Is More Always a Good Thing?
In autumn 2021, 10 different startup support programs happened in Albania simultaneously. We have analyzed whether more programs are a good thing in this case.
In the autumn of 2021, something extraordinary happened in the entrepreneurial ecosystem in Albania: ten different startup support programs were rolled out simultaneously.
Only three years ago, we were happy to report on one of the first-ever acceleration programs happening in Albania: the Uplift program. The program's first cohort started in September 2019 and culminated with the big Demo Day in January 2020. The significance of this program was massive. It completely changed the paradigm for all ecosystem actors willing to support startups in a meaningful way, setting the bar very high.
Now, only three years later, we're facing an entirely different landscape in the Albanian entrepreneurial ecosystem. Not just one or two, but ten different startup support programs are happening at the same time.
Such a development can be interpreted in many different ways. Still, for us at Swiss EP, with a development mission to facilitate the strengthening of emerging entrepreneurial ecosystems, this situation can mean only one thing: Albania's entrepreneurial ecosystem is growing rapidly.
But is such rapid growth a good thing? Let's consider some facts.
1. Most of the programs are addressing needs of idea-stage startups
The large majority of programs addressed the needs of entrepreneurs in the awareness, idea- and very early-stage of their development. Such teams are fairly easy to locate and support. While anyone with the business idea can start the program, only a few graduates will be qualified to continue developing their businesses to more relevant phases. In fact, the large majority of them will fail, according to global statistics.
Programs working in this area are:
- Tirana Inc program—for university students implemented by 6 Albanian universities with the support of Preneurz Amsterdam,
- JUP—by Junior Achievement Albania for high school students,
- IDEA Albania—an entrepreneurship program,
- Flexible Startup Support—set in the city of Durres and implemented by Oficina and Innovation Nest,
- Mindspace University-Balkan Ties—program by The Ivanaj Foundation also with a focus on university students, and
- Rise an entrepreneurship—training program by Yunus Social Business.
Still, the consistent existence of such programs is crucial for building a sustainable entrepreneurial ecosystem. They provide a constant flow of new founders and startups who can move on to the following stages of the entrepreneurial journey.
2. Tailor-made support for scaling startups
Startups who make their ideas into a reality and make it to find their way to the market are the ones who can scale in many different aspects. Some of the programs happening in Albania in autumn 2021 address their needs, offering education and funding at the end of the process.
Programs operating in this space are:
- Biz Growth Design program—implemented by Board of Innovation (Belgium),
- Uplift Accelerator—implemented by ICTMedia Labs with the support of SlovakAid,
- GROWpreneur—implemented by Yunus Social Business and
- TechBoost—a regional pre-acceleration and acceleration program implemented by Destil in Albania.
It is natural to expect fewer programs in this space given the number of startups who can benefit. Some programs are regional, so additional benefits such as networking and peer learning could be even more significant to startup founders.
3. Programs are funded mainly by international donors
Looking at the funding sources of the programs, we find that except for JUP (funded by the Albanian American Development Fund) and the Mindspace University-Balkan Ties program, the other eight programs are financed by international donor programs. The EU for Innovation (EU4I) program is leading the way offering financial support to 5 programs: GROWpreneur, Tirana Inc, Biz Growth Design, Flexible Startup Support, and Uplift Accelerator.
While support from international donors is largely positive, particularly compared to a few years ago when we had few or no startup support programs, it should be handled with care. Currently, the international donor community is a primary supplier and motivator for organizations to do startup support programs. This is perfectly normal at an early stage of development in an ecosystem in a transitional country. But, at some point the national government should step up and fund programs. As things stand now, there is a risk of developing a strong dependency on the international donor community.
Support programs should have regular cycles to be effective. Knowing that donor initiatives have a short life span, they are not the most reliable funding source. Still, they can be a good vehicle for startup support organizations to build a portfolio and case studies that might attract more relevant and versatile funding stakeholders in the future.
4. Organizers are gaining valuable experience
Since startup support programs in Albania were not common in the past, the wave of 10 programs in 2021 brought a valuable learning opportunity for local startup support organizations who gained experience in program management, organization, and facilitation.
Through collaboration with the international donor community, these organizations can prepare to work with VCs, corporates, and public sources who usually fund acceleration programs in more mature entrepreneurial ecosystems.
Finally, is more programs a good thing in this case?
We don't have a straight answer at the moment. While we see many benefits to the current situation, as we explained above, there is also a risk that this is a one-time spree that will never happen again. As local community actors benefit from this unique chance to learn, gain experience, and explore different directions, we can only hope that some of them will put it to good use, and trigger a priceless transformation for the entire ecosystem.