From grants to ground game: How Malta's startup scene really goes from 0 to 1

Startups are sold as romance: big ideas, bigger exits, and the promise of going from zero to one. The reality is far messier – especially in Malta, where "support" often stops at grants, schemes, and photo ops. Simon Theuma argues that money alone won't build a real ecosystem. Malta's unfair advantage isn't another fund; it's proximity, culture, and community. The real work happens from the bottom up – in shared spaces, candid chats and even WhatsApp groups where founders stop feeling alone.

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"Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1."

Simon Theuma

This quote, from Peter Thiel's seminal book Zero to One, neatly describes the startup and innovation phenomenon in a nutshell. Decades prior, Carl Sagan also captured the sentiment in a somewhat pedantic fashion: "If you wish to make an apple pie from scratch, you must first invent the universe."

All this to say, making new stuff is hard. From the outside looking in, reshaping the future in one's image seems exciting, romantic and a noble use of one's time. Combine that with the potential of a life-changing payout, and you start to ask why everyone isn't doing it. The reality, on the other hand, is somewhat stark – the vast majority of startups fail within the first couple of years. While the effort is always commendable, there is no prize for failure – you leap, and you either land safely with a golden parachute, or they have to scrape you off the ground with a spatula. 

There are myriad reasons why startups go wrong: bad ideas, bad timing, poor financial management, poor team dynamics, and so on. In truth, these calamities can befall any business, but they are magnified in startups. When there's no product, no customers, and no funds, where does a founder start creating their apple pie from scratch? And how do they ensure that they don't starve en route?

In this vein, calling startups a "risky proposition" is an understatement. Why would anyone in their right mind in Malta invest in a startup rather than that most magnificent of investment vehicles, the 4+1 block of flats? Simply put, they buy into the founders' vision and the founders' ability to deliver, which is why, when raising funds in certain circles, an inordinate amount of effort is placed on perfecting the pitch, with other fundamentals almost being an afterthought when held up next to the "dream" and the upside. But the risk is ever-present, and managing it has become less and less the purview of private enterprise and more a burden borne by the state.

On paper, governments like to project themselves as startup-friendly. Malta likes to do this more than most and does not hesitate to jump into new sectors to either certify excellence or simply try to be the nexus of something new, for better or for worse. From a broader perspective, the EU faces overwhelming competition from opposing sides of the map – the USA to the west and China to the East. Still, we are lucky enough to live in an age where innovations happen in days, not decades.  

Caught up in all the hype, every career politician probably dreams of being the one to introduce and cut the ribbon on what can become the next billion-dollar unicorn, like Facebook or ChatGPT.  So governments do what governments do best: they throw money at the problem - funds, grants and incentives to soften the blow or sweeten the deal to get your startup project off the ground. All well and good. But very often, that's it.

The truth that nobody wants to accept is that money alone is not enough to build an ecosystem.  People will most certainly come for the money, especially if some of the incentives are designed to attract foreign startups rather than harbour local ones. But the million-dollar question is, will they stay? Are these measures more akin to indirect tourism, where we "pay" people money in the hope that they will spend more in the economy than they receive? Another inconvenient truth is that community building is often an unprofitable exercise.  It takes a lot of effort and a long time to reap the benefits, and it leaves the builders open to competition from other communities or even simply from different players who move in to monetise.

But it has to be done. When every country is happy to throw money at its founders and entrepreneurs, we need a unique selling point that transcends funding. For example, what is very often overlooked by us Maltese is proximity - we all know that Malta is small. Still, foreign founders highly value the fact that key stakeholders are just minutes away, rather than a 2-hour commute. What tends to suffocate the locals is a breath of fresh air for the expats, and having everything and everyone at arm's reach is an edge that other larger countries cannot offer without the cosmopolitan prices.

So why are we not capitalising on this idea? Probably because policies and funding, first and foremost, are a top-down approach - the result of market research, consultancies and meetings with "key stakeholders". Somebody unknown who's building software or drones in their apartment is hardly going to be considered as such. Still, those are the kinds of people who ultimately hold the keys to the kingdom - and are also the kind of people who are turned off by "business breakfasts" and "round-table discussions".

Carl Sagan

By contrast, startups exist in the realm of memes, candid conversations, casual attire and a lack of regard for traditional authority figures. Instead of letting them come to us, we need to go to them: speak their language, wear their clothing and partake in their values. A bottom-up approach is potentially less costly and also resonates better with the talent that we are trying to attract or cultivate locally.  It helps foster the right culture, one that runs counter to the Maltese mindset of absolute secrecy and other mental blocks that we have put up for ourselves. But most importantly, it helps a founder feel like they're part of something bigger - the idea that their experiences, no matter how small, are contributing to the overall success of the ecosystem - and that they are not alone in their struggles.

As the curator of the Malta Startup Space, I get a lot of questions from larger entities about our secret sauce and how we went from 0 to hundreds of locally based, hyper-engaged founders, investors, and supporters in a few short months. On reflection, I think the key is in the word "space": we've created an environment where people feel comfortable enough to be themselves, where entry is free, and where everyone's opinion is welcome.  An image that resonates with many of our founders is that we're more like a massive group of friends who just happen to run startups than a business network.  While this might feel out of scope for more formal or government-based groups, in terms of the bottom line, it's working. There's a wide range of expertise, and founders can get half a dozen consultancies in a matter of minutes simply by sharing what they're working on or asking a question. That kind of feedback loop is vital to the startup process and cannot be replicated by simply paying people to do it.

Going from zero to one sounds like a microscopic step and seems hardly worth the effort. When it feels like other countries are leaps and bounds ahead due to their size, resources and human capital, it's tempting just to skip the basics.  Starting from zero is an opportunity to reflect on what our country can truly offer to the world of startups and innovation.  Just being present is not enough, so how can we lead the charge? Sometimes the answer is as simple as creating a WhatsApp community for founders.

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