Athens Greece start-ups crisis

There is no reason to be optimistic about Greece’s future. After months of teetering on the verge of something terrible, Greece has endured a legally questionable referendum that divided the country politically, been in arrears with the IMF (repaid this week) and has increased its chances of exiting the eurozone by playing chicken with its creditors.

Businesses are closing at an unprecedented rate and capital controls are making simple things like buying medicine and food very difficult for the average citizen. The government has been reckless in its negotiations with the Eurogroup and Prime Minister Alexis Tsipras has ended up with an austerity package more severe than what was originally on offer. The whiff of disaster hangs in the air.

Your best ideas come when your back is against the wall

And yet, in this mercurial political climate – where social unrest is brewing and a capricious tax system, including a new increase on VAT to 23 per cent, makes it hard to know what the future will hold, people are opening businesses – and succeeding. “Your best ideas come when your back is against the wall,” says Nikos Drandakis, the co-founder of Taxibeat.

Nikos opened Taxibeat, an app similar to Uber that connects taxis with passengers, at the height of the crisis in 2011, when there was only one venture capital firm funding new businesses in the country. “For us there were no other options – it was do or die,” says Nikos.

If anything, the crisis was a boon to Taxibeat because they were able to work with drivers who couldn’t find enough customers to make ends meet. “Taxi drivers desperately needed some new ideas to offer new customers,” he says.

Taxibeat made drivers more efficient, helping them find customers quickly through their smartphones. Only three years after the company opened in Athens, around 30 per cent of the city’s 15,000 registered taxis use the app.

The company has expanded their business into emerging markets, and is currently only a few months away from breaking even in Lima, Peru – a city with 200,000 taxi drivers. Perhaps the fact that Taxibeat has assets outside Greece makes them feel more secure about surviving if the country were to default, but others don’t have the luxury of that business model.

Funky Gourmet, a two-Michelin starred restaurant in Keramikos, Athens, is an unlikely survivor of the crisis. At a time when luxury goods and services are being hardest hit, it’s a wonder that a restaurant where dinner can cost several hundred euros has weathered the storm, and thrived.

The owners of the restaurant, Argyro and Georgianna Chiliadaki and Nikos Roussos, opened their business as a private chef service in 2007 when the economic climate was favourable. Two years later in 2009, among civil unrest that burned in Athens for weeks, they took the risk and opened a restaurant.

“We believe the same rule that applies everywhere applies in Athens as well. If a restaurant has something of quality to offer, it will acquire a place in the city’s life,” says Georgianna, who pointed out that Funky Gourmet has seen a steady growth in visitors. Their food is whimsical yet sophisticated – an Alice in Wonderland approach to fine dining. They take typical Greek dishes like pastitsio and choriatiki (Greek salad) and playfully turn them on their head.

Though a large percentage of their summer customers are tourists, they would still be left exposed if the country does default, as social unrest could push away diners. “It’s an extreme scenario that we will have to deal with if and when it happens,” the owners tell me.

Even if you take away the terrifying possibility of a getting booted out of the European Union small businesses struggle daily with the government’s hostility to private investment and enterprise.

“Is cursing allowed?” says Nikos of Taxibeat when asked about his view of the political climate. “I see no sign of hope other than the whole system collapsing.”

Nikos brings to light a concern that almost every Greek has at the moment – after electing the left-wing Syriza party in the hope that they would ease austerity, the government has instead dug the country into an even deeper hole.

Holger Schmieding, the chief economist at Berenberg, a multinational financial institution, several months ago (before the referendum and arrears) wrote a scathing report of Syriza’s damage to the country: “The rise of Greece’s radical left to power has aborted the Greek recovery, paralysed domestic investment and triggered capital flight of €50billion within three months, equivalent to almost 30 per cent of Greek annual GDP.”

Like Taxibeat, the founders of VOIS – an architectural company based in Athens – have had to adapt their business model to stay afloat during the crisis. But they have been able to benefit from the economic downturn. “The crisis helped us because we’re young and not expensive so people know we’ll give them everything we have for a low price, and that we have a good appetite for work,” says Katerina Vordoni.

The group does everything from office spaces to remodelling, but their strength lies in designing beautiful homes that blend with the environment and have a discreet sense of simplicity. “We give great importance to things that are resistant to the passage of time,” says Fania Sinanioti, the company’s other half.

They’ve definitely had to streamline their business due to the crisis – using more local materials and labour as well as learning how to manage clients on incredibly tight budgets who are always looking to bargain the price down. “If people don’t bargain they feel like they’re losing something,” says Katerina.

Educated in London and Boston, Katerina and Fania could easily have remained abroad for their careers, but decided to return to Greece because they saw an opportunity, and wanted to work as individuals instead of cogs in a big architectural firm.

“Greece is a very privileged country in many ways – especially for architecture – the colours, nature, light and topography,” Katerina says, with Fania adding: “That’s what we’re trying to do with our work – remind our clients of the beauty that we have.”

Another entrepreneur inspired by the beauty of Greece is Lito Karakostanoglou, a jewellery designer whose collections have been celebrated in Athens for over a decade, but have recently grown to prominence on the international market.

As a muse for her jewellery collections, which combine mythology and geometry, her home country is invaluable. “It has to do with the climate, it has to do with the sea, it has to do with the women here.” Lito says, adding: “Greece is a bit of a mess but from that mess you can have wonderful things.”

Again, a jewellery store that sells pieces laden with diamonds and sapphires – which easily fetch thousands of euros – doesn’t seem a likely contender to outlast the crisis, regardless of how many wealthy ship owners fill the country.

Lito attributes some of her success to the fact that she’s diversified her collection to include cheaper items around and below €100. Having her jewellery sold on an international e-commerce platform like Net-a-Porter doesn’t hurt either. “Now that we’re growing outside of Greece there’s bigger brand awareness,” she says, pointing out that 50 per cent of her sales occur outside the country.

What would she do if the country exited the euro and social unrest engulfed the capital? “I would move to Mexico,” she says.

For the two women at VOIS whose clients are in Greece, the situation is a little different. “If that happens I cannot think about the business, it’s more of a question of survival and whether we’ll be able to find food in the supermarket.”

Even with Prime Minister Tsipras’ capitulation on his economic and political stances over the past few weeks, it’s hard to believe the government will make good on their promises to reform the country. These entrepreneurs have had to navigate the murky waters of a country in crisis with resourcefulness, innovation and entrepreneurship as their tools.

The fact that these start-ups have managed to stay afloat during such a turbulent time is a testament to their strength, capability and adaptability – seeds that will hopefully grow in time to regenerate and revitalise the ailing Greek economy.

This article was published in Volume 11 of SUITCASE Magazine and has been updated due to changes that have occurred in Greece over the past few months.

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