In 2008 I had the privilege to travel to Istanbul to check out the tech scene. I’d arranged a tech startups meet-up with Arda Kutsal, a local blogger who’d started Webrazzi, a tech blog. I landed at the airport and caught a taxi to the hotel we’d agreed to meet at, thinking the meet-up would be in the bar. “No sir,” said the lady on reception, “your event is in the ballroom”. So, I trundled by carry-on luggage down the hall until I opened a huge door, only to find around 800 people listening to speeches. From the stage, Arda pointed to me said “Welcome Mike!” into the microphone, whereupon the whole ballroom swung around to see me standing there with my luggage.
Now, I’m telling you this story not merely to reminisce, but to illustrate how hungry the tech scene in Turkey was to develop. And develop it did. l
In the intervening years Webrazzi has grown to become, ‘effectively’ the TechCrunch of Turkey, operating its own conferences, while others have sprung up. Turkish startups like Trendyol appeared, started by Demet Mutlo, one of the many taking advantage of Turkey’s booming economy. With a population of 80 million, most of them under 30, Turkey looked like it had a bright future. Even as the dark clouds of political unrest started to appear a few years ago, those seemed like a side-show to the wider boom that was taking place.
But when riot police started brutally evicting protesters from the last central city park not to be taken over by yet another shopping mall linked to the ruling elite, the overall signs were not good.
And so, to the present. President Erdogan has declared victory in Turkey’s historic referendum on a new constitution that will turn the country from a parliamentary democracy into a presidential one. But unlike in the US, the president will be handed sweeping powers, with few checks and balances. Turkey, it seems, is suddenly going backwards.
Just as with Brexit, the referendum has divided the country right down the middle. And in sophisticated, urbanite Istanbul, the people there dismissed what they saw as a grab for power by the President.
Barring an unforeseen and unlikely challenge, Erdogan will now be in power until 2029 — longer than Kemal Ataturk, the nation’s founder. Since last year’s coup attempt, he has cast his opponents as terrorists, jailed opposition leaders and journalists, dominated the airwaves and shut down almost all opposition media.
He will now have to win an election in 2019 to acquire these new executive powers, so everything is at stake for him, and Turkey isn’t about to get any calmer. As David L. Phillips, of the Institute for the Study of Human Rights at Columbia University, says: “Turkey’s western orientation is finished.”
So where does this leave Turkey’s tech startup industry?
The major concerns are two-fold: what will venture capital do and will the talent stay?
A significant global investor told me off the record that he thinks this will play out as “a Russia story.” The referendum result, he says, adds a significant risk factor for foreign capital going into the…