The Revolution of AI in Businesses

#Business#Featured#Start-upRead the full article

Browse by categories



#Capital Markets

#Real Estate


Articles in #Business
The rumors about crisis have started to take shape: Romania might enter a recession – “technical” for the time being, that is two quarters without economic growth – in the second part of next year or in 2020, according to the chief economist for Central and East Europe with Unicredit, Dan Bucșa (Source: Agerpres). Here is my take on several consequences of the so-called technical recession. 

What Technical Recession Means

The unanimously accepted definition refers to two successive quarters of economic contraction. Since the contraction is measured on the Gross Domestic Product (GDP), we may say that economic recession is just a first signal that a growth cycle of an economy is about to end. More somber terms, such as depression or crisis, refer to the subsequent effects: increase in the unemployment rate, inflation, decline in the purchase power, then production and so on. History shows that economic crises are frequent, but they differ in respect of severity. Experts say that growth is the natural tendency of economy, but sometimes a peak followed by a decline happens. For instance, since the year 2000 we have already had two global crises. The best known and most severe one, of 2007-2009 (followed by recession), but also the Dot Com Bubble at the beginning of the ‘00s, when many Internet companies imploded. The “breaking of the online bubble” at the time affected Romania very little, as compared to the 2007 crisis. 11 years ago, the real estate global meltdown was more noticeable in Romania, as the country was already in a local real estate bubble. In other words, the economic statisticians can predict with a rather high degree of precision the decrease of GDP for two successive quarters, but the effects deriving from here are less predictable, especially from the point of view of severity and duration.

The Global Background and Romania’s Specificity

Besides the recent news regarding the decline on the stock exchanges, in principle, Romania’s economy is, first of all, interdependent with the other economies of the European Union and the forecasts are pointing at a slower growth in these economies. Most analysts have raised red flags because Romania’s surplus of a few good years was spent on state wages and other similar expenses, and this leads to a decrease in the efficiency of the economy on a medium term. Here is how Unicredit Chief Economist explains these things: “If Europe grows by 1%, it is likely that we will avoid recession. If, however, it grows by less than 1%, then chances are that a recession will follow. Our forecasts indicate a slower pace of the economy in 2020 by about 2%.” As usual, the official sources are far more optimistic in respect of the years 2019 and 2020. Still, the global slowing of the economy is not a fact that can be denied or ascertained from Bucharest.

