Over the past few months, while on what I would loosely call a sabbatical, I’ve had the opportunity to explore a few up and coming entrepreneurial ecosystems around the globe. So I thought this would be a good opportunity to share some of what I’ve learned on my travels as it pertains to two of my favorite topics, startups and local economies.

For simplicity’s sake, I have examined my experiences through the lens of what I believe is (at least part of) a core foundation of successful startup ecosystems. This includes five key indicators of vibrancy and success:

Workforce Capacity : Is there adequate human capacity and manpower to drive innovation and entrepreneurial activity? Can it be competitive on a regional or global scale?

: Is there adequate human capacity and manpower to drive innovation and entrepreneurial activity? Can it be competitive on a regional or global scale? Access to Capital : What is the investment climate in the region? Are startups getting funded and, if so, by whom and to what degree?

: What is the investment climate in the region? Are startups getting funded and, if so, by whom and to what degree? Infrastructure: What entrepreneurial infrastructure is available? Are there seed funds, accelerator programs, incubators, collaborative workspaces, events, meetups, etc?

What entrepreneurial infrastructure is available? Are there seed funds, accelerator programs, incubators, collaborative workspaces, events, meetups, etc? Startup Culture: Is there an interest or desire to build scalable ventures? Does the workforce have an entrepreneurial mindset? What is the awareness and visibility of startups in the region?

Is there an interest or desire to build scalable ventures? Does the workforce have an entrepreneurial mindset? What is the awareness and visibility of startups in the region? Success Stories: Are there any startup success stories? Any exits or IPOs? Any startup heroes that are committed to the next generation?

With these indicators in mind, I’d like to share my limited experience in three fledgling startup ecosystems: Macedonia (Skopje), Bulgaria (Sofia), and Thailand (Bangkok).

MACEDONIA (3.4 out of 10)

This small Balkan country was the first stop on my journey. I’ve gotten to know Macedonia quite well over the past three years through friendships, business partnerships, and the acquisition of one of my businesses. So I should caveat that I am a bit biased and bullish in my belief of the country’s potential. To me Macedonia is the classic “blank canvas” of technology innovation.

As one of the poorest countries in Europe, this small landlocked nation (population 2 million) has all the classic challenges one might imagine: unemployment, low wages, no notable exports, and an increasingly growing “brain drain”. But on the flip side, it has excellent post-secondary education (particularly in engineering & science), a low cost of living, and a youth culture that reflects US and European tastes far greater than previous generations.

As one of my favorite Macedonian entrepreneurs, Teddy Pejoski, CEO of Skopje-based boutique code shop, GSIX (www.gsix.me) once told me, Macedonia is rich with potential and talent. Macedonia’s biggest challenges are keeping that talent at home, having a government that creates an enabling business environment, and fostering culture of startup entrepreneurship through proven successes in the local market.

Workforce Capacity (7/10)

At first glance, this tiny country may not seem to have much to offer. But digging a little deeper, you will see that there is virtually a software developer on every block. Tech talent in Macedonia is strong and, with comparably low wages (median salary for senior engineer is approx. $1000/mo), there is great opportunity to be competitive on a global scale. However, entrepreneurial education is almost non-existent and an “old world” way of doing business still seems to dominate the landscape.

Access to Capital (2/10)

Access to capital in Macedonia is virtually non existent. The government has not caught the startup fever yet and there is not a VC to be found. The few angel investors that exist are relatively unsophisticated and largely risk averse while lending opportunities (mostly from banks) are borderline exploitative. And in the few cases where startups have managed to raise some capital, it came from other parts of Europe such a Slovenia, Switzerland, or Sweden.

Infrastructure (3/10)

Although there are a few co-working spaces popping up around Skopje and a growing number of tech meetups and events around town, longer-term sustainable entrepreneurial infrastructure is still severely lacking in Macedonia. There are no legitimate startup accelerators, no incubation programs of note, and nothing in place to help nascent entrepreneurs take those first steps toward starting up. So for interested investors, I see this as the next great step (and opportunity) to tap into the tremendous capacities of this young ecosystem.

Startup Culture (3/10)

Perhaps a testament to its not-so-distant communist past, the entrepreneurial mindset is not very strong in Macedonia. Although more and more young people are looking toward Berlin, Boston, and the Bay Area for inspiration, the majority of the workforce still strive for stability, consistent income, and low-risk living.

