Startup Revolutions in Romania

On a December morning, 40 entrepreneurs arrived at an Italianate villa on the outskirts of Bucharest to launch the new frontier of European business. In three days they would found three companies, go up against European market leaders, challenge a domestic car part industry, gain the skills and contacts they need to shake up digital economy of Eastern Europe.

Romanian entrepreneurs are a different breed to the British attendees of the typical Launch48 Weekend. They’re more like digital frontiersmen, matching their skills against an immature digital market. Internet penetration is 37%, and just 2% of the Romanian population use ecommerce.

The entrepreneurs in the villa felt they weren’t getting much help from the government either. The convoluted tax environment is hardly friendly to young companies. “Just register your company in Bulgaria” suggested mentor Dragos Roua.

After all the attendees pitched their ideas, everyone gathered in teams around the three winners. InviteMe.ro wanted to manage wedding invitations. MapMyLife were to provide a mobile social network and coupon platform based on a map. Centrul do Piese (Parts Centre) would make it easier to source second-hand car parts in Romania.

As ever the Launch48 mentors – experienced entrepreneurs, digital businessmen and developers – were on hand to knock teams into shape. InviteMe.ro completed their competitor analysis by concluding that there wasn’t any in Romania. “But what if someone from abroad launched here?” a mentor asked, confused looks all round. They also made the capital mistake of overconfidence “…what do you mean you have too many people in your team?” demanded mentor Ian Broom “have you finished all your consumer research? What about your blog? Have you thought about legal problems?…”. No time for complacency at Launch48.

MapMyLife got stuck in a rut of “featuritis” to quote Andy Munarriz at the last London Launch48 Conference. When you have 48 hours to build a web app, you must decide on the core features early and stick to them. MapMyLife couldn’t decide whether to be a social network, a voucher platform or simply a way of pinning your favourite places to a map. To make it worse, a lot of good advice from the mentors pulled them in different directions. It’s easy to descend into infighting when this happens. The whole team nearly gave up and went home in frustration.

“Do what you want to do. Just forget the advice you don’t like, remember this is your company” said Ian

Centrul do Piese entered the first board meeting with a plan to manually check prices for car parts to order. The mentors pointed out that with hundreds of different car-part companies would make it a costly business to run. They struggled because the car-parts market in Romania is so fragmented. It’s difficult to build a digital business model on an antiquated, paper-based ordering infrastructure.

By the final presentations all three teams had leapfrogged their initial problems and built something far more impressive. InviteMe.ro had been galvanised by the mentor’s attack on their confidence, they ran a consumer survey campaign on assorted social media and received 320 responses within 48 hours. An astonishing amount of feedback made it easy to tailor their product to their target market, and in the process they had proved interest. InviteMe.ro had an alpha release of their invitations system ready at the end of the event. One of the team also worked for a company specialising in printing wedding invitations and they could leverage his knowledge of the industry.

MapMyLife managed to rationalise the functions in their demonstration app by the final presentation.

Centrul do Piese came very close to floundering in the mire of pre-digital distribution. But the mess they struggled with regarding their initial business model made them realise the true value of their product. All they needed to do was create a simple alternative to the complex systems already in place and they could disrupt an industry worth €1 billion, rather than the €10 million market they had initially aimed for.

All the teams learnt a lot from the mentors and the experience. They had proved it was possible to start a viable digital business in Romania, in just 48 hours! You would have been hard pressed to predict it 24-hours in, but remarkably every team intended to continue their startup project after the final presentations held at the Netcamp conference in front of 250 people.

Although Centrul do Piese realised their true potential fairly late, it was clear they’d caught onto something very big. They were still jumping up and down in excitement as we caught a ride to the airport.

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