Written by Sonata Brokevičiūtė

Recently the Startup data benchmarking company Compass has released its Global Startup Ecosystem Report which highlighted Silicon Valley and New York as the prime global cheerleaders among all the startup ecosystems. The report also noted that nowadays startups are immensely interconnected, and that today’s technology giants as well as tomorrow’s most disruptive and innovative technology more than ever depend on the new entrants – young, struggling but fearless organizations that are not afraid to take on the status quo. Many of such promising young startups already offering groundbreaking results are located in Lithuania, whose multiple competitive advantages and welcoming reforms unleash the country‘s full potential of becoming the world‘s next champion of the startup ecosystems.

Lithuania‘s competitive advantages determine that the country is one of the most suitable startup ecosystems in the world. Its strategic location in Central Europe, multilingual, highly qualified IT talent pool and a low-cost ecosystem have turned the country into a hotspot for local and regional startups. The chief director at Enterprise Lithuania, Mantas Nocius argues: “If we want to advertise the Lithuanian products worldwide, we must analyze how startups operate in the top markets, which set the tone for the rest of us.” Due to the current trend which implies that interconnectedness of all they key players of the best ecosystems is highly valued for providing the necessary tools as well as the suitable culture for the emerging startup communities to succeed in, Lithuania also currently seeks to provide the most effective ways to put entrepreneurs in contact with financiers and policy makers, mentors and partners.

#StartupDay2015 Worldwide

This year not only the breakthrough products and discoveries make our country stand out. Recognizing the increasing potential of the international cooperation as well as the need for support to growing local and regional startup ecosystems, the governmental organizations Enterprise Lithuania and Startup Lithuania invited all the entrepreneurs worldwide to unite in the recognition of the International Startup Day by sharing inspiring music. Everyone from Vilnius to Klaipeda, Helsinki, Kiev, Amsterdam and Barcelona celebrated the virtual event by sharing the music which inspires them to innovate. In fact, the event even exceeded the borders of the Old Continent. Based on the results from Twitter and Facebook, #StartupDay2015 was also actively observed in such faraway places as Vietnam, Japan and the United States.

Mantas Nocius compliments the strong and exceptionally unified Lithuanian Startup community, which regardless of being a fairly recent development, is able to put Lithuania among the leaders across multiple tech industries globally, as well as call their fellow innovators to spend one day a year meeting up in the social platforms and learning more about each other. It turned out that music, which inspires the most innovative solutions, varies from Michael Jackson‘s inspiring lyrics in Heal The World to such modern hits as Avicii’s Wake Me Up or Zedd’s Find You (Jovani Remix). Nevertheless, entrepreneurs also listen to old school songs by Queen or David Bowie. Interestingly, some of them feel inspired by the classical melodies of The Phantom of the Opera, while others tend to look for inspiration in more contemporary types of music like electronic or hip hop. However, Enterprise Lithuania and Startup Lithuania will combine all of these styles by creating the Startup Music Playlists which are going to allow everyone to get a sense of what truly inspires the most groundbreaking innovations of our times. Moreover, based on the location tags of the startups and entrepreneurs, who participated in the #StartupDay2015, Lithuania is going to publish the Global Startup Music Map, calling all the entrepreneurial cultures to unite through music.

2015 Summer Startup Highlights

This summer has been extremely productive and joyful for many Lithuanian startups, including such young and ambitious companies as TRAFI and SEMSEYE.

The world‘s most accurate public transport journey planner – TRAFI – closed a $6.5 million Series A funding round led by Octopus Investments EBRD Venture Capital Investment Programme, along with Baltcap and previous investor Practica Capital. Real time processing of traffic, scientific algorithms and machine learning combined with the additional use of crowd-sourced reports allow TRAFI to predict journey durations and arrival times up to 200 percent more accurately than any competitor. In Lithuania alone, nearly 300,000 unique commuters use their app on a monthly basis, but the journey planner not only operates where it was originally launched. TRAFI already helps to plan millions of journeys in Latvia, Estonia, Turkey and Brazil as well.

Lithuanian startup SEMSEYE recently started offering a solution comprised of one or more devices that uses analytics to show and analyze people flow counting in multiple location in real time. SEMSEYE platform supports the most popular online browsers, offer informative diagrams, statistics, and allows to disperse resources and cut spending most effectively. Thus, SEMSEYE was quickly noticed by the world‘s most famous tech companies. In the “Challenge UP!” business accelerator selection, “Cisco”, “Intel”, “Deutch Telekom” experts from 300 participants picked 12 finalist, and the Lithuanian startup was among the best ones. Many of the largest Lithuanian companies such as “Omnitel”, “Teo”, “Avitela” already use “SEMSEYE”. In 2013, they also won “The Innovation Of The Year Prize”.

UAB “Magma Solutions” is one of the most recent and successful hardware startups whose technology specialists invented a system called “AirVision”, which allows hang gliders without GPS signal to precisely navigate in the environment. Many investors became motivated to view the phenomenal system right away. Currently, the authors of this breakthrough technological solution which could alter the aerospace industry completely are thinking about turning Vilnius into the very first city in the world which would legalize pilotless commercial airliners.

