How Kyrgyzstan Could Become a Startup Nation: The 2016 Policy Case
On October 11, 2016, Aziz Soltobaev presented a policy argument in Bishkek under the hashtag #KyrgyzStartup: that Kyrgyzstan could follow a deliberate path to building a startup economy — and that the conditions for doing so were already partly in place. The presentation, Как превратить Кыргызстан в стартап нацию (How to Transform Kyrgyzstan into a Startup Nation), drew on real market data, international comparisons, and a set of Kyrgyz companies that had already competed and won at regional and global levels.
The argument was not purely aspirational. By late 2016, KG Labs had run Garage48, competed in the Future Agro Challenge, sent a startup to the Startup Nations global finals in Mexico, and operated a Startup Grind chapter. The presentation was an attempt to translate those accumulated experiences into a structured policy framework — addressed not just to the startup community but to the institutions that set the conditions in which startups either grow or stall.
What Is Wrong — and Why It Has Not Been Fixed
The presentation opened with a direct diagnosis. Kyrgyzstan in 2016 had no venture capital, no organized business angel networks, no legislation attractive to tech entrepreneurs, no government grants or subsidies for startups, and a domestic market widely considered too small to sustain technology companies. The High-Tech Park existed — offering one of the most competitive tax regimes in the world — but had produced no visible results at scale.
The comparison was pointed. Malaysia had allocated $150 million to build a biotech sector. Russia had put $2 billion into Skolkovo. Kazakhstan was running TechGarden with active grants and subsidies. Chile had invested $40 million specifically to attract 800 international startups to relocate to Santiago. Kyrgyzstan had built the legal and fiscal infrastructure — the High-Tech Park — and then left it largely unused. The gap was not in the enabling structure; it was in the activation of that structure.
Why It Is Possible in Kyrgyzstan
The counter-argument to “the market is too small” was a list of Kyrgyz and regional companies that had already demonstrated what was achievable. Picvpic had won the Echelon 27 Central Asian competition in June 2015. Makeuseof.com sat in Alexa’s top 1,000 most visited websites globally — with a market benchmark valuation comparable to Mashable’s $300M. BeSmart had exited at a $2M valuation. Art Asian had won the Eurasia Mobile Challenge 2015 in Spain. Namba Taxi had reached the finals of startup competitions in Kazakhstan and Turkey. Lalafo — a Ukrainian marketplace product — had successfully launched in Kyrgyzstan within a year of entering the market. Kolesa.kz had entered at a $17M valuation and exited at $30M between 2013 and 2014.
The Belarus example anchored the geographic argument: the creator of Wargaming and World of Tanks had become the first official Belarusian billionaire, and Belarus ranked 36th globally in ICT development in 2015 — first among CIS countries. Belarus was post-Soviet, small, landlocked, and not conventionally associated with technology wealth. The parallel was deliberate.
The Market That Already Existed
The “small market” objection had a specific reframe in the presentation. By 2015–2016, ICT represented 8% of Kyrgyzstan’s GDP, with total sector revenue reaching $417 million — of which telecom operators claimed 89% ($371M). The three mobile operators had a combined subscriber base of 4.7 million: Beeline at 1.93 million, Megacom at 1.5 million, Nur Telecom at 1.27 million. Internet operators generated $56 million in revenue. The software development market alone was $15 million, served by 40 to 50 active companies, with 70% of that revenue coming from donor-funded and government projects.
| Connection type | Subscriptions (2015) |
|---|---|
| 2G | 3,297,003 |
| 3G | 1,768,305 |
| Ethernet | 183,209 |
| LTE (4G) | 94,841 |
The 4G figure — 94,841 LTE connections in 2015 — was the growth edge. Internet access costs had fallen from $100 to $15–30 per Mbps over two years. Mobile traffic had exceeded 50% of total users on popular local sites. The infrastructure was shifting faster than the product ecosystem that could use it.
The thought experiment that followed: imagine a Kyrgyz startup with 7 million internet users subscribing at $1 per month. That is $84 million per year in potential revenue — from the domestic market alone, priced at a tier accessible to Kyrgyz consumers. The “small market” argument assumed that the only market was offline and traditional. The connectivity data suggested otherwise.
