Dear readers,

This week we have a provocative thesis from Albanian entrepreneur Engjell Rraklli: that the region may have spent the last decade optimizing for the wrong thing. In a detailed reflection on how the Balkan startup ecosystem was “imported” through donor programs and external narratives, Rraklli argues that services, not products, may be the more realistic and sustainable foundation for growth in the region. 

His view is very direct: early revenue, customer accountability, and operational discipline matter more than chasing scalable product myths built for Silicon Valley conditions that do not exist locally. That framing lands at a moment when the region’s service-heavy tech sector is shifting toward AI-native products, with the real economy of Balkan tech still trying to find its feet. 

Meanwhile, capital and consolidation are moving the landscape. ATMOS Space Cargo raised €25.7 million to advance its re-entry vehicle program, while Bulgaria’s Dronamics brought in a Japanese strategic investor to expand into geospatial applications. In software, Bulgarian, Codery acquired Elfshock to deepen its automation stack, and A1 Serbia moves to acquire Serbian developer DEX, signaling continued consolidation in regional IT services.

This week’s Founder Take circles back to execution under pressure rather than ideology. The emphasis is on disciplined iteration over speed for its own sake - moving quickly, but constantly validating whether what is being built actually holds up in the market.

Enjoy this week’s edition!
Bojan Stojkovski
Editor-in-Chief, IT Logs

The Balkan tech ecosystem did not emerge as a natural byproduct of industrial evolution in this part of the world. Rather, it was a process introduced in the beginning of the 2010s and assembled through workshops, donor programs, and imported narratives that promised a shortcut to innovation. In cities like Tirana, the idea of a “startup” arrived fully packaged, complete with vocabulary, expectations, and success metrics that had little to do with local realities.

Back then, the infrastructure was minimal. There were no functioning venture capital networks, no reliable funding pipelines, and no legal frameworks designed to support high-risk entrepreneurship. What existed instead, was exposure.

“They spread awareness, and I guess those were very successful,” he says.

But awareness without infrastructure creates a particular kind of ecosystem - one that’s driven more by belief than by systems. For Engjell, that belief translated into action as he stepped away from traditional education, choosing to build rather than follow a prescribed path.

When money entered the system

If the early phase of Albania’s tech scene was defined by ambition, the next was defined by capital. Specifically, donor capital. EU-backed programs and international development agencies began injecting funds into the ecosystem, often through grant schemes designed to stimulate innovation.

“After that, big donor money came. And that kind of shifted the narrative.” Engjell says. 

The shift was subtle at first, but its effects grew over time. Founders began optimizing not for market validation, but for funding approval. Somewhere along the way, the startup became less a vehicle for solving problems and more a mechanism for accessing capital.

“People started chasing funds. Many people claim to be doing startups just to get those funds.” he says.

This reorientation had structural consequences. Instead of building products or services with clear demand, founders began designing ideas that fit grant criteria. The result was a slew of concepts that rarely translated into sustainable businesses.

“Usually those ideas are very silly. And they don’t really start living.” Engjell says. At the core of the issue, he argues, is a lack of accountability. “Grant as a mechanism is a poor startup builder. Because it doesn’t provide accountability.” he says.

As a result, this absence of pressure creates a vacuum where execution becomes optional. 

Reframing the debate on products versus services

Within this distorted landscape, one question often dominates founder conversations in the region: should you build a product or a service? For Engjell, the question itself is flawed.

This is where he diverges sharply from prevailing narratives. While much of the ecosystem pushes founders toward product development, often framed as more scalable or more “startup-like”, Engjell sees services as a more realistic entry point.

“I’m a big proponent of services,” he says. For him, the reasoning is practical: service businesses generate revenue earlier, require less upfront capital, and force founders to engage directly with customers.

But avoiding difficulty does not eliminate it - it postpones it, Engjell warns. “If you can’t scale a service, you will have an even harder time scaling a product.”

Learning through constraint

Division5, the company Engjell founded in 2015, embodies this philosophy. Built without external funding, it grew through necessity rather than strategy.

This created a feedback loop that many grant-funded or venture-backed startups never experience: direct accountability to the market. “Customers either stay or leave. There is no in-between.” he tells IT Logs.

Over time, that discipline translated into growth. The company expanded into new markets, built a stable client base, and scaled its operations. “We doubled every year,” Engjell says.

But the real test came during the downturn of 2023, when global demand for tech services contracted sharply. “We lost half of our contracts,” he recalls. However, the response from their side was immediate - cost adjustments, aggressive sales, and rapid pipeline rebuilding.

“We turned it around in one and a half months,” Engjell says, adding that the downturn was not an anomaly, but a correction. “2021 and 2022 were not great for the IT Industry. They were silly since demand was artificially inflated, creating a false sense of security. You didn’t need to do sales, people were coming to you.” he explains.

When that demand disappeared, only structurally sound businesses remained, and the real companies stood out, Engjell adds.

The Silicon Valley illusion

Going back to the products beat services narrative, Engjell reveals a deeper issue: the replication of a model that does not fit the region. “We keep chasing something that does not apply to our context,” he says.

The Silicon Valley model - built on abundant capital, legal predictability, and high-risk tolerance - cannot simply be transplanted into the Balkans. Yet much of the regional discourse continues to assume that it can.

Even when investment arrives, it often bypasses the local system entirely. “You have to incorporate outside. That’s the condition.” Engjell notes, adding that this raises a structural paradox. “If the company is outside, if the capital is outside, is it really Albanian?” he asks.

Catching the AI wave 

While much attention remains on startups and funding, Engjell points to a more substantive movement that already happened in the region, and managed to produce results: the rise of outsourcing and service-based tech companies. “That was a very good moment. Because people learned how things actually work.” he says.

Developers working with foreign clients gained exposure to global standards, product development processes, and market expectations. That experience is now feeding into a new generation of businesses.

These are not unicorns. They are not even startups in the traditional sense. They are small, sustainable businesses generating consistent revenue, he says. “They make 15K, 20K, 30K a month, which is great.”

This, in his view, is the foundation the ecosystem should be building on. Together with the rise of AI, which Engjell sees as a potential equalizer - it’s a development that could reshape both services and products.

This could fundamentally change the region’s dependency on capital, which leads to a provocative question. “If you can do that, why do you need venture capital?”  Engjell asks. 

At its core, Engjell’s argument is neither anti-startup, nor anti-product - but anti-illusion. “We are chasing a dream that is not ours,” Engjell says.

The alternative he proposes is less glamorous, but more grounded: build entrepreneurs first who will build capabilities and systems. From there, everything else becomes possible. “Some of those people will build startups, and maybe even unicorns.”

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