Aydın Koç, Entrepreneur, Advisor & Angel Investor Keiretsu. Series of interviews with investors in Turkiye n°14.
While I am preparing my spaghetti sauce, totally my way and not the Bolognaise way, we mistakenly label, I get upset when peeling the tomatoes after a short bath in almost cooking water. Although Türkiye is not the place where the tomatoes originate from, they come from the New World and Columbus is implied, we are in the top 5 producers in the world list, but I don’t like the quality. I don’t know where they come from, what is their history and as we have a great soil and climate, why are they clearly from greenhouses on no-soil culture. In the summer I spend quite some time in Balikliova, a small village next to the sea at about 60 km from Izmir. The local tomatoes are to die for. So we can if we want.
I met Aydin Koç in Istanbul at an exposition organised by a very close friend, Sezer Arslan. He was there together with his wife and we had a nice chat, although I had no idea that he was the founder of Keiretsu Forum Türkiye. Once I understood, I asked for an interview but they were going back to the States where they reside, so we agreed to do the interview through the famous internet. I tried some time to connect with the local Keiretsu team before our encounter, but without any success, so I was excited that suddenly I could talk to the local founder. Somehow, connecting with the Angel Investors in general, if not an investor or startup, is not that easy. Despite all social media channels and other digital addresses, also Angel Investors prefer to build a wall around them to protect them from… just communicating with people. This always reminds me of the old style of doing business where the big bosses have an assistant and some other people in between to filter. Very post-industrial behaviour if you ask me. After some attempts, technology didn’t help us, we finally could talk over the digital line.
Aydin is a product of Middle East Technical University in Ankara where he ended his studies in 1973 with a Master in Electronic Engineering. He has 1 older brother, his father was in the military and his mother was a teacher. Born in Ankara, you could find him at the American College in Tarsus, Mersin, my favourite place to buy my şalvars, typical baggy trousers for Turkiye. He tasted the first professional years in Istanbul at Philips where he went more and more into management instead of pure engineering. At the age of 28 he left Türkiye and landed in California where he went for an MBA at Stanford. Although most recognize the name, companies founded by Stanford alumni generate more than $2.7 trillion in annual revenue, equivalent to the 10th-largest economy in the world (Wikipedia info). Aydin stayed in the US to collect experience where he entered in The Boston Consulting Group as the first Türk. Remember, we are only at the start of the Internet, which would be popular at the beginning of the ’90s. In 1976 he married so his wife accompanied him all the way throughout his whole career in different countries and cities and they raised their twin daughters in the meantime. Don’t be mistaken, Aydin’s wife, Hülya Koç, was always active and started her own company. After a short period at Booz&Co, Aydin joined LSI, Large Scale Integration where he worked for 10 years as Director of Business, responsible for marketing and the business development. LSI was a 1 Billion dollar business at that time and I am convinced this experience was key for Aydin. He had customers like Sony and other international big players. In 2014 LSI was sold to Avago Technologies for 6.6 Billion Dollars, so Aydin was at the basis of an immense success. He passed through some other companies for shorter periods like Oak Technologies, Zilog Inc and BitBlitz Communication, all in the Valley. He definitely experienced the hardware years of Silicon Valley before it became the software centre of the world.
After this intense period, it was clear for Aydin that the startup scene offered great opportunities. Being active in Silicon Valley in the starting years is, of course, a huge step forward, as you are emerged in it, and not reading about it 1000s of kilometres away from the action. In 2001 he discovered fundraising, being active in a more consultant role, and entering the early years of the startup not yet ecosystem. This is just after the dotcom balloon exploded and the start of the internet becoming a www phenomenon. In the meantime, his wife was also active as the founder of Childcare Careers, a temp staffing agency that they sold successfully in 2008. So imagine this Turkish couple, in the early 2000s being very successful, far from Türkiye. As such, already a great story. I understood already that Aydin’s wife was a strong person when we met at the exhibition and during the call it was even more obvious as she was listening in the back and from time to time gave her clear opinion. Something like strong women behind or/and strong man behind. They sure make sense together, which became very clear.
Definitely, an important step towards becoming an Angel Investor was the friendship with Randy Williams, the founder of Keiretsu Forum in the Valley. Aydın saw that Keiretsu was very well organised and he became a part of it. Keiretsu Forum is the worlds largest investment community of accredited angel investors, venture capitalists and corporate/institutional investors founded in the San Francisco East Bay in 2000 by Randy Williams. Today active with a constant deal flow, consisting of 52 chapters on 3 continents invested in over 1000 startups for over 800 million USD. Keiretsu Forum members invest in high-quality, diverse investment opportunities. The Keiretsu community is also strengthened through its involvement in social and charitable activities. Aydin never forgot about Türkiye while working and living in the heart of Silicon Valley and he started Keiretsu Forum Turkiye in 2012. This was very early in Turkiye where the startup scene was about to start with some early birds already present but no great exits yet. Aydin spent half of his time in Istanbul and people who wanted to join were sent to California for training. Remember, Keiretsu was and is very well organised. Important to understand is that Keiretsu is not a fund but a group of investors who meet monthly with new startups and invest individually. Keiretsu as an organisation takes care of the due diligence. The operational cost is carried by the membership dues and the interest in investment is quite broad, so no specific domain is targeted.
