Russian startups do not succeed because of laziness

The founders of the shot Russian startups explain what really hinders our young IT entrepreneurs.

Recently, we published material in which representatives of the accelerator of IIDF, Innopolis University and Kazan IT park discussed why there are many ideas in Russia, but few startups. Experts separately noted that Russian universities do not teach to develop ideas before a working business, that IT entrepreneurs are more comfortable building a business abroad, they lack positive examples, it is difficult to make a profit for a project, and the requirements of legislation take a lot of time.
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Past material was hotly discussed by representatives of the startup community, so we have prepared a sequel. In this post, the start-ups themselves, for their part, told about the infrastructural, legislative and personal problems that young IT entrepreneurs face in practice.


Andrey Makeev, founder of Flowwow:

Flowwow is a flower marketplace where, on the one hand, shops and florists place their goods, and on the other, customers who want to deliver flowers in a profitable, convenient and fast manner. We attracted little investment, it was from the IIDF and a round from a private investor. (The service received 1.4 million rubles of investment from the IIDF and 4 million rubles from the core business angel, more here ) The business belongs to the team and a small part of investors. The company is growing at 300-400% per year. We work in different cities, we go online 2ofline.

In Russia, lazy people who want to spend a couple of months at work, and then sit and receive dividends. But this does not happen, you need to work hard every day.

From an infrastructure point of view, IT entrepreneurs have no problems, only their head is what has been driven into it by others for years: “You won’t succeed, you don’t know how.” Do not listen to anyone, do your job well and dream more.

There are moments in Russian legislation that are worth revisiting: pay attention to transparent tax systems in Western countries and allow them to accept different currencies. Russian companies can not accept foreign currency. Our marketplace with a simple scaling model can bring money from other countries into the budget of the Russian Federation, but it is forbidden to us.


Ainur Abdulnasyrov, founder of LinguaLeo:

LinguaLeo.com - service for teaching English. He attracted 200 thousand dollars of investments from business angels and 3 million dollars from venture capital fund Runa Capital. Now the project has three main owners: I am the founder of the project, Attair.vc is business angels, Runa Capital is venture investors. The project is slowly growing and developing.

In Russia, the lack of a culture of entrepreneurship and the development of technology projects. We almost never teach the professions of the head of a technology company. Novice entrepreneurs lack practical examples for current IT companies to share experience, knowledge, motivation: how to do to get a result. This needs to be taught, to show examples with an explanation of all the details, to tell how to attract investments and expand grant support for the very beginners. And to support the process of introducing benefits for educational companies.

Before I founded LinguaLeo, I took a course on technology entrepreneurship at HSE, I was a resident of a business incubator with another project. But for a long time I independently explored many aspects of creating an IT company.

In Russian law there is no convenient and understandable form for all to implement flexible agreements on options, angel and venture capital investments. It is worth paying attention to legal instruments in English law, since investors choose it more often for concluding transactions.


Konstantin Ivanov, co-founder of 3DPrintus.ru and DigiFabster:

3DPrintus.ru - online 3D printing service; DigiFabster.com is a cloud-based sales automation and lead generation system for commercial 3D printing services around the world. A total of about 1 million dollars of angel investment from Russian and American private investors was attracted. There are twenty of us in two companies with offices in Moscow, New York and Munich. We work with clients from the USA, Germany, Great Britain, Australia and Mexico.

People justify their laziness with the fear of a bad ecosystem, the absence of a venture capital market in Russia and terrible legislation. You need to start with yourself, change attitudes towards entrepreneurship, risk and opportunity.

In Russia, there are traditionally many ideas and problems with their generation. We need to be taught to sell - marketing, packaging, perseverance in sales. In our country, sales managers disappear after the first failure and no longer return. In the UK, sales people can sell me something for a year, sometimes two - they don't have a stop button. They are looking for any ways to convince me that I need what they sell. This is one of the fundamental things that should be taught at least at the basic level.

Starting a business does not interfere with anything: all the basic things can be done independently. Now there are hundreds of services that make life easier for an entrepreneur - from registration to accounting, reporting, control of sales funders, telephony, banking.

IT entrepreneurship is conditionally tied to the country. Nobody bothers to do an IT product in Russia, but with the market and customers in other countries. You have to understand what are the advantages at home and use them, adapting to the mentality and market of another country.

For IT entrepreneurs in Russia, a huge number of “creches” have been created: accelerators, experts, programs, venture investors and much more. The only problem is that the market is still young and not developed. Both the venture capital market and the start-ups market, and the M & A market are M & A. But the market cannot be blamed for being few years old.

Over the next 5-10 years, those foundations will continue to form that are in the same US market: a clear and transparent incorporation of a company with attracted investors; regulation of options and vesting; regulation of rights and transfer of intellectual property. Everything should be integrated into the ecosystem, which will tell you what venture money is, how it works and what are the options for using it; how and why we need options for employees, why they are better than high salaries. With all this knowledge will only begin to work.


Dmitry Stepanenko, founder of Hot-WiFi:

Hot-WiFi is a service for solving marketing problems of a business using a wireless access point - advertising places through guest Wi-Fi. Investments attracted from FRIA in 2014 and 2015: 1.4 million rubles in 2014 - pre-seed, 5 million rubles in 2015 - seed. The business is now mine, two co-founders - product developers, an investor - IIDF.

