Dateline: Warsaw, Poland
Seventy years ago, this was a city in ruin.
Even thirty years ago, you would have never thought about living here. Then again, you could say that about a number of places we talk about here on a daily basis.
Located in the heart of central Europe, Poland presents an interesting opportunity. By western standards, it is still cheap. Investors from the UK have been telling me for years that the fancied the place as a place to park their British pounds.
According to one person I spoke to here, Warsaw is the next Berlin. Yet there are also challenges to doing business and living in Poland’s capital of Warsaw.
Around Warsaw are symbols of Soviet rule, most notably the Palace of Science and Culture. Right in the middle of the city is a giant, albeit somewhat charming, memorial to an era of central planning where Stalinist and post-Stalinist rulers figured they can “culture” the people of their newest conquest.
When it comes to doing business in countries like Poland, the challenge is often the same: how many remnants of that culture still exist today.
There are some businesses in this part of the world, and especially further east, that I wouldn’t touch with a ten-foot pole. For as much as my restauranteur friends in Kuala Lumpur try to tell me that their local staff can’t be trained to provide top-notch service (something I don’t believe), there is certainly a mentality in much of eastern Europe that the customer is always wrong.
I guess they figure they can make up for it with beautiful women.
However, there is also a growing entrepreneurship culture in Poland, as well as an acknowledgment that the country is one of the best-positioned places in Europe for serving the entire continent.
Last week, I met up with some students from an entrepreneurship school here in Warsaw. I heard some excellent ideas for disrupting the way business is done here in a country that doesn’t even haven Amazon yet.
Trying to find a place to have my laundry done, for example, proved to be a real challenge once I determined I refused to pay the Westin $5 per pair of socks washed.
Polish-English and Polish-Spanish translators abound, but no service has any real ability to market. I spent half an hour trying to get quotes from broken web forms and ordering on Paypal links that timed out before I decided to give up.
The types of opportunities here in Poland are the same as I see in many later-stage developing countries. As I told the manager of my last US business, “our strategy is simple: we answer the phone”.
Here, as with many growing European countries, the only thing you have to do is answer the phone and be ready for business. Despite the fact that there are a number of programmers here, the web is not so useful for local services. I call this “the Alexa effect”.
That’s not to say Poland is some backwater, because it’s not. Living in Poland offers one just about every western amenity you would find elsewhere, from McDonald’s to Zara to five-star hotels.
The issue I have is that service here is rather weak. My stay at the Westin here has been rather sub-par despite it claiming to be a five-star hotel. Any kind of business that requires a deep staff is not something I’d be interested in.
The businesses with deep staff that already exist largely do a rather poor job of servicing customers. The high-speed trains here are wrapped with T-Mobile ads promising on-board hot spots… that don’t work. Try and find someone who cares.
On the other hand, a business that involves a small staff developing apps or creating simple solutions to problems in the local market would be welcome, as – like practically every other emerging or newly emerged European country – youth are tired of the way things here work and yearn for more.
That doesn’t mean that the Polish want to leave. I recently shared how, seven years ago, my extensive time in Ireland was met with frequent reminders that western Europeans view people here as US persons view Mexicans.
The stereotype couldn’t be further from the truth, though, and with 40 million people living here, the domestic market is interesting considering how few other European countries have the ability to grow as much as Poland does.
That’s especially true as the average salary here is approaching 1,000 euros a month… a reasonably high sum for this part of the world even if far behind Germany.
Companies like Amazon have set up shop here as logistics between Poland and Germany are easier. I spent a month in the southern Poland city of Wroclaw last year observing how that region is changing with regional investment from large firms.
So far, Polish workers tend to feel underpaid compared to their German and western Europe counterparts, which I suppose is why more of them are turning to entrepreneurship. It will be interesting to see what develops.
I’m not saying Poland is a home run investment at all. Real estate here seems a bit unattractive to me when you compare it to cities like Budapest or even emerging parts of Barcelona. You can rent in Brussels for less than you can in Warsaw.
Living in Poland, on the other hand, is quite affordable. Perhaps my vision is a bit clouded as I arrived here from uber-expensive Sweden last week, but $2 for your first month of 1GB at LTE speeds is hard to complain about.
The cost of living here is rather low when you set aside what I consider to be housing prices that are a little above average for the region. The cost of hiring here is reasonable, internet speeds are as fast as they are in the United States (and at lower prices), and food here is almost ridiculously cheap.
The big question for investing in Poland will be if the culture can overcome the older generation’s exposure to years of Soviet propaganda and “it eez not my problem”-style service attitudes that leave everyone feeling unaccountable and unempowered.
I suspect that the answer is yes. Younger people here are very open and friendly and not as nationalistic as you’ll find in other parts of Europe.
With time, I think Poland will be a success. Can Warsaw be the next Berlin, attracting digital nomads and club-going hipsters the world over? That remains to be seen. Poland is a conservative place and I’m not quite convinced.