Interview with Murat Aktihanoglu on TurkTechNet, Start-ups in Turkey and US
With Murat Aktihanoglu we talked about how TurkTechNet is established and what happened after the event and what the plans are for the future. Also, he informed about his opinions on start-up environment and new incentives from US and Turkey.
Mr. Aktihanoglu, how did you decide to be in the entrepreneurial area and start Entrepreneurs Roundtable Accelerator (ERA)?
I am an engineer, and one of the first graduates of Bilkent University. I have an undergraduate degree in Electrics and Electronics Engineering, and Masters Degree in Computer Science. I used to live in Silicon Valley, and worked for an engineering company named Silicon Graphics. Shortly after, I moved to New York in 1998 and started some technology companies. For me, start-ups are a natural way to operate. I felt much better starting companies, instead of working for them. It is different for everyone. After I moved to New York, I went to Japan for two years in 2003. When I came back to New York, I started Centrl Inc., which was a location based social networking platform. I realized that in New York, entrepreneurs do not have a home to go to. For this reason, in 2007, I started Entrepreneurs Roundtable (ER) which is a non-profit organization. And then two years ago my partners Jon Axelrod, Charlie Kemper and I have started a fund to invest in startups and help them very hands-on as an accelerator along with our 250 mentors and 20+ sponsors. So Entrepreneurs Roundtable Accelerator (ERA) is a for-profit early-stage technology investment fund. We invest in 10 companies twice a year to help them every day for three months. ERA also provides the companies free space in the heart of Times Square and free services for three months along with amazing help from over 250 industry expert mentors. We still organize the events and ER events have now also expanded to Ankara and Istanbul. Entrepreneurship in Turkey is becoming very popular. But in Turkey people have huge problems finding investors. As ER Turkey, we try to make it easy for people to start companies.
Although New York is becoming a better place for start-ups, it is more common in California. How did you decide to start this in New York? Were you already living here before ERA?
I moved to New York in 1998 because I love NY, and I didn’t like California too much. It is a quality of life issue for me. In California, or San Francisco it is a different lifestyle, and the options are limited. So I moved to NY, and since there were not many entrepreneurial start-up companies at the time in NY, it propelled me to start ER to help the entrepreneurial community in New York. New York was then the 3rd largest VC market, and now it is actually the 2nd largest VC market in the United States, having passed Boston. However, Silicon Valley is still the number one in this market.
We know you from TurkTechNet, which is a non-profit organization dedicated to elevate Turkish entrepreneurs, technology start-ups, and investors to the level of global competition. How did this project start, and how was TACCI involved?
Our Commerce Attaché Serhan Kara is an amazing visionary, and he envisioned helping start-ups. With the help of our Consul General Levent Bilgen, we started TurkTechNet. The vision was to help Turkish entrepreneurs, and improve their chances of reaching global investors. Also, our second goal was to promote the Turkish start-up community in the world, so that global investors can get to know Turkish start-ups. Finally, our third goal was to improve the overall start-up community in Turkey, so that Turkish entrepreneurs and Turkish investors feel like they are part of the global scene, not isolated as a small niche, but part of the whole global market, which improves everything. Obviously, when we started TurkTechNet, we reached out to all the important people and organizations in the US, like Celal Secilmis, and TACCI. TACCI and you took care of all the logistics. Everyone at TACCI was super helpful. Overall, when TurkTechNet was established, the Turkish community came together, and we achieved our goal.
Is it true to say that there is increasing attention recently, towards Turkey by American capitals? Can we relate it to the effect of Turkey’s improving global vision?
There is an increasing demand from global investors for investing in Turkey. Currently, e-commerce start-ups are getting lots of attention. I think it is going to expand. TurkTechNet brought 10 companies from Turkey to New York, and none of them were e-commerce. We did it on purpose. Our goal was to promote Turkey, and there are a lot of interesting technology companies, not just e-commerce. There is an interest in e-commerce; however, real value will be from technology companies in Turkey. We want to emphasize technology companies. For example, Netmera, which came to New York for TurkTechNet is a cloud platform, and can be used by any company from any country. Hazelcast is another company from TurkTechNet, which can compete with any other company in the world. So our goal was to promote entrepreneurs in Turkey that can compete globally.
Turkey has a very young and dynamic population. What is your personal impression on the entrepreneurial potential of the population, in the competitive global market?
Turkey has huge potential! That’s why we started TurkTechNet. We believe that Turkish people already have an entrepreneurial spirit. We just want to point them in the right direction, and we don’t want them to just buy and sell things. We want them to compete globally. Some Turkish technology start-ups will have exits, and they will sell their companies to Microsoft, Google, and IBM to name a few. The rest of the entrepreneurs in Turkey will take them as a role model, and they are going to expand even more. I personally believe hundreds of successful companies will come out of Turkey in the next five years.
For now TTN is interested in technology related start-ups, but it will soon stretch to other areas. What is the next sector in your mind?
