Pleurat Rexhepi is the director of the Metropolitan Incubator in Tirana, he studied in the United Kingdom for over 10 years, then continued his doctoral studies at Kings College London, through a scholarship from the Fund of Excellence. He has been an internal lecturer for 9 years on the subject of innovation and corporate governance at the Faculty of Economics, University of Tirana.
"I have set up several businesses, one of them is Molla Store, the first authorized seller of Apple products in Albania. My family and I set up a plastic factory in the food sector, but the time came when I sold all my businesses and focused on MetroResearch which is part of the Metropolitan University of Tirana, and Metropolitan Incubator, where I offer mentoring, project writing and student assistance in various fields of entrepreneurship. I am also a member of WBIF where I operate as an international partner. In November we brought angel investors to Albania for the first time, leaving the incubators, accelerators, and all Albanian entrepreneurs with a bit of responsibility on encouraging the creativity of startups. Now, this fragile point is navigating towards the solution and the question arises do we have quality startups to offer to international investors so they can invest in Albania?
This will be a special challenge for all leaders in the field of startups, SMEs, acceleration, to encourage as many companies as possible to register in mentoring programs to become as professional as possible when faced with foreign investors. ”
Prishila Gjoka: Throughout your journey as Metropolitan Incubator have you had support from state institutions?
Pleurat Rexhepi: In Albania there has been facilitation recently from the Ministry of Entrepreneurship Protection regarding the laws for the registration of startups and exemption from local taxes, although a modest incentive. The greatest need is that for the professional organization of startups and grant applications. Recently in the new state budget, it has been promised that there will be about 10 million euros budget for startups, for the first time such a huge budget, compared to previous years, which I believe will create a positive climate for the application of startups in Albania.
Prishila Gjoka: The actors of the Startup ecosystem have started working towards this, there are more programs and the current ones are developing and advancing in their programs. The question arises, is there interest from the startup's side to absorb the new knowledge that is being offered?
Pleurat Rexhepi: This is a question that should be discussed in the ecosystem of startups and entrepreneurship, we need to engage in coordination projects with each other, to have intermediate cooperation between organizations because we are in a not very large environment. If we have over 10 business incubators in Albania and each of them tries to attract its share of startups, we will have an economic inefficiency and an imbalance. I would suggest that the incubators focus on certain fields, like the field of technology, social enterprise, manufacturing, and so on.
In Metropolitan Incubator we have implemented several concrete projects where we have assisted over 15 startups to apply for social entrepreneurship grants, in the EU4Innovation Challenge Fund, AIDA, in various international trainings from GIZ, so we have always encouraged the startups we incubate to apply. We think that it is necessary to increase the level of startups with new knowledge and a new vision, so we assist with Masterclasses and professional training, without neglecting other cities. In cooperation with the Municipality of Berat, we are in the phase of implementing an incubation program in Berat.
In addition, the project to open innovation centers in the fields of technology, electronics, architecture has been launched, and students can conduct studies, research in professional laboratories, with all the conditions and support of pedagogical staff or mentors.
Prishila Gjoka: Is it conditional being a student in the Metropolitan University to participate in the Incubator or in the Innovation Centers?
Pleurat Rexhepi: No, research centers and the Metropolitan Incubator are open beyond the university, over 80% of startups come from outside the university. We hope that applications from the university will increase, but it should be noted that most startups come with the right educational background and then explore ways to build a startup, so it is a cycle that is usually followed after studies. There are also students with ambition and initiative that we incubate but are not currently in the development phase, so it is necessary to know what you are looking for in the implementation of your ideas.
Prishila Gjoka: How does the whole mentoring process function until the idea is finalized?
Pleurat Rexhepi: The head of our university, Arjan Cukaj, currently funds the mentoring team to provide free mentoring for startups. The mentoring team includes professionals from the field of law and public administration, banking sector, specialists, managers of over 10 years in the field of banking and project managers in public administration, mentors with over 10 years of experience, and mentors in the field of business. So it's a well-experienced and well-trained staff.
