“Much can be solved by helping a startup and explaining what mistakes we have already made” - Interview with Leonid Igolnik

Leonid Igolnik , a business angel from Silicon Valley, an expert in engineering and engineering management, became the guest of the next issue of “No Slides”. In the fall, he drove to St. Petersburg at one of our conferences. What we talked with Lenya:

• who is Leonid Igolnik, what he did and does;
• creating a competitive advantage;
• about startups and their survival;
• B2B, business platforms and digital communications of “traditional” businesses;
• about business angels;
• about money;
• about the culture of "growing" startups;
• about the attitude to failures in the Valley;
• how the price of the company is formed.

Here's a video:
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Under the cut - traditionally, transcript. Enjoy reading!

- Dear friends, good afternoon! This is the show “Without Slides”, my name is Alexey Fedorov. And today I have a guest from sunny California - Leonid Igolnik. Leon, hello!

- Hello!

- Leonid is a specialist in startups, performance, engineering management, and also a business angel, so today, I think, we will have a very interesting conversation. Leon, tell us about yourself, introduce yourself to our viewers: who you are, what you did and what you are doing now.

- Well, let's start from the beginning. I grew up in St. Petersburg, at some point we left here. He began his professional career while still studying at a university in Israel. He worked for one of the earliest Internet providers, and there somehow got into the so-called enterprise software, that is, everything related to B2B. And this has been living for the last 20 years. At some point, I moved to North America, lived for a long time in Canada, worked in Toronto, in a company called Tucows (those who are older can still remember). She at one time was the second largest domain registrar. I did a little bit of this, a bit of advice, and inadvertently in October 2005 (and winter began in Toronto, or, as they say now, “The winter was coming”), I ended up in the Silicon Valley for a year, and somehow it dragged on. I have been based there for 12 years. He worked in such SAAS companies as Taleo, where he was responsible for two large SaaS products, at one time the largest in their fields related to human resources software. For a very long time, Software as a Service was engaged at the stage when no one yet believed that SaaS is something you can live with and earn money with, and that the company will entrust you with its most valuable data. At some point, as often happens with companies that break out at certain frontiers, we were eaten by a larger company, and we ended up at Oracle, where I served a voluntary-compulsory punishment for several years. But in general, it was also interesting there, because we helped the guys at Oracle understand what SaaS is and what is needed for that.

- What year was it?

- It was 2012.

“And they didn't understand that much yet?”

- Yes, then it was still early. Then another Fusion was written as singleinstance per tenant.

- Do you mean Oracle Fusion Middleware?

- No, it is the Oracle Fusion Suite application. Middleware - he is middleware, he doesn’t care, he is singleton and multitenant. We talked with the JVM team, discussed what can be done to make it easier to write multitenant applications.

- Communicated with Shipilev, Kuksenko and all these people?

- We talked with the guys at Redwood Shores, but more with product management. We discussed how easy it is to do things for multitenant, how to manage resources in one VM, where you have a lot of clients running. We worked with a team of databases, my product was probably the first in the world that Oracle took for itself in 12c Multitenant. Very interesting database.

At some point, I went to a company that at one time was called Computer Associates, now called CA Technologies, and many guys from Taleo gathered there. I was responsible for two major products. First, it helped to slightly extend the life of the original product, which was invented by APM, the former product of Wily, now called CA APM. These are the guys who once gave the Java Agent API, the original implementation in the community, because without this a normal APM product cannot be written. He also helped our security business understand how to write security products for SaaS, this is now a new trend in the industry. Just recently I saw that Duo Security, one of the rather popular vendors, closed another round in this area.

“Does that mean you got another wad of money?”

- In my opinion, somewhere fifty million.

- So this is round C, most likely already?

- It can already D, I do not know. I think we'll talk more about this. And since May I have been on a small professional holiday. Periodically I leave to talk with people at conferences. I decided to play a little with ML, I train a neural network to play snake. It is very interesting to watch how this happens.