We started TurkTechNet in the technology area because that’s what I know, and that’s what the initial group knows. But now, we are working with other groups that know about the biotech industry. In Philadelphia Hasan Ayaz at Drexel University is putting together a similar program for biotech, and health technology companies. Energy is another sector that I know that Turkey is interested in. In Turkey we have some very interesting Green technology startups, like eco-friendly energy companies. Also, nanotechnology is an interesting area. So we are expanding in these sectors. Internet technology and mobile are our first focus. TurkTechNet is going to create many different programs. We are going to bring more start-ups from Turkey to New York and Silicon Valley. We are planning to bring Turkish investors to the US for training. We will also bring women entrepreneurs from Turkey to the US for training, and take foreign investors to Turkey for local start-ups. Since our organization has amazing people in it, we are going to implement many different projects.
You were already engaged in finding investors for various start-ups as a business in US, but then you decided to bring this to Turkey voluntarily. To what extent has your beliefs about the Turkish start-up’s potential played a role in this decision?
We organize events in Istanbul as Entrepreneurs Roundtable and last year in November we had an event where more than two hundred start-ups came by. I asked everyone what the biggest business problems they had were. Access to global capital was the answer. When this was brought to my attention, I realized that we have amazing entrepreneurs and companies, who are not able to reach global investors. That’s when I had the first idea of this project.
What is your opinion of the extent that Turkish companies are successful in acting with a global vision?
I think we are getting there slowly. We are not confident for the time being, but as we see more examples of Turkish companies going global, it is going to get easier. So far, at TurkTechNet, we try to show people that this is possible. If you start a company with the vision of having 10,000 users, versus 100,000,000 users, it will really affect everything. We want all Turkish entrepreneurs to think big and compete globally.
What was your impression of the 4 day training camp?
We had around 200 applications, and interviewed around 30 companies. Out of the 30 companies, we chose 10 of them. We could easily bring 20-30 companies to New York. We are amazed with the quality of the companies, and all of them can raise money easily. In the first 4 days of the boot camp we were amazed. It was a great learning experience for these entrepreneurs, because they learned how to fundraise in the US from US investors, which is very different than Turkey. Our teachers, instructors, and all the panelists talked about rules and structures. It was very intense. All the companies were really focused, excited, happy, and they learned new things every day. They also realized that what they were learning was going to be useful all their lives, when they meet with global investors. So it was a very positive outcome!
Do you hear from companies about investment possibilities? What was investor’s impression about the ten start-ups work and potential?
We are in touch with all ten companies. Three to four of them are talking to investors currently. We think the numbers will increase. Bottom line is an investor presentation that we prepared with them in the boot camp. Now they can use that presentation with any investor from Europe, America, or anywhere globally. They had a breakthrough in New York. From now on they will meet investors, and I think their chances are tremendous. I know all of them will raise money.
What do you think about JOBS Act* and crowd funding?
JOBS Act is going to change things in the US a lot, but it also has some risks associated with it. Any company can raise 1 million dollars online. They have to register with an institution to raise money from people. We see a lot of risks, there may be some potential scams although there is a limit on how much people can contribute. We are hoping that overall JOBS Act is going to enable more companies to start, and that’s the goal of the government to create more jobs. We just hoped that the US population will not be disappointed by JOBS Act’s bad examples. So we hope it is going to work out. Also SEC still has not approved this and it will take at least 2 more years before the law will be in effect.
Also, what do you think about new incentive packages for investors in Turkey?
The new law will be introduced in July. We don’t have much knowledge regarding this matter yet. We are working with experts, and they are going to provide us more information, on our law firms and our Turkish government. This will provide more early stage capital for start-ups in Turkey. Also, this will increase foreign investors’ interest in Turkey. Currently, Turkish companies establish a company in Netherland, Luxembourg, Delaware, US, e.g. in order to get investments from foreign investors. So it will be easier with this new law.
What are the trending industries in the entrepreneurial area, and what is your guess about the next trending companies in five years?
I wish I knew. Right now we are seeing a lot of movement in mobile obviously. Already in Japan, people surf the web on mobiles more than on their desktop. So, currently our start-ups are first getting their mobile websites before their regular website. I think there is some structure change in five years in telecommunication, finance, insurance, and health care. There are huge opportunities for entrepreneurs in these areas. Insurance companies are changing. Also banks will change. Investors will want to invest in companies that will disrupt major industries.
What are your recommendations to those who are trying to become successful in the US for both Turkish and US entrepreneurs?
Know the landscape well in your field, be passionate, work hard, and be enthusiastic. If you are not passionate enough, you can’t make it work, because start-ups are super difficult. There is so much uncertainty. If you are not excited about your company, you will just give up, so you have to be passionate.
Do you have any other suggestions?
TurkTechNet is not limited to the current volunteers. We are completely open to all Turkish people who live in US. Entrepreneurs, investors, anyone can join us. We don’t have a president, we don’t have a vice president, we have no structure, anyone can come and execute. We want all Turkish people, and want the Turkish community to engage with TurkTechNet.
What is the next plan for TurkTechNet?
We are hoping for another project in October. We want to take 10 companies to Silicon Valley, but this is not the final decision yet. This will also depend on sponsors. If we find sponsors today, I can say we will definitely have another project in October 2012.