The start of the year is when everyone makes plans. Mine is a simple one: to look more closely at what is happening in the Romanian startup ecosystem and to ask myself, honestly, why so few Romanian tech companies are known around the world, when we have everything we need to have many more.
I am not writing from the stands. For the past few years I have been working on Retargeting, a marketing automation platform for online stores that I built with Rareș Bănescu, and from day one we decided not to stay in Romania: our target is the US market. So I have seen many of the mistakes below up close, some of them in the mirror.
We have the ingredients. And some proof
Romania has very good engineers, lots of them, with strong training in maths and computer science, and they speak English. Costs are still far lower than in Western Europe, internet connections are fast, and a small team here can build a serious product on a budget that would cover a few months of rent in San Francisco.
And we have a few examples showing it can be done. Bitdefender started in Bucharest and now sells its security software all over the world. Avangate built an e-commerce platform for software companies, with international customers. And lately people are talking more and more about UiPath, a Bucharest company that makes process automation software (so-called RPA: software “robots” that take over repetitive office tasks) and is starting to win large customers abroad. It is still early days, but it is the kind of company worth watching.
The trouble is that the list ends quickly. For a country with so much tech talent, we should have dozens of names, not a handful.
We think small from day one
The biggest obstacle is not money, and it is not the law. It is mindset. Many Romanian founders start by asking “how do I make this work in Romania?” and only years later, if it works, do they ask “what if I tried abroad too?”. By then the product, the pricing, the team and even the company name have been cut to fit a small market.
Romania is a good test market, but a small market for software. Say you are building an app for restaurants. Here you might have a few thousand potential customers. In Europe or the US, hundreds of thousands. Same development effort, a market a hundred times larger. Limit yourself at the start and you have already chosen your ceiling.
We know how to build, not how to sell
This may be the most painful gap. We have an excellent engineering culture and a commercial culture that is still young. Romanian founders are often developers who believe a good product sells itself. It does not. Especially in a market where you compete with companies that have entire sales, marketing and support teams.
A mediocre American startup with a great pitch and a good salesperson will often beat a Romanian startup with a better product and an awkward presentation. It is not fair, but that is how the market works. Sales, marketing, negotiation and customer relationships are crafts as serious as programming and should be treated that way from day one, not “once the product is finished”.
English-language marketing is not a translation
I see plenty of Romanian websites with an English version translated word for word, full of phrases that sound odd to an American or, worse, unprofessional. A foreign customer does not know you, has no reason to trust you, and decides in a few seconds whether you look like a serious company.
Your website copy, emails, decks, case studies and even the way you answer a support ticket must sound natural to your target market. If nobody on your team writes at a native level, pay someone who does. It is one of the best investments you can make.
Local money is scarce and cautious
The venture capital market in Romania is still small. There are some angel investors, a few funds and a few accelerator programmes, but nothing comparable to what you find in London, Berlin or Silicon Valley. Cheques are smaller, and local investors often care more about quick profits than about aggressive growth.
That has an upside: it forces you to be disciplined with money and to reach paying customers quickly. But if you want to grow globally, sooner or later you will need investors who understand large markets. And they will be far more interested in you if you already have customers abroad, not just in Romania.
Fear of failure and company structure
We have a complicated relationship with failure. In America, a founder who has shut down a company is seen as someone who learned something. Here, they are seen as someone who “could not pull it off”. So many people would rather stay in a small, safe zone than try something big and risk falling in public. I know what losing a business feels like: in 2009 I sold my majority stake in my online companies under pressure. It hurts, but it does not define you.
Then there is the legal and tax side, which technical founders usually avoid. Romanian legislation changes often, red tape is heavy, and many foreign investors are not used to Romanian companies and their rules. That is why many startups that want to grow abroad eventually set up a structure in another jurisdiction, for example a US or UK company that owns the Romanian operations. It is not mandatory and it is not a magic recipe, but it is a conversation you need to have early, with a good lawyer and a good accountant, not in the last week before a funding round.
What you can do from day one to be global
- Pick a large target market and name it. “The world” is not a market. The US, the UK or Germany are. Build the product for the customer there.
- Everything in English, from the start. The product, the website, the documentation, the code, even the important internal discussions.
- A co-founder or key person on sales. Not after the first year, but from the start. Tech without sales is an engine without wheels.
- Talk to customers in your target market before writing a lot of code. A few video calls with potential foreign customers teach you more than months of guessing.
- Prices in dollars or euros, designed for that market. Not “cheap because we are from Romania”. A low price often signals low quality.
- Legal structure discussed early. Which company, where, who owns what, how a foreign investor comes in.
- Be present where your customers are. Conferences, communities, local partners, maybe even someone on the ground. You do not sell in America from Skype alone.
Our advantage is real, if we use it
I do not believe Romania is doomed to export only programming hours. We have people who can build world-class products at costs few can match. What we lack is the courage to think big from day one and the discipline to learn sales and marketing as seriously as we learned algorithms.
In 2017 I would like to see more Romanian founders talking from the outset about customers in Chicago, London or Munich, not just in Cluj or Iași (two of Romania’s main tech hubs). And if you have a startup: what, concretely, is stopping you from selling abroad? The market, the money, the team, or fear?