- Class! And how do you even combine all this in yourself? All that you have been doing in recent years is consulting, business, and so on, and now you are writing a neural network with your hands.

- Still, I want to remember that you were somewhere else once an engineer. Such things, of course, are not forgotten, after all I have been programming since I was 12 years old.

- How old are you now?

- Almost 40 already.

- How did you do programming in the glorious city of Leningrad?

- BC-0111 and DCK, it all started with this. In the local vocational school in the summer they opened a computer center, because vocational schools needed to earn money, and it was possible to go play with toys.

“Do you remember exactly where it was?”

- In Kupchino. In a local vocational school, a computer room was opened, all the children ran there, it cost about 20 kopecks an hour. According to the parents, I spent the whole summer there. If you had to find me, you could definitely search there. And also, surprisingly, the old Leninsky Sparks newspaper helped me, where an article once appeared that implemented some sort of elementary sorting. Something somewhere in my head was connected that it was possible to drive this program into the BC, because BASIC was built into it, and there was something to be done. And this feeling, when I wrote the code, and this plastic thing did something, it burned. And so, thanks to the newspaper Leninsky Sparks, Octobrists and Pioneers, I got into programming.

- This is surprising, because somehow it was traditionally in the late Soviet Union that children were supposed to learn computer science, and they were given all sorts of languages, but they basically passed everything on paper, and the teachers checked it on paper, because no computers in schools did not have. And what you are telling is very cool, because it means that somewhere they did appear, and people did it live, on real pieces of iron. Just when they talk about the features of national education of programmers, about theories, algorithms, about all this, it turns out some juicy details that almost no one had a machine when the children of your generation were taught.

- At home, maybe these Commodore appeared. As I remember, they wore each other on the game tapes. But, again, there was BASIC, it was something to play with. Then I went to visit my sister, she is also a programmer, she studied here, in Bonche, and they had a computer there. And my father had a computer at work.

- So you grew up in such a computer environment.

- But at home, before moving to Israel, there was no computer. I remember how we wrapped the diskettes in foil so as not to demagnetize them when you go on escalators.

- In Israel, you have learned, and then moved to Canada, in Toronto. And how did you get there? For work or family reasons?

- Yes, somehow it happened. And for family, and for workers. At some point, my sister left Israel, I went to Canada, I liked it, and then I was delayed.

- Can you briefly tell what you have been doing in recent years, after you left Oracle?

- I ended up at CA Technologies, a company unique in its approach to the market. These are one of the few software vendors that (and here I must apologize in advance for the partial lack of professional Russian, English terms will appear, I grew up professionally in North America) vendor-neutral. The company has an approach to the development of exactly some tools that allow our clients to manage quite complex systems.

The customers get the largest telecoms, insurance companies from around the world, banks, and so on. And we saw a very interesting transformation of the industry there, because today “every company is a software company”. There was a kind of trend, and if in the early 2000s we saw that some applications appeared on the web, and users had to use what they wrote. I still remember my first web bank application, which was just awful by today's standards. We began to notice that, at least in North America, there is such a trend: before, people chose the service and used the applications, and now very many choose the application and thus choose the service.

- And it creates a competitive advantage?

- Great. For example, I changed the bank like that three years ago, because I am traveling a lot, the mobile application of my original bank was in a terrible state, it did not suit me. And at some point I chose the application that I liked, and thus I took my entire portfolio of what I needed from a financial point of view to another bank.

- It is very interesting. We have such a living example in Russia - Tinkoff. If earlier they told about themselves that they are a bank without offices, then at some point they understood this chip and began to tell that they are not just a bank without offices, but a bank that is “Online-first”. Mobile and Web. Now they are investing more in the mobile app. And I have a question: in Russia now there is such a market that here mobile and online banks are quite advanced. Even the largest bank in Russia, Sberbank, is heavy in many ways, it has many social and other functions - even it manages to transform quite quickly. They have a very good mobile application, a decent online bank, and so on. When I talk to people from the United States about this, they say that so far many large American banks are still stuck. Is it true? Is it changing now? Did a big bank enterprise understand that you still need to do this?

