Do business incubators in Russia need and what are they eating with ?!
Good Monday, dear habrovchane!
Write this article made me think about the relevance of IT-incubators in Russia. And here is not so simple. We can make weighty arguments both in favor and against. On Habré, articles about YCombinator (one of the largest IT incubators in the world), Russian counterparts (AddVenture, InCube) and just start-ups appeared more than once. But I will allow myself to go through the main points once again, look at the peculiarities of the domestic realities and ask a few questions to a respected audience.
First of all, let's think together what the whole business incubator is. In my opinion, this is a commercial (!) Organization, which, having rich (!) Experience, connections (!), Money, office and other infrastructure, helps companies at an early stage of development (seed) to get on their feet, to give the project a presentation ( start-up) and sell it (or find investment for further development). Everything is simple: you have an idea, we have experience and money - let's make money together!
')
A small digression. Hungry for meat, can miss: As Brender wrote (James Brander) in the article “State sponsorship versus private venture capital investments: Canadian experience”, the main thing that a young entrepreneur can get from an investor is a quality “tutorial effect”. The author’s conclusion is that the state needs to fundamentally change its role in the venture capital system, since, being a formally equal player in this market, they do not complement private investment, but replace it. The problem lies in the fact that since the state is a less “quality investor” in terms of “guardianship”, some of the projects that received state funding and “bent” after a while could successfully receive money from a private investor. In other words, if the government financed projects that for one reason or another did not receive frequent investments, that would be normal. But there is a situation when companies that could receive private money, and therefore better guardianship and, ultimately, higher chances of success, come to the state for money. Thus, it is not a supplement of private investment, but a replacement. A kind of mousetrap from the state.
What does the notorious YCombinator offer and why there are practically no analogues in Russia? !!!
YCombinator Terms:
1. 14- $ 20K investment in exchange for 6-7% in the company's share
2. 3 months for project development
3. Moving to one of three cities with the whole team where the incubator is located
4. Provision of "Office Space"
5. Technical specialists and consultants in the field of IT, marketing and strategy.
6. Free lawyer
7. Designer.
8. Once a week a big hangout with IT-bump as a speaker.
Actually not a lot - no millions and luxury: some money for life and the rest for the project. And it is surprising that there is a long line of people willing to join them. Obviously, happiness is not in money!))
At the end of each session, a bride (Demo Day) is arranged for potential investors, in which start-ups present their projects in the hope of receiving investments for further development. Everything, the circle is closed. Hit or miss. Only the best will survive! And in fact survive, bastards! I do not want to run prospectics of successful startups here, but you will be surprised how many services we use have grown out of these IT incubators.
Actually, a business model similar to YCombinator is implemented in most incubators, which I will quote at the end of the article - $ 10-20K for 5-10% in the company's share. But there are interesting exceptions. In Israel, there is a venture fund Genesis Partners , which sponsors something like “under-incubator” TheJunction . The point is that everything is very similar to an incubator, with the exception that the participants of this holiday do not receive a penny of investment. Otherwise, everything is very similar: 3 months, free workplace, consultants, once a week debriefing and lectures known to all of Israel on Thursdays. Specialization - naturally IT.
There is an assumption that in this way the fund eliminates unsuccessful undertakings and invests in interesting and successful projects that have proven their viability and viability for 3 months. This ingenious scheme allows you to naturally filter out crazy ideas and unscrupulous startups, and, ultimately, for the fund to reduce risks and increase profitability.
Looking at all this venture madness, in a good sense of the word, I have a question - why is this not in Russia and is it possible to repeat the success (albeit not on that scale) of the leading western incubators !?
Thoughts about why this is not :
1. Do not reach the hands. A simple assumption. After all, we are a lot of Western ideas just repeat (if not clone), albeit with some delay (FaceBook 2004; Contact - 2006). But incubators have been operating in the West for over 20 years !!! Agree, a phase shift is a poor explanation.
2. Lawlessness on the part of law enforcement and tax authorities. First, the IT industry, I think, is less vulnerable to these comrades. A company can be registered somewhere far away and there is essentially nothing to select. And in general, the activities of IT companies are usually less public. Secondly, in spite of all the repression, another business exists and develops. Those. the argument is also weak.
