Stephane Gantchev: The general problem of the region is “overengineering”

On February 8-9 of 2018 Latvia’s capital Riga hosted TechChill tech event, which gathered around 2000 representatives from around the world.

Stephane Gantchev is the partner of LAUNCHub Ventures in Bulgaria. Prior to LAUNCHub Ventures, he worked for France Telecom as Head of Innovations.

Stephane Gantchev is one of the most active figures in Bulgarian tech ecosystem. He is the co-organizer of DigitalK Conference and SiliconDrinkabout Sofia events.

Itel.am reporter talked to Stephane Gantchev within the frames of TechChill.

What is the mission of LAUNCHub Ventures?

We mainly look for Bulgarian startups as we are based there, but our strategy is regional so it’s a good chance for all Central and Eastern European entrepreneurs, including Armenians.

There is still not enough seeds capital in this region, so basically we can fill the gap. If you go to London or Paris, startups have a lot of options to get seed funding. Eastern European region doesn’t have the same number of opportunities.

What do you know about Armenian tech and how interested are you in partnerships?

Until now we didn’t have many exchanges with Armenian startups, but I think this is also related to the maturity of the ecosystem. Maybe today we will be able to meet more good Armenian startups compared to 2 years ago.

Of course, we are interested in partnerships. The most natural way to cooperate for me is to work with individuals and angel investors.

I think Armenians in general are better than other Central and Eastern Europeans countries, as they are more business and sales oriented.

Another great factor is the “Armenian mafia” outside the country, and I mean diaspora. You need to definitely engage more with them to get advisors, have people that will open doors to potential customers, etc. And in later stage they can introduce you to investors.

Sometimes startups hurry to apply for venture funds. When is the right time to apply?

First of all, I don’t like the term “apply”. You are not applying; you are fundraising, as you are talking to people with money. Many people approach us, but sometimes they are not ready to do that.

If you are only in the idea stage, you aren’t supposed to speak to VCs. Instead you can talk to local angels, accelerators.

Then if you already have a product but you still don’t have revenue, it’s sometimes too early to discuss venture funding, because we want to see some initial traction, revenue, even if it’s small.

My advice to the startups is to do their homework before approaching investors, and know which investors are right for them.

What do European startups lack to be more competitive?

I think that the general problem in the region is “overengineering” and selling every day.  Definitely when someone launches a startup, he/she has to think immediately about the sales and marketing, and the founders should step back once a week and discuss the strategy: what to do next, how to approach the costumers, and this is something people in the region don’t do enough.

Another important aspect is being fast. European startups are slow compared to American startups.

For example, we invested in an American company around 5 years ago. At the same time we invested in several other companies with similar sales model. The Americans now have a company valuation of USD 500 million, and they do many millions a year in sales. Bulgarian company has the valuation of no more than USD 10 million, and they are doing one million per year. They both started at the same time with the same sales model.

Narine Daneghyan talked to Stephane Gantchev