- From my experience in dealing with clients, I can say that, naturally, they all understand this, but there are certain laws of physics that are difficult to change. The States have a very complicated banking system, it is very fragmented due to the fact that each state has its own specific laws governing the banking system, which complicates the problem. In addition, all these banks are not young, they had no options to start from scratch. You can laugh, but, for example, CA still has a fairly large part of the business - this is the mainframe support software for applications that still live everywhere that we all go through. Just over them appeared a bunch of layers of more modern software. First in Java, now Node is gradually appearing in banks. I don’t know how much it was known here, the Equifax credit bureau was hacked in the States.

- Does it collect everything?

- Yes. In the States, there is an approach to issuing a loan by identifying your risk as a potential customer. There are two or three large agencies, one of them is Equifax, they recently, during the last four weeks, have been hacked, about 145 million profiles have been stolen, more than half of the country.

- Do I understand correctly that the population is wildly credited?

“There’s nothing to do with one another, whether it’s loaned out or not, but these agencies exist, they help businesses make a decision about issuing a loan.”

- But simply, if there are about 300 million inhabitants in America, and 140 of them have been hacked, does this mean that at least so many people use it?

- Everyone has a credit history, it does not depend on whether you use loans or not. The bank issued you a credit card, you want to pay for a phone subscription, and you need to check whether you can give it a loan or whether you need to demand a prepayment from you. The credit agency is engaged in exactly helping the business in deciding whether you can give something on credit, whether it is a credit card, an account, a loan or whether it is possible to pay for the phone without prepayment.

- That is, the business of such an agency is in this case that it collects and issues this information?

- Yes, they have some algorithms for calculating risks. Returning to digital transformations. All these transformations are underway, but the risk is rather high. There are more conservative banks that, in terms of their approach to security, move more slowly, there are banks that are more aggressive. This is all pretty serious weight, and she has a lot of inertia.

- Why is it all very interesting to me: there is Sberbank, and at our conferences Sberbank Technologies, their technological division, is a rather large client. And I sometimes see on the sidelines that guys chuckle about how it all works. I understand that this problem exists for all major banking, and in the States, apparently, the same thing.

- I think this is a problem for all large businesses, not just banking. When I was in charge of APM, among my clients, for example, without mentioning names, there were three major providers of state communications. The task was, for example, the following: on the day of the release of the new iPhone, to make the system not fall when everyone wants to buy it. This problem exists in all. Telecom providers in the United States are equivalent to Russian mobile operators, only here we have operators that deal not only with communication technology, but also with the Internet, etc.

- We have the same situation. In Russia, the three largest companies are MegaFon, MTS and Beeline. I have the Internet at home from Beeline, and in the office the Internet from MegaFon. They conduct an interesting transformation. The same Beeline: if earlier they were positioned as a cellular communication operator, now they are positioning themselves as an operator of IT solutions, in particular, home Internet.

- I suspect they seriously had to tackle the transformation of their back office when they made such a business decision.

- Generally it is very interesting. The classic story from Amazon, when people were selling books, and then they realized that there you can work in a completely different way.

- The new Amazon motto is generally very interesting, well explains their approach, their new key task. It sounds like this: "We want to participate in every business transaction in the world." This very well explains, for example, why AWS (Amazon Web Services) is suitable for this strategy, because with AWS you can participate not only in the business that is directly involved in Amazon, but also in all businesses that are hosted on Amazon AWS.

- Let's talk a little about Internet startups, moving gradually to this part of your life. I begin to notice that those businesses that are a kind of platform that unites two certain audiences scale up: say, the audience that sells, and the audience that buys. And in this sense, it turns out that such a quadratic transaction volume, when you have N sellers, M buyers, you have N for M, and if you go through N for M, for some constant transaction, then you are great , you miss all this through yourself. Startups are platforms against startups that provide some kind of service or sell a product. What is different about working with others? From the point of view of the investor, vendor, technologically. You have just, as I understand it, a great expertise in the loads.

