Skip to content
Technologická Inkubace

Ivo Denemark: From Idea to Success or How to Launch a Startup the Right Way

Investments Startups
29.07. 2024
line-arrow Ivo Denemark: From Idea to Success or How to Launch a Startup the Right Way

Technology parks and incubators help the development of small promising companies in the Czech Republic. They can advise in the very beginning, but also connect with a suitable investor. How to choose the right one for your idea?

The article was taken from Computer magazine

Starting your own business is definitely not easy. Family and friends may help you in the beginning, but it also depends on what kind of project you are coming up with. “If you say you are going to secure communication based on quantum coding between satellite constellations and the armies of NATO member states, your grandmother probably won’t contribute,” says Ivo Denemark, director of the Startups and Venture Investments Division at CzechInvest.

You are currently the Head of the Startups Division at the CzechInvest agency. How did you get into promising entrepreneurial projects?

From the age of twenty-one I was in business, I had a school for management training, which I eventually sold. I made my living as a consultant, first in the field of subsidies, then in the field of innovation. I was lured to CzechInvest by the opportunity to work with startups in the space industry, because CzechInvest runs the ESA BIC incubator for the European Space Agency. So I started working for space startups and after some two years of working with them I was promoted to the position of Director of the Startups and Innovative SMEs Division. So under my division fall all incubation activities, not only just from the space accelerator, but it is also for example the NATO accelerator Diana, which we are preparing with the Ministry of Defence, startups in the Technology Incubation or accelerating startups abroad.

What is the first step a person should take who has a startup project in mind that he thinks he could break into today’s market with?

First of all, you need to say what is its goal. This means writing down a business plan, which may sound a bit superficial, but without it, you can’t move forward. The moment I know how much money I want, a step called FFF – Friends, Fools and Family – comes into play . This means, first and foremost, I start fundraising in my community. So you can either invest in the project yourself, or your friends or family, but it can also be a private investor or an innovation support program. There are also a number of competitions, but that’s where we get into what the specific project is. Because if you tell your friends or your family that you have a machine to make potato chips, they will probably understand that more than if you say that you are going to provide quantum-coded communications between satellite constellations and the armies of NATO member states. Well, maybe Grandma won’t invest after all.

Is there any way to check in advance whether my idea actually has a chance of success?

In this respect, I think technology incubators work quite well. Both a regional network, which will provide you with some initial consultation, for example. And then there are a number of different competitions just for budding entrepreneurs, whether it’s Vodafone Idea of the Year or just different regional competitions. And that’s where I think if you’re not quite sure yet and you’d like to get some feedback, that’s where you can meet investors and mentors. They might advise him that he should pilot the product somewhere even further, where he can’t think of it himself. The important thing, which is a very common Czech vice, is that we don’t talk about our idea because someone will steal it. That’s definitely not the case, on the contrary, we need to actually confront these people. Talk to them about the idea, get their opinions. Because if it’s such a simple thing that someone would steal from you, it’s probably not even worth pursuing.

What is the best strategy for reaching investors?

You need to have a clear exit strategy and a clear business plan. You have to learn to speak the language of the investor. If you go to a chemist and start telling him, well, it’s bubbling and it’s red, he won’t understand you. But if you learn his language and you empathize a little bit with the other side, then suddenly the communication will be more balanced, then you have a much better chance. We do this at CzechInvest once a year. Investment Academy for startupswhere we teach people how to communicate with investors. The typical problem is that a startup is in love with a problem that it is solving, but the investor very often knows nothing about the problem, that is not his job, his job is to invest the money and ensure some kind of return. This is what the person has to understand when they go to him.

Could you elaborate more on the work of the incubators? How can they help start-up projects?

In general, incubators tend to focus on the very early stages of the business. Quite often they have support from a city or a region, so typically, if it’s a regional incubator, they offer some initial consultation or a space to present an idea. And then there are incubators that are more focused on just providing some office space, which is not inherently bad. In the early stages of a project, it’s very important for companies to meet each other. Other incubators then offer various interesting programmes. For example, the South Moravian Innovation Centre has the Prototype and Verify project, where it helps some selected candidates in those support programmes to make a prototype of a physical product and first test it on the market. Within our incubation programmes we also do the so-called pre-incubationthat means that we help companies to define which support programme is best for them and to define some requirements for incubators in their location and so on. And then there are incubators that are specialised in some specific technologies, like the creative industry, where you can use different 3D printers or glasses and so on.

So what should one look for when choosing a suitable incubator?

The main aspect is that the incubator’s services make sense for the startup. Then it is important to look at the price of these services, for example. Some incubators provide some trial period for free, others might want to get a stake in the company. It’s also important to look at what kind of mentor network the accelerator offers. If there really are some experts there, they don’t have to be there physically every day, of course. And then it’s good to know what companies are already there, because that also indicates something. And not every incubator that is, for example, well rated is necessarily good for my company.

What does CzechInvest offer to start-up companies?

There are a number of these programs, but the most basic is that we offer help when you want to develop that basic product. Whether it’s ESA’s BIC space accelerator or the Technology Incubation programme, which focuses just on the initial idea, where we can also help connect you to investors. We also help with promoting projects abroad. Finding the right region and accelerator there.

What areas of the technology sector are probably the most attractive for start-ups? How does the trend of generic AI play a role in them?

AI is, of course, a phenomenon. But I would say that very soon there will no longer be startups primarily built on AI, because using AI within a startup will be like using email. There is a lot of talk about quantum technologies in the context of the new government strategy, especially in cybersecurity we are already seeing some startups in this area. I think with the war in Ukraine, the defense industry has started to be a big topic. It was actually completely taboo for startups until then, and now suddenly we see that these companies are not afraid of it. They understand that it is important, that there is money to be made there. And I’m not talking about rifles and grenades or explosives. It’s telecoms encryption projects or maybe innovations around drones.

Can you mention any specific startups that have come out of CzechInvest programmes?

So it’s hard to pick a favourite child, but one company we like to mention is Dronetag. It was actually formed from a group of students who came to a space hackathon we organized a few years ago. Today it’s an international company with over fifty employees. They are involved in the digitisation of drone transport, so you could simplistically say that they develop license plates for drones. And it’s such a simple example where they were able to identify some
problem before regulation came in. They prepared the hardware and they were able to lure investors to it. Today, they have manufacturing in Asia and they’ve covered major markets around the world. In the space sector, it may be
Stratosyst, a startup developing stratospheric balloons that reach great heights. It is also tackling projects with the European Space Agency, as well as a defence project. Unlike conventional
satellites, such as Elon Musk’s, which run around the planet all the time, these balloons can stay in one place for quite a long time. This means that, for example, in the context of some long-term observation, they are much more stable.

Who is Ivo Denemark
A macroeconomic historian and educator by training, he has been helping innovative projects and their financing for a long time since selling his own educational company. He joined CzechInvest in 2020 as Business Development Manager of the ESA BIC incubator. He subsequently used his knowledge of the incubation process to set up specialized support programs (incubators) for AI, Mobility, Creative Industries and other sectors. He has been involved in social projects for many years, especially in Prague’s Žižkov district, and co-founded the charity festival ŽižCon. He plays curling competitively and is a volunteer firefighter. His hobbies include board games, boating and raising his daughter.

Author of the article: Jan Spěšný

Similar news