Building entrepreneurial ecosystems in North Macedonia and up-and-coming startup hubs in Western Balkans
What can I say about the Balkans? Well, imagine putting together a puzzle where only some pieces fit yet all pieces are from different puzzles. I arrived in Skopje (SKOP-YEAH), the capital of North Macedonia, early Sunday morning to begin what would be a continuation of my Eastern Europe exploration. Earlier this year, I was part of a consulting engagement that recommended initiatives on how to prepare University of Latvia students for sustainable, entrepreneurial venture creation in the former Soviet Union country. I’ve traveled to over 20 countries in the past two years, explored every continent except Antarctica and ‘Down Under’ so of course, in typical American fashion I thought, the Baltics… the Balkans… the same right? That answer is a resounding NO!!! From Speķrauši, Jāņu Siers, and Black Balsam (not enough of) to Shopska, Burek, Rakija (too much of), the two regions couldn’t be further apart. One was part of the Soviet Union while the other nested center of what was then the Socialist Federal Republic of Yugoslavia. My purpose in Skopje was to aid the development of the country’s entrepreneurial ecosystem, working with entrepreneurs and support organizations across startup hubs in Western Balkans as part of EIR Europe, an initiative by the Swiss Entrepreneur Program (SwissEP) and funded by the government of Switzerland and implemented by Swisscontact. Over those subsequent months, I traveled to North Macedonia, Albania, Croatia, and Bosnia and Herzegovina, meeting entrepreneurs, innovators, ecosystem developers, and support organizations from all over the world. One month removed, I am just now understanding the significance of the experience and want to share my observations and conclusions on the region and more specifically, North Macedonia’s future in entrepreneurship and innovation.
Before I speak about the ecosystem, it would be wise to touch briefly on the region’s history. North Macedonia’s ecosystem development has been slow to take hold as the country and greater Southeastern Europe are most known around the world for its past conflicts and entanglements dating back to the 15th century with the Ottoman Empire and more recently the breakup of the Republic of Yugoslavia. To what seemed to be a region of endless conflict, from the Serbs and Turks to the Balkans Wars, World War I, and Communism, the Balkans is no short of unrest and instability. Nevertheless, I do not care to dwell on the past but if you require a short, chronological description of the history, please visit here. Regardless of its complicated history, the entrepreneurship ecosystem in North Macedonia has made significant strides in the last two years but is still early in its development. In short, on the supply side, new organizations have entered the market offering support to entrepreneurs and startups, while on the demand side, there appears to be a shortage of potential entrepreneurs and startups. This is particularly evident among women. Soon to be renamed the Republic of North Macedonia, part of an agreement to settle a decade-long feud with Greece that has prevented its NATO and EU membership, the nation is on course for change, and for two months, I had a front-row seat to its evolution.
So what themes emerged? While in the country, I dedicated 250+ hours of coaching, mentorship, and ecosystem development to 60+ established companies and early-stage startups and 20+ co-founders but within the first week of arrival, I noticed the community’s apprehension towards entrepreneurship. The fear of someone stealing their idea, primarily from academia, has penetrated the country’s psyche and tested their willingness to proactively ask powerful questions and seek answers impacting the validity of their business ideas. Nonetheless, for those who successfully overcome these internal struggles, there are still challenges. For example, identifying and sourcing expertise needed to effectively scale a startup, notably sales and business development, has constantly handicapped startups’ ability to grow outside of North Macedonia. The few acceleration programs are limited in their capacity to successfully build teams and nurture innovative business ideas. Moreover, corporate accelerators and academia are unaware of the difficulties in technology integration and research commercialization, respectively.
