see that most of company’s that got financed

# Finishing line

As an ecosystem, we have a great potential which we do not use yet. Being constantly between Israel and Poland I have an impression that we are still a bit infantile. Startups are not a business in Poland and I don’t know why.

But looking at a progress we made over last year or two years – I think positive change is something that will come naturally very soon.

Jeremi Jak

Jeremi is communication & marketing expert working in the area of startups, new technologies and culture. Founder of Polish-Israeli Startups Foundation where he strives to develop Polish startup ecosystem and build a lasting bridge between Israel and Poland. Over past 5 years, he worked as a communication specialist for brands like Mitsubishi, ASUS, HUAWEI, Nationale Nederlanden. The connected experience of software project management and marketing executive make it possible to effectively consult and develop startups.

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