- In loads including, yes. A great example is Uber, thanks to which I ended up in this interview today.

- There are two audiences. There are drivers who are looking for orders, and there are customers who need to go somewhere.

- I don’t know how well this is known here, but we have a lot of scandals there with Uber.

- It is known. We have special resources that live due to the fact that these gossip from the Valley are broadcast here.

- Let's take the company Uber, which started from the fact that San Francisco was a disgusting taxi. And now the company, consisting of thousands of people with a certain number of servers located somewhere in the States, operates worldwide. I work quite a lot, both for work and myself, and I used Uber in almost every country.

This Digital Transformation allows us to operate today worldwide, crossing all borders, both national and cultural. For example, in Vietnam, I went to Uber Moto - this is when a scooter with a helmet comes to fetch you and carries you. By the way, it is faster than by car, considering what traffic they have.

The scale that can be achieved today from your home office is unrealistic. The Internet has really transformed the way business works. And there are quite a few examples of such companies today. Facebook is also a great example for a billion users. WhatsApp is a great example of a company of 60 people on the day of purchase.

- More than 19 billion already worth the company.

- The guys developed very well, at that time, I think, they had over a hundred million monthly active users. And these scales - they are very interesting, but there are problems that are not mentioned much. In the Valley there is a standard approach to investments and in general in the development of startups, because startups are dying more than we know. Basically, according to statistics, one out of ten goes somewhere and becomes profitable. Although Uber is still not profitable, we still go to the subsidies of their investors, but we are very pleased, and it is clear why they are doing this - they are trying to buy a market for themselves. As in the case of Amazon, having Uber, at some point all the competition is likely to go. At least the key figures.

- Here is a famous story that they are dumping to increase market share.

- Just like Amazon, like a bunch of similar businesses at the stage of its development.

- Amazon is not profitable?

- Amazon has Jeff Bezos has such a great swivel lever, which can regulate how much they earn. If investors are satisfied, why pay income taxes if you can continue to invest in business development. With this approach, market products are very difficult to build. First, you need to convince the market that you have this problem, and there are not very many such problems that are quite well known. For example, the problem with a taxi is quite elementary. , - , , , , , , . : « ?» , , — , , . , , . Uber .

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- Suppose I - an Internet startup in the Valley, who came up with something. In which case do I need to turn to venture capitalists (investors), and in which case - to business angels?

- The startup development culture is very interesting. I will give a small context. I am often asked how easy it is to describe the Valley. For many years I have come to the conclusion that I call the Valley Hollywood of our industry. As in Hollywood, we have an acting school, they are accelerator incubators, there are some of our major studios - venture capitalists who invest their money. If you look at the film industry, it’s the same investment for getting the product back. Cinema can be perfectly shot outside of Hollywood. But, as we have already discussed, there is a certain concentration of money and talent in Hollywood, it is pleasant to live, the weather is good, the taxes are high.

- And the role of VC, respectively, is played by these various companies that produce films. All sorts of Miramax, Paramount, 20th Century Fox and so on.

- Yes, this type. All VC-funds manage someone's money, they have the so-called LPs (Limited Partners), limited partners, who were given money under management.

- And they have the same connections - they know which director, which operator, which actor, and which distributor network.

- Yes. But usually a startup does not start with venture capital. Traditionally, start-ups begin with the so-called “friends and family money”. Some small amount of money is going. There is also such an English concept as “sweat equity” - “to earn with your own sweat.” Many startups start with the fact that you still need to come up with a product and make sure it is there, make some kind of MVP (minimum viable product is the minimum viable product), that is, test the hypothesis and prove that it has a market, and under It is possible to collect some initial investment.

