Thursday, August 8, 2013

Startups Gets Zen-like....

“Krakow is to Berlin what yin is to yang” – inside Poland’s tech talent stronghold


In Krakow, one of several cities vying for Poland’s startup hub crown, tech talent outweighs business brains. Clarissa Steinhöfel, from Berlin, fills us in…

What surprised me about Krakow is that it’s easier to hire an experienced developer over there, rather than a business-savvy entrepreneur who understands technology. Quite the opposite to Berlin: arriving in Krakow for the first time, for Krakow Startup Safary, my first impression of the startup world there was one thing above all – that there is a lot of human capital around when it comes to technical talent.

During the event, I asked entrepreneurs, CEOs and developers alike about Krakow’s qualities as a startup hub.

Krakow’s tech guns for hire

Krakow Startup Safary took a peek inside the headquarters of four successful companies in Krakow, including Ganymede – a leading social gaming developer in Poland that has been around since 2004.

Ganymede CEO Marek Wylon described the biggest advantage of founding a company in Krakow as the huge amount of specialists available for hire as well as the 300,000 graduates from renowned IT universities. Quaint and small as it is, Krakow is home to some very reputable technical universities that sprout many of the skilled developers in Poland. (Wylon cited the former CEO of FiveOneNine Games and former General Manager of Playdom Lloyd Melnik’s blog post to corroborate his opinion.)

Krakow’s pool of talented Flash programmers, with similar design sensibilities to the US and western Europe, is among the reasons why Melnik considers Krakow to be a great source for social game development and acquisitions. He argued that as the sixth largest economy in Europe with 38 million inhabitants – and the only country that managed to dodge a decline in GDP after the financial crisis – Poland is a market worth focusing on.

Business-savvy co-founders – a rare commodity

On the way to DuckieDeck’s office, a company developing educational games for pre-schoolers and toddlers, I had the chance to talk to other participants and ask them about their take on Krakow’s ecosystem. Most told me that while they have no trouble finding fellow developers, it is harder to find co-founders to start a company with.

This may be the biggest difference between Berlin and Krakow. While Berlin has plenty of business-savvy entrepreneurs and experienced marketing experts, there is definitely no abundance of developers to choose from. In a sense, Krakow is to Berlin what yin is to yang. Even Google seems to have come to this realisation: although their marketing and sales departments are located in the capital, Warsaw, the technical development centres are headquartered in Krakow. IBM, Motorola and Comarch also have also located their development centres there.

Building the startup scene in Krakow

Ela Madej, the CEO of Rainbows & Unicorns (makers of Credictive), remarked that although the ecosystem was non-existent when she co-founded her first company, Applicake, with a group of IT students, the fact that Startup Safary visited Applicake’s office shows that the scene is evolving steadily.

In an effort to build up the community in Krakow, Ela (left) co-founded and runs Hive53 with Piotr Nedzinski. Hive53, which hosts a series of meetups for people with entrepreneurial drive, recognises the value of an international perspective and makes it a point to feature talks by entrepreneurs with substantial global experience.

Notable past speakers at Hive52 include Mike Butcher, European Editor of TechCrunch, and Vincent Vergonjeanne, former CEO & Co-Founder of Kobojo, who just moved to Krakow and is founding his next startup there.

Apart from Hive53, more and more networking events are accommodating the growing need for the startup community to gather, exchange ideas, network and learn from each other.

Krakow’s VCs – Satus Ventures and Innovation Nest

Investments in Krakow’s steadily developing ecosystem happen on an occasional basis. There are two important players in terms of VC funds in Krakow. One of them, Satus Ventures, invested in DuckieDeck and has 50 million PLN of committed capital (around 12 million of which is EU funding).

Another big player is Innovation Nest, which recently invested in iTraff (image recognition technology for mobile devices) and UXPin (a UX tool developer). The leading investor and CEO of Innovation Nest is Piotr Wilam, one of the most experienced tech and web entrepreneurs in Poland, who recently invested in 500 Startups, the accelerator founded in 2010 by prominent Silicon Valley angel investor Dave McClure.

There are also investments coming from outside of Poland – Berlin’s Point Nine Capital invested in Brainly, a social learning website that is expanding steadily and currently targeting 17 countries.

Krakow has yet to witness a big exit from someone who has achieved international success. But while there is no clear candidate in Poland in terms of startup hubs, Krakow is in the running to win the race.

This is a repost of a report filed on the Venture Village website on January 14, 2013

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