It is assumed that by the time a man flies to Mars, surgeon robots capable of performing simple operations under the supervision of a doctor via the Internet will already be used in medicine. A bunch of medicine and the Internet in general is a very expected event, but its implementation, by and large, is stalled.

We decided to put our treasure into the approach of this happy time in our Internet project. However, the project has not been implemented as planned. Next, I want to tell you the story of CardioStep - the first Russian medicine startup.

The idea and the first implementation

Initially, our group of four people engaged in the development of software and hardware systems for the rapid diagnosis of the state of the human body in sports and fitness. In 2005, we had an idea to simplify the system, make it cheaper and make it accessible to everyone. We decided that the best solution would be an Internet service focused on fitness and healthy lifestyle lovers. People could select and plan workouts with the help of the service, evaluate their stress and learn to reduce stress right on the site in real time.

So, the idea for a startup was online diagnostics and stress reduction.
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To work with the service, an apparatus was developed for measuring stress based on an analysis of the structure of the heart rhythm. The device was supposed to be as cheap as possible and, ideally, free for users. In practice, it was possible to achieve a cost of around five dollars.

The least clear idea was about the implementation of the web service itself. There were no close analogs of what we had planned just as there were no suitable frameworks. We presented the service as a highly interactive application, more like an offline program than a website. However, in 2005, many web programmers have not yet heard about Ajax, web 2.0, and usability ideas were not common. We decided that we would write modules in which there is a lot of intellectual property, and transfer other sections of the site to outsourcing. Perhaps it was one of our first mistakes. One of the best studios in our city (and we are in Kemerovo) was busy with the task for two months - until it became clear that it could not solve it. Then we turned into one of the best studios in Novosibirsk. After seeing the technical task, they requested two months, but did it only after six months.

When we gathered all the modules together and launched the site, it became clear that the interface was bad and the possibility of modifying custom modules was not important. In addition, 2006 was already in the yard, and there was a clear social trend on the web, which was completely absent from our startup. In the end, we rewrote almost all modules for the site, which were made by contractors.

ActiveX was used in conjunction with Ajax to interact with the Internet-based system for measuring stress. Exercises to relieve stress were performed on the basis of Ajax, ActiveX and Flash. For example, one of the exercises to reduce stress was performed in the form of a flash game. The user had to learn how to control the flight of the aircraft due to his breathing. While inhaling, the plane flew down, while exhaling it went up. The task was to shoot down soap bubbles and clouds located along the course of the aircraft.

On our own, we could not bring the project to the market. The reasons were:

1. Our remoteness from markets;
2. The need to organize the production and delivery to the user of additional equipment;
3. Lack of own financial resources;
4. The lack of a ready market due to the high novelty of the service.

Despite the difficulties, we were able to complete the development of the service, release an experimental batch of equipment and make a test run. Total costs amounted to about 50 thousand dollars.

Investor Search

From the very beginning of development, we began to search for an investor. A detailed 30-page investment proposal was prepared. The summary of the proposal was translated into English and sent to more than 40 foreign venture capital funds. In most cases, there was no answer - or we were informed that the project did not comply with the foundation's policy. In two cases, they wrote that the project is interesting and will be considered sometime. In general, correspondence with foreigners did not bring results.

We took part in two specialized investment venture exhibitions. As a result, there were several calls from journalists and the local administration. Later material appeared in the journal Expert-Siberia and a couple of notes in the regional business press.

We also applied to Russian venture capital funds, as well as to business angel communities. It should be noted that such funds began to more or less actively operate only the last year and a half. After each round of communication with the funds, chapters were added to our investment proposal, but there was no other useful result. The impression was that Russian investors are still not ready to deal with real venture financing. Everyone needs to show an already operating business. It is desirable that there were 50-100 thousand users, and even better to show a positive financial flow. Strangely enough, representatives of business angels approached this, strangely enough. Nevertheless, one of the leading domestic funds offered to act as an agent for seeking investment abroad. It was the best offer we received in Russia.

We turned to several foreign companies that work in a related field with a partnership offer. Interesting contacts were established with companies from the USA, Canada and the Netherlands. However, not being venture investors, they could not finance the project.

The lack of external support did not add optimism, and our internal motivation was also not infinite. As a result, by the autumn of 2007 we were already tired of the project and decided to suspend it.

Conclusions for yourself

1. It is better not to transfer technologically complex modules to an outsourcing, since there is absolutely no guarantee that a remote contractor has real experience in the required field. And if you donate, then you need to be prepared that the work will either not be done at all, or the deadlines will increase several times. In such cases, the project can be transferred to the execution of several outsourcers at once, so that according to the results of some time, choose one that has a lower delay in terms.

2. We have gained experience in several areas: the development of biomedical approaches to diagnosing and reducing stress through the Internet, developing non-standard web projects, developing electronic devices, and experience in negotiating with investors. However, it turned out that the attraction of such an extensive experience to the project makes it unique, but potential investors cannot draw a conclusion on the project precisely because of its unusual nature.

3. Funds operating in Russia for the period of autumn 2007 preferred to enter the project not at the startup stage, but at the expansion stage of the existing project. Support for venture and innovation projects in Russia is in its infancy, despite the large number of slogans.

What now

Despite the pessimism regarding CardioStep, new ideas and the spirit of adventurism have not disappeared. It was decided to make a new project. We set the bar again high. One of the parts of CardioStep was a service for observing the location of sports colleagues on the map. We converted it into a separate project GeoKontakt.ru . His goal is to give everyone the opportunity to see each other’s location on the map and phone for free.

In early 2008, a Canadian company, with whom we had previously spoken about financing, offered to purchase CardioStep in exchange for its shares and a small fee. We agreed. The business model of the project has been changed. Now we are finalizing it with the new requirements. On the Internet, it will appear in the fall under a different brand and will be focused on the North American market. We hope the second start will be much better.

So we beat the sour cream in the hope that it will become butter.

In the next publication I will present the investment proposal of CardioStep. I hope it will be interesting to those who have chosen to develop their own startup.