I recently met with several senior executives from Turkey who were visiting the United States as part of a business delegation. My conversation with Murat Kansu (General Manager of Microsoft Turkey), Cenk Kivilcim (General Manager of Cisco Turkey), and Mahmut Unlu (CEO of venture fund, Unlu Yatirim Holding), yielded some points that I believe will be interesting to my readers:
1. Turkey has become a regional hub
According to all of the executives with whom I spoke, Turkey is the regional hub for many multi-national companies - in some ways continuing its historical role as the bridge between the East and West. Kansu told me that Microsoft has had operations in Turkey for nearly a quarter century, and oversees its entire presence in the region from there - managing from its regional headquarters in Istanbul its operations in nations as diverse as the Gulf States, Pakistan, and Israel.
2. Political instability has not translated into to economic fears
Despite a fair amount of political instability in Turkey, business is stable - and growing. All of the executives with whom I met indicated that unlike the economies in various regions in which political instability has severely hampered business activity, Turkey's economy remains somewhat isolated from politics. According to them, both the government and members of the elements within Turkish society who oppose the government, understand that care must be taken not to disrupt economic activity. While such a scenario seems hard to fathom, Kansu pointed out that in July, there was a failed coup d'état in Turkey, and in September, Microsoft had its highest ever number of new Windows activations in the country - indicating quite clearly that even a coup d'état did not undermine the confidence of a large number of technology buyers. Windows activations, of course, reflect not only the purchase of new software, but often of new computers.
3. Turkey's economy is the 18th largest in the world.
The figures that all three executives mentioned about the large size of the Turkish market are in agreement with the International Monetary Fund's estimate for 2016, as well as the World Bank's 2015 analysis and United Nations figures from 2014. With a nominal GDP of over $750-Billion, Turkey is a much larger market than many in the West might realize.
4. Despite this, there is a lack of VC capital.
While there is plenty of capital available in Turkey for mature businesses, the executives noted that Turkish startups that have grown past the bootstrapping stage face a severe shortage of potential investors. Such a situation forces many younger firms to focus from an early stage on positive cash flow at the expense of growth, leading many startups to get stuck in a perpetual, stunted "early stage." Of course, such a situation also creates opportunities for foreign investors - in fact, some foreign VCs have made investments in Turkish startups, but, as of yet, the total such investment is tiny compared with the need. The capital situation is a big challenge - but might also create great opportunities for the right parties.
5. Almost half the population is under the age of 30
According to the executives, Turkey's disproportionately young population plays a significant role in making the country both technology oriented - a large number of people are "digital natives" - and an earlier adopter of new technologies than many other nations around the world. This creates great opportunities for businesses offering technology to the Turkish market.