More than 100. This is the number of startups that are part of a recently launched platform that aims to connect businesses and various institutional support mechanisms in North Macedonia. The portal was created by the local Startup Macedonia association. The existence of such an association and the platform itself are signs of an emerging innovation ecosystem for this relatively small country with a population of just over two million and a GDP of 12,000. 6 billion dollars.
To become a relevant startup hub in the Western Balkans, however, the country still has a way to go. Like other states in the region, North Macedonia is also struggling with a brain drain, but there are early signs of people willing to return and start a business, as well as several initiatives boosting the entrepreneurial scene.
Paving the way for the rest
One of the stories that illustrates how the ecosystem could develop is Solveo – an innovation consultancy that inspires businesses to work with Macedonian youth and find revolutionary solutions to their business challenges. The company was founded in 2016 by Macedonian entrepreneurs Dragana Neshovska and Ivan Zografski. After completing their studies in London, Neshovska and Zografski returned to North Macedonia with ideas on how to implement their new knowledge while bringing innovation to the Macedonian market.
“Inspired by global market trends, we started with the idea of bringing real innovations mainly to Macedonian companies. Understanding the limits of innovation and the need for faster and more efficient new product development for our customers, we have positioned our company as a pioneer in the development and successful launch of new products to the market,” says Ivan Zografski, co-founder of Solveo. According to Zografski, Solveo’s trust in Macedonian youth ultimately paid off, as most companies were willing to adopt their new approach to implementing innovative techniques to the different business challenges they faced.
Having started with two employees in 2016, Solveo now has over a dozen full-time employees, working with domestic and international clients in industries including IT, aviation, retail and finance . The company is continually looking to expand its set of services and customers, says Dragana Neshkovska, co-founder of Solveo.
Solveo also organizes Startup Weekend Skopje, an annual event that enables networking and exchange of ideas among aspiring entrepreneurs in the country. Startup Weekend is a place where young entrepreneurs can present their ideas and receive feedback from their experienced colleagues, while learning and acquiring various skills. “We think people should have these opportunities. We are willing to do something in our environment to help those around us and we want to inspire positive change. If you give people inspiration, infrastructure and a good process, they can work together in a very creative and useful way and achieve great things,” emphasize the founders of Solveo.
Lessons learned
Some companies have also struggled in the market, and one such example is Snowball games – an independent game studio founded in 2018 and which has successfully launched several games in the global gaming market. “The story of Snowball started with a group of people from different backgrounds, working in different locations but with a one thing in common: a passion for video games. Thanks to the initial investment, the studio took shape and started working on the new game called Yatzy Dice Clash,” says Ljupcho Koshchicovski, CEO of Snowball Games.
However, after its first success, the startup had to scale back its expansion plans, faced with the challenges of the video games market, particularly in the face of competition from large publishers. “We learned a lot about the industry and managed to publish and place our games at the top of their category. Having learned the lesson of self-publishing, I would recommend anyone who wants to create and develop games to partner with a publisher from the start and leave the publishing to the experts,” says Koshchicovski.
Although the Macedonian gaming market is not yet fully developed, there are many talented people working on many incredible projects, Koshchicovski adds. “The beauty of the gaming industry, and the same can be said of any IT industry, is that the location of the business does not restrict the geographic market.”
A foundation to build on
Even though the country has strong potential in the IT industry, developing an entrepreneurial spirit still takes time. According to a 2018 study research by USAID and Startup Macedonia, an association created by a group of Macedonian startup enthusiasts, and data from state statistical offices show that the country produces more than 10,000 graduate students per year, representing a significant number of talents that can play a role in the creation and management of a business. dynamic startup ecosystem. Additionally, it only takes 24 hours to start a new business and 15 days to obtain a work permit and residence permit.
The Government Innovation Fund is working to strengthen the ecosystem and has launched several initiatives aimed at connecting the community. Additionally, there are also three business accelerators capable of investing in startups. Another initiative is the MKstartups Space – a first entrepreneurial community center in the country. According to representatives of the Fund, the center aims to become a kind of home for the startup community and bring together all players in the Macedonian ecosystem under one roof.
Yet alongside talent, community efforts, and supportive administration, capital is another ingredient of a functioning startup and innovation ecosystem.
The challenges: startups need capital
One of the initiatives of the Innovation Fund is co-financing subsidies for projects that are in the proof of concept phase, up to the marketing phase. Yet, besides regionally active South Central Ventures, there are still no dedicated venture capital funds in the country.
“It’s only recently that the European Bank for Reconstruction and Development got involved in this whole thing, with a program dedicated to the early development of startups. So there are advantages to starting this region, but also disadvantages,” believes business consultant Igor Izotov. “While many, myself included, would say there is money in the state, I would mention the Innovation Fund here – but that money is not ‘smart’. It’s not about opening new markets, or opening doors to new businesses, or bringing in advice from people who have been down this road. Money will allow you to create such a product, but will not sell it to you. » adds Izotov.
Other disadvantages are political instability, pollution and corruption. As for economic challenges, these would be linked to making smart investments and accessing markets, says Izotov.
However, the ecosystem is rather new and weak, and needs its successes and accumulated know-how to take the next step.
The next streaming and monetization hub?
Izotov further points out that even though most startups in the country have started creating a product, they are still not able to sell it properly. Currently, this is one of the biggest challenges Macedonian businesses face if they want to achieve rapid growth. According to business consultant Igor Izotov, some of the most suitable areas for starting a business in the country include software industries such as video streaming and monetization, lead generation software, and mobile application development.
“There are already successful startups working in these sectors, and if we were smart, we would make some kind of consolidation and devote all available resources in this direction,” comments entrepreneur Igor Izotov. And shares a vision: “If Malta can become an “e-gaming island”, why shouldn’t Macedonia be the country of live streaming and video monetization?