Success Stories (2/10)

Outside of a few copycat internet businesses like obvious Groupon clone, Grouper (www.grouper.mk), there are few, if any, startup success stories in Macedonia. So when US-based entrepreneurs like Ilir Sela (a Macedonian who grew up in Staten Island) raises $15m for his startup, Slice (www.slicelife.com), folks start to take notice (especially now that they’ve hired 250+ Macedonian developers for their offshore operations). But until Macedonia experiences a true success story where exited founders become local investors, it will have a tough time building committed support for the local startup scene.

BULGARIA (5.6 out of 10)

To me, Bulgaria is a nation of paradox. Quickly emerging from its communist past to full membership into the European Union, Bulgaria is no longer what much of Western Europe imagines it to be. And although there is still a high level of poverty, a vast urban-rural divide, and some serious environmental concerns that need to be addressed, cities like Sofia are beginning to more closely resemble a modern European city than a former Eastern Bloc outpost.

While Bulgaria still remains heavily reliant on primary production sectors such as agriculture and energy, there is a growing science and technology industry that is helping to drive growth and to a certain extent, exports. And although entrance into the European Union has undoubtedly fostered a brain drain of talent to the West, there are an increasing number of investors and entrepreneurs returning to their homeland to begin building their local innovation economies.

Speaking with local entrepreneur/investor, Dilyan Dimitrov, one of the visionaries behind local startup factory, Eleven Ventures (www.11.me), I learned that many of the pieces of a vibrant Bulgarian startup community are now in place (largely thanks to Eleven’s EU-backed investment and acceleration of dozens of startups). However, the Bulgarian ecosystem is still challenged by a loss of talent to other EU countries, a lack of mid- and late-stage investment capital, and a global unfamiliarity with Bulgaria as a hub of startup activity.

Workforce Capacity (6/10)

Like Macedonia, Bulgaria has strong STEM education and a healthy workforce of investors, engineers, and software developers. However, entrance into the EU has meant many have left their homeland for greener pastures (and higher wages) in Western Europe. But enough have remained at home to grow a healthy tech outsourcing industry, which means that some of the pieces are in places to convert current employees into future startup entrepreneurs.

Access to Capital (5/10)

Thanks to programs like Eleven and LaunchHub Ventures (www.launchub.vc), there is a decent amount of seed capital floating around Bulgaria. But the proverbial buck seems to stop there. Bulgaria is severely lacking growth capital and, as a result, Series A funding tends to come from other parts of Europe, luring talent west in the process. Until the investment stack evolves to cover the needs of growth-stage startups, Bulgaria will remain at risk of losing the economic benefits of the innovations they produce.

Infrastructure (7/10)

I was surprised at the amount of startup infrastructure in Sofia. There are numerous, high-quality co-working spaces, plenty of weekly startup events/activities, and even a Global Accelerator Network (a spinoff of TechStars) startup accelerator. With the seed funding opportunities already in place and a growing commitment from government to enable startup growth, many of the pieces are there. But like any ecosystem, a few missing links are enough to stall growth. And in the case with Bulgaria, a general lack of access to growth capital, not enough high-quality mentorship, and limited international market linkages keep the Bulgarian startup ecosystem in a somewhat stalled position.

Startup Culture (7/10)

Startup culture in Bulgaria is pretty strong. There are lots of homegrown, if not copycat, technology companies serving local markets. Need to crowdsource a taxi, find local events, buy a bus ticket, or market your small business? You’ll find a Bulgarian startup to serve you. You may even run into a Bulgarian startup from abroad if you are an online advertiser, veterinarian, or software developer. But since Bulgaria’s EU membership provides such a lucrative “Plan B” for tech talent head west, there seems to be a lack of long-term commitment from startupreneurs to execute their vision when the going gets tough.

Success Stories (3/10)

Perhaps the most successful Bulgarian startup to date is pCloud (www.pcloud.com), a cloud storage startup with over $3m in Series A funding. And there are certainly plenty of successful entrepreneurs across the globe with Bulgarian roots. But to date, there have been no major acquisitions or exits that have proven to the local ecosystem that scalable growth and global success are possible. But with the growing number of startups forming every day in Bulgaria, I would venture to say that Bulgaria is only a matter of a few years away from a recognizable win.

THAILAND (6.4 out of 10)

As I am currently writing this from a small coworking space here in Bangkok, Thailand’s startups are definitely most front of mind. Within the past few days, I’ve had the opportunity to speak at a Lean Startup event at Stamford International University and meet/mentor four local startups poised for market entry and/or growth. But like the other communities I’ve visited recently, Thailand is not quite ready to take a the leap onto the global stage.

