Ussal Sahbaz just published an interesting post — Why Turkey needs a National Artificial Intelligence Strategy.
Ussal is a dear friend, CEO of EDAM, an Istanbul based independent think-tank, anyone interested in Turkey and startups should follow.
On his post, he argues that against the AI giants of USA and China only a few small countries can position themselves as AI innovation hubs. Ussal, rightfully, underlines the importance of the size of the targeted markets to train formidable AI technologies.
“Mid-sized emerging countries like Turkey, Brazil, Mexico, Indonesia, or South Africa are stuck in the middle. These countries are not a natural home for global business models, because the local markets are not small. Yet, the local markets do not produce enough data for AI companies to reach to scale at home and then blitzscale globally. The fact that the local markets are large (but not that large) becomes a curse. These countries are able grow unicorn companies, but they are largely focused on local markets with little potential for a global expansion. For instance, Indonesia has 4 unicorns: two local marketplaces for goods and services, one for motorcycle hailing, and one for local travel booking. Turkey has –according to some sources — one unicorn so far: Trendyol, an e-commerce website for the domestic market. In comparison, Israel has 18 unicorns, all with global business models.”
Exactly!
“The fact that the local markets are large (but not that large) becomes a curse.”
I have been calling Turkey a swampland for startups for some time now; a very nutritious ecosystem (many dead or about-to-go-extinct ‘animals and plants’) making it easy to start and grow to a certain size. Yet once the start-ups are on the path to profitability, they literally start ‘sinking’ into the mud they ‘sprouted’ from unless they start focusing on international markets dislocated from the realities (…) of our region.
Yemeksepeti, the food delivery giant of Turkey, is a case in point.
Delivery Hero acquired mainly-Turkey-focused Yemeksepeti for USD600m in 2015, making it one of the biggest success stories of Turkish tech startups.
Delivery Hero was in its 5th year of operation when it gobbled-up the 15-year-old target.
Delivery Hero went public in 2017, and now, only 8 years old, is valued more than USD7bn…
Emerging European and the Middle Eastern start-ups cannot solely rely on local economies to become big success stories; not just in AI but across all sectors. They need to test locally, if necessary, and go beyond their borders before getting to know that sinking feeling.
Godspeed.