What Effects We Will Feel on a Personal Basis

Once again, according to this forecast, recession will be felt in business and in the pockets of each of us only by means of its consequences. If a safe workplace or the negotiation in Euro of the contracts/salaries is precautions within anybody’s grasp, it is more interesting to see what happens with the personal surplus of money. Forbes publishes an article that includes two recommendations worth noting:
  • Avoid emotional behavior. The most common advice “buy cheap, sell expensive” is very difficult to apply in investments. This is proven by the fact that the assets of the American investors have increased over the last 20 years by only 2.5%. To give another example, without a massive demand, cryptocurrencies would not have increased in value so much until 2017, only to decrease dramatically over the last few months. Somebody invested and subsequently lost that money, contrary to the axiom “buy cheap, sell expensive”. Paradoxically, this means that in a recession or crisis, there are plenty of bargains/understated assets. However, these are difficult to identify and profited from.
  • Make several personal sub-pools, according to age and plans. If you are still active, a “safety net” comprising an amount sufficient to secure your lifestyle from three to six months should be enough. If you are about to retire from professional life, safe investments will have to provide a sufficient amount for many years. Optimistically speaking, at such point in time, the accrued surplus is higher, which means that other sub-pools, more risky, could be well represented.
In a nutshell, both personally and businesswise, the latest rumors suggest prudence, but they are not at all a reason to panic. Most of us went through our crisis apprenticeship ten years ago, which means that we will know how to behave logically and non-emotionally in the following recession, no matter when it might come and how severe it might be.
Last summer, Japan and the European Union signed a historic free trade agreement, regarding food products, cars and long lasting development products, among other things. There is a new ambassador in Bucharest and we do no longer need a visa for the short term trips to Tokyo or Osaka. Most certainly, Japan is a country full of opportunities and I have started by sorting out the famous problem of Japanese business etiquette. Here are a few recommendations I've verified from several sources: 
  • Punctuality is a must not only in respect of the start time, but also the end time. Be highly ceremonial, remembering that not only handshakes, but even tapping on the shoulder or any kind of physical touching are not desirable. Jokes also. First names are used only at the express invitation of the interlocutor, in a long lasting relationship. The well-known bow should be avoided, unless well practiced in advance.
  • Business cards are strictly necessary. Order some in Japanese and here is why: they are produced and studied carefully at the beginning of the meeting and all this even bears the name of a ritual, meishi. You are supposed to also read carefully the card received.
  • “No” is not “no”, as the Japanese almost avoid to utter it. It is suggested by a whole series of euphemistic strategies, such as laterally shaking of the head, changing the topic of discussion or silence altogether. You should avoid saying “maybe” or “we will consider this”, as in the Western culture this means rather “yes”, whereas in Japan it is the opposite. 
  • Be careful with “Sayonara”. We have all heard it said in Japanese animes and we may feel tempted to use it, but it may mean “farewell”, rather than “see you soon”. At the end of a meeting regarding an ongoing negotiation, it may indicate that you are not willing to continue the talks.
  • A translator is absolutely necessary, unless you speak fluent Japanese. Even if they do speak good English, more traditional businessmen will avoid using it directly.
  • Decisions are not made in a topic specific meeting. You may be impressed by the extended participation of the Japanese party, but you shouldn’t wonder how such an extended delegation will make a decision in a meeting, because they won’t. To the Japanese, the purpose of the meeting is to gather information. The decision is made subsequently, further to an elaborated process and it will be communicated to you afterwards.
If you are lucky enough to have a less ceremonial business partner, enjoy it! Bear in mind, however, that their effort to adopt the western practices is, after all, also a proof of extreme traditional politeness. Anyhow, it is recommended that you should avoid risks, especially during first meetings. My sources:
The famous business publication Forbes provides, on its website, an updated list of friendly countries towards entrepreneurs and other businessmen. I have visited a few of these countries, reason for which I’m taking the liberty to nuance the comments of Forbes, as follows:

Top 3 Developed Economies

  • United Kingdom. It is a well-known global financial center and Forbes rates it as being the third European economy after Germany and France. With or without Brexit, British economy is strong because agriculture and extractive industries are strong and Brexit will change fewer things than one might think. My advice: Find time also for museums if you go to London. I have never seen things more organized and easy to grasp than there. For students, entrance is free. You can make donations at the British Museum or the National Gallery. As much as you can.
  • New Zeeland. It is far, but has had economic growth for decades on end. A few dozens of years, it was a mainly agricultural economy depending on the British Empire, but the New-Zealanders have managed to solve the problem in the meanwhile. As the engines of the economy run smoothly, you would need serious resources to start a business. On the other hand, as far as red tape is concerned, everything would go just fine. My advice: Take some time for the local culture and nature. If you don’t understand the role and influence of the Maori tribes on the New Zeeland’s economy, you have lost a lot both personally and financially.
  • The Netherlands. Everybody knows that it is a country where you can indulge yourself, but by far fewer people know that it is the sixth strongest economy in the European Union with a great deal of exports. Officially, the Netherlands undergoes an austerity period, regulated by public policies. As compared to Romania, this configuration is by far more promising. My advice: If you get to Amsterdam, visit Rjksmuseum. You don’t have to be art lovers. Just try and see how bourgeoisie, that is business, is born. 