As in Eastern Europe, Thailand has no shortage technical talent, with a large number of college graduates entering the engineering and IT workforce. And with a growing ASEAN economy and a rising population base of 70 million, Thailand has national/regional markets that can drive business success on their own. Add the low cost of living, relatively high quality of life, and hospitable culture (did I mention the food?), it is no surprise that a large number of expats are relocating to Thailand to build or launch their ventures. Yet Thailand remains a developing country with high rates of unemployment, limited opportunities for upward mobility, and a poverty rate that continues to inhibit growth.

Recently I had the opportunity to meet with Pavel Laletin, cofounder and GP in local startup factory TechGrind (www.techgrind.asia). He and his partner, Efraim Pettersson Ivener, are ecosystem builders and visionaries in the truest sense, having built a nearly full stack of startup services in Bangkok that includes a workspace, incubator, angel network, and venture fund. But from their experience and what I have witnessed, startup activity in the region still seems to be dominated by expat founders and foreign capital, with a lack of homegrown startupreneurs and very few sophisticated Thai early-stage investors.

Workforce Capacity (7/10)

Like its Eastern European counterparts, Thailand has no shortage of STEM graduates and therefore, tech talent. Thai wages remain comparably low and technology product awareness is quite high, largely due to access to low-cost technology (i.e. smartphone usage) and internet bandwidth. However, there still remains a strong language and cultural barrier that prevents the Thai workforce from competing on a global scale. And although I am unsure these barriers will ever be effectively overcome, the ASEAN market is large and powerful enough to create western-scale successes at a regional level.

Access to Capital (7/10)

There seems to be a major shortage of seed capital for startups in Thailand with most businesses destined to bootstrap far longer than they would be in other parts of the world. And while that undoubtedly helps foster resilient and tenacious entrepreneurs, it also leads to slow movement and inefficiency when it comes to market entry and customer acquisition. However, mid- and later-stage capital in Thailand is on the rise, with the Thai Venture Capital Association (www.tvca.or.th) launching a $570m fund last year and CVC Capital Partners (www.cvc.com) just recently opening up $250m to the ecosystem. As a result, the median value of investment deals has spiked from less than $60k in 2012 to over $1.1m in 2016. So the times they are a’changing in the Land of Smiles.

Infrastructure (6/10)

Subtract the ridiculous number of newly-formed co-working spaces across Bangkok and there is little entrepreneurial infrastructure in place to support to local startup ecosystem. And while organizations like TechGrind and corporates (like Telekom giant AIS) are working hard to change this, the geographic size of Bangkok and its distributed population make it quite challenging to serve the thousands of engineers and entrepreneurs spread across the megacity. Events appear to be infrequent with low attendance, incubation/acceleration programs can be counted on a few fingers, and scalable entrepreneurship remains on the fringes of both formal and informal education. But it is only a matter of time before this changes, as exhibited by the current construction of True Digital Park, a 2 million square foot innovation hub in central Bangkok that is scheduled to open in early 2018.

Startup Culture (6/10)

While there is certainly a growing startup culture (combined with a long cultural history of small business and entrepreneurship), there have yet to be notable successes that are pushing young Thais into the realm of the startup unknown. Instead, startup culture in Thailand is gaining notoriety from the signifiant number of expats moving to Thailand to build their enterprises in an environment of lower costs (i.e. longer runway), good bandwidth, and a relatively sophisticated and early-adopting test market. With increasing infrastructure on the horizon and increasing local press about startup life, I foresee the entrepreneurial mindset of Thai youth growing exponentially in the coming years.

Success Stories (6/10)

In the past few years, there have been at least a dozen Thai companies raising capital in the tens of millions. So perhaps more success stories are on the horizon. But to date, the most notable acquisition of a startup in Thailand is Alibaba’s purchase of Lazada for $1B, (although I should note that Lazada’s headquarters are actually in Singapore). Smaller acquisitions of Thai businesses like One2Car (www.one2car.com), Computerlogy (www.computerlogy.com), and Tarad (www.tarad.com) will make headlines. But the first Thai-founded unicorn still seems like it is years away.





For those of you that found this little brain dump useful, or if any of you would like to learn more about these growing startup ecosystems in greater depth, I’d be happy to share both what and who I know with you, to the best of my abilities. Feel free to contact me via LinkedIn at www.linkedin.com/in/gerritmcgowan or via email at ecosystemsabroad@gmail.com.