3. An opportunity for Russian potential investors to earn 20-40% per annum on real estate, hydrocarbons, etc. with significantly lower risks. The IT market is far and incomprehensible to them. Foreign venture capitalists are avoiding Russia. And the matter is not only in the above reason (clause 2, the Magnitsky case), but also tritely poor knowledge of English technicians. After all, if the key to success in mentoring, then without normal communication - you will not get far!
3. Erasing borders. Indeed, in the modern world, the borders are blurred the more, the better you know foreign languages. Thus, a sensible team doesn’t bother to buy tickets and fly to the incubator in the "new exam" in some New York or Boston ... $ 1,000 and forward curved legs!
4. The absence of technical specialists or entrepreneurs who would come to the incubator with their own stepmaster. It seems to me that there are a lot of those and others. And in the universities is still well taught (in some places). Perhaps the problem at the junction. Techies do not feel where the money is and what is in demand, be afraid to disclose the idea to investors; entrepreneurs do not really understand the IT market. In the end, everyone plays their own game ... It is quite possible. As a result, investors are afraid to create an incubator that would be banal empty.
5. The absence of all the threads in the hands of the investor-incubator. As already mentioned, success is achieved through a synergistic effect. In Russia, it is very difficult to sell a successful, even brilliant project. Just no one. Or it will not be much money. Those. The problem of exit from the project is the most important problem for the investor !!! Another related problem, I think, is the misunderstanding and ignoring of America as the main market. And it manifests itself at all levels - from the concept of the project to the language of the interface! In Israel, for example, the absolute majority of projects are created with an eye on the American market.
I think the list can be supplemented, so I’m happy to hear your opinion on this!
Moving on to the second part of the program : Recently, I have been developing applications for mobile devices, and I had a thought that perhaps a “specialized” incubator that deals exclusively with projects for mobile devices can solve part of your problems. Of course, not all.
What is at the moment:
1. A successful and experienced team that develops applications in St. Petersburg (we can do without names and names; if anyone is interested, write to the PM). Our children can conduct training lectures, seminars, presentations, advise prospectors on technical issues.
2. Design team.
3. US-Israeli marketing and promotion partners.
4. Lawyer specializing in intellectual property.
5. Accountant for record keeping.
6. Russian, American, Israeli IT and venture capitalists who are ready to participate in the project in one capacity or another and advise participants.
Specialization in mobile applications solves the problem with the exit for the investor. Those. in fact, there is no way out. Rarely, the mobile application becomes the object of absorption by any IT-giant. Thus, the success of the incubator, so to speak, is directly related to the success of the application itself in the Apple Store.
Dear Habr's audience, I would like to ask the following:
1. What do you think, is it worth focusing on a specific topic - mobile apps? Or expand the horizons?
2. Who are the potential startups who can come to the IT-incubator ?! Senior students? Kst, the average age of participants YCombinator - 26 years.
3. Will working specialists be able to quit work and try themselves in this field? In the States they can.
4. Will it be interesting to non-residents and should they be specifically provided with housing? By the way, the American incubators are not involved in the housing issue.
5. Do we need control over the stapling in the form of a share of 50% + 1 (especially the Russian mentality) or is the western 6-7% enough ?!
6. How much infrastructure is needed: 1. Do I need a “hostel”? 2. Do I need “preparatory courses”? 3. Do I need to provide Macs for use? Or a hangar clean field - quite sodhod?
7. Is it possible and does it make sense to establish direct contacts with specialized universities? Perhaps someone from habrovchan there!?
8. The eternal question - Petersburg or Moscow? Will there be enough startups in Petersburg for an incubator ...?!
I would appreciate your constructive comments and advice. If someone is personally interested to participate in the project in one capacity or another - write in a personal!
Have a good week everyone!
UPD: Posted by Tominsky Mikhail. If someone liked the article and he has an extra invite, I will be very grateful! tomshinsky@gmail.com
Promised table of IT incubators:
Write this article made me think about the relevance of IT-incubators in Russia. And here is not so simple. We can make weighty arguments both in favor and against. On Habré, articles about YCombinator (one of the largest IT incubators in the world), Russian counterparts (AddVenture, InCube) and just start-ups appeared more than once. But I will allow myself to go through the main points once again, look at the peculiarities of the domestic realities and ask a few questions to a respected audience.
First of all, let's think together what the whole business incubator is. In my opinion, this is a commercial (!) Organization, which, having rich (!) Experience, connections (!), Money, office and other infrastructure, helps companies at an early stage of development (seed) to get on their feet, to give the project a presentation ( start-up) and sell it (or find investment for further development). Everything is simple: you have an idea, we have experience and money - let's make money together!
