What prevents Uzbek startups from growing into large companies?

Uzbekistan is experiencing the early stage of venture market formation. The first funds are emerging, accelerators are conducting selection rounds, and startups are presenting at pitch sessions. Yet systemic success remains limited: most projects do not survive their first year, and those that do rarely scale beyond the country’s borders.

Kun.uz spoke with venture investor Azizbek Kurbanov, founder of the insurance marketplace Sug'urta Bozor and former managing director of a venture fund. We discussed the typical mistakes made by Uzbek startups and what the local ecosystem needs for sustainable growth.

Problem One: Launching Without Domain Expertise

One of the most common mistakes is when founders enter an industry in which they have never worked. Someone with no background in logistics decides to build a delivery service. A team with no understanding of manufacturing processes attempts to develop an ERP system for factories.

“People have never done anything in the industry, have never worked in it, yet they decide to launch a product for that very sector. And they don’t even have an advisor with relevant experience on the team. It simply doesn’t work like that,” Kurbanov notes.

Solutions that succeed in more developed markets have been tested repeatedly. Interface design choices, product-launch sequences, monetization models — all of this can be studied by examining foreign competitors. However, without understanding the industry’s specific nuances, mere copying does not lead to meaningful results.

Problem Two: Conflicts Among Co-Founders

Venture market statistics show that disagreements between co-founders are among the leading reasons startups shut down at an early stage. In Uzbekistan, where a business partnership culture is only beginning to take shape, this issue is particularly acute.

Co-founders spend 10–12 hours a day together. They go through periods without funding together, raise investments together, and make difficult decisions together. Misalignment in values or working styles becomes visible quickly and often proves fatal for the project.

A telling example is the insurance marketplace Sug'urta Bozor. The project scaled to tens of thousands of sold policies totaling more than one million dollars largely because the co-founders immersed themselves in operational work: analyzing user behavior through Yandex.Metrica, reviewing session recordings, and iteratively improving conversion rates. The result: conversion grew from 1–2% to 25%.

Problem Three: Overstaffed Teams at the Start

Founders coming from corporate backgrounds often try to replicate familiar management models in their startups: they hire large teams, build hierarchies, and create departments. But a startup is not a corporation. At an early stage, speed and the quality of interaction between people matter far more than headcount.

“It’s not about how many people you have, but about their quality and how they work together. You can’t just gather a group of strong specialists in one room and expect results,” Kurbanov says.

Experience shows that teams of two to five people are more effective in the beginning. There are fewer approvals, decisions are made faster, and communication is simpler. Scaling the team makes sense only after a working product is found and demand is validated.

Problem Four: A Shortage of Leaders with Relevant Experience

Uzbekistan lacks managers who have gone through the full journey from an early-stage startup to a scalable company. Most experienced professionals come from corporations or government institutions, where the decision-making logic is fundamentally different.

Yet it is precisely early-stage experience in a growing company that teaches how to build a business from scratch. One year in a five-person startup that scales to fifty provides far more relevant expertise than three years in a well-established organization.

“Everyone now highlights ‘ex-Google’ or ‘ex-Yandex’ in their profiles. But if a person joined a large company only a year ago, they did not witness its growth. Their background is in operating within a system, not in building one,” the investor notes.

Uzbekistan and Kazakhstan: A Five-Year Gap

Kazakhstan began developing its venture ecosystem earlier. The Astana International Financial Centre (AIFC) allows companies to register under English law, which simplifies attracting foreign investment and is familiar to international funds.

International accelerators such as Google for Startups and 500 Startups appeared in Kazakhstan sooner. Many regional headquarters of tech companies are also located in Almaty or Astana.

Uzbekistan began developing comparable infrastructure later, but the situation is changing rapidly. In 2025, the Enterprise Uzbekistan center was launched in the country, whose residents can operate under a legal regime based on English law. This is expected to simplify cooperation with foreign investors and increase the confidence of international funds. At the same time, specialists with international experience are returning, the first local funds are emerging, and a professional community is taking shape.

“Give Uzbekistan five years, and you’ll see results. The right people are returning, launching startups, and taking on important roles. We’re only just beginning,” Kurbanov says.

What the Ecosystem Needs

Market participants highlight several key factors for further development.

More players. Healthy competition among startups, funds, and accelerators creates pressure to improve quality. As long as there are few players, the market remains “greenhouse-like.”

Stronger connections between participants. Startups need access to investors, investors need access to strong projects, and both sides require clear and predictable rules from the government.

A culture of speed. “In business, everything needs to be done quickly. Everyone thinks, but only a few act fast,” Kurbanov says.

Tolerance for failure. In mature markets, the failure of a startup is considered a normal part of an entrepreneur’s journey. In Uzbekistan, failure is still often seen as a personal defeat, which reduces willingness to take risks.

Conclusion

Uzbekistan’s venture market is still in a formative stage. The first startups have already gone through the full cycle—from launch to scaling or closure—creating a base of local experience that can now be analyzed.

The typical mistakes (launching without industry expertise, co-founder conflicts, premature team expansion) are common across emerging markets worldwide. Understanding them can save time and resources for the next generation of entrepreneurs.

The key question is whether the ecosystem can build a critical mass of participants and develop infrastructure comparable to neighboring markets. The first meaningful results will become visible within the next three to five years.