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«I Want My Own IT Startup»: Skolkovo Foundation Experts’ Advice

Open Innovations Startup Tour, the largest CIS road show in search of the innovation projects, took place in Barnaul for the very first time. During the Tour, experts of Skolkovo Foundation and successful entrepreneurs talked a lot on what to do and what not to do if you want to launch your own startup. They paid specific attention to IT. We were there as co-organizers within the Innovation Support Association, assessed the local IT-startups, and, of course, listened to the experts’ advice attentively. Now we are ready to share what we have learned.

Innovations Startup Tour in Barnaul

We hope that our plan helps you to move off the dead center and finally get your brilliant idea from the table’s drawer, where it has been dusting for a long time.

No thanks needed

1. Choose a niche

Fortunately, there is a big choice for startups. Good prospects are opening up in alternative energy, hybrid electronics, and advanced manufacturings. And, of course, in information technologies, which rapidly penetrate into all other spheres.

For example, you can try additive manufacturing and construct your own 3D-printer. Or in robotics and make eco-friendly aggregate for all intents and purposes. Or to compete with Tesla and introduce the world your own car, worked on the alternative fuel.

Alexandr Fertman

Alexandr Fertman, Science & Education Department Head, Skolkovo Foundation:
«Why large enterprises understand that there is a space for small and medium business? The big companies can accumulate resources, but they are not mobile enough to solve many modern problems. That’s why they invest money in small enterprises. And if you will create your own enterprise, and then sell it – build another one. You should concentrate your forces on technology, engineering skills, while the large companies – on the construction of plants and mass production. Horses for courses».

2. Learn!

Good entrepreneur is the one who learns. Always. Very fast. And he feels no shame about it.

For example, at the end of 1994 Oy Visual Systems Ltd., founded by today’s Advisor to the President of Skolkovo Foundation Pekka Viljakainen, launched the first online banking service in Finland, which allowed paying bills online. Nobody considered it as a good idea. Then the company had to teach every resident of the country (5.5 million people) to use the novelty. It took six years. The long way, which finally led to success – in 2001, 97% of the country’s banking services were digitized.

Pekka Viljakainen

Pekka Viljakainen, Advisor to the President of Skolkovo Foundation:
«Entrepreneurs, inventors create something new, never seen by the clients. That’s why the entrepreneur at the same time acts as a teacher, explains to his audience how to use the product. However, you will be able to teach only when you are to ready to be taught».

3. Do not fear

We used to hide our mistakes. This is normal. However, for some reason we are afraid of everything and don’t like to demonstrate our achievements.

You need to share your success
You need to share your success and achievements.

According to Pekka Viljakainen, such secrecy is the weakest part of the Russian business community. He is absolutely sure: as long as such behavior continues, Russia will not develop, as connections in the community are not being built and knowledge is not shared.

Pekka Viljakainen

Pekka Viljakainen, Advisor to the President of Skolkovo Foundation:
«I wrote the book for entrepreneurs called «No Fear». It doesn’t mean that you should have no fear for anything. This, above all, means that you should be afraid of other people in no case. You can’t do business and be afraid that someone will steal your ideas».

4. Get rid of the myths

The entrepreneur’s life is wrapped in different sorts of myths. Your own business seems to be a paradise on Earth. No problems, no worries. Control employees, taking sunbaths on Bali, and earn profits.

However, the reality is different.

Don't trust
Will you believe in fairy-tails or build your business in reality? Image source: salnikov.ru

Instead of a fantastic sum of money – continuous losses, taxes, expenses. Instead of the incredible success and industry acknowledgement – stress and twitching eyes. Instead of the absolute freedom – job 24/7 without sleep and any rest, but with never-ending force majeure and firefighting even at midnight. No, of course, a four-hour workday and half-year travelings are possible. But in 15 years. When your business gets on its feet, and you gain necessary knowledge and experience.

So, if I you have decided to become an entrepreneur, especially in high tech, think twice whether you are ready to face with all these problems.

Renat Batyrov

Renat Batyrov, CEO of Skolkovo Technopark LLC:
«The businessman’s way isn’t covered with rose petals. Today the competition is very high, much higher than 10 years ago. You will never achieve the level of business guru, if you want just to get profit and not to put all your life in your business. Success is only for those who are ready for the continuous changes and self-improvement».

5. Discuss everything from the get go

Must do. Discuss with your business partners all the important details, from who’s a big boss here and who has the right to vote for internal regulations, to the global strategy and plans for the future.

Yes, the procedure is not always pleasant, because you should consider many sensitive issues, including financial. But it is really necessary, even if you are friends since childhood and drink beer every weekend together. There is always a probability of «divorce» with a scandal and battles for the property.

Igor Kovalev

Igor Kovalev, DI-Group CEO:
«Be boring – discuss all the possible options. If you are ready for this or that, everything will be easier for you. This includes financial planning, planning of the production, and all the options «if suddenly». This way, you will be protected. You will protect yourself in terms of intellectual property, in terms of legal purity and legal issues, you will protect yourself from someone stealing your technology or the team falling apart. It is no supernatural. It is the foundation for your future business».

6. Create a global product

Skolkovo experts recommend: create a product suitable for all over the world, not just for Russia.

Use the best international practices, it is not forbidden. Business giants act exactly this way.

Pekka Viljakainen

Pekka Viljakainen, Advisor to the President of Skolkovo Foundation:
«All successful entrepreneurs, to whom I had the pleasure to talk, develop their products for all over the world. If you have a laundry and you wash shirts, look how laundry networks are built around the world».

7. Hurry up!

The reality of the hi-tech world is that if you want to fit into it, you should do everything very quickly. You have no time to scratch your head, smoke bamboo, and lengthen out launch and entry into the market.