')
A small digression. Hungry for meat, can miss: As Brender wrote (James Brander) in the article “State sponsorship versus private venture capital investments: Canadian experience”, the main thing that a young entrepreneur can get from an investor is a quality “tutorial effect”. The author’s conclusion is that the state needs to fundamentally change its role in the venture capital system, since, being a formally equal player in this market, they do not complement private investment, but replace it. The problem lies in the fact that since the state is a less “quality investor” in terms of “guardianship”, some of the projects that received state funding and “bent” after a while could successfully receive money from a private investor. In other words, if the government financed projects that for one reason or another did not receive frequent investments, that would be normal. But there is a situation when companies that could receive private money, and therefore better guardianship and, ultimately, higher chances of success, come to the state for money. Thus, it is not a supplement of private investment, but a replacement. A kind of mousetrap from the state.
If you're interested, you can look at the Skolkovo project, RVK and philosophize in this perspective. But back to the incubators))
What does the notorious YCombinator offer and why there are practically no analogues in Russia? !!!
YCombinator Terms:
1. 14- $ 20K investment in exchange for 6-7% in the company's share
2. 3 months for project development
3. Moving to one of three cities with the whole team where the incubator is located
4. Provision of "Office Space"
5. Technical specialists and consultants in the field of IT, marketing and strategy.
6. Free lawyer
7. Designer.
8. Once a week a big hangout with IT-bump as a speaker.
Actually not a lot - no millions and luxury: some money for life and the rest for the project. And it is surprising that there is a long line of people willing to join them. Obviously, happiness is not in money!))
At the end of each session, a bride (Demo Day) is arranged for potential investors, in which start-ups present their projects in the hope of receiving investments for further development. Everything, the circle is closed. Hit or miss. Only the best will survive! And in fact survive, bastards! I do not want to run prospectics of successful startups here, but you will be surprised how many services we use have grown out of these IT incubators.
Actually, a business model similar to YCombinator is implemented in most incubators, which I will quote at the end of the article - $ 10-20K for 5-10% in the company's share. But there are interesting exceptions. In Israel, there is a venture fund Genesis Partners , which sponsors something like “under-incubator” TheJunction . The point is that everything is very similar to an incubator, with the exception that the participants of this holiday do not receive a penny of investment. Otherwise, everything is very similar: 3 months, free workplace, consultants, once a week debriefing and lectures known to all of Israel on Thursdays. Specialization - naturally IT.
There is an assumption that in this way the fund eliminates unsuccessful undertakings and invests in interesting and successful projects that have proven their viability and viability for 3 months. This ingenious scheme allows you to naturally filter out crazy ideas and unscrupulous startups, and, ultimately, for the fund to reduce risks and increase profitability.
Looking at all this venture madness, in a good sense of the word, I have a question - why is this not in Russia and is it possible to repeat the success (albeit not on that scale) of the leading western incubators !?
Thoughts about why this is not :
1. Do not reach the hands. A simple assumption. After all, we are a lot of Western ideas just repeat (if not clone), albeit with some delay (FaceBook 2004; Contact - 2006). But incubators have been operating in the West for over 20 years !!! Agree, a phase shift is a poor explanation.
2. Lawlessness on the part of law enforcement and tax authorities. First, the IT industry, I think, is less vulnerable to these comrades. A company can be registered somewhere far away and there is essentially nothing to select. And in general, the activities of IT companies are usually less public. Secondly, in spite of all the repression, another business exists and develops. Those. the argument is also weak.
3. An opportunity for Russian potential investors to earn 20-40% per annum on real estate, hydrocarbons, etc. with significantly lower risks. The IT market is far and incomprehensible to them. Foreign venture capitalists are avoiding Russia. And the matter is not only in the above reason (clause 2, the Magnitsky case), but also tritely poor knowledge of English technicians. After all, if the key to success in mentoring, then without normal communication - you will not get far!
3. Erasing borders. Indeed, in the modern world, the borders are blurred the more, the better you know foreign languages. Thus, a sensible team doesn’t bother to buy tickets and fly to the incubator in the "new exam" in some New York or Boston ... $ 1,000 and forward curved legs!
