When you think of tech in Europe, popular destinations that come to mind: the UK, Berlin, Tel Aviv, and other well-known places. Safe to say that Belgrade, Serbia is not one of them. This is an unfortunate respect. However, Belgrade — reputed for its impressionable fortress, elongated day breaks over cold brews, and its culinary acuteness to bread and meat — has a faint rumbling beneath its surface. A rumbling that has been growing over the past few years, beckoning that entrepreneurship exists and tech startups are at the helm of the call.
A Time of Transition
Belgrade’s current situation is representative of the country as a whole. The entrepreneurial spirit has been there, just not in the Silicon Valley form to which most of the world is accustom. In fact, Belgrade’s tech economy is representative not only of Serbia, not only of the Balkans, but Eastern Europe in general. An economy built on outsourcing their talent to Western countries like the United States, Canada, and the UK in order to fuel startups in places like Silicon Valley. In 2015, Serbia exported EUR 678.3 million of software services. However, despite the GDP brought in from a remote work economy, the country does suffer from a bit of a brain drain where talent often leaves. Furthermore, unemployment is still relatively high as the rate increased up to 14.6 percent in the first quarter of 2017.
So how can Serbia, and especially Belgrade, retain its IT talent and at that the same time have that talent work on local companies and opportunities as opposed to those abroad? It is in response to this question to which the aforementioned beckoning calls. Entrepreneurship exists. Tech startups are at the helm. Many Serbian people believe entrepreneurship is the answer to some of the gaps in the economy. It’s a tool to encourage local IT talent to stay put, a tool to boost the local employment opportunities even beyond engineering, and a tool to attract foreign interest for investment. Even so, as with most transitional phases, there are some who hold differing opinions. Many locals still do not see the potential in Serbia, especially as its capital begins to become more of a tourist/expat destination.
Nurturing the Ecosystem: Investing in Investors
I had the opportunity to sit down with team members from ICT Hub — a prominent organization that fosters technological development and entrepreneurship in Belgrade — and discuss the startup landscape. According to their team, recently, everyone has had their hands in the pot: emerging accelerators, new investors, co-working spaces, and even the government. The appetite is ferocious and the talent and economic conditions are present as well. Yet the area that is lacking is access to capital; not in terms of actual money, but instead in terms of trained and well-seasoned angel and VC investors. While there are well endowed individuals scattered across the landscape, potential investors still need to be educated in how to invest in tech startups, why venture money needs to be syndicated, etc. ICT Hub has taken it upon themselves to teach investors, and has even started their own small seed-fund for those that go through their accelerator program. Still, there isn’t much opportunity to raise capital, so entrepreneurs bootstrap for a long time (due to risk aversion associated with leaving a job), or look outside of the local market. Even with the few opportunities for small investments, entrepreneurs often use that as a runway extension to start raising larger rounds.
What does this mean for outside entrepreneurs?
Serbia’s incognito reputation as a tourist destination mirrors its reputation as an entrepreneurial city — a pleasant surprise, full of potential and not enough attention. Due to this interesting dynamic, there are pros and cons of building a business in cities like Belgrade. The cost of living is comparable to Southeast Asia; however, there is a much lower expat community and tourism is still not as popular, which makes it a more difficult market to navigate and build connections. There aren’t too many opportunities for funding, but if a company already has pre-seed capital for bootstrapping, then its runway can go a long ways while even leveraging local talent. Finally, Serbia’s maturing entrepreneurial and tech market presents opportunities for expansion and access to the surrounding Balkans and Europe in general.
When Rokk3r Labs originally set out to find entrepreneurs across the globe and tell their stories, two of our goals were to build awareness and harness the collective effort of those looking to build companies around the world. So far, it has been made evident that entrepreneurship, tech startups, etc. are alive and thriving in places where most people’s preconceptions would cast doubt. The point of this post is to emphasize the latter of the two goals. In Serbia, where education and capital is key, our companies 10xU and Rokk3r Fuel were created to address those very needs. It’s an ideal market where we can fill in the gaps with our expertise and methodology in company building, not as a catalyst, but as a supplementary agent that helps fan the entrepreneurial flame. How can we continue to help these areas that have seeds of entrepreneurship grow and thrive? How can you?
For the Global Entrepreneurship Series, Rokk3r Labs’ Jide Adebayo is on a journey across the world digging deeper into entrepreneurs’ stories, understanding the universal investor mindset, and connecting the global collective genius.
We are excited for you to follow the journey, engage with the stories and share your experiences from the region. You can also read Jide’s personal anecdotes and connect with him over at jideadebayo.com.
More from the Rokk3r Labs Global Entrepreneurship Series:
- Prague: Cultivating a Promising Market
- Lisbon: Punching Above Its Weight
- Thailand: Carving out a Space on the Entrepreneurial Map
- Cambodia: Kingdom of Mystery
- Vietnam: Resisting and Reinventing
- Kuala Lumpur: A Melting Pot of Culture, A Recipe for Ideas
- Kuala Lumpur
Rokk3r Labs is a venture builder and the world’s first ‘cobuilding’ platform for entrepreneurs, corporations and investors to create exponential startups. In 2017, Rokk3r Labs launched Rokk3r Fuel EXO, its first global venture capital fund. As a partner, Rokk3r Labs increases value, mitigates risk and helps to remain at the edge of innovation. With a focus on leveraging exponential technologies (e.g., the blockchain, artificial intelligence, and Internet of Things) and implementing new-age methods of raising capital, Rokk3r Labs is harnessing the global collective genius to cobuild companies that change the world. Currently, the Rokk3r Labs portfolio includes over 40 ventures. Visit www.rokk3rlabs.com.
