With a first unicorn under its belt, multiple exits, a growing pool of experienced venture capital funds, the high quality research institution INSAIT, Bulgaria shines as one of the more mature innovation ecosystems in Central and Eastern Europe. The country aims to further improve the legal framework for innovative businesses to thrive by attracting talents from abroad, allowing pension funds to invest in venture capital, incentivizing angel investments, upgrading local laws to make them more friendly for startup businesses, increasing funding for R&D, and establishing specialized funds.
And yet Bulgaria is far from the North Star goal to become an innovation-driven economy and be globally recognized as a tech startup powerhouse.
The Bulgarian innovation community recently gathered in Varna for the third edition of The Bridge event to create the roadmap for this long-term vision and ponder about how to design an environment for systemic success of entrepreneurs in the country. Also how can successful Bulgarian entrepreneurs pay forward by making Bulgaria globally visible as an innovation hub and how to engage the Bulgarian diaspora to contribute to this mission?
The gathering was organized by the non-profit organization Power of BG, the global community of Bulgarian entrepreneurs and innovators. The event gathered over 200 entrepreneurs, investors, ambassadors from the Bulgarian diaspora, ecosystem building organizations like Endeavor Bulgaria, and friends of Bulgaria representing important markets in MENA, US, and EU to fully channel the potential for business synergies and social impact.
Putting Bulgaria on the global map of innovation
In the last couple of years, Power of BG has grown from an informal gathering of entrepreneurs to an organization that aims to help create an ecosystem where every Bulgarian entrepreneur is equipped with the resources, support and access to build globally relevant ventures.
As Nikola Likov, Chairman of the Board at Power of BG, alongside Co-Chairman & Founder Todor Gigilev explained for The Recursive, on the one hand, Power of BG aims to promote entrepreneurship within Bulgaria, particularly among the younger generation. By spotlighting successful individuals who are making significant economic impact and creating jobs, the organization provides a platform for knowledge exchange and collective progression of the ecosystem.
On the other hand, Power of BG is tackling the challenge of scalability. Trust-building events like The Bridge in Varna are designed to foster an innovative and vibrant ecosystem that can compete on a global scale. Power of BG has already established a hub in the UK, with plans to expand into the USA and the Middle East. These international circles aim to provide reliable connections for Bulgarian entrepreneurs looking to expand into new markets.
However, as Power of BG continues to expand its reach and influence, the success of its mission will ultimately depend on its ability to effectively engage with the Bulgarian diaspora, attract international investors, and put Bulgaria on the global map as a crossroad of innovation in CEE.
Here are some key strategies that could help position technological advancement at the center of the country’s economy, as discussed at Power of BG’s The Bridge event.
Developing a strategic blueprint for innovation
A crucial strategy for driving innovation in Bulgaria involves creating a comprehensive blueprint that encompasses various stakeholders. This includes government bodies, financial institutions at all levels – from angel investors and seed funding to banking, EU funding, venture capital, private equity, and family offices. These entities play a pivotal role in investing in Research & Development and facilitating knowledge transfer.
Iskren Krusteff, Chairman at INCREDA.org and board member of Power of BG, proposed a model where universities, as sources of innovation, could retain a 10% profit share from the commercialization of their research. This approach, similar to NASA’s model, ensures that all players in the innovation chain are incentivized.
Krusteff also emphasized the importance of ‘cultural impactors’, like those within the Power of BG network, and supporting industries – telecoms, mentors, accountants, lawyers, and more – in propelling the ecosystem forward. All these stakeholders need to stay abreast of regulations to facilitate businesses’ seamless integration into the ecosystem.
Moreover, Krusteff highlighted the critical role of human capital in driving innovation. Universities, research centers, institutes, and labs are vital ‘human capital actors’ but he also mentioned that a policy should be in place to attract human capital to Bulgaria.
Lastly, Krusteff stressed the importance of reputation. The nation’s reputation is shaped not only within Bulgarian borders but also by how it is perceived in international markets. This involves individuals beyond Bulgaria’s boundaries promoting the country as a prime business destination, thus encouraging Bulgarians to return home. Creating a welcoming environment for those returning to Bulgaria is a key part of this strategy.
Driving innovation through education and research: the INSAIT strategy
Attracting the top world talent to Bulgaria is at the heart of the Institute for Computer Science, Artificial Intelligence, and Technology (INSAIT)’s mission. The Bulgarian version of MIT is not just an academic institution, but a strategic nerve-center and a breeding ground for deep tech innovation.