- I talked with some familiar guys who are raising business here. Basically, this is some kind of development business. The guys said an interesting thing: they (I don’t know how they measured it) test each hypothesis is worth one Land Cruiser. That is, I can buy a car, but I can say: "Sit and test the hypothesis." Judging from such bloated sums and sums that are worth these rounds, in the Valley to check such a hypothesis is much more expensive?

- Yes, but most people understand this perfectly well and understand that there is an arbitration price of development, and very many do it outside the Valley, although, again, there is a special culture in the Valley, although I don’t believe in it completely because I worked with teams around the world, I had teams in Prague, in Serbia, in Krakow. In the Valley they consider that "there is no better than our programmers," and therefore everything must be done there, but it is very expensive for various reasons. Now there are a lot of outsourcing that lives in Central and Eastern Europe, they are well aware of this, and even there are some ready-made packages for startups that do not always include full cash compensation, and in part they take equity from the company.

- Is it possible to test the hypothesis in the existing economy for your money?

- Can. And I give a lot of businessmen advice, sometimes I get acquainted with someone, because, being a business angel, I want to make sure that the money invested will be spent correctly, I now have a set of some companies that I recommend going to, make UX, help write MVP and so on.

- Relatively speaking, these are some low-cost companies (not in the States, it is hardly possible with the state economy; somewhere in Europe, in Russia or somewhere else) that can do something pretty quickly in a couple of months and you can somehow check.

- A small amendment: States - the country is big, we naturally have different conditions, different prices for accommodation. There is a Valley, and there is everything outside the Valley. There is a coast, it is more expensive, a lot of things happen in the center of the country, where it is still more expensive than in Eastern and Central Europe, but it can be there.

- It's cheaper there, and there, respectively, there is a cluster of such small outsourcing companies that deal with such services as testing a hypothesis.

- Not every founder (especially if he does it for the first time) can work effectively with outsourcing in Europe, it is hard. There is a difference in time, there is a serious difference in culture - communication, understanding, and so on. There are certain barriers.

- You can pay a little more, but do not take all these risks on yourself?

- It depends on the founder. This is exactly the moment when a business angel can help with advice, looking at the founder of the company, at his experience.

- That is, a business angel - he, including, comes before any venture capital?

- Usually this is the second money after “friends and family”. Naturally, the risk is very high. If a standard venture capitalist ruins a company ten to one, then a business angel, rather, twenty to one, the money went nowhere.

- Angel has to build a portfolio?

- Yes. If anyone is interested, my portfolio of investments is in my LinkedIn profile.

- How many positions do you have there now?

- Twenty-five, I think. There are still some positions not directly. At one time in the Valley, I participated in the creation of an accelerator-incubator called Batchery. We co-own every company that has passed through us, that is, this ownership is not directly. And this money is collected under a very interesting condition. You and I said that you were getting some sort of company. A lot of initial investments by angels are made by a tool called Convertible Debt (convertible debt) in English. This is a type of loan that is given to an angel company. But this is a loan that is never repaid. So you came to me as a company founder, and in order not to even try to understand how much your company is at this stage of an idea or some MVP made by you, certain tax implications are made to evaluate your company at a rather early stage. We will not delve into them, they are very specific, related to the American tax system. The initial money is collected by a tool called Convertible Debt or Note - I wrote you a loan. Since our industry is large, there was an incubator in its time, called Y Combinator, it released a fairly standard set of tools called Safe Note, it lies somewhere on the site. These are all legal documents that describe all the conditions. The key things in Note are that I give you a loan, it has a percentage, that is, the money I gave you, grows at a certain percentage, rather high, usually 18-20% per annum.

- Ha. Now Russian bankers laughed. We have a refinancing rate of more than 10%.

- And we have a loan of 5-6% - this is quite normal.

- And we have 40% per year for the bank - it is nothing at all.

“There are also certain tools to protect the angel from devaluation by the investor, but the most interesting thing is that this tool says that as soon as you get your first so-called Priced Round, when you collect money when the company is already valued.”

