Cluj Startups, Entrepreneurship, Scaling, New Products, Investments and much more

We hear almost every day about new tech startups that breach the barriers of success. Whether getting amazing investments or creating new market niches in which they make incredible amounts of money, we all look up to them. We want to duplicate what their achievements. Sadly, almost all these startups are from any other country, but not Romania. Cluj startups are no different than the other startups in Romania. Somehow, they can’t seem to penetrate the international market yet.

We do have our own share of successful exits, but still they are very few. We want to change this…or to be more accurate, to help change this. That’s why we have started the Cluj Startup Jobs project. We want to help in one way or another the future entrepreneurs that are out there among you. You will find here a list of available startup jobs, but also we want to focus on materials to help starting entrepreneurs to build their Cluj startups and not leave for other cities/countries. There is a lot of talent in Cluj-Napoca and we are sure that soon there will be a few internationally successful companies here.

Outsourcing companies and intrapreneurship

There are a lot of successful outsourcing companies around, but lately we have started to see the number of Cluj startups increasing, with startups from all parts of the world opening offices in our city. This is a clear confirmation of the existing talent that is found very easy here. It also means this is a cool place to invest, to start companies too. With the rise in numbers of such companies, the clear benefit that comes to mind is an increasing number of startup jobs in Cluj-Napoca.

Cluj-Napoca startup ecosystemSlowly, the focus of almost every IT company is starting to change towards creating own products and selling them. This process is actually not that simple as the big companies have a lot of complicated internal processes that somewhat obstruct the creation and fast pivoting of such products. There is need for a few things to change inside the existing outsourcing companies. These changes will mean that in the future we will have more “product companies”.

That is very important as the outsourcing days will be over sooner or later. Remember, the same thing happened before in Romania with the knitwear industry. Everything that was being produced here was designed and sold in other countries; we were only used for the cheap manual labor, with no intellectual property. When suddenly it wasn’t cost effective anymore to produce goods here, they relocated to other countries. And whether we like it or not we need to start working on this. We need to it so that when it happens, the impact will not be so drastic. One of the things that should be somewhere at the top of the list of future plans is to encourage intrapreneurship in such organizations.

A good idea was to create the Cluj IT Cluster, an organization formed by all the outsourcing entrepreneurs. At the moment this kind of outsourcing companies dominate the local market. The idea was to join forces and work together in bigger projects and to also help local startups emerge. Sadly, although the project started as a good idea, the implementation and actions taken by them have not been that helpful; they focused on creating an unofficial salary cap in the local market and limiting the migration of work force from one company to another. There is no existing startup company helped by this organization. Also, they are not helping to create new startups.

Cluj Startups

Let’s try now to focus on the main subject: local startup scene. It can be divided in two main segments: startup companies started by locals and startup companies from abroad that have opened offices here. Both segments are very important and provide different benefits to the local market, be it employees or future startups.

A very interesting and innovative kind of startup company is the one where the co-founders are from different parts of the world: at least one is local and at least one is from another country. These kind of startups usually have their offices in multiple countries; the one in Cluj-Napoca focused entirely on the tech part and the other ones are focused on marketing and sales. A good example of such startup company is (or was) Liverail – a monetization platform for video publishers; they had the technical office in Cluj-Napoca and marketing and sales offices in London, New York and Menlo Park. A few years ago they were acquired by Facebook, becoming one of the most successful startup companies from Romania.

Foreign Cluj Startups

In the category of foreign Cluj startups with offices here, we can name a few: Comply Advantage, Knotch, AdLogica. Each one of them is focused on different niches. The fact that they have decided to invest here by opening their offices and hiring local talent is a confirmation of how interesting Cluj-Napoca is from a technical perspective. We can only hope that more such companies start branches here. Maybe also have some other departments beside the technical one.

These organizations will generally hire employees from the outsourcing companies to fill their Cluj startups job openings. We, as people working in tech field, have a pretty good experience with everything tech related; what we lack are the sales and marketing skills, along with the product inception. By having working experience in these startup companies, in the future, those employees will have the necessary skill sets to start their own startup companies.

Local Cluj Startups

Cluj startupsLastly, there is the category of Cluj startups that have an entirely local ownership and have the headquarters in Cluj-Napoca. Sadly, there is a very small number of such IT startup companies that are building and selling their own products. We can name here Moqups, Life is Hard (although they are listed on the stock market in Romania), Onyx Beacon, Zonga, Parking Plus, Clever Wash, HipMenu, Catwalk15. To be entirely honest, there are a few other ones. Squirrly for example is a local startup company, but they are registered in London, UK; they only keep the technical department in Cluj-Napoca.

These Cluj startup companies range from small to medium ones and focus on very different niches. Most of them are selling their products internationally; the exceptions being Zonga and Life is Hard that are focused on romanian market. It is encouraging to see this number of startups, but the problem is most of them are not exactly successful. With a few exceptions, they have not reached yet a level where they stop calling themselves startups, and start calling themselves companies. They have a minimum number of employees and they don’t seem to be able to attract good and helpful investments. In general, these companies will recruit a very small number of people from the outsourcing sector. Because of this, they are not really creating many new startup jobs. The founders are basically employees too because they don’t really afford to hire too many tech employees for their Cluj startups.

Investments

Now, we reach the painful subject of Investments. Pre-seed investments are non-existing in Romania; the angel investors that are around demand a lot of existing traction and offer very little in exchange. Before you contradict me, think about this: an investment of 1 milion euros in a romanian company is considered big. That’s the problem. Startup companies from all around the world compete against each other for the same clients, and that costs money. For a Cluj startup company, it’s close to impossible to compete with similar companies from UK or USA. Here they get investments of tens of thousands of euros, while the foreign competition has access to investments of millions.

Getting new customers costs a lot; if you don’t get that big amount cash to attract customers and start selling your products to enough people, sooner or later you are forced to close the business. And that’s simply sad. Despite everything that you hear from all other sources, we need a lot of money investments. We need the Cluj startup companies to start burning money so that they can learn. So that they can adjust different strategies and at some point…succeed. With money invested, Cluj startup companies would be able to hire skilled marketing and sales specialists from abroad. By having them run these departments from here; they will end up teaching and forming a lot of employees that will be able to handle a lot of situations in the future.

I will stop here with this introduction; there are a lot more to be said, but they will be said in other articles on this website. I hope you enjoyed reading this, even if you don’t agree entirely with everything said here.