GoPro, Inc., the leader in the market of action cameras, is an example of the right speed. When the company has released the fifth version of the camera, they’ve announced publicly that the life cycle of the product would be nine months maximum. That is, during this period of time, they had to sell it to their global audience, and at the same time to develop the innovative sixth version of the camera.

Pekka Viljakainen

Pekka Viljakainen, Advisor to the President of Skolkovo Foundation:
«The soviet style of planning, with its five-year plans, isn’t appropriate for modern entrepreneurs. You can’t draw a plan for your company for five years ahead. Technological cycles have become so short today that five or three years may seem like an eternity».

8. Find a mentor

For a startup founder, mentor is a best friend, almost relative. At the same time, the mentor should be a practicing entrepreneur. Successful, for sure, whose advice will really be useful for you (agree, you don’t need a mentor-loser).

The key moment. When you are looking for a mentor, don’t find a «dementor», who will bleed you dry. Or will not get along with you. Or mentor will deceive you into parting with money. This also happens.

A good mentor does not require any payment for his help as his main purpose is to grow a colleague or a future partner. But you also can’t demand anything from him. In fact, he doesn’t owe you anything. Mentor will wave his wand and make your business successful, but will tell you what’s best to do.

Attention! A mentor at work
A mentor will help you grow but will not replace any team member.

Good mentors don’t grow on trees. In Russia, you can find your mentor in special organizations, actively practicing the mentoring:

  • The Mentors Association of Skolkovo Foundation
  • The Mentoring Institute of Boris Tkachenko
  • IBLF Russia

And, of course, it is useful to look attentively at the business community in your hometown and to participate in events and activities, gathering the local startups. Who knows, maybe there you will meet your mentor.

Anna Brusnitsyna

Anna Brusnitsyna, Expert of Found «Our future»:
«When you have a mentor, the business survival rate increases to 80%. While you warming up, he will save you 10 years of life. Of course, there is a lot of information available to the public. You can find out anything from anywhere. But the mentor helps not to sink in this information flow and to focus on the most important things. He gives you exactly the information you need to get».

9. Get investments

Very important point. There are many things you can’t do without money: to pay your employees, to buy equipment, to cover numerous costs. Is it necessary to continue?

If you aren’t a heir of the wealthy parents, don’t own an oil-derrick or the huge savings, the financial issue can become tough.

Questions? The first question is money
What are you supposed to do? Where from will you get money for the startup?

Use the special institutions support

Many special institutions are racing to help the beginning entrepreneurs with such problems. Together they form the so-called «ecosystem» of business support. In Russia, they are:

  • Innovation Promotion Fund
  • The Internet Initiatives Development Fund (IIDF)
  • Russian Venture Company (RVC)
  • Federal accelerator for technology start-ups Generation S
  • National Technology Initiative (NTI)
  • VEB Innovations fund
  • The Russian Direct Investment Fund (RDIF)
  • Russian Small and Medium Business Corporation
  • The Russian Export Center
  • RUSNANO Corporation
  • Industrial Development Fund

As you see, there’s a choice.

All these institutions are federal and very serious. Therefore, they have the high requirements. With projects a la «quickly wrote a draft yesterday», there is no sense to apply to them.

In most places, you may find also similar regional institutions, including Enterra’s motherland –
Altai region. Their degree of requirements are lower, but you shouldn’t get brazen and come to them with something doubtful.

Remember: no one will just give you money for your super-duper-very-awesome project. Even if you exercise every morning and have broccoli for breakfast. Even if you’ve read all books about Steve Jobs. Even if you are a patriot.

Investments and grants are given only to those who prove that really deserve them.

For this, a potential grant recipient should pass through all circles of hell a number of procedures.

Consider the following example taken for Russia.

Think, for instance, of Skolkovo Foundation (by the way, it is also the part of the ecosystem that supports entrepreneurs).

First, you should choose what type of grant from the fund you want to receive. There are three types:

  • Microgrants
  • Minigrants – up to 5 mln rubles
  • Large grants – from 5 to 300 mln rubles

They differ greatly in the criteria for projects selection and in response time. Let’s suggest that you want to take a minigrant.

Your approximate steps are: submit the application and wait about 50 days until you get a verdict, whether your project is suitable for financing or not. Then the awkward starts: the expertise.

It includes a lot of tiresome paperwork. You must provide a sheaf of different papers to prove the project to be useful and perspective. The package includes the grant memorandum, consisting of 35 pages in average, the project’s roadmap, cost sheets, various letters of intent, agreements with investors and etc.

Then the Skolkovo experts check all of these documents in detail and decide, whether to give money or not.

The projects that pass the expertise receive not just grants, but also the status of the Skolkovo residents.

Alexander Malyavin

Alexander Malyavin, Senior Specialist of the Grant and expert service of Skolkovo Foundation:
«Money is a minor point. Don’t look at the fund as at some «money bag». Skolkovo provides a wide range of different tools for startups and developers: mentoring programs, business angels, consulting and information support, tech services. If you properly juggle all these tools, you will have everything you need for successful project realization».

Pekka Viljakainen

Pekka Viljakainen, Advisor to the President of Skolkovo Foundation:
«As I am an investor, I often have people coming to me and saying: «Dear Pekka, give me please a million dollars for three years, and just call back in three years, there is no help needed. Then I ask: «Are sure that you really know how to run business?». He answers: «Yes, of course, I am a patriot, I read books, I’m ready to make money». I never invest in such people, because they don’t understand the nature of innovations and business overall».

10. Act!

Just do it. We understand that it sounds like the hackneyed quote from the blog post about success and motivation. However, sitting on the sofa, you can’t build a world corporation.

So just do it. Without fear, beyond reproach and with a good share of common sense

Who knows, maybe that’s you who’ll be the next Steve Jobs or Elon Musk.

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