Top 3 Less Known Countries

  • Estonia. You may know that the country had joined the European Union three years before Romania, in 2004. It is even more likely that you have heard that it is a highly computerized country. In terms of business, this means that many Romanians move their businesses there and pay taxes also there, by the so-called e-residency. The process can be easily initiated here. My advice: In general, use all the online facilities regarding the bureaucracy and the related aspects. You will save serious money, which you would otherwise spend on lawyer, accountant, paper and printer. I have never been to Estonia, but if you want to make a comparison, just pay an invoice via the Romanian Post. There the conversations are still conducted in ROL (Romanian Old Lei).
  • United Arab Emirates. I have already written in detail about the economy in Dubai and the rest of the Emirates. The business facilities are numerous, but the legislative framework is somehow volatile. In any case, the Emirates are a territory in which money circulates. All you need is know exactly what you want. My advice: Apart from malls and the like, we don’t deal with an exceptional tourist destination. Look for medium comfort, because the average is very high in the Emirates. Avoid extravagant spending, because these are more than welcome in the Gulf.
  • Romania. As a native of this place, I only note the presence of my country in the Forbes top, ranking 43rd at the date of this analysis. The good news is that we are ahead of Bulgaria, Thailand or Turkey. The economic picture presented by Forbes is far from pretty. Still, if we have a look as if at a mirror, we have reasons to believe it is not that bad. My advice: My advice wouldn’t be useful in the given context. Still, I like doing business and pay taxes in Romania. If I were a foreign investor, I would be cautious enough to rely on a good local team in respect of the support departments, from Legal to Human Resources. We all know the rest.
Bucharest, 15 November 2018. For immediate release. Romanian entrepreneur Octavian Pătraşcu successfully concluded the sale of a building located in Bucharest, Calderon street no. 70, to a foreign investment fund, interested in office buildings in premium locations, present on the Romanian market since 2006.  "We acquired the building one and a half years ago," said businessman Octavian Pătraşcu. "We made the building profitable by acquiring trusted, quality tenants and improving the internal organization and cost-effectiveness. This resulted in a good yield for me and a solid, long-term investment for the buyer." Octavian Pătraşcu is a Romanian businessman with a successful career in fintech, startups and real estate. As an angel investor, he has two successful exits in fintech and one for Vector Watch, a smart Romanian watch, which was acquired by the famous Fitbit wearables company. "For Calderon 70, we’ve sold after the asset became more valuable due to the tenants, but also to market growth," said Pătrașcu.
If you have reached this blog post, this means you have done your homework and you know the academic definition of an angel investor: the term originates from the financers of the plays on Broadway and refers to a person who ensures the cash flow of an incipient business usually with their own money. It sounds romantic, as in a play: a young man with a dream that might change the world is visited one night by a supernatural creature, filthy reach, who helps him make the dream come true and, of course, to change the world. However, you can figure it out that reality is actually different:
  • Angel investors finance startups, therefore need other guarantees than the profit margin. It is very simple: startups do not generate profit in the incipient stages and the contributions in capital of the first investors replace exactly this kind of profitability. That is why the investment they make at time zero will be subsequently converted in shares or in another form of participation to business.
  • Angel investors usually invest their own money, which makes them more involved in the business in which they invest. It is all but natural that they want to keep close to the entrepreneurs they finance, to ask questions and expect information on the evolution of the business. That is why the investments are made on phases: according to the success of the first phases, the subsequent funding is ensured.
  • Angel investors offer more favorable conditions on a short and medium-term than the banks or the investment funds. They do not require either interests or dividends, but that is exactly why they expect, on the long run, profitability (Internal Rate of Return) of 20-30%.
However, if you consider these constraints more thoroughly, you realize they are in fact benefits. The questions asked by a competent angel investor are not obstacles, but tools that help you clarify the objectives. The experience brought about by this kind of financers from other businesses means a contribution of financial culture and not only. Also, remember: a person who is not a parent, nor a spouse has been willing to invest their money in you and this obligates you and makes you a better performing entrepreneur. In a nutshell, a good angel investor is not necessarily measured by the number of zeros of the amount they make available to you. Together with that money, you can win an experienced partner, a sort of brains of your business, which influences you for the better, affecting neither your capacity of entrepreneur nor the reputation that comes with success.
Every month, I receive dozens of financing questions or requests that are more or less detailed. Almost all have something interesting in them. However, as my time and financial resources are limited, the ideas that I plan to use are only a few every year. I am not the only professional investor who has in mind a set of criteria according to which we validate an idea. Following is a list proposed by me. When making it, I have tried to be as objective as possible.


