During Global Entrepreneurship Week Turkey last fall, more than 250 registered entrepreneurship events were held in 37 cities. More than 120 of these events took place in Istanbul. As entrepreneurship continues to gain ground throughout Turkey, Istanbul remains an example to the region of how a handful of successful entrepreneurs and experts can change an ecosystem for the better.
There has been an increasing ‘buzz’ in Istanbul about the role of startups over the last couple of years. As a gateway between east and west with an estimated population of roughly 17 million and a dynamic marketplace featuring a well-educated young population and growing middle class, Istanbul has great potential to provide resources and success for entrepreneurs both domestically and regionally.
According to the 2013 Global Entrepreneurship Monitor Report results, opportunity-based (rather than necessity-based) entrepreneurship is increasing in Turkey. Istanbul has the highest rate in creation of opportunity-based entrepreneurs, with a rate of 81 percent, much higher than Turkey’s average at 67 percent.
It is clear that entrepreneurship interest in Istanbul is rising. Not only are the numbers of entrepreneurs themselves increasing, but also the number and variety of different players of the ecosystem. Investors, mentors, incubators, NGO’s, government institutions are all becoming more and more integrated to create a virtuous circle in Istanbul. Needless to say, this buzz is generating a huge role model for the other cities in Turkey and around the region to follow.
As of June 2014, Turkey boasted roughly 50 local VCs, 250 certified angel investors, nearly 20 incubators, 50 techno parks and around 10 technology transfer offices supported by both government and private sector funding nationwide, and Istanbul is a starting point for most of these initiatives.
One of the most essential needs of an ecosystem is for mentors. Endeavor recently embarked on a series of tech sector survey studies. Led by the Endeavor Insights Group, these studies explore the relationships across tech startups over time, tracking five fundamental behaviors: inspiration, mentorship, investment, startup work experience and serial entrepreneurship trends. The results demonstrate a very robust level of interaction in Turkey: First generation technology entrepreneurs are involved in 63 percent of the next generation of startup investments, 46 percent of these first generation investors serve as mentors while another 45 percent of them serve as board members for new companies in their investment portfolios.
Educational and government institutions have been the last movers to join the entrepreneurial wave sweeping through Turkey, although universities, incubators and accelerators are an exception. Institutions like the International Entrepreneurship Initiative (co-chair of GEW Turkey together with Endeavor Turkey) and Junior Achievement are working on projects to foster entrepreneurship among high school and university students throughout the year.
The Istanbul entrepreneurship ecosystem continues to demonstrate how a few successful entrepreneurs can make a big change. Hakan Bas for example, is an astounding young serial entrepreneur. He founded Peak Games, a company featured in Techcrunch as one of the most successful gaming companies in the world, with Sidar Sahin. The CEO of Lidyana.com since 2013, he has made numerous investments and produced Turkey’s first 3D animation movie, as well as been featured in Forbes’ young leaders lists several times.
The ecosystem has grown to an extent with limited support from the government, yet government backing has peaked in the last two years in very positive ways. The government is trying to make their contribution to the entrepreneurial community by organizing events like “Innovation Week,” a three-day event organized by the Turkish Exporters’ Association, during Global Entrepreneurship Week. The event hosted the famous physician Brian Cox and GEW Australia host Jeremy Liddle this year.
One of the biggest catalysts to supporting the ecosystem has been the Angel Investor Incentives bill passed by the government in 2012. With the establishment of certified angel investors and related tax incentives, entrepreneurs are now able to interact with a pool of angels, and the government is able to legitimize the transactions. As of June 2014, 194 of Turkey’s 250 angels are from Istanbul.
Hasan Aslanoba turned the ecosystem upside down last year thanks to his record-breaking investments. Even before the angel capital incentive program was announced, Aslanoba, the former CEO of Erikli Su and Nestle Water, singlehandedly doubled the amount of angel capital investments in Istanbul from 2013 to 2014 with his USD 38 million in angel investments in 39 startups. Now he is leading the charge to challenge other prominent family business owners to establish formal family investment offices, including an angel investment strategy, across the country.
In 2015, Turkey will chair the G20 summit, the premier forum for global economic cooperation, bringing together the world’s major economies. The B20 will be held at the margins of the G20 Summit November 14-15 during the opening weekend of Global Entrepreneurship Week, with the participation of the global CEOs of the companies involved in the B20 taskforces.
B20 Turkey has established a new taskforce named “SMEs and Entrepreneurship”, reflecting the importance of strengthening startup economies to the world economy. This taskforce’s first action item is setting up the World SME Forum - a permanent international institution. To be initiated by Union of Chambers of Turkey and International Chamber of Commerce, the forum will be legally established in Brussels and headquartered in Istanbul.
For more information about GEW Turkey’s activities for 2015 and ways to join the ecosystem, please visit the GEW Turkey website.