Startups mainly active in the technology sector have become more popular since the beginning of the previous decade. On the one hand, the economic crisis led to the shrinkage or collapse of many traditional businesses in the country and left many Greeks looking for new employment options.On the other hand, technological changes have had a catalytic effect on more and more markets internationally and presented a number of important opportunities. The great success stories of companies worldwide that “started from a garage” and evolved into giants like Google, formed not only a business environment but a broader culture, an “ecosystem.”
How have Startups evolved in Greece? Leveraging information from startupper.gr, the new survey of diaNEOsis, under the scientific supervision of Professor Emerita at the Athens University of Economics and Business, Ioanna Sapfo Pepelasis, and carried out by the consulting company Octane, attempts to map the Greek Startups and the ecosystem that supports them.The researchers looked at the literature, did 14 interviews with influential executives of the local market, while at the same time they highlighted typical examples of other countries, isolating initiatives that Greece could adopt in order to develop this market in a healthy way even more.
The profile of Startup founders – How old are they and what have they studied?
At the same time, they prepared a questionnaire to which 267 Startup founders responded, gathering useful information about the profile of these companies, the founders, the problems and risks they face, even about the impact of the pandemic on their activity, information that has not been available until recently.
Among the founders of Startups who responded to the survey, the vast majority – 8 out of 10 – are men, an inequality that is also observed in the rest of the European countries, which have, on average, a corresponding distribution among the sexes. From an age perspective, Startup founders are relatively young: 9 out of 10 are younger than 44 years old, while over 50% are under 34 years old, usually quite educated since 48.7% have a master’s degree and 17.2% a PhD, while most of them declare studies either at a Polytechnic school or at a business administration school, and 68.2% have as a full-time job their Startup.
24% have little (up to 3 years) or no experience. Three out of 10 founders who responded to the survey are more or less more experienced, with 4 to 10 years of experience, while 22.8% of founders said they have significant work experience, over 15 years. Of course, although it appears from the above data that most of the respondents have some experience, the majority (62.5%) stated that they had no previous experience in managing a Startup.
In any case, many of the founders who responded to the survey – almost 4 out of 10 – stated that their experience concerns a job with a “neutral to non-existent” relationship with the subject of their Startup. Several of them, 22.5%, say they have had at least one failed business venture in the past. These are, therefore, entrepreneurs who took a significant risk: many had little or no experience, often in unrelated subjects, while some “carried” the burden of one or more failed attempts.
Also interesting are the differences in the profile of the founders depending on whether they operate at home or abroad.As the researchers note, “the Startupper who has founded and operates the company abroad has different characteristics from the one that operates in the Region of Greece”. The Startup founder abroad is often older (35-44 years old, compared to 25-34 years old), has more work experience (4-10 years vs. 0-3), but also additional experience in managerial positions (1-5 years vs. 0-1).
When and where the Greek Startups were founded, their size and “gender”
The year in which most Startups were founded (almost 2 out of 10) compared to the rest of the years, was 2018. The vast majority of the Startups in the sample, that is 93%, were founded in the period 2013-2020, with more than half of them having been established in Athens. The next choice of the founders (15.4%) was a European city, followed by Thessaloniki (12.7%), Patras (4.5%), the USA and Heraklion (3%)
Next, by measuring their size, a large majority (76.4%) are micro-enterprises with up to 10 employees. Less than 3% employ more than 50 people and usually appear to be collaborative schemes. 48.3% of the companies had two founders, 19.9% three, while 13.9% had more than three. Only 18% had a founder. Almost 1 in 3 say they drafted their business plan with a mentor. However, the founders’ teams are in their majority male-dominated: 62.2% are made up of men only, while only 6.4% are made up of women alone.
In which fields are Startups active? The sector in which most people operate is tourism. As is probably to be expected, a large proportion of these companies, almost 1 in 10, are active in information and communication technology (ICT), while the corresponding percentage is also involved in agri-food and life and health sciences (8.6%). Abroad, of course, the ICT sectors come first, followed by tourism and agri-food.
Concerns and opportunities – The challenges that domestic Startups face
But what does the product of Greek Startups look like? 87.5% of companies include the use of digital technology as the original idea, while 38.6% have a purely digital idea. Fewer have a “natural” idea that uses digital technology (26.6%) or, conversely, a digital idea with a partial physical presence (22.5%).Only 12.4% follow the traditional, purely natural model. In any case, it seems that the vast majority of Startups in the survey, about 7 out of 10, had to readjust the original idea, one or more times. In fact, 19.5% did so more than twice. In addition, Startups are, by the majority, an extrovert activity: 63.7% say they target international customers and only 36.3% domestic ones. However, 1 in 3 say their biggest problem is lack of experience in attracting international customers.
Almost half of the Startups in the sample began their activity with very low capital, from zero to 10,000 euros. Only one in five (21.7%) started with a capital of more than 50,000 euros. 35.2% of these companies today declare themselves profitable, while about half (47.9%) say they are not profitable at this conjuncture.Regarding the biggest challenges they face for their future, the founders stand out more than any other in their expansion potential (22.8%), followed by staffing (19.1%), competition (16.9%), and the availability of funding (15%). Among possible changes that would improve their activity, the founders of the sample choose more than any other, the “modification of the insurance and tax framework” (79.8%).
Although the pandemic did not create for the Startups the problems it created for other businesses (8 out of 10 founders say they implemented teleworking), overall the impact it had was rather mixed. About half of the founders pointed out in the survey that the Covid-19 pandemic has negatively affected the course of their business. 28.5% of founders believe that the pandemic had (partially or absolutely) a positive impact on the development of their company, while 22.8% said it had no effect.
The survey of diaNEOsis, in order to highlight the opportunities for the local economy from the development of Startups, frames the above findings with data from previous surveys that had been carried out, but also from the newly established Startup Registry (Elevate Greece) of the General Secretariat for Research and Technology.These sources show that Startups employees are paid fairly competitive salaries, while 4 out of 10 also receive shares of the company as part of their benefits, plus that in 2021 the top 10 Greek Startups raised four times the amount of funding they received from the corresponding 10 top of 2020, amounting to approximately 398 million euros.
At the same time, the survey lists some operational practices implemented by ten countries (9 European and Israel), explaining in detail the tax incentives given to investors by the UK, the policies to attract investors to Israel, the creation of a university-independent research centre in Germany, the attraction of companies to test an original product in the Netherlands, the incentives to attract talent introduced by Estonia, Ireland’s digital public services, as well as the renewal of entrepreneurship centres in Italy’s universities. Finally, the study concludes with policy proposals for the further development of Greek Startups, but also in a guide with many sources of information for the would-be founders of such enterprises.
The idea of Startups seems to fit into the characteristics of the Greek economy, as they gather characteristics, among others, that are required for the evolution of the Greek production model, leveraging specialized knowledge, and concern sectors in great growth internationally. Therefore, from this perspective, their healthy development seems to be an important and broader economic opportunity for the country and for the culture of local businesses.
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