Disrupter profiles: Exploring Istanbul’s ecosystem with Cagdas Onen
On my recent trip to learn about the startup scene in Istanbul, I knew that I would have to cover a lot of ground in a generally underdeveloped market. With only four days to work with, I sought out how to meet with some of the most influential players driving local startups from their early stages with hopes of making it to the international landscape. Luckily, I had the good fortune to be connected with Cagdas Onen, my guide to the Turkish ecosystem.
During my trip, Onen succeeded in arranging meetings with some of the city’s most interesting startups at the Koç University Incubator Center as well as with Galata Business Angels’ managing director, Ayse Inal.
Coming from a background in international hi-tech marketing, Onen is intimately familiar with many of the local Turkish startups as well as the bigger global players from across world. For Onen, working with local startups is a part of his wider vision to help grow his country’s ecosystem and build a flourishing tech sector for the still young cadre of Turkish companies.
Onen defines his role in nurturing the local sector, calling himself an International Startup Catalyst. Citing the two goals that drive his work, he says that his aim is to first and foremost help Turkish startups scale their businesses to an international level through his network. The second goal, which can be a real challenge in Turkey, is to help investors find good local startups that match their investment portfolios and strategies.
He has opened Onen Consultancy as the public face of his mission to kick Turkish startups into gear.
Big picture thinking – taking startups to the international stage
In gauging the level of Turkey’s budding startup community, one could fairly assess that it is still going through its growing pains. With a pool of young and motivated talent and support from the universities and government, many of the resources necessary for an ecosystem to blossom would appear to be in place. That said, there are many obstacles that must be overcome as it matures.
Since beginning to work with Turkey’s startups, Onen has understood that their best hope of becoming successful in the long run is to take their operations to the much larger international market.
Onen notes that there are definite challenges for companies working solely within the Turkish arena. He points to the fact that, “The market here is not sufficient to support these companies in the long run. As more competition for these companies arise locally, they will need to look elsewhere to expand,” adding that in a constricted market, capital is far from easy to come by.
This second point is a sticky issue for the Turkish scene, where finding significant funding can be difficult for many companies. While places like the United States and Israel have a thriving startup investment scene, Turkish investors are still more skittish about putting their money into a sector that is far less tangible and the chances for success slim.
Onen says that, “From the investor’s point of view, the system here is also growing. But for them to gain confidence in becoming involved in this market, they will need to see more examples of successful exits from the local Turkish companies.”
However getting to that point where the local scene can produce this chain of initial successful exits is likely to take time. As for a road map of how to reach those goals, he says that, “There is an essential need to look for accelerators and investors in other places that can help these companies to grow and thrive. I feel that the Turkish companies need to first develop themselves in the domestic market, but then have the capability to take their products to the international scale. These confidence building measures are critical for the long-term success. It’s from this point of view that I started to work with the local startups.”
Looking abroad for new opportunities and partnerships
One of the key ways that Onen thinks is essential to helping Turkish startups expand is that of international synergy. In searching for partners that could play a role in pushing these companies in the right direction, Onen looked to nearby Israel for inspiration. He says that, “After my first visit to Israel, I started giving talks about the need for international synergy between Israel and Turkey, based on an entrepreneurial cooperation and shared aspirations.”
Since that first trip, he has set his sights on building a bridge between the two countries, one he hopes will be mutually beneficial over the long run. Onen has visited Israel three times, including for the recent DLD convention. He notes that his visits are always short and has not yet had the time to make it out for a tour around Jerusalem.
Describing his work in making connections, he says that, “The first step I took was to hold an event in Tel Aviv this past March with partners from Samurai House and Gvahim’s the Hive. I took with me a delegation of eight Turkish people, including three startups, the managing director of an accelerator, and an angel investor.”
The aim of that trip he explains was to allow Turkish startups to interact and network with the Israeli startups, and to pitch their ideas to a panel of judges with the hope of receiving funding.
“While they didn’t win, it was an important experience for them to present in front of the Japanese and Israeli judges,” he says. “Since then, I’ve been working to help Turkish and Israeli startups to help both sides discover mutually beneficial opportunities.”
Looking to the future on a practical level, Onen recognizes that both countries have different advantages that they bring to the relationship. “In general, I think that Israel and Turkey can help each other in the following ways,” he says, pointing to the technology transfer approach.
“Israeli hi-tech companies can do business here and help the local companies to develop,” Onen says, before explaining that, “Meanwhile, Turkey can help provide a much wider market for Israeli companies, both domestically as well as to other markets that might not have been previously available.”
Turkey he says can be used as a test market for Israeli startups before they launch to the rest of the world.
He also cites the possibilities for investors on both sides where they can cooperate for joint investments.
The importance of realistic planning for going international
While Onen fully believes that the future of these startups is dependent on taking their businesses international, he notes that entrepreneurs often singularly focus their sights directly on Silicon Valley. For many of them, however, this can be a mistake. First, they are not yet in a position where they can run with the league there, often lacking the necessary infrastructure and experience.
Second, they ignore alternate possibilities in other international cities. He points specifically to Vancouver where a number of startups have begun opening up shop, gaining the attention of the Valley. In some instances, these companies can use such smaller cities to gain a foothold in the industry and then make their leap to the majors when they are truly ready.
Facing the challenges head on
While developing expanded cooperation between the Israeli and Turkish ecosystems has many potential benefits, the current relationship has been fraught with tensions in recent years. Onen says that, “The political environment can create a negative perception for the business community. While they don’t necessarily care about the politics, it can affect their decision making.”
It is worth mentioning that traditional trade between Israel and Turkey has remained strong despite the public disputes, but some in the fledgling tech sector have expressed their concerns about entering into any political minefields.
However, Onen is optimistic and believes that both sides need to get a better personal understanding of the other by actually flying out for visits, explaining that, “We are located very close to each other and this can go a long way in increasing our cooperation.”
In looking to the future, Onen states that the long-term goal is to establish a healthy bridge and see more of these startups doing business with each other. He hopes that as the connections continue to grow, he would like to see projects like the establishment of a joint investment fund that can support projects in both countries.
Back now in Istanbul, Onen is already hard at work on a new opportunity that he is optimistic will emerge as an exciting B2B venture. “During DLD Tel Aviv, I made additional connections and found new opportunities to create the bridge between Turkey and Israel. I can easily say that I am going to be bringing more Turkish startups so that they can also experience the Startup Nation concept from its source.”
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