At the start, as there was not that much activity in the ecosystem, the investments were rather low and very early stage, with the risks that come along. As Stage-Co we are now active for almost 6years (we kicked off April 2013) and I must admit I didn’t meet Keiretsu in the first years. Some of their members were more visible but that was more because of the personality and less by the investment actions. Nevertheless, Keiretsu Turkiye invested in 26 startups in the last 6 years and 10 million TL in eight startups in 2017. These numbers are of course small in comparison with Keiretsu US but for our region, this is definitely not bad.
When I checked the social media channels I see that Keiretsu is present but compared with for example 500Startups Istanbul and GBA they seem a bit stiff and corporate, read professional, with an overload of the Keiretsu logo on all pictures. This is something we need to address in Türkiye, in my opinion with a more startup and human-centric approach. In our culture, we are still very corporate in the way we address “business”. I am convinced that being more cool would not hurt at all and gives a greater sense of connection with mainly a very young audience. As Stage-Co we organised over 100 meetups, Startup Weekends and Hackathons but we hardly saw Keiretsu present in a way that is engaging and connected. Apart from some exceptions, we are overwhelmed with founders that barely reached the age of 26. Esra Talu became General manager in January 2018, so that is a woman, and hopefully a new wind. The first General Manager was by the way also a woman, Asli Isinak for five and a half years and today Partner at Company SAYJ Global Partners.
We come to the stage in the conversation where I want to figure out some opinions. Although Aydin is still very active, with years on the counter, he is also very diplomatic and diplomatic. Not too many people in Türkiye were so close to the epicentre of the startup whirlwind that has overtaken the world now. WWW is not only the internet but is also the democratisation of technology and the cheapest step-up to start your own business with leverage as the new orange. So touching on the quality of startups today Aydin sees an improvement thanks to more coaching and mentoring. As for Keiretsu Forum Türkiye, there is also a build-up of experience. Don’t forget that it started in the Valley in 2000! In that sense, the Turkey office is as young as the startup scene here. Education always comes back as a domain where improvement is needed. Aydin is happy that the industry types that have changed and increased in number can also be found back in the universities.
As for startups, he indicates that in their approach to build and grow their business they are too slow to go towards customers. A classic of course and on a personal note I can add that government funding is great but grants are not really stimulating for startups to earn money. In addition, thanks to a rather big home market, although disputable as the buying power decreases from year to year, the eagerness to see their project as an international business is lacking. Every time I see the list of new startups I see in 99% a Turkish name, often with a tongue in cheek approach, but totally irrelevant in any other language, so market. This also goes back to education where there is a lack of good English education, where practice is put forward, and not the theoretic part. Aydin also comes back to the importance of a complete and complementary team, the essence of a successful startup. He is a bit disappointed though that they don’t even use their own contacts in order to acquire customers. A result of modesty or simply fear to disappoint?
Equity for value, it sounds logical but in our region knowledge is not valued like for example real estate. Aydin recommends startups not to be afraid to offer equity for persons who can help to build a successful business together. A great point and this has not been raised too many times by other investors.
Ticket size is definitely a problem in Turkiye, as it is way too small. If a period of 6 months to raise the next round is normal here, what is long in preseed and seed, you barely raise enough money to survive till the next round. Of course, the Turkish ecosystem is still risk-averse so we have a chicken and egg situation. Don’t be mistaken, in Türkiye, business people invest billions of TL in projects, in heavy industry, real estate, in the classic industrial sectors. We are not yet in the new economy driven by innovation and knowledge. Keiretsu Forum invests in a wide range of startups, like on tech, pharma and education. Aydin agreed that the AgroTech domain is totally underserved.
Final question on happiness in private and business life. Aydin considers himself, together with his wife, very fortunate that thanks to hard work and being at the right place they don’t need to work to live anymore and spend time on what they like. Travelling is definitely one of the favourite activities next to their family life. He likes to work together with people and that can be understood as he is a big soccer fan, with Galatasaray in his heart. If I understood correctly, Aydin played himself but I didn’t go into details here. As for the business happiness, the same remark comes back, working with people and where possible help them in being successful. It is clear that Aydin is driven by creating impact with a warm heart for people around him. At the end of our talk I also heard his wife becoming more prominent in the conversation and that made us come back to the issue, man and wife working together, like is also my case We decided we all liked it a lot and I could hear joy in her voice when we mentioned the classic man-wife disputes, always ending in a united harmony. Interviewing by means of the internet is great, it makes it possible, but in this case, I would definitely have liked to end face to face and go for dinner the four of us. I am sure we would discover nice similarities on how we work and live as couples, partners in crime at home and in the business. I will always remember the warmth and genuine character of this talk.
Patrick Bosteels, Stage-Co and Stagecoworking Co-Founder
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