Entrepreneurs and startups are the heart of every ecosystem but they aren’t the only organs. The biggest economic development driver for the 2.1M North Macedonians is the government. Recently, the country established a new venture fund of €10M, financed by the European Union, and World Bank and managed by the Fund for Innovation and Technology Development (FITD) with a mandate to invest in innovative projects from established North Macedonian companies, early-stage startups, and acceleration programs. Following the first investment, I had the pleasure to lead a 2-day boot camp focused on pitch development, early-stage financing, marketing, and innovation for the Fund’s applicants. This experience manifested the government’s short-sighted approach to ecosystem development and deficiency of clear objectives, key results, and accountability. Early on, it was unclear how the venture fund would address the supply and demand imbalance in the ecosystem. A recent report issued by Startup Macedonia outlines some of the obstacles including difficulty adapting to market forces, lack of cohesion and transfer of knowledge, support that’s broad, rather than focused, non-existent or low barriers to entry to programs, rather than an emphasis on high-quality ideas, and a mismatch between startups needs and the services provided. In my estimation, these challenges are the reasons why regional investors are skeptical of North Macedonia and as a result, deploy capital elsewhere in more developed, neighboring ecosystems Croatia, Serbia, and Bulgaria. Speaking with a venture capitalist from one of the largest funds in the Western Balkans (€40 million), they see a better potential for greater returns elsewhere relative to North Macedonian’s young ecosystem. Take notice of quotes from North Macedonian ecosystem actors I meet, ranging from startups, academia, financiers, and government.
As I reflect on these encounters, I ponder:
• How do we increase aspiring entrepreneurs’ participation in the North Macedonian startup ecosystem?
• How do we stir startup spirit and incorporate an entrepreneurial mindset among students?
• How do we foster engagement and empowerment across ecosystem actors and coordinate value towards its central core…the entrepreneurs?
• How do we align ecosystems’ support for early-stage and growth startups’ areas of need while remaining flexible and relevant?
• How do we drive an appropriate narrative and share the ecosystem’s story?
Before I can address these questions, I contemplate my learnings from other Balkan ecosystems and global startup hubs.
While in North Macedonia, I performed smaller missions in both Albania and Bosnia & Herzegovina (B&H). I quickly understood the importance of mentorship and experienced reasons why it’s the most beneficial support system for entrepreneurship. I was invited to Banja Luka, B&H by WaySeven Technologies, a software development startup, to deliver a talk on the “entrepreneurial mindset”. The need for this event exemplified the lack of education about entrepreneurship and what it means to be entrepreneurial. Mentors are major actors in the ecosystem; investors, business leaders, academics, successful entrepreneurs, etc., and the key ingredient to an ecosystem’s maturity. These individuals have built and/or mentored startups and possess connections to multiple actors in the host’s entrepreneurship ecosystem. An enticing value proposition to solicit support from mentors is the opportunity to source and maintain a highly talented and successful network. This is one of the reasons I decided to visit Banja Luka and am grateful for it. Check out pictures from the event!
Sticking with mentorship, I recently conducted a survey with global incubators and accelerators where 57% of respondents ranked ‘Mentorship Program’ and ‘Presence of an Entrepreneur In Residence’ as the most important metrics for incubator program success. One respondent stated, “Good mentors are essential but they are half the recipe”. This respondent is right and leads me to the second point. In the same survey, 71% of incubators selected ‘Program Offerings’ as one of the top contributors to their success. The ‘Type of Services Offered’ and the ‘Number of Events’ were also among those areas considered important. Closer to home, accelerators and co-working spaces such as Startup Factory in Zagreb, Croatia, and Smart Office Coworking in Banja Luka, both believe acceleration strategy and programmatic cycle that fully incorporates mentors, EIRs, and additional elements will enhance the competencies of entrepreneurs and such programming should be managed by experienced actors of host ecosystems. This brings credibility and generates sufficient deal flow (applicants) for incubators/accelerators.
Ultimately when assessing the trifecta of ecosystem development; in academia, government, and industry, similar problems have emerged within neighboring countries. Governments everywhere have promoted self-employment and supported the formalization of new businesses; however, the limited flow of viable business ideas entering the creating stage provides pipeline issues for ecosystems. With few teams emerging from the difficult early development stage as fully committed to establishing and managing businesses, there is an opportunity for government, academia, and industry to collectively address pipeline issues and transition entrepreneurs from learning to creating. Government funding can improve the country’s education system with an increased focus on entrepreneurship and innovation much so that; academia can solicit experienced practitioners who’ve been through the journey. When effectively implemented, it can create a robust pipeline of entrepreneurial-minded students ready to create. To go further, the Industry is in a prime position to invest in scalable business models once they’ve cleared early troubles. The industry should work with academia to ensure barriers are removed early before providing financing. This applies to countries like North Macedonia. As Nina Nikolikj, Manager of the Swiss Entrepreneurs-in-Residence program in North Macedonia and now a good friend, recently stated in a Forbes article that she hopes the combination of resulting changes and efforts to nurture entrepreneurship will help the Balkan country catch up with some of its neighbors, specifically the one to the north. “Serbia is our closest neighbor but it’s a bigger market and their entrepreneurial ecosystem is much more mature,” Nikolikj says.
