What makes startups spring up in the former Soviet bloc?
Since 2003, Microsoft‘s annual Imagine Cup has presented grants worth millions of dollars to teams of students using technology to help their community. The contest is global, but TechWeekEurope noticed that a lot of the recent winners have come from Eastern Europe.
Five teams from former Communist countries reached the finals in various categories in 2011, and seven teams in 2012. That looks like a trend to us: to find out more, we spoke to Don Grantham, president of Microsoft for Central and Eastern Europe (CEE), and tracked down two of the most interesting recent contenders: QuadSquad from Ukraine created a sign language-to-speech application called EnableTalk, that won in 2012; and Nimero, a start-up from Bulgaria that reached the finals in 2009.
All dreams are welcome
“Youth around the world are facing a new problem—an emerging opportunity divide between those who have access to a good education, and the skills and connections to be successful, and those who do not. Our commitment is closing this divide,” Grantham told us.
The Imagine Cup provides ambitious students with funding and support to help transform their project into social enterprises or non-profit organisations. This global competition is especially important for countries from central and Eastern Europe, which are home to a huge number of developers interested in technology, but often lack the infrastructure necessary to start a technology business.
According to Grantham, a new, entrepreneur-friendly environment is being created by the governments of Eastern Europe because they are desperate to reinforce the next generation of business leaders. At the same time, these are the countries where many social issues remain unsolved.
In July, Microsoft announced that QuadSquad won first place in the Software Design category at the Imagine Cup 2012 finals in Sydney. The student team created EnableTalk – a pair of gloves that transform sign language into a form of verbal communication, giving people with speech and hearing impairments better tools to interact with the world.
To continue the development of EnableTalk, QuadSquad was awarded a $50,000 cash grant plus software and mentorship support.
The miracle gloves
“At first, we wanted to help athletes who are hearing impaired – for example, one track and field female athlete who we worked with closely lost all hearing in her childhood. Some of these people are very accomplished and high achievers, but in Ukraine, the government doesn’t do a lot for people with disabilities so they get no help,” explained Max Osika, one of the lead developers at QuadSquad.
EnableTalk combines sensors on the fingers of the glove with a controller that analyses the incoming data, compares it to the sign library and then generates the verbal equivalent of a sign. The whole project was created from scratch – both the software and the hardware – and currently has no equivalents.
“Imagine Cup has been very helpful for us, it would have taken us years and years to get this kind of exposure globally normally – ever since we won we’ve had emails from all over the world offering to help us and invest seed funding,” said Osika.
According to the entrepreneur, there’s plenty of engineering talent in Ukraine, but the business infrastructure remains underdeveloped. “It’s really hard to find solid investors as there is no culture of venture capitalism. People are ready to invest in a web-based company that can launch quickly for $50k-$100k, but not for a venture like ours.”
“A few months ago we got the Windows Store for Ukraine, which has generated a lot of excitement in the developer community – it’s simpler and cheaper to contribute to a global marketplace,” added Osika.
No more ‘brain drain’
Nimero is another example of a successful business grown out of Imagine Cup. The Bulgarian start up has developed Envision – a software system that uses Microsoft Multi-Point technology to improve the learning experience in the classroom by making education a more enjoyasble experience.
Initially created by a team of four students, Envision is currently used by over 220 schools, including almost a fifth of schools in Bulgaria and even some in the US. After reaching the international finals in 2009, the company was awarded the second place at the Imagine Cup UK competition in 2010, as well as the ‘Start-up Of The Year 2011’ title by the Bulgarian Association of Information Technologies.
“The competition gave us the opportunity to try something new. We put together a team first, then started looking for a project, and since we are interested in education, it seemed like a natural choice. We ended up basing Envision on technology that allows every student in the classroom to use the same computer at the same time,” Kiril Rusev, co-founder of Nimero, told TechWeekEurope.
“When we started, we were students, so we have never worked in the educational field. Microsoft Bulgaria helped us meet headteachers, provided feedback and support. Recently, we were invited by Microsoft Europe to present Envision and our new project Jumpido to the European Commission in Brussels. As a start-up, we appreciate things like that.”
“Three years ago, it was harder to create a start-up. The resources were limited, the financing – hard to find. Right now, we have investment funds, incubators and accelerators. There are so many things going on it’s impossible to keep track. It’s fashionable to be an entrepreneur,” concluded Rusev.
Next, Nimero plans to focus on a European expansion. And the company is not alone. Increasingly, talented young people from Eastern Europe decide against moving abroad. They create companies that serve the domestic market, and use the Internet to form business relationships that cross borders.
Symbolically, the international final of the 11th Imagine Cup competition will take place at the former heart of the Soviet Bloc, in St. Petersburg, Russia in July.
Below, you can see team QuadSquad present EnableTalk at the Microsoft Imagine Cup finals in 2012.
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