Martin Vechev, Founder and Architect of INSAIT explained their strategy to appeal to the brightest minds in the field of AI. It’s all about “Impact per unit”, he said, adding: “If you put your effort here in Bulgaria, you’ll be directly on stage. Your impact per unit of work will be the highest in the world. That’s what really matters.”
Vechev’s “Impact per unit” concept suggests that Bulgaria’s unique position could offer unparalleled opportunities for individuals to make a significant impact. This perspective could inspire a new generation of innovators and researchers to contribute to Bulgaria’s technological advancement, reinforcing the country’s commitment to becoming an innovation-driven economy.
Fostering audacious entrepreneurship
Another key change in the journey towards an innovation-driven economy, is the mindshift in entrepreneurs themselves.
Sim Simeonov, a seasoned founder, investor and startup advisor, living in the US, called for audacity in entrepreneurship, highlighting the need for a shift in mindset when it comes to setting goals and taking risks in business.
“The biggest problem I see in companies is the lack of crazy and big ideas. We shouldn’t set low and small goals because it’s challenging to climb initially. When we take smaller risks, we’re more prone to not achieve high enough goals.”, Simeonov stressed.
Balancing Simeonov’s call for audacity, Vassil Terziev, member of Power of BG, entrepreneur, angel investor, and startup mentor, reminded the audience of the importance of humility in one’s pursuits. Terziev’s message was a call to nurture a culture of respect, inclusivity, and collaboration within the ecosystem. He emphasized that success is not merely the result of individual brilliance but is also contingent on the support and cooperation of others within the Bulgarian ecosystem. This balance between audacity and humility could be a key factor in fostering a healthy and productive innovation ecosystem in Bulgaria.
Engaging the Bulgarian diaspora
The Bulgarian diaspora plays a crucial role in propelling the country towards an innovation-driven economy. Engaging these communities can provide valuable connections and networks that can help Bulgarian companies expand into international markets, but also improve the country’s image abroad.
An example of this strategy in action is the Bulgaria Innovation Hub, which has successfully positioned numerous Bulgarian companies on the U.S. market. The NGO, led by Pavlina Yanakieva and Ivan Dimov, demonstrates the potential of leveraging the diaspora for economic growth and innovation. With 47 companies already participating in their program, including companies like EnduroSat, Dronamics, SessionStack and AMPECO, the Bulgaria Innovation Hub serves as a model for diaspora engagement.
Success stories, such as that of Bulgarian Oscar-nominated actress Maria Bakalova, can also play a vital role in sparking innovation across all sectors. Bakalova, a world ambassador of Bulgaria in her field and a special guest at Power of BG event this year, highlighted the need for private-sector investments in the Bulgarian cultural ecosystem as well as the importance of the mindset and believing you can achieve global scale success even from a small market like Bulgaria.
These investments can provide much-needed capital, drive economic growth, and stimulate innovation. Moreover, she advocated for cultural exchange and interaction with global markets, particularly those in the US, as a way to broaden horizons and open new opportunities for Bulgarian startups, entrepreneurs, and creatives.
The role of business-focused media to drive economic and technological growth and connect the Bulgarian diaspora with their homeland was shared by Hristo Hristov, CEO of Darik Radio, Chairman of the Board at HR Capital and venture partner at Eleven Ventures.
What’s more, a diversified media landscape can prevent the concentration of power, ensure diverse opinions, and serve as a platform for sharing success stories and inspiring contributions to Bulgaria’s innovation journey.
What Bulgaria can learn from global ecosystems
The Power of BG The Bridge Event served also as inspiration for examples from other ecosystems Bulgaria can learn from.
The importance of a robust educational infrastructure was underscored by Alexander Vassilev, CEO of WeTransfer, who urged Bulgaria to reposition itself as a creator of high-value products. This shift can help the country move away from being seen merely as a low-cost alternative.
Competitive salaries are another crucial aspect, as highlighted by Dimitris Kalavros. He shared Greece’s strategy of establishing a government fund to support local talent, arguing that attractive salaries can help restore confidence in the ecosystem and lure talent back to the country.
Allon Mason, Founder & CEO of UserWay.org, shed light on Israel’s innovative spirit, attributing it to their robust educational system and a mindset of ‘rule-breaking’. This mindset, he suggests, could be beneficial for Bulgaria to adopt.
Finally, Rodrigo De Sa, CSO of Roots Ventures by Saudi Aramco & PIF, emphasized the need for tracking progress through relevant KPIs and adopting a global mindset. This approach can help Bulgaria stay on track and ensure that its innovation journey aligns with global trends and standards.
Power of BG gathering was a powerful reminder that the brightest minds in and outside the country can do much to drive a positive societal and economical change in Bulgaria, but we are yet to see the real results of this labor.