Building A “Green Garage“ For Innovations

Alisa Matsanyuk is one of the most successful foreign-born innovators, who moved to Lithuania and now is contributing to the efforts of helping the most promising local specialists. The founder of  “Game Insight" recently announced that she is opening a unique Technology and Experimental Science Area called “Green Garage“ in Vilnius which is going to find the startups with the most potential at their early stages and help to fund them. The Garage will provide more than 250 square meters of new space for technology developers, electronic lab and learning centre, filled with the most modern equipment and necessary tools (worth more than 300,000 Euros) that will allow to create prototypes for metallic, wooden or plastic products. A comfortable and spacious common space will inspire creativity and encourage the communication among the most promising innovators.

Current conditions allow each of us to make any device, which means that in the near future engineering will take over programming as the most desirable occupation. Lithuania is quickly ascending to lead in the sector, country‘s exemplary electronic and engineering education allows the country to host the most qualified specialists. In addition to high qualification, the motivation of the Lithuanian innovators is also often highlighted and celebrated. For instance, “Green Garage” will specifically focus on the most motivated young innovators. Matsanyuk claims: „We care about the people who are really determined to create something new and start business. This is our target audience“.

On the other hand, Matsanyuk says the way we think has changed significantly over the past hundred years, and it affected people‘s confidence. Back then, only the fit athletes would have been encountered in a fitness center, whereas none women or children without exceptional athletic abilities would have ever been able to try sport. She agrees that engineering may not be for everyone, but firmly argues that since a hundred years have passed, current conditions allow anyone can at least come into the Garage and try.

Modern Startups Grow Faster Than Traditional Businesses

Ilja Laursas, the founder of mobile applications company “GetJar“ and risk capital fund “Nextury Ventures“, argues that modern startups grow much faster than traditional businesses, and therefore their contributions to the country‘s economy are much more appreciable. For instance, two simple games, “Angry Birds” and “Clash of Clans”, pushed Finland to become one of today’s global leaders in the game market. Each of these startups are worth more than 1 billion Euros. Mr. Laursas calculates that if approximately 15 percent of the profits are paid to the country in taxes, additional half of the value also are spent on wages.

Even if such startups choose to relocate their businesses to London or Silicon Valley, they tend to leave their subdivisions back in the country, where it was started. Director of the Entrepreneurship Department at Enterprise Lithuania, Mr. Varkuelvicius agrees: „When you put in work, employ specialists, and achieve success, you cannot simply close down the center.” Perhaps, the owners move the offices of sales and/or marketing, but they do not close down the successfully operating product development subdivisions. For instance, when the Lithuanian online exchange platform for clothing, called “Vinted“, attracted over 20 million Euros in investments, and started operating internationally, they still kept their headquarters in Vilnius. Moreover, when the specialists leave such companies, they tend to use their experience and knowledge to establish at least several similar startups within the same industry.

The Country Could Earn 20 Million More

Increasingly more foreign high skilled specialists and innovators begin to demonstrate an interest in moving to Lithuania for favorable business conditions among which they often note the advantage of having one of the lowest taxes in Europe. There are already several ways for foreign startups to relocate here. They may request for an EU Blue Card or apply for a residence permit. It is calculated that foreign-born tech specialists would also significantly contribute to the skills and experience of over 25,000 highly trained IT specialists currently in Lithuania.

According to Mr. Dovydas Varkulevicius, Lithuania is recognizing the foreign-born innovators’ propensity to join the local companies and start new businesses here, therefore Enterprise Lithuania is proposing a new Startup Visa Project which would expedite the processing of these visas up to 3 times. Mr. Varkulevicius predicts that at least 50 foreign companies more than before would be able to relocate to Lithuania with the Immigration policy changes.

Are We Going To Use Our Full Potential?

Lithuania is going to host the very first conference in the Baltics about the future ”ISM FUTURITY”, where the local and regional futurists, scientists and business leaders are going to discuss what the world will look like in 10 years from now. The participants will also be to see tomorrow’s potential in the Lithuanian startup products.

Mr. Nocius claims, that „Lithuanians are hard-working and they recognize that if they are seeking for the Western standards, they must work longer hours, have shorter holidays and offer more flexibility than their competitors. However, despite the fact that the future largely depends upon the Lithuanian products and its talent pool, Lithuanians must still overcome their inherent lack of confidence which deprives them of their full potential while advertising their groundbreaking products and abilities.

Lithuanians still tend to prefer certain markets, like the Northern European countries, but they are afraid to actively look for opportunities to enter the farther and less explored markets such as in the US or UK. „We need audacity and we need to acquire the skills to sell our products. We need to look up the trends in London, New York, Tokyo, Paris and Rome. If we found the keys to being successful there, we can succeed anywhere,”- says Mr. Nocius.