The Roadmap: Startup Bishkek, Startup Valley, Startup Nation
The presentation proposed a phased trajectory: Startup Bishkek by 2017, as the concentration phase — building critical mass of founders, events, and community in the capital. Startup Valley by 2019, expanding the ecosystem beyond Bishkek into regional hubs. Startup Nation by 2021, as the moment when the ecosystem would have enough depth — in investment, talent, and policy — to operate as a self-sustaining system.
The target for the goal state was specific: 1,000 Kyrgyz startups, so that at least 2 could reach a $100 million valuation and exit within three years. The funding ladder was explicit — pre-seed through startup competitions ($3–10K), seed through local business angels, Series A through Kazakhstan, Ukrainian, and CIS investment funds, Series B through global venture capital. Each stage was already present in some form in the regional ecosystem; what was missing was a Kyrgyz pipeline feeding into it.
Six Things That Would Need to Change
The companion document to the presentation — What We Need to Do to Boost Tech Entrepreneurship in KR — spelled out six operational areas:
| Area | Key actions |
|---|---|
| 1. Education | Scrum, kanban, lean startup, and agile training for existing companies; soft skills (pitching, networking, English correspondence, international client relations); international learning centers (Microsoft Innovation Center, Google, IBM, Facebook, Yandex, Mail.ru) on university campuses; subsidized training from Ukrainian and Belarusian partners |
| 2. Legislation | NVCA-style startup legal framework: co-founder equity agreements, dilution mechanics, convertible notes, IP ownership, international company registration procedures |
| 3. Community | Business angel training and investment association; ideation sessions, hackathons, meetups, and thematic gatherings running in parallel with every major event |
| 4. Mass media | Support local content; publish on international English-language platforms to raise Kyrgyzstan’s visibility in the global startup conversation |
| 5. Investment | Build to 100 business angels, then invite international VCs; train telecoms and internet operators on corporate investment and startup integration |
| 6. Qualification | Build an interactive startup ecosystem map; standardize and audit local outsourcing companies by headcount, skills, English capacity, and legal structure; attend international exhibitions jointly |
Education and Infrastructure: What Was Already Moving
The presentation documented what had already happened in education policy as evidence that the system was capable of change. Computer science lessons had been moved from 9th grade to 5th grade starting in 2016. More math hours were mandated across schools. A tender had been issued to connect 600 schools to the internet. A teacher retraining program for computer science instructors had launched. The gap was still large — only 230 of Kyrgyzstan’s schools (10%) had internet access in 2015, and most students lacked access to computer labs — but the direction of change was established.
At the higher education level, 19 of 55 universities were producing 1,345 IT specialists per year, with around 800 faculty in relevant departments. The IT Academy had launched in 2016. An MBA in IT and startups had started at KGUSTA. Manas University was planning a techcampus and R&D center. Estonia’s X-Road e-government system had been signed for implementation in Kyrgyzstan at the end of 2015. A dedicated state communications body — Goskomsvyaz — had been created in 2016, for the first time giving ICT policy its own institutional home in the government structure.
None of these were sufficient on their own. But the presentation’s argument was that they were cumulative — that the question was not whether conditions existed, but whether they would be deliberately connected into a system, or left to continue developing in parallel, at lower velocity, without strategic coherence.
Presentation Details
| Detail | Information |
|---|---|
| Presentation date | October 11, 2016 |
| Hashtag | #KyrgyzStartup |
| Presenter | Aziz Soltobaev — KG Labs Foundation; Internet Society KG; BOT Systems Venture Fund |
| Title | Как превратить Кыргызстан в стартап нацию (How to Transform Kyrgyzstan into a Startup Nation) |
| Key market data | ICT = 8% of GDP; total ICT revenue $417M; software market $15M; LTE subscriptions 94,841 (2015) |
| Roadmap | Startup Bishkek (2017) → Startup Valley (2019) → Startup Nation (2021) |
| Target | 1,000 KG startups → at least 2 exits at $100M within 3 years |
| Archive | 2016-10-11 startup presentation/ (47 files: PPTX, PDF, 40+ images, companion doc) |
