How to Unleash the Potential of CEE Startups: Cooperation  + Ambition + Speed 

Central and Eastern Europe is known globally as a leading outsourcing hub with an abundance of great tech talent. But what will it take the region, sometimes abbreviated as CEE, to nurture more of its own homegrown startup success stories?  

When Endeavor Greece and The Recursive recently gathered top players from the region for a panel discussion at a side event during Slush, the founders, operators, and investors on stage all agreed on one thing. When it comes to CEE, there is no shortage of potential. 

“What we don't lack is technical talent and people. We have a lot of great ideas, great engineers,” said Petr Smid, General Partner at Rockaway Ventures. CEE engineers and operators are helping to build some of the world’s greatest and best known companies, although often abroad. 

But while there is tremendous potential, there are also still limitations holding back companies, from lack of local capital and coordination to a nore startup-friendly regulatory environment . Remove those barriers and CEE startups are poised for incredible scale and impact. Luckily, the panelists had plenty of specific suggestions to offer.  

Small country problems

Success stories like Czech cybersecurity giant Avast Software and e-documents company Evrotrust, whose CEO Konstantin Bezuhanov took part in the panel, show what CEE is capable of. But founders in the region still face challenges. 

First, is the small size of the countries that make it up. “We cannot build for our own markets” Petr stressed. Another is a lack of capital, particularly early-stage capital and investment from local investors. 

“When you look at the Nordics, you see the loop there. Successful entrepreneurs, they're coming back after their exit. They're becoming LPs, GPs, entrepreneurs, angel investors,” Vladimira Cincurova, CEO of European Startup Embassy, observed. “This loop in central Europe is just forming.” 

When investment in the region comes from abroad, that means the gains often return abroad, Petr pointed out: “You're actually significantly limiting the amount of capital that stays here and that can then go to the other startups,” 

Finally, CEE founders may be talented, but many still don’t think audaciously enough, according to Ivan Georgiev, co-founder and CEO of Bulgarian customer experience company Pontica Solutions. “We need to set bigger goals as entrepreneurs,” he said. 

More community 

While these challenges facing CEE entrepreneurs are real, the panelists had plenty of suggestions for how to overcome them. “The most important thing is community,” Vladimira insisted. 

Petr has seen the impact of a regional strategy firsthand while working in the U.S. “I’ve often had these discussions about, so what country are you representing? If I say it's the Czech Republic or Poland, from a San Francisco perspective, [they are] such small countries. If suddenly you represent a region of 200 million plus people, it's a much bigger number of interesting investment opportunities.”

Stressing not only the region’s overall size, but its successes is key. “The same way that we know engineering made in Germany has a brand.  Made in Japan has a brand. We should make startups made in Central Eastern Europe also have a brand,” agreed Konstantin. 

Governments in the region need to help with knocking down barriers both within and between countries, several panelists felt.  

“There are a lot of geopolitical complications for the CEE region to act as a unit,” Ivan acknowledged. “But if each country does the same things, it'll still promote entrepreneurship and the next unicorn. This is in a nutshell, less bureaucracy, economic stimulation, and brand awareness of your country.” 

Vladimira highlighted the EU-INC initiative, which is attempting this kind of coordination on an EU-wide scale. “If you want to scale across 27 different countries, you're fighting with 27 different tax regimes, legal frameworks, employment contracts. It would be great to have kind of our European Delaware,” she said. 

More speed 

Collective action could help boost CEE startups. But so could more speed and ambition. Several of the panelists emphasized that founders in the region need a foundational mindset shift that prioritized speed and global ambition.  

“We need to be international from day one,” Petr insisted. “You cannot have a space tech startup that goes step by step.No, you need to go big from day one because the company's working with SpaceX in the U.S., they will go big from day one.”

Vladimira was also all in on heading to America “as soon as possible.” Don’t wait to raise a Series A, she urged founders,“because by the time you raise it, your competitors are already there and everything just happens faster in the United States. Try to get some U.S. traction as soon as possible. Try to get some U.S. investors on your cap table as early as possible.” But she stressed, ”don't forget to get back to your local ecosystems and support them.” 

If an immediate jump to the U.S. isn’t possible, Konstantic offered another, still ambitious alternative. He called it the “trampoline strategy.” Start in your local market, then jump to a big European market like the UK or Germany, and then use that momentum to go to the U.S. 

“Get proof points as early as possible,” he advised founders. “It's good to make sure you build those relationships and those bring trust.”

Achieving escape velocity together

Overcoming the challenges that weigh down the ambitions of startups in Central and Eastern Europe is largely a matter of cooperation and mindset, the panel concluded. The raw materials for scale and impact are there. It’s just a matter of working together to reach escape velocity.