The process starts with a preliminary meeting with startups that express interest in being incubated, we make it possible for their ideas to be synthesized, we offer personalized mentoring based on needs, both financially, legally, and regarding the presence of the idea in the market. Most people have business ideas but that is not enough, everyone has business ideas but they should find out how commercial that idea is in the market they seek to operate. For this purpose, a brainstorming session is held by all mentors, with mentoring sessions of about one to two hours each week, and we also encourage startups to participate in international or national competitions for grant applications and assist them in the application process, meaning we evaluate their applications. This is the assistance we provide and it is free of charge.
Prishila Gjoka: In addition to assistance through information, training, and mentoring, do you offer monetary or material rewards such as office equipment?
Pleurat Rexhepi: Every year a festival of innovative ideas is organized, Startup City, where startups or SMEs or IDEA projects, pitch in front of a prestigious jury and we select the 10 best ideas. The first three winners receive prizes, respectively the first place receives 2500 euros, the second place receives 1000 euros and the third place receives incubation from the Metropolitan Incubator and a scholarship for studies at the Metropolitan University of Tirana. We are constantly working with sponsors to offer minimal financial grants so that their ideas take off and develop to some extent in their core. It is not a small reward for a startup that makes a good pitch, gaining mentoring and a fund of 2500 euros. We plan to hold Startup City in May this year and invite applicants not only from Albania but also from Kosovo, and possibly from Northern Macedonia. Last May we had about 50 applications.
Prishila Gjoka: How do you see the rate of innovation, implementation of ideas, creation of startups year after year, do you think it is increasing?
Pleurat Rexhepi: We have noticed that the desire to create startups and increase startups always comes when there is a financial reward, fortunately, or unfortunately, Albanian startups follow national programs when there are financial rewards to develop their ideas. In our ecosystem, we notice a pronounced lack of funds for startups making it a primary goal for them to win the monetary prize to realize their ideas. We hope that with the disbursement of funds from the Albanian government and international institutions operating in Albania, this trend will improve and startups will have more opportunities for grants and funding but also for mentoring and development.
Prishila Gjoka: Do you think that the fact that mentoring is offered for free impacts in a way, maybe startups need to pay to understand the value of the program and to seriously dedicate themselves to it?
Pleurat Rexhepi: Mentoring is indeed valued more when it is offered for a fee, but in the Albanian market, our startups are not in the phase of investing in human capital, which includes the purchase of training packages. If we set a price they will not be able to afford the costs of the services we offer, startups are not yet prepared at this stage. The moment that Angel Investors come to Albania and invest in startups, I believe that there will be an opportunity for paid mentoring.
Prishila Gjoka: Out of the 50 startups that applied in Startup City last year, what was the ratio between those that were worth it or had perspective and those that gave the impression of merely ill-formed ideas?
Pleurat Rexhepi: We think that the 10 selected ones are worth discussing, they have shown potential to develop and to break down their ideas into detailed action steps. Rather I would say that startup applicants have a lack of information, do not properly conduct market research and for these reasons are disqualified and do not proceed further.
Prishila Gjoka: We often hear that work falters in market research, perhaps because the individual creates an emotional connection to his idea, to the solution he offers by making him semi-blind or irrational to real market demands?
Pleurat Rexhepi: Yes, on this aspect we notice significant defects. Doing business does not mean having only a professional idea, doing business means studying the competition that operates in the same field where you will operate, finding the resources, taking a risk, and offering something innovative that others do not. It is a long process that does not take place within 2 or three weeks but after 2-3 months of intensive work, and startup entrepreneurs forget to understand that in the beginning they should have a pilot project. You don't need to cover all the population of Albania or Tirana, it is important to start with a pilot project, with a certain number of products and services, and focus on one champion or in a given sector. You can then take the development steps by setting the right objectives, having the right strategy in implementing ideas and operational developments in the local market.
So, these are the phases we have to respect, we can not go from the nuclear phase of setting up a startup and claim that we will sell to half a million customers within a year.
Prishila Gjoka: Meanwhile, we have noticed that there is an imbalance between the development of startups here in Tirana compared to other cities, why do you think this happens?