A strong team with a good claimed product does not interfere with anything - all the problems in the head. We did not face any infrastructural or legislative restrictions. Reduced tax rates for IT companies and software vendors provide substantial business support.

The path from an idea to a successful and profitable business is difficult, but surmountable. In my student years in Moscow, I was looking for an investor for my idea at a single event, and I met with Ilya Korolev, who offered to become our mentor. He believed in our team, not in the project. Investors are invested primarily in people who will lead a startup to success.

The right mentor plays a big role in business success. Ilya helped us at the start: at weekly meetings, he explained how to structure ideas correctly, taught us the right approaches to testing hypotheses, told about hadi-cycles and customer development. Thanks to him, we avoided blunders.

Further for us, the FRIA accelerator, where I submitted an application, became a mentor. After a three-month acceleration, we showed growth and invested in us.


Alexander Scherbina, General Director of ITEC. Group:

There are more than a dozen companies to which I relate - ITECH.group, ITECH.service, ITECH.games, WIZL, Giftd, LifeHacker and others.

Money is either not required - for web development or digital advertising, or I add funding for private investors to my money. In 2012, we attracted investments from the AddVenture professional foundation to the MedBooking.com project, which I sold in 2015.

Some of the companies are wholly owned by me, in some - a controlling stake or a minority. Some companies I sold. Each project develops and grows in its own way.

Not only in Russia there are a lot of ideas, but few successful and profitable startups. So everywhere, and it’s normal that successful ones are just a few of hundreds, sometimes even thousands of startups, ideas, inventions. And I don’t see in our country serious infrastructure and legislative restrictions that will prevent a young IT company from moving forward.

The most important problem is the number of places where you can get knowledge. Dozens of events take place in California every day: conferences, meetings, workshops and just talking with people around: on the street, in a restaurant, in a company. Many large IT companies, from which employees come with their projects, have gained vast experience and funding from former employers. The absence of such an infrastructure complicates access to information, but does not make it impossible to obtain it. It just takes more effort.

There is a shortage of qualified personnel on the market who must prepare universities. But this problem exists in other countries. See how many foreigners work in western IT companies.

There are reasons that do not depend on a person, and he does not succeed, because he is not a businessman by nature, but this is normal. Then it is still possible, given the previous experience, to move on - to move to the role in the project that suits most.

The limit may be the size of the market in which the company operates. Going to large markets is harder than working on a local one that you know well. But an energetic and purposeful entrepreneur will not stop anything.


Mikhail Sverdlov, guest professor at Innopolis University, founder of Afisher.info and Pomnim.pro, director of IT at the city hall of Innopolis:

I have two federal projects: Pomnim.pro is a service for finding and caring for graves in Russia and the CIS, Afisher.info is an event content aggregator used by the largest federal and city portals, receiving quality content from us on city events, sports posters, business and social events. Our content is purchased by Yandex, the federal network of regional Internet portals Hearst Shkulev Digital Regional Network. Both projects are federal, work in 50 cities, their number is constantly increasing with the growth of companies.

On investment rounds were received from IIDF and business angels, but I am skeptical about investing in startups from scratch. I stepped on a rake when both the team let down and the people with whom we had agreements did not fulfill the obligations. The investor needs to present the already developed project with a proven team, and most importantly, the project needs to understand why investments are needed. If just a team meal, then this is not the best motivator.

In Russia, starting a startup or business is simple, difficult - to make it profitable. But it is everywhere, miracles do not happen. Since Soviet times, there is a stereotype that an entrepreneur is a person who, from the first day, drives a “six hundred” Mercedes and has a big shovel to collect money. And when people come across a business, they have a substitution of concepts: not every entrepreneur is bathed in wealth. Many of them, both in Russia and in America, are poor and unhappy people who have sold or mortgaged apartments, investing all their money and energy in the business they are working on 24/7, sacrificing their health and time for the family.

This is a difficult job: you need to form a team, fight for your place in the market, meet the demands of consumers. To find a niche in the market, you need to experiment, try different approaches. And we do not have a culture of error, after the first failure, many give up, although this may be the best lesson. Society is also intolerant of mistakes. In the west, this is easier, and people with mistakes are valued, since the chance that they will step on the same rake is several times less than that of an MBA graduate. When everything is good - this is bad, mistakes help us grow as entrepreneurs and professionals.

The state helps entrepreneurs in their work. They are trained, development institutions are being created, there are a large number of grants and benefits for beginners. At universities in Russia there are departments that teach the basics of entrepreneurship, legal and accounting aspects of activity. I am now teaching courses in entrepreneurship at Innopolis University and I consider training in business management necessary. Few people are born with an entrepreneurial mindset, these are nuggets and their units, so it is important that people who have successful cases share their skills with beginners.

You need to learn how to sell your ideas, understand the needs of the market and the customer, create value that solves the pain of the customer and the consumer. Since the idea itself is worthless. If a person succeeds in adapting some successful western idea on the Russian market, this is no less success than inventing something new. There are already billions of ideas, you just have to get up and start working.

And in the Russian legislation there are no restrictions that can not be overcome. It’s absolutely real to open an IE or LLC, spend a day or two on it, then just do everything according to the law, pay taxes on time and do business quietly.