INTERVIEW: Winners of Startup Georgia
Startup Georgia is a government-initiated competition aiming to find and support the best new business ideas. In August, 20 participants were chosen from the 150 applications by experts from the US’ Silicon Valley.
GEORGIA TODAY spoke to the founders of one of the winning companies, Bubblestack, a startup focused on developing a high-tech platform to automate the agricultural hydroponics process.
CEO of the company, Nika Ckhikvishvili, and CTO, Dato Gokadze, enthusiastically shared their success story and their views on the current startup ecosystem in Georgia for young entrepreneurs.
How did you find out about Startup Georgia?
Dato: We found out about it one week before the deadline. There were two types of project- one for high-tech products and one solely focusing on innovative ideas. In terms of the latter, the sponsor would get 50 percent of the company’s shares, while the high-tech program implied giving up only 5 percent of your shares. But as we did not want 50 percent external involvement in our company, we decided not to apply and to continue developing the startup on our own. Then our friend told us about the high-tech program and as our idea involved the usage of high technologies, we decided the project was a good fit for us.
What is your company’s mission?
Nika: Hydroponics is an agricultural method that involves growing plants in water without soil. With this method, 90% less water and 50% less soil is needed and you get a larger yield as plants do not have to compete for nutrients. Additionally, there is no need for pesticides, thus fresher healthier products are grown. The technology itself has existed since ancient times, however, it is very difficult to control this process and it is not fully automatized anywhere. You also need experience and a great deal of scientific knowledge in order to be able to control this process. Existing automatized solutions are expensive, often over USD 100 000, thus only big businesses can afford to integrate this technology. We wanted to make this process more personalized and accessible. An analogy can be drawn to Steve Job’s mission to make computers personal and cheap. We want this technology to be available to SMEs.
This project can have an important influence on Georgia’s agriculture
Nika: Yes, it can, as almost 50 percent of the country’s population is in the agricultural sector. And only 20 percent of the Georgian market is satisfied with agro-products. This means 80 percent of products are imported.
This project requires not only IT knowledge but also a good understanding of biology, chemistry and physics. What’s your educational background?
Dato: I have an educational background in Economics, but I’ve been working in the IT sphere for years.
Nika: I have a background in Chemistry and Biology, but I also worked in IT after I graduated. However, my educational background helped me a lot while developing this idea.
Give us a SWOT analysis of your startup
Dato: to start with strength, this technology makes the process of cultivation 50 percent more efficient and productive, as less soil, water, nutrients are required. It saves energy. A weakness might be that the capital investment might be relatively high. But the benefits that it brings in the long term are more than worth it. Another weakness is that we need the government to be involved in the successful launch of this product as we develop it, but it should be available to farmers.
Do you think the Business environment is friendly for startups in Georgia?
Dato: We are very content with this the Startup Georgia program- it’s clear innovations are welcomed and there is minimal bureaucracy. Though, I think specific laws could be introduced for startups, in the form of tax deduction, for example, at the initial stage.
You attended the Inno4 Forum in Tech Park where Hungarian startup founder Gergely Boszormenyi stated that EU funds are actually harmful to startups. Do you agree?
Nika: If we take Silicon Valley as an example, they do not receive grants there, as businesses are based on competition and have self-sufficient business models. But we as a company need a grant, not for just our budget but also to launch our product in the market to make it available to farmers.
Dato: The main problem with grants is that you play by the rules given by the program that is funding you, but in our case, it is only 5 percent involvement and we are not limited according to any particular business model.
On Georgia’s Innovation and Technology Agency’s list of Startup competition winners, you scored lowest in the ‘marketing’ criterion and the highest in ‘idea.’ Why?
Nika: Because we’re still new in the business field. Initially, we were overexcited about the idea itself, but we soon discovered we had issues delivering our idea to potential sponsors and customers. Our product requires awareness-raising, so we need to design a social campaign about the cultivation process, ecologically clean products, etc. We’ve just created a website and we post live videos explaining the whole process. We also aim to publish an online book about hydroponics.
Is your target only Georgian farmers?
Nika: Not only them, as this product can also be utilized by large supermarket chains, in order to grow fresh products in an energy efficient way. Additionally, we see the potential in the larger, international market.
What will you do if another company introduces a similar idea of automatized hydroponic system?
Nika: This is no unique project in these days of overpopulation and scarcity of resources in the world today. The aim of our project and the brand identity itself is that we are an open source. We actually aim to involve many people, even our competitors (if there are any) in order to have some kind of modular system, de-facto standard that will be used by lots of companies in future. Our system is not closed- we want development and that’s why our written code is openly available to anyone wanting to add on something or be somehow involved.
Natia Liparteliani