It’s hard enough being a startup without the financial collapse of your country to contend with.
For those in Silicon Valley who are used to Uber being worth more than 40x the debt payment that Greece just missed, capital controls — which are just what they sound like — are an alien concept. But this is unfortunately not so for startups in Greece, who, because of restrictions on money that can leave the country, are now in arrears for their AWS and Google ad bills.
This week, the Syriza government failed in negotiations to receive a tranche of bailout money in time to make a $1.7 billion IMF payment on June 30th. Instead of deciding whether to accept the creditors’ offer himself, Prime Minister Alexis Tsipras put the decision to a referendum, or public vote, to be held this Sunday. Bear in mind that voting on fiscal matters is unconstitutional in Greece.
As news of the negotiations sputtering out reached the general population, the country saw a run on the banks, which resulted in the implementation of capital controls, currently allowing Greeks to withdraw €60 a day at ATMs and placing a limit on any foreign transactions, even for something as mundane as payments for iCloud.
The human impact of this is devastating. And it sucks for companies too. Imagine being a founder competing against other startups that can pay their bills? This is why the founders of BugSense, one of the handful of Greek startups to have seen a successful exit (to Splunk), have offered to act as a proxy for Greek startups that need to make payments. “Pretty much most Greek debit cards don’t work at all,” BugSense CEO Panos Papadopoulos tells me. “Not even €60 per day.”
There is a common misconception that Southern Europeans and Greeks in particular are “lazy”, and that’s why they are in this mess. That is not true, point blank: Greeks are some of the most educated, industrious people around. (Disclosure, I am Greek). But the consequences of centuries of conquest and abuse, a rampant culture of clientelism and government corruption starting from the 1980s makes it very difficult for ambitious people to work within these constructs and inside the country if they are not, as we say in Greece, from the proverbial “good family.”
Over 200,000 Greeks have moved abroad since the crisis started five years ago.
Papadopoulos and his co-founder John Vlachogiannis, and organizations like Openfund who also offer support for Greek startups during the crisis, are a part of the solution, and in this case are literally helping startups stay inside the country. Breaking ground in order to foster a thriving startup and entrepreneurial culture, in addition to doubling down on what we do best, is the way we “save” Greece, whether we remain in the Euro or not.
(For what it’s worth I would vote ‘Yes’ in this weekend’s referendum if I were there.)
Started by Englishman Thom Feeney, an IndieGogo Greek Bailout crowdfunding page has had over 1.2 million € pledged to it so far, just 0.07 percent of the goal. Feeney’s campaign was begun on a “fixed” model. According to IndieGogo’s terms of service, this means that money goes back to the donors if the goal isn’t hit, which it won’t be. And even if it were, that wouldn’t solve the debt problem, as there’s an even bigger payment looming down the road: Greece owes 340 billion € in total, more money than Apple’s cash on hand.
Considering that one can bypass the middleman and donate directly to alleviating the outstanding Greek debt, Feeney should stop his fixed campaign, and start a new “flexible” campaign, where he’ll be able to retain the money even if the money raised doesn’t hit a 1.6 billion € goal. (IndieGogo doesn’t allow you to change campaigns from fixed to flexible mid-campaign.)
Even though the money raised in the new campaign would be comparatively modest, it could go to Zerofund’s efforts, in addition to non-profit organizations like Desmos, who are on the ground in Greece making sure people who have lost everything have the basic necessities of life like food and shelter. Or organizations like Edosa Fakelaki, which allow people to anonymously report bribes.
While Amazon Web Services is a bit higher on Maslow’s hierarchy of needs, Papadopoulous says that they’ve had 30 applicants for the payment relief program so far, and is already helping 10 startups weather the crisis. He is working through his vacation to get something more formal than an application going, and says that parties interested in contributing should email him or give him a shout on Twitter like Marc Andreessen did. “We are really not formal yet,” he tells me. “[And] hopefully we won’t be needed for long,” he said, in an understatement.