Zerofund: An innovative platform to kickstart Greece’s startup scene

Editor’s note: This is a guest post by Greece-based journalist Eleni Natsi. You can find her on Linkedin, Twitter and Facebook.

In 2011 the leading French newspaper Liberation published an extensive report on the Greek economic crisis as well as what happened to the global financial markets following former Prime Minister George Papandreou’s decision to call for a referendum. The referendum asked Greek citizens to vote on whether or not they want to accept the EU bail out package and all its measures, or to exit the Eurozone and return to the drachma.

The title was “Le Chaos”.

“Le Chaos” turned itself from a news title to a dominant word for foreigners each time they refer to Greece since the beginning of the severe economic crisis back to 2009.

The 💜 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!

But is that the whole truth about Greece? Certainly not. Some people, especially the young generation, do their part to beat the crisis. And sometimes against all odds. Due to the crisis, government services were asked to undergo harsh budget cuts and companies started laying people off by the thousands. As a consequence, people started thinking of creating – and some of them actually funding – their own companies.

BugSense, Taxibeat, Hellas Direct, the newly funded by Openfund startups Incrediblue and Workable HR (a €100,000 investment in Incrediblue and €600,000 in Workable HR) are some of the successful Greek startups that were founded during the crisis, paving the way for a hopefully better future for Greece. Are we talking about the rebirth of the Greek startup ecosystem? This remains to be seen in the next few years but certainly something feels right about this.

Zerofund and how to fight startups’ “bugs”

If somebody wanted to identify the problems that Greek startups face, three words would surface: funding-networking-logistics. Also, if somebody asked who knows in detail the problems of a startup, the obvious answer would be “a startuper”. And here comes Zerofund.

Zerofund is a collective effort of Greek entrepreneurs, famous Greekamericans and others, to deal with the problems faced by startups in the country. It was founded by active startupers, John Vlachogiannis, Maria Nasioti and Panagiotis Papadopoulos, the core team of BugSense, a tool that collects and analyzes crash reports from mobile apps.

So, what is Zerofund?

Zerofund is essentially a social network of mentors from Greece and abroad and a funding and participation bridge to an acceleration program in the United States called Mindthebridge.

Almost all “heavy weights” of the Greek startup scene participate in the Mindthebridge platform as mentors: Pinnatta, Taxibeat, Hellas Direct, E-shop, e-food,  Doctoranytime and Weendy supported Zerofund from the very beginning along with many others such as Visionmobile, a market analysis and strategy firm in the mobile sector.

Behind the Zerofund curtain one can also find personalities with an international presence such as Alex Gounares (formerly AOL CTO and before that one of Bill Gates’ closest aides at Microsoft) Location Labs CEO Tasso Roumeliotis, as well as Google Product Managers from San Francisco and London who agreed to offer their knowledge to the Greek startups.

Is it like Kickstarter? Nope. This is how it actually works

The first step for a Greek startup that wants to participate to Zerofund was to simply register to zerofund.org. Zerofund accepted registrations until February 1st .

In the days after the registration, the Zerofund team sends to all registered startups a template in which – through the use of text-video-photos – the startups have to describe in detail what they do and their team’s composition.

In this point comes the public audience: anyone can view details of the startups, and if they’re interested, they can publicly offer a “virtual” investment sum.

This the first difference between Kickstarter, the famous crowdfunding platform, and Zerofund, the “innovative crowdresourcing platform” as John Vlachogiannis, CTO of BugSense puts it: “In the case of Kickstarter your aim is to raise a particular amount of money for your project to get off the ground. In Zerofund, the virtual amount of funds that needs to be raised from each startup is just the means of going to the next phase. In fact, not putting real money through the Zerofund platform saved us from legal issues.”

So, what’s happens next? In the next phase, approximately on February 20th, during a specially organized event, the startups that managed to raise the specific virtual amount of funds, will be called to present their idea to the public. At that point, anyone who is interested can offer an actual amount of funds (not virtual) to the startup of his choice.

The funds a startup will collect will be funneled directly to the coworking spaces Colab and 123p, where the startup would be offered space to work, and meals.

“The whole scheme was built like that for a number of reasons: firstly, by giving the money to coworking spaces and not directly to startups means that startups don’t need to have a legal identity. Secondly, by giving the money to coworking spaces and putting startups to work there, we reinforce and build a strong startup ecosystem. In a coworking space, startups learn to interact with each other, exchange ideas and cooperate. Coworking spaces are also the fertile soil for new ideas to flourish and become business ventures” says John. And here starts the actual work: according to the schedule, the selected startups will have one month to build their product/service.

Since ZeroFund is a Microsoft BizSpark Network Partner, free resources will be provided to startups as well as from Google and the Microsoft Hellas Innovation Center. Naturally, during that period, the startups will have access to the mentor network that was mentioned before.

In the next phase, the Zerofund team will evaluate the startups and their products, and will choose the one that will travel to the USA in order to participate for a period of three months in the Mindthebridge acceleration program. There, besides the direct funding it will receive ($65,000), the startup will also be given the opportunity to be exposed to an extremely dynamic environment, such as Silicon Valley.

From its side, the Mindthebridge acceleration program has the capability to take three more startups that “reached the finishing line” and have built a well structured product or service in the one month initial period.

During the entire process, Openfund, a Greek fund focused on technology startups in Greece and South East Europe, will watch the startups that enter the Zerofund platform closely. According to future plans, startups from other parts of Europe will be able to enter the Zerofund platform too.

The Greek startup scene: A no man’s land?

No man’s land: One phrase, so many interpretations. In the case of the Greek startup scene, ‘no man’s land’ may refer to an area of uncertainty or ambiguity. In fact, the newly built Zerofund platform faces one crucial challenge: Are there going to actually be well-built teams able to go through the process, build a good product/service within a month and cut the finish line, successfully entering the MindThebridge acceleration program?

Another tricky part might be that of the virtual amount of funds that someone publicly offers in the platform. At the next pitching occasion before the audience, will they actually give that amount of real money to the startup of their preference? This remains to be seen, but what should be noted here is that Zerofund was built on a community, meaning that every person involved in it is exposed and judged by this community.

Concerning the first challenge – the number of well-built teams going through the Zerofund process – it should be noted that the Greek startup ecosystem is brand new, and is still in its infancy.

Despite the fact that there are some really good examples of Greek startups, what the Greek scene lacks is a successful role model. So far there isn’t a Greek startup that has accomplished either a good exit, or a really notable profitable organic growth and can be an example for others. Keep in mind that from 1957 and for the next 20 years just eight Fairchild Semiconductor employees founded 67 startup companies in the newly-born Silicon Valley. The bottom line is that successful ecosystems are built, among other things, on successful examples or role models that give their feedback on the new-born ones and create a startup “think big” mentality.

Since the startup ecosystem is newly built, the same challenge applies to the four new venture capital funds (Odyssey Venture Partners, PJ Tech Catalyst, Openfund II and First Athens) that have to invest their money (€65 million – $86.8 million – without the First Athens fund, which hasn’t made an official announcement yet) in a considerable number of Greek startups in the ICT sector in the next few years. In Greece these funds were built under the JEREMIE initiative, which is organised through the European Investment Fund (EIF). Through the Jeremie initiative, the EIF manages funds made available from the European Regional Development Fund and related public expenditure granted for utilisation under the JEREMIE initiative.

In conclusion, currently in Greece having a pool of talented people who are urged to do their part to beat the crisis could be simply put, in an interpretation of Eric Hobsbawm’s famous book, as… “Interesting Times.”

Image credit: Thinkstock