Silicon Valley is still the "place" to be when it comes to technology. Even after the announcement of the "death of the office" in companies such as Twitter, as well as the geographical opening of technology giants and venture capital, the Valley continues to be a magnet for entrepreneurs. For many people, the answer to whether a technology company has succeeded depends on whether this has happened in the technology hub. Bulgarian companies are no exception and many of them sooner or later head overseas to seek their fortune (and the market).
But success there is not a matter of luck. Few Bulgarian entrepreneurs know this better than Bogomil Balkansky, former vice president at Google and current partner at Sequoia Capital. That is why, in late 2018 he, alongside other established names such as Pavlina Yanakieva, Vassil Terziev and Ivan Dimov, created Bulgaria Innovation Hub (BIH) - an organization whose goal is to help Bulgarian technology startups enter the US market.
So far, two graduates - or cohorts, as the company calls them - of Bulgarian companies have passed the hub's programs. Not every company can participate - BIH is looking for those who already have a product on the market and more importantly - in which funds have already invested, most often one of the Bulgarian ones, such as Eleven, LAUNCHub, Brightcap and others. The explanation is simple - the hub does not have the ability to inspect every company, so it trusts the judgment of VC investors who have already done this work and invested.
Bulgarian companies' interest in the Silicon Valley is nothing new. Many of them have gone through the advice and guidance of one man - Bogomil Balkansky. "All my friends from Bulgaria, mainly investors, were sending me a stream of Bulgarian entrepreneurs coming to the valley. At one point, I began to notice the common mistakes they all made," Balkansky says.
"First, many of them are unprepared to spend their time in Silicon Valley. Second, most are inexperienced and naive in their expectations of what a one-week or two-week visit can achieve. Third, they lack knowledge on how to win customers, look for partners or attract investment in the United States. Fourth, they have nowhere to hold business meetings except in cafes or in foreign offices."
This is how the idea of a Bulgarian hub was born, which would deal specifically with this flow of companies and help them solve exactly these specific problems. At the end of 2018, BIH appears officially - Pavlina Yanakieva, known for her work in the "Teach for Bulgaria" foundation, becomes executive director. Yanakieva and Balkansky work from the United States, and Telerik co-founder Vassil Terziev and investment banker Ivan Dimov work from Bulgaria.
"Our goals are twofold: to support the successful development of Bulgarian startups and their entry into the American market, as well as to promote Bulgaria as a destination for innovation in Eastern Europe," Yanakieva said.
According to Balkansky, the program is important because the Bulgarian market is too small for the growth of a Bulgarian technology startup. "So the path of all startups very quickly leads to leaving Bulgaria as customers. This means three directions: EU, USA or Asia. However, the US is the largest single market and large companies here give more chances to small startups than the conservative Europeans," he says.
The hub cohorts
The program, developed by the BIH team, consists of 27 modules - from business etiquette in Silicon Valley, through the creation of an American company to fundraising. After each module of the hub, they collect an evaluation from the participants. It is not difficult to guess which subjects were most interesting to the companies - those related to fundraising, and what the venture capital funds are looking for in the Valley.
So far, a total of 28 companies have passed through the hub - five in the first cohort in 2019, 16 in 2020, and seven more in 2021. Among them are younger companies such as Ondo and more established ones such as Tiger Technology. Enhancv and Sensika. The first class went through the program entirely physically - with a program in the United States. The second, understandably, was virtual because of the pandemic. However, this factor allowed many more companies to get involved.
Among the speakers are Bulgarians with experience in the Silicon Valley, such as Momchil Kyurkchiev from Leanplum, Ivan Osmak from Gtmhub and Balkansky himself. Another famous name is Todd Rolland-Miller, former vice president of Steve Jobs' Next Computers.
The program is divided into two parts. "The first part is the modules. The second part is going into detail looking at the needs of individual companies. Most of them have revenues of between 1 and 10 million dollars and want to draw up their own strategy for entering the US market," says Yanakieva. Not everyone has to go through both phases - the choice is entirely theirs, and the price of the course also varies according to their wishes.
How the initiative is funded
Unlike most similar programs aimed at specific countries, the Bulgarian hub is an entirely private initiative. It is funded by several sources: Balkansky, Terziev and other representatives of the Bulgarian community in the United States, as well as funds from Bulgaria. Additionally, in 2021 the organization secured 725 thousand dollars in funding. The first program of the hub in 2019 was free for the participating companies, but after that it became paid, even though the fees are low - in fact, lower than the direct benefits of the program.
The companies receive 15 thousand dollars in Amazon Web Services cloud services and 50 thousand dollars in other services. Thus, in practice, participants actually have a direct financial benefit from the program. The advantage for the funds themselves is that the companies in which they have invested would cost much more if they successfully enter the largest technology market in the world.
"Our idea is in two directions - the first is to be able to generate our own income through the program. The second is to rely on the prospect of grants from other large foundations, which is the usual format of NGOs. We are still that - an NGO with a focus on educational activity," says Yanakieva.
The goal of the hub is to have sessions in both spring and fall. "The interest is huge and this is the reason for the decision to take more companies," Yanakieva concluded.