So what now? How can actors improve the North Macedonian ecosystem? Based on these observations, I believe there are four considerations for ecosystem leaders to ensure efforts from the last three to four years are fully realized.
1. Improve the startup's competencies in sales, business development, and go-to-market strategies. As one ecosystem actor stated, “The #1 priority for early-stage North Macedonian startups are sales and business development”. Startups will not thrive in North Macedonia alone. They need unique ways to test and expand their business models globally.
CodeWell, a North Macedonian company offering IT solutions and services to worldwide clients Heineken, T-Mobile, and Sony Music, has relied on organic growth since its founding but now is actively exploring growth opportunities in markets outside the Balkans. Given the lack of expertise in sales, business development, and go-to-market strategies in the country, I worked with CodeWell’s leadership on identifying growth acceleration levers for rapid revenue scale from a business model innovation, operational excellence, and people capacity perspective.
2. Support entrepreneurs and early-stage startups on rapid idea/product validation. Entrepreneurs and startups should understand failure and accept it as a given. Furthermore, entrepreneurs need to seek out risk, not run from it. “Entrepreneurs in North Macedonia are scared of 1) idea will be stolen and 2) failure from testing their idea’s validity”.
GSIX is a software development company that blends entrepreneurial skills and technical expertise to provide fast and reliable software solutions serving over 20 million users. GSIX is currently developing a prototype for a new product offering and wanted to rapidly test features, capabilities, and big ideas in their organization. I led a workshop on how to test big audacious ideas in a week using an AI product I prototyped back in 2012 as a case study. Additionally, during Techstars Startup Weekend Skopje, I helped launch an AgTech startup, Akva Gradina, bringing in-home gardening to the world through affordable, accessible hydroponic systems. Our team took 2nd place in the competition. There is definitely a need for focused support on rapid ideation and validation of early-stage ideas and I believe events like Startup Weekends and Startup Grind are shifting things in the right direction.
Akva Gradina pitch during 2018 Techstars Startup Weekend Skopje
3. Increase students’ learning capacity with curriculum experimentation and experienced practitioners. There is a lack of education about entrepreneurship and what it means to be entrepreneurial. “The current curriculum for entrepreneurship is too structured and faculty are inadequately trained to teach the subject. Students are not getting educated nor aspiring to pursue entrepreneurship. There needs to be a change in mindset.”
To become part of the solution, I trained 40–50 primary and secondary students on product development for the “Best Business Concept” competition organized by the Republic of North Macedonia (FYROM), University Ss. Cyril and Methodius and sponsored by the Foundation Macedonia 2025. Following the training, the faculty lead for the competition expressed interest in collaborating on a class that teaches the entrepreneurial mindset to students. This is just one example that debunks the widely held belief that academia is immune to change and unwilling to experiment.
4. Entrepreneurs and startups are the heart of an ecosystem. It should have your undivided attention! Bureaucratic institutions have a short-term mentality, employing policies that hurt, not help entrepreneurs and startups. “Balkan actors don’t know how to collaborate. They’ve become really good at corrupting professionalism.”
Lately, the government has been the main driver for the country’s ecosystem development but the lack of professionalism and business etiquette in dealings has driven startups to partner with western European companies. Previous administrations incorporated policies to solicit foreign companies to open offices in the country by subsiding companies’ employee costs, further exacerbating the ‘brain drain’. I met two North Macedonian startups who recently joined accelerators outside the Balkans, in two ecosystems much more advanced than their host country. Nevertheless, these startups expressed interest in maintaining a strong presence in North Macedonia. Despite their expansion, they understand that new support organizations like FITD, which are continuously learning and receptive to feedback, are the beginning of the country’s transformation. To illustrate, I received news shortly after my departure that FITD held subsequent boot camps for additional companies seeking investment which proves the aforementioned, shows an inclination to try new things and a continuation of its goal for a sustainable startup ecosystem.
I want to thank Swisscontact and SwissEP for the opportunity to serve the entrepreneurial community of North Macedonia and the Western Balkans. If you are interested in learning more about the SwissEP program, let’s connect!