Pleurat Rexhepi: This comes as a result of an imbalance of economic development that Tirana has compared to other cities, the metropolis of Tirana has about 1 million residents compared to other cities that have hundreds of thousands of residents, where I would highlight Vlora, Korca, Fier, alittle less Elbasan, and Shkodra, as cities that may have premises for the development of incubators and the ecosystem of startups in general.
The other reason is that all grants and funds are mainly concentrated in the universities of Tirana because there has been a greater absorption of these funds by applicants in these universities in general, private and public. In district universities, we notice a wince in applying and generating business ideas. If you look at the ratio of applications from the capital compared to other cities there is a large disproportion of registered businesses, incubator development, accelerators, grant disbursements, and administrative support. This imbalance presses all the focus on Tirana, but we should not be pessimistic because it is a relatively small country, thanks to technological developments today there is national mentoring done online.
Metropolitan Incubator conducts intensive training with startups in Vlora, in cooperation with the Municipality of Berat we are launching Metropolitan Incubator in Berat. We have startups from Vau i Dejës and Durrës. Although this dispersion requires time, requires patience, and requires constant work from the entire ecosystem to encourage startups to register on different platforms and seek opportunities to develop.
Prishila Gjoka: Of all the startups you have incubated to date, can you name a few that are moving forward safely so far and think you have the premises to develop even further?
Pleurat Rexhepi: One of the startups we have incubated is from Vau i Dejës, Atelier, which we assisted to apply to the Eu Fund for Innovation in the Challenge Fund. She managed to receive a support grant of over 15,000 Euros, for the production and professional cultivation of silk from the silkworm, for the first time in Albania. The team has purchased a production machine and is in the process of signing contracts in Kosovo for the export of silk raw material. This is one of the startups that we are proud of, complemented by the aspect of the services we offer to startups because it has increased the number of employees, has bought a new environment, it started with 3-4 employees and today has over 10 registered employees and offers training courses for young girls.
The second case is the case of Jason, an innovative guy in the field of children's animation, who by following a master class training with us and thanks to a personal conversation with him, he was presented with Startup City. He attended all the training, became part of the competition, and received the second prize, a motivating prize to further develop children’s comic books. A startup that serves Albanian children and youth to have fun in the format of graphic books for a certain group of topics. Usually, topics on social discrimination are addressed, he tries to illustrate the educational side and reconceptualize how society should react in childhood. Jason has signed an agreement with Bukinist to sell his books online and we hope it will develop into having an international approach.
These are the two pioneering startups that we have developed but we also have startups from Vlora in terms of honey production, we have other student startups. We also have startups that have attended our training but have continued with other incubators because they are located in Kosovo.
Prishila Gjoka: All these new ideas that are presented to you, in which sectors seem to be focused mainly?
Pleurat Rexhepi: I can mention the field of tourism, atelier, and IT, but from time to time we are also in communication with startups from other sectors. There has been expressed interest in our service also from the French Embassy, which has developed various Hackathons and the Hackathon winners have been incubated by us. So, there are public institutions such as municipalities, with which we have agreements to incubate business ideas that arise in different cities and we have international agreements with ICK Kosovo and various institutions in Northern Macedonia. We are trying to apply in the Western Balkans and host a Hackathon in November of the upcoming year. We apply continuously to generate activities for startups.
Prishila Gjoka: Can you share with us any tips to inspire those who have ideas to apply to the Metropolitan Incubator and why not participate in these initiatives that are expected to be held?
Pleurat Rexhepi: My suggestion is to start from the first degree which is research on the idea and possibility of commercialization in the market. So, not to remain at an unexplored stage in the market but to do their best on research work and figure out what the market has to offer, who are their customers, who is the target, what marketing campaign will they follow, how will they implement the strategy they have and what strategy is that. They need to be clear about what they offer in their service and what the competition offers concerning the product or service they choose. They should be more serious in the work they pursue, dedicate at least 3-4 hours intensively per day, and not consider it as a spatial idea but something that is realized in concrete projects and divided into milestones. This requires working with different organizations, with incubators and accelerators of the country, not to let go of the opportunities given by Tirana or other cities and see them as opportunities to cooperate and orient in breaking down their ideas into more concrete approaches.