- My company is valued at so much money, I give so much percent of shares to an investor and get the appropriate interest per day.

- Yes. Like an angel, my money grows as a loan and is converted into company shares in the first Priced Round, that is, it is the second or third money for the angel. And at this moment this conversion occurs, and there are a lot of conditions that protect the angel.

- You enter the share on certain conditions before the assessment, and it is written there that when they receive an assessment, you receive a certain part according to your amount.

- And the angels defend themselves by the fact that in such a tool there is such a thing as Cap (top bar). Let's take a standard example today. I invested in the initial business under the condition of convertible note, under the condition of Cap in three million. If for the first time a company is valued at ten, I still get a percentage of shares, as if the company was valued at three. If the company is rated lower, I will get a percentage of the share of the lower estimate. Angels thereby protect themselves. Angels also very often get the opportunity to participate in subsequent investments in the company in order to continue to maintain their stake in the company.

- So you have the right of the first night in this sense?

- Yes. And there are additional rights that, due to the high risk, make it possible to somehow protect an angel from either losing money, or to allow, if the company is quite successful, to continue to develop its position in it. Previously, everything was clear. There was a seed round when we planted some seed. Now a lot of them have appeared - Seed, Pre-Seed, Pre-Seed A and so on.

- Is all this infrastructure developing somehow? And the legislation?

- The legislation is rather standard, it has existed for a long time.

- Say, the patterns by which all this interaction takes place?

- Patterns appear, and the market, even in those five years that I have been taking part in it as a business angel, has changed in the Valley, because we have a lot of money spinning. There are two concepts in the Valley: dumb money - “stupid money” and smart money - “smart money”. Just like venture capitalists, angels can help you with money. Sometimes you need for the development of the company a light passenger who does not climb anywhere. He gave you a check and went about his business. And there is the concept of smart money. If a company comes to me that wants to engage in the HR industry, I know a little about the industry, I have a list of contacts that I can call, for them I will be considered more “smart money”.

- Because for them you have added value. Turning to you, they do not just get money, they get something else.

- They get contacts, industry knowledge and so on. Due to the fact that a lot of money is spinning, the initial investment in a company can be from 50 to 150 thousand dollars. It is not such a large amount of money for a person who lives in the Valley.

- Well, I'm sorry, if I correctly understand the cost of programmers in the Valley now, then 150 thousand dollars is such a normal engineer for a year.

- This is his salary. It costs the company 200-220 thousand, because there are more taxes, medical insurance, offices and everything else.

- That is, this is not even enough to feed a normal engineer for a year. For half a year is enough, but no more. How, then, at the expense of this money can you grow?

- Well, not in the Valley. Very often, since we have a rather technical place, the founder's Sweat Equity itself. Very often, the founders themselves write the initial version of their product.

- Why then because of such small by the standards of the Valley of money in general to get involved in it all and share with someone? Or as soon as your money runs out, are we trying to find something somewhere?

- Yes, at some moment the founder must live, eat, support his family for something. It all depends on individual situations. Naturally, the further the company develops without attracting other people's money, the more profitable it is for the founder, the more share he will have. We haven’t talked about this yet, I was engaged in Mergers and Acquisitions for a very long time, these are buying and selling companies.

- This is how Oracle bought Taleo.

- Yes, and in Taleo we bought companies, I have somewhere for $ 3.6 billion of transactions in which I participated. And I saw how money is distributed when buying a startup. Apart from the investor, most of the money goes to the founders. In any rule there are exceptions, but basically the money goes to them, and individual employees, well, enough for something.

“Can I have a stupid question?” A business angel needs to get some capital. So you became at some point a wealthy man. And how did it all happen next? Someone who bought some of the companies you worked for ...

- I was at one time the vice-president of the technical department, who was responsible for two of the three products in Taleo.

- You had an option there, you were a public company, and when Oracle already bought you, they probably forced you to serve voluntary-compulsory punishment for some more years?

- Yes, usually it is from two to three years. I spent two years in Oracle after the purchase.