4. The absence of technical specialists or entrepreneurs who would come to the incubator with their own stepmaster. It seems to me that there are a lot of those and others. And in the universities is still well taught (in some places). Perhaps the problem at the junction. Techies do not feel where the money is and what is in demand, be afraid to disclose the idea to investors; entrepreneurs do not really understand the IT market. In the end, everyone plays their own game ... It is quite possible. As a result, investors are afraid to create an incubator that would be banal empty.
5. The absence of all the threads in the hands of the investor-incubator. As already mentioned, success is achieved through a synergistic effect. In Russia, it is very difficult to sell a successful, even brilliant project. Just no one. Or it will not be much money. Those. The problem of exit from the project is the most important problem for the investor !!! Another related problem, I think, is the misunderstanding and ignoring of America as the main market. And it manifests itself at all levels - from the concept of the project to the language of the interface! In Israel, for example, the absolute majority of projects are created with an eye on the American market.
I think the list can be supplemented, so I’m happy to hear your opinion on this!
Moving on to the second part of the program : Recently, I have been developing applications for mobile devices, and I had a thought that perhaps a “specialized” incubator that deals exclusively with projects for mobile devices can solve part of your problems. Of course, not all.
What is at the moment:
1. A successful and experienced team that develops applications in St. Petersburg (we can do without names and names; if anyone is interested, write to the PM). Our children can conduct training lectures, seminars, presentations, advise prospectors on technical issues.
2. Design team.
3. US-Israeli marketing and promotion partners.
4. Lawyer specializing in intellectual property.
5. Accountant for record keeping.
6. Russian, American, Israeli IT and venture capitalists who are ready to participate in the project in one capacity or another and advise participants.
Specialization in mobile applications solves the problem with the exit for the investor. Those. in fact, there is no way out. Rarely, the mobile application becomes the object of absorption by any IT-giant. Thus, the success of the incubator, so to speak, is directly related to the success of the application itself in the Apple Store.
Dear Habr's audience, I would like to ask the following:
1. What do you think, is it worth focusing on a specific topic - mobile apps? Or expand the horizons?
2. Who are the potential startups who can come to the IT-incubator ?! Senior students? Kst, the average age of participants YCombinator - 26 years.
3. Will working specialists be able to quit work and try themselves in this field? In the States they can.
4. Will it be interesting to non-residents and should they be specifically provided with housing? By the way, the American incubators are not involved in the housing issue.
5. Do we need control over the stapling in the form of a share of 50% + 1 (especially the Russian mentality) or is the western 6-7% enough ?!
6. How much infrastructure is needed: 1. Do I need a “hostel”? 2. Do I need “preparatory courses”? 3. Do I need to provide Macs for use? Or a hangar clean field - quite sodhod?
7. Is it possible and does it make sense to establish direct contacts with specialized universities? Perhaps someone from habrovchan there!?
8. The eternal question - Petersburg or Moscow? Will there be enough startups in Petersburg for an incubator ...?!
I would appreciate your constructive comments and advice. If someone is personally interested to participate in the project in one capacity or another - write in a personal!
Have a good week everyone!
UPD: Posted by Tominsky Mikhail. If someone liked the article and he has an extra invite, I will be very grateful! tomshinsky@gmail.com
Promised table of IT incubators:
| Incubator | City | Conditions (Inv-i = share) | Results |
| YCombinator | Silicon Valley, Cambridge, Massachusetts | $ 14-20K = 6-7% | Report |
| Techstars | Boston, Boulder, NYC, Seattle | $ 18K = 6% | Report |
| Seedcamp | London | € 50K = 8-10% | Report |
| Launchbox | North carolina | n / a | Report |
| DreamIT Ventures | NYC | $ 10-25K = 6% | Report |
| Seedrocket | Barcelona | up to € 150K = n / a | Report |
| Alphalab | Pittsburgh | $ 25K = 5% | Report |
| Bootuplabs | Vancouver | up to $ 100K = 5-15% | Report |
| Shotput Ventures | Atlanta | $ 6-18K = 5-10% | Report |
| Capital Factory | Austin | $ 20K = 5% | Report |
| 500 startups | Siliconon valley | $ 25-100K = 5% | Report |
| fbFund | Siliconon valley | up to $ 100K = n / d | Report |
| Nextstart | Greenville | $ 5-10K = 5-10% | Report |
| Springboard | Cambridge, UK | $ 8K = 6% | Report |
Source: https://habr.com/ru/post/124272/
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