  • Start off with the essence, define the idea in a sentence. Do you know what USP or Unique Selling Proposition is? It is a concept from advertising and refers to the sole benefit proposed by your product. Maybe, you know that I have invested in Vector Watch and together with the other investors I have enjoyed its success, when it was sold to the famous Fitbit. From the very beginning, Vector Watch is a smartwatch different from the rest, whose battery lasts for one month. This is the starting idea and it is clear, even though there are several other aspects to add afterwards.
  • What is your business plan? How do you monetize? This article does not aim at giving you tips on how to make a business plan. What you should note, however, is that an excellent idea, without the steps leading to it putting into practice is as good as null. Gutenberg invented the printing press by putting together already existing innovations. The printing press was taken over from the vineyard people, whereas the print with block molds had already existed in China for over 1000 years. And still, he revolutionized the world as he was intelligent enough to put all these together and turn them into a functional technology.
  • What is your market? Good start-ups mean creative, or even disruptive ideas, but they do not work by themselves. Vector Watch was an innovation on the smartwatch market and Gutenberg’s printing press replaced the medieval manuscripts, so they turned up in an existing background. Show your financer in what area of products or services you fit. They will all the more appreciate your innovation.
  • Growth opportunities/strategies/exit. If you don’t know yet that angel investors provide financing in order to get benefits at a later date, you should read business literature seriously. Your business may turn, logically, into a listed company and it may skyrocket by the subsequent contribution of an investment fund or it may be sold to a market giant. This evolution is also dictated by its nature and also by your personal preferences. Where do you see yourself in 10-year time? As CEO and minority shareholder of the company created by you, as Steve Jobs? Or maybe developing a quite different business? Relying on your exit money to invest in other people’s businesses, therefore acting as an angel yourself? You should answer all these questions and then send your answers also to possible investors.


  • Clearly state to your investor what/how much you. Of course, the answer to the question “How much?” is the most important. Shyness has no place here, the well-grounded figures are strictly necessary, even if you won’t start with them, but with the idea. However, the financing pace/calendar is also important: if need be, a professional investor may rely not only on their money, but they will also know how to attract other resources.
  • Do your homework. It’s not necessary to suffocate with data the potential financers from the very beginning. However, if you have manage to arise interest by the initial presentation, you must be ready to answer any question. If you don’t have the answer in your mind, you can resort to notes, telephone, laptop. If you nevertheless happen to not know the answer, don’t try to mislead your interlocutor with phrases such as “We’ll see”. Not knowing a minor aspect is pardonable, but superficiality isn’t.
  • You will always need an attractive Powerpoint presentation, even if it is an informal pitch meant to arise interest. Assuming that you have managed to arise interest from the very beginning, the presentation is the second stage. However, be careful, as there are two types of presentations: those meant to be designed, which come as a completion of speech discourse and the self-standing ones, which are meant to be sent by e-mail. Ideally, you should prepare both versions.


  • Personal recommendations. These are certainly the most effective, although in Romania we tend to pay too much heed to them. Two things are worth mentioning here. Firstly, it is most serious if you disappoint the author of the recommendations. If you do that, no one will take it out on you directly, but your failure risks to be mentioned in the private talks between people who matter. If, on the other hand, you manage to make your potential partner enthusiastic about your project, it is a success: your personal recommendations might turn into endorsement. If you can turn a financer or a famous partner into an endorser, that is quite an achievement for you.
  • Industry events. The same as, in our country, personal recommendations are overrated, events are underrated. You have often heard that, at specialized conferences, it is the networking that matters, not the presentations. If you invest a few thousand euros in the participation in an event of the Mobile World Congress class, you will head home with a few dozen of business cards. If you manage these contacts well, some of them might become your business partners or financers. The thing is that events are very useful for a first contact, which you then need to cultivate by other means.
  • Online, in 1:1 conversations. By “1:1 conversations” I mean whatever can be conveyed via social networks or e-mail. LinkedIn is very appropriate for this purpose, as long as you know whom you are addressing and what you are asking. Don’t be shy, but avoid suffocating your potential partners with generalities, standard messages, so called spam. Of course, those who make their e-mail addresses public do that because they are open to proposals. If the e-mail is written well, it will receive an answer, especially from the potential foreign partners – even if it is a negative one.
  • Online, by public financing requests, such as Kickstarter or Patreon. It may seem that the crowdfunding platforms are meant for charity or cultural projects, financed with little by many, but this is not exactly so. A successful campaign on a platform of this kind is a good argument for a more significant investor. Even more, even as part of these campaigns, sometimes there is significant financing from individual investors, besides the “little” financing from “many”.


The question does not refer to the time of day or the year when you make the proposal, but to the degree of maturity of your idea. Writing this article, I have started from the idea that you have incorporated a startup, in other words, you have the capacity of founder and entrepreneur. Well, in order to attract an investment, you must have already proven your reliability to a certain extent. This means a functional business, even if of a small scope and without profit. Professional investors are attracted by more than plans on paper. As long as they will entrust you with their money, they expect guarantees that you will know what to do with it and the safest guarantee is that you have already achieved something with your own forces.
1 2 3 4