- So that there is no such thing as buying a company, and all the key people run away.

- Usually when buying a company, this is all taken into account in the process of examination, due diligence. And when there is an evaluation of the purchase, the money that is needed so that key personnel do not run away are included in the purchase budget.

- And the money is quite serious, they need to somehow interest people so that they, having already made money in this place, do not run away. Because they immediately change the range of interests, the standard of living and many such things.

“You know it happens differently in the Valley.” I have seen people who are really changing money, but there are those who, having received quite serious sums from well-known exit points, continue to live and behave just like usual. Money influences everyone very differently. But since there is concentration, there is a culture of “helping someone further”, returning to our saying about the elevator down.

- We talked about the rounds and about investments. How many companies really survive? There are different rounds, different amounts of money - round A, B, C, first less, then more and more, and an order of magnitude at once. The first round may be a million, the second - ten million, and the third - a hundred. Typical story. And I understand that the further the company goes, the more rounds it passes, the more likely it is that something will really come out of this. We may have completely wrong statistics, now I’m talking about numbers at random, but, as we already understood, of the companies that receive round A, every tenth somehow rises, and nine burn out. What happens to these people, with their infrastructure? The valley, as I understand it, is very much tied to this story with startups, of which 90% do not end in anything. How do you live with this?

- You know, in the Valley of "failure is always an option" - many people think that, having failed in something, you get some valuable lessons that will help you in your next startup not to make the same mistakes. For example, two of my close friends started a company, gathered a round - it did not go. We talked with investors, closed the company, started to make the next startup.

People don't go anywhere. Again, the industry is big, not everyone is ready to continue working with such risks, someone is going back to work for an employer, with a fixed salary, a good life, insurance, and so on. Everything is very individual. And someone goes to the next call.

- You, as a business angel, come across people who either have never done startups, or once did something, they did something, and this is their second startup, or people who once did something then, one or two or three times, they never succeeded, but here is another cool new idea. Does this affect how you communicate with them, decision making?

- When a team is at the stage of communicating with a business angel - this is one of the most crucial moments for several reasons. Firstly, if I invest my personal money in your company, we will communicate quite a lot. One of the first decisions that I have to take for myself is whether it will be pleasant for me, as an angel, to periodically communicate with you. This is an elementary, banal solution, but it is. Sometimes people somehow connect, and sometimes they don’t. Secondly, there are just experienced founders, and there are founders like me who have worked in the industry, made some kind of serious career and leave to do something different. They have some kind of experience, some kind of connections, and so on. But there is another culture in the Valley, called the advisory board - a group of advisors to a company, which is usually often compensated for by shares of the company or, most likely, by options of the company.

- Do they have any living money?

- Not a single startup has any living money, and if there is, then they should be spent on product development, and not to attract experts. I am a consultant in several companies, but they cannot afford me for my normal hourly payments. And one of the tips that I always give is: if you come for the first time, your idea is interesting, we believe in it, and we like you, surround yourself with an advisory board that will compensate for your lack of any expertise and connections in a certain industry. And thus, without spending money, you can slightly compensate for this risk as well.

- It turns out that you and your counterparties, as is customary in our Russian Federation to say, are engaged in the fact that you somehow correctly balance risks and all such things?

- As with any investment. But it depends on the team, ideas, technology. Recently I saw guys who wrote their doctoral studies at UC Davis University, which is located near the Valley. These guys are engaged in biology. And they have a so-called defensible IP - this is some kind of intellectual property that is protected by something. Most startups like Uber are protected. In principle, you can write today another Uber, there are a bunch of clones. But then the secret is in the business model, not in technology.

There is a kind of startups where the technology is protected by a patent. And these guys, while doing their doctoral thesis, decided that they didn’t like how long the RNA sequence was going to be, and came up with a new method that speeds it up tenfold. Accordingly, this was done under the auspices of the university, the university has a patent, it is protected. , — , , . , , .

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