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Struggles of Croatian startups

Nikolina Kukoč

Nikolina Kukoč

06.04.2021.

Starting any journey assures there will be bumps in the road

Starting any business is a challenging task filled with all sorts of obstacles. What’s more, the market is highly competitive and crowded, making it difficult for new startups to find their product-market fit and make themselves well-known. Nevertheless, startups still find ways to overcome these challenges and eventually reach success.

The key is to determine the main difficulties one will face once the decision to start this venture is reached and find the means to overcome them. However, that’s easier said than done, especially since you can’t know for sure what kind of problems you’ll be faced with.

By asking for input from members of our startup ecosystem, we have managed to identify some common issues startups in Croatia face.

This is certainly not the most detailed list, nor do all startups face these same difficulties: the same way each of us is an individual with different experiences, so is any startup company.

However, it is already evident that not talking about issues we face does not resolve them, so that is why we are bringing these issues out in the open: solutions to any problem appear only through awareness and discussion, not by pretending everything is perfect.

Lack of investment capital

Getting any business funding is one of the main issues that all businesses face and have to tackle in order to survive. While there might exist some initial sum of money a founder saved up to start a business, businesses don’t survive for long on those savings alone and should also not rely exclusively on the next sales check to arrive so that the bills can be paid and the next step in business development can be taken.

A steady influx of funds is essential for small businesses to survive and one can always find themselves in need of extra funds to take care of rainy and in-between days.

Croatian startup ecosystem, and subsequently the smaller Split ecosystem within that larger one, are no strangers to this issue of lacking funds. Despite some initiatives that are trying to change this for the better, the whole ecosystem still remains somewhat paralyzed by a chronic lack of risk capital, so entrepreneurs find it extremely hard to gather funds for both early and growth stages. Therefore, when it comes to funding their business ventures, startups in Croatia have to rely a lot on international funding, which is rather challenging to raise.

Difficulties with bureaucracy

Extremely large contributions to the state through various taxes, mandatory payments to various public institutions, as well as contributions to and from the salaries, etc. is an issue that affects all aspects of the Croatian private business sector, and startups are not exempt. This cannot be changed easily and within a short period of time.

For some of the issues with bureaucracy, changes in our country’s laws must be made as well. That does not mean we should give up on demanding change and just accept things as they are.

Thinking you can’t change bureaucracy? That our bulky and inert public apparatus and its inefficiency is too much to handle and too immovable to be pushed to change? Perhaps you’re right.

However, until we start loudly holding the ones in charge of it accountable, it will continue to be inert and inefficient. That is why we are addressing bureaucracy as an issue and you should too – every time it hinders your progress. If you keep silent, you will be right on the issue of unchangeable bureaucracy, making it a self-fulfilling prophecy.

Difficulties with ensuring the influx of skilled and educated workforce

While our universities do keep producing a yearly influx of new graduates, we have struggled with keeping them from going to work abroad. We already discussed the issue of this brain drain in our ecosystem overview. The solution is as simple as it is complex: ensure the graduates have places to work and they will stay. However, even if we do have high-quality graduates that exit our universities with a degree in hand, what our educational system struggles with is being up to date in its earlier stages.

Elementary school and high school programs are still rather outdated with a lot of dry theory that is learned just to be regurgitated at exam time and then promptly forgotten afterward.

We do not teach critical thinking, self-reliance, and problem-solving skills.

And we definitely don’t equip our young ones with the proper tools for dealing with failures, learning from inevitable mistakes, and self-motivation during times of struggle.

The issue with education is that, even if all these changes happened tomorrow, they will bring results only in ten years or even longer down the road. However, that is not the reason to give up trying to change it – quite the opposite: its change must be demanded loudly and frequently to finally happen.

In addition to the ones who work in education and have noticed these issues first-hand, the ones who are also responsible to demand these changes for the better are employers. They know best what kind of workforce they need, therefore they should also demand educational changes that will enable them to have the workforce with the required skill set.

Problems that need solutions, not insurmountable obstacles

We didn’t decide to discuss these startup issues so as to scare anyone off from starting their own startup journey, nor are they listed here to bring anyone’s mood down after reading this article.

What they should make you feel is that you are not alone: no one’s journey is perfect and without a single issue.

We talk about them publicly like this to open the discussion about these and other issues startups face, and maybe even to initiate further contemplation on how to resolve them to improve everyone’s startup journey. These issues are not insurmountable and unsolvable, even though they may seem that way now. With enough drive and determination, and most importantly by coming together to drive this change forward, we are sure these issues will one day be in the past.

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About author:

Nikolina Kukoč

Researching is woven into my DNA, but I'm a musician at heart. Interested in too many things and always curious. Forever in love with Split and enchanted by people who teach me new things. When I'm not writing about Split's tech community, you will find me somewhere in nature, in the theatre, or with my head stuck in a book. I do my best to live by the verse from the opera "Fedora" by Umberto Giordano: "Love forbids you not to love."

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