Popular myths abound about the failure rate of startups, but a look at the statistics suggest that small businesses have indeed a good chance of succeeding. The one-year survival rate across Europe is over 80 per cent according to Eurostat, with 44 per cent still going strong after five years. The European Union describes small and medium businesses as ‘the backbone of Europe’s economy’ and Malta is no exception, with our island nation in the top three countries when it comes to creating high growth businesses.
We talked to four new businesses to find out how it feels to launch a business in Malta, what inspired them and why they think their company is going to be one of those big earners.
Eman Mifsud, 27, is a Life Science graduate with a strong passion for IT. He has created THATSpace, which is an online platform for working and holding meetings out of the usual office environment.
“THATSpace.io is transforming restaurants and hotels into satellite offices – it is like Airbnb for remote working,” he says.
“People can pay by the hour for a secure, private and quiet space at an affordable price and get high speed internet, as well as hot and cold beverages to keep them going.”
Mifsud’s business kicked off in 2016 when he was selected for a pre-acceleration seed fund from MITA Innovation Hub.
“Luckily, startups are on the agenda at both national and European level,” he adds.
He also got help from Trade Malta and Malta Enterprise, which allowed him to exhibit overseas, and he was backed by Startup Chile, an accelerator empowering early stage companies in Latin America.
He describes the business development journey as a rollercoaster but adds: “The exciting moment is when you receive an encouraging message from a user. It fills you with energy to continue striving.”
Mifsud has a clear vision for the future.
“In the next five years, it is estimated that one in every two people will be working half of the time remotely out of office. Many global companies have started to adapt remote friendly working conditions. I see THATSpace as a global player in the workspace services.”
His local support base remains important, despite the challenges.
“Malta being a small nation is unique. This means that it has its own opportunities and challenges. For instance, access to equity finance is still in its infancy when compared to cities like Silicon Valley, New York and London. But Malta is an excellent testing-bed to validate a business solution as one can consider it a metropolitan city with a high-density population.”
Anatoliy Gatt, 22, is a student at the University of Malta. He started coding when he was 12, got a job as iOS developer at 15 and started his own business at 16. His latest venture is called Freshy, a platform where restaurants can sell excess food in the form of a last-minute offer.
“Freshy will locate people nearby and push them a notification. If one is interested in a meal, it can be purchased with a single tap of the app. Then just walk into the restaurant and present a four-digit code to pick up the meal,” he says.
Gatt was inspired by seeing a restaurant owner throwing food away at closing time.
The most important factor to succeed in Malta is to know the right people and to make them excited enough to help you
“I started researching and found out that food waste is a global issue. The largest contributors to the food waste issue are the hospitality and catering industries. I thought about a simple way to help businesses earn more, customers pay less and to bring improvement to environmental sustainability. This idea turned into Freshy,” he says.
Freshy is a recipient of the TakeOFF Seed Fund Award, MITA’s YouStartIt Award and an MCA grant for winning Startup of the Year award. The company was named “One of the Top 10 hottest startups in the world” by CNBC. Gatt sees it expanding rapidly to 50 countries.
He says that networking has been the key to his success in Malta.
“The most important factor to succeed in Malta is to know the right people and to make them excited enough to help you, sometimes without any return, which did happen a lot in my startup journey. Due to Malta’s size, it’s not very difficult.”
There have been some bumps in the road though. “Although Malta is promoting itself as startup hub, it has a long way to go before really becoming one. It still takes six months for a startup that is funded by two government organisations to open a bank account. And what kind of startup hub are we talking about when, after praising the idea, the startup is rejected for funding based on a “not eligible” NSO code? Those are just couple of examples of the extreme levels of bureaucracy that we are presented with by organisations that should help startups, not slow them down,” says Gatt.
Alisa Jensen, 31, has been shuttling between Malta and Norway as she develops her recruitment startup. The company aims to give businesses a fast track to available candidates, from an extra pair of hands to a last-minute manager. The idea won the StartUp Weekend in March this year, and Jensen was accepted in MITA’s accelerator YouStartIt.
She was inspired by seeing the dysfunction within her industry.
“A lot of things don’t quite work, and it will just get harder to balance talent supply and demand with the coming 4th industrial revolution. New technologies and automation are taking over certain types of jobs – 45 per cent of the tasks we are paid to do today can be automated with existing technology, not to mention self-driving vehicles, cleaning robots and self-serving restaurants. By challenging the traditional way of recruiting, utilising and developing talent, we can help societies meet the constantly changing talent demand.”
Being in Malta has played a role in the development of the project.
“From my experience, governmental support initiatives in any country tend to be bureaucratic and hard to navigate, but in Malta you get to meet the right person and have it all explained. Though the ‘startup-enabler initiatives’ in Malta seem to be a bit fragmented, you can see that each player, be it MITA, Malta Enterprise, Trade Malta, or others, has a genuine desire to help you succeed. MITA’s program helps you structure the process, connects you to mentors, and grants equity free capital.” The business is also exploring EU funding. In five years, she sees her business “acquired by Google or Facebook”.
Registrator is the brainchild of Branko Stojakovic, 41, who lives in Sliema. Stojakovic has been a software engineer for 15 years. His startup project draws on that experience, bringing accountants and their clients to one common accounting and bookkeeping platform and one database.
He was inspired as a student, while doing bookkeeping for his mother’s stationery shop.
“I realised how inefficiently accountants and their clients worked together. It is easy to stand out from the crowd with this project because the idea of using different accounting offices as data sources for a centralized web application is completely unique on the market.”
Stojakovic got help from Malta Enterprise and TAKEOFF with consulting, mentorship, funding and networking and says that now is a good time to be a startup in Malta.
“This project wouldn’t be where it is without them”, he says. His biggest challenge has been gathering funding but says “leaving my full-time job to focus on a dream” has been exciting. He plans to establish his product worldwide within the next few years.