Swiss EP promotes entrepreneurial ecosystems. Why is it important to support the start-up scene?
Teresa Widmer: In our target countries there are many capable people with good business ideas. However, it is difficult to found a company without any support and get one’s foot in the door of the marketplace. Exchanging experience and mutual learning is of primary importance. This is where Swiss EP comes in. We determine where and how our partner organisations need support, and bring successful start-up experts from abroad who can provide developmental support to the organisations, as well as new ideas and inspiration. Growth-oriented start-ups benefit early on from improved products and services and are better equipped to develop, create jobs, and generate added value to the local economy.
Where has Swiss EP been most successful over the past four years?
Making our partners responsible for their own development and of their local ecosystem, and not having the programme determine their direction. They lead, we support. Thanks to very good personal relations with a strong, locally rooted team, we have become a trusted partner. The second success factor is that we have the best resources: founders of similar organisations and start-up experts from more developed ecosystems bringing their own experience and showing new opportunities. Over the past four years, we have been able to connect local and international organisations much more closely than what we could have expected at the start of the programme.
And how will the project move forward during the next phase?
We’re not changing much overall, because we can see the positive results in the first phase. Our main focus will remain on three pillars: first, we provide individual guidance to our partners to help them become stronger organisations; second, we will continue to foster their cooperation and link them with each other, which forms the basis of any successful start-up ecosystem; and third, facilitating access to early-stage investment capital. Here we are working on the supply side to professionalise local private investors, while on the demand side we are helping our partner organizations to make their portfolio startups fit for investments.
What will be the challenges for the next four years?
One challenge in all the project countries is how to help our partners develop a sustainable business model. Through exchange with founders of similar organisations that are already successful on the market, our partners learn different business models and gain valuable support in the implementation of their start-up programmes. The organisations must diversify their revenue sources. Unfortunately, we often see that the business model merely chases after donor funding than diversifying income. This isn’t sustainable. A further challenge involves the mentality. In our programme countries, failure is often a heavy burden. For this reason, even more courage is needed to implement a new idea. Moreover, in all countries there is no early-stage investment and thus financing opportunities during the early phase of company growth. Although in Peru and Vietnam there are networks of angel investors, the knowledge for how to build a solid portfolio is lacking. Here as well, by including experienced investors, Swiss EP is introducing expertise to these countries about how to evaluate and invest strategically in start-ups.
How does Swiss EP differ from other development projects?
First of all in terms of the target group: growth-oriented start-ups founded by people with a high level of education who move beyond their comfort zone and take the risk to implement their ideas. Additionally, our programme has no specific sector focus as other projects because it is again up to our partners if they target their support to a business vertical or certain stage of business development. Additionally, business ideas can spring up anywhere. Furthermore, we have the flexibility to react effectively to new opportunities in the ecosystems. This is where great praise is due to our donor SECO. They have dared to create a relatively open project and remain very pragmatic. It’s nice to see that SECO is on board of this learning journey that we are taking as a programme team. In my opinion, SECO is setting an example for how donors in the future can design their projects.
This sounds like a special dynamic. Is it also reflected in project management as well?
One strength of the EP Swiss team is the ability to act with agility and flexibility to opportunities coming its way. Our project team has adopted the “lean start-up approach”. That means we try out and quickly assess, improve, and move on to the next idea if something doesn’t work out. In this dynamic environment of start-up communities, for example, we were able to abandon developing annual plans, and we measure success only through a few performance indicators.