Is there a startups ecosystem in Turkey?
If you were to make a location based keyword search using the phrase “startup at Twitter,” Turkey would surprise you. There are so many events happening at the same time every day, you would think you are either in or near Silicon Valley. I did a search yesterday and this is just a fraction of what I found: There are numerous tweets about Startup İstanbul, the biggest startup event in our region, organized by e-tohum/Burak Büyükdemir. I had already known about Startup İstanbul but I did not know the Üsküdar Municipality had organized a startup event called “Startup Stars Night.” Apparently, they are creating a co-working space for startups with some benefit from partners, such as İstanbul Startup Angels, Yıldız Technopark, Radore and Mentornity. I also learned that a startup called Datapare received 550 thousand Turkish Liras of funding from the Istanbul Startup Angels. There was a mentorship education event Starters HUB called Turkish Mentorship Movement Training. There is a tweet calling Turkish startups to apply for a Microsoft competition for $3.5 million. There was an event by Startup.watch about Turkey’s startup scene.
This is only a fraction of the chatter for the last few days. So our startup ecosystem should be immense, right?
Unfortunately, that would be an incorrect statement. I had written here before that I guessed the startup ecosystem in Turkey creates a lot of noise but little bang. After getting the statistics from startup.watch, I am sad to be right.
According to Serkan Ünsal of Startups.watch, in the first half of 2017, $36 million was invested in 63 funding rounds. Turkey stands in 18th place in terms of the amount of investment among the 36 European countries but in 27th place in terms of the amount of investment per capita. Ünsal adds that the per capita investment in Turkey is very low. For this reason, both the number of startups and the number of investments need to increase. To do that, role models and success stories must increase. Ünsal underlines that it seems like the chicken-egg dilemma.
If you dig even deeper into the previously mentioned investment sums, you would find that usually a few transactions make up a great percentage of the whole. In total, not more than 50 transactions are made in a year in Turkey regarding startups. Therefore, we cannot really talk about an ecosystem. There is some traction and it is increasing, but to call a handful of deals an ecosystem would be an overstatement.
So, what could we do to change that?
I believe the biggest burden is on the bigger private institutions rather than the state. The state is doing its best with all kinds of endorsements. Of course, there are many problems with how KOSGEB or TÜBİTAK funding work. They should be better streamlined and focus should be given to ease entrepreneurs’ burdens.
The key to creating an ecosystem is in the hands of bigger private institutions like banks, airlines, construction companies and holdings. If they choose to trust startups and start to buy product and services from them, then we can talk about an ecosystem. If they refuse to work with startups, then we will still be going to seminars on how to be a great mentor, investor or entrepreneur and still get nothing out of it.