BY Mikhail Naumov as seen on Forbes||
The concept of a modern entrepreneurial Russia has long remained a mystery. The country has gone through tremendous economic transformation and has a history of free-market capitalism younger than I am, as I write this.
One thing is blindingly bright – the pure drive and ambition of the young entrepreneurs I meet in Russia. They operate at the speed of light. Not quite old enough to remember the Soviet bread lines, but fortunate enough to take part in the entrepreneurial transformation of the 1990s.
I can certainly relate. Born in St. Petersburg in 1989, and growing up in a small city in the Ural Mountains, I knew nothing of pitching VCs or building a global business, and focused my youthful energy on trying to understand the rapidly evolving society around me.
Fast forward 13 years, and I’m back in Russia to speak at the National Finals of the Global Student Entrepreneur Awards (GSEA-Russia). This annual competition identifies top student-founded companies in the world and gives them a chance to showcase their solutions on a global scale. The program in Russia is led by accomplished Russian serial entrepreneur, Sergey Vykhodtsev, and his enthusiastic team of young Russian change-makers. The event is perfectly choreographed and hosted at the beautiful RIA- Novosti television headquarters in Moscow.
Sitting before a bright-eyed crowd, we are bombarded with questions from an audience full of students and young business owners, eager to connect with successful entrepreneurs from overseas. Among them are the seven Russian GSEA Finalists, running incredible companies, each deserving of their own post and analysis.
Ironically, their experience is not so different from my own. Young, driven and absolutely hell-bent about their businesses. In true Russian taste, they get straight to the point. “What do you do?” “What is your company’s annual revenue?” “How are you scaling your product on the global market?”
And just to think – 22 years ago, being an entrepreneur in the Soviet Union was illegal!
Whereas today, you can find countless young Russian entrepreneurs running several companies at the same time.
On Young Russian Entrepreneurs:
1. They move FAST. When arriving in Moscow, I saw a flood of sports cars, which often personify the ideal of a young Russian entrepreneur. Swift and flashy. The only thing faster than their Audi is the rate at which these passion-driven founders move, speak and conduct business. Many no longer say“hello” and “good bye” on the phone during routine business conversations in order to accelerate the pace of work. They zoom around the city, the regions and the country despite the outdated road system and gridlock traffic. Many prefer the WiFi enabled Sapsan Express Train, which gets you from St. Petersburg to Moscow in less than four hours, a trek that used to take an entire day.
2. They run at least three companies at the same time. If you ask five Russian entrepreneurs under the age of 30 about what they do, many will answer with something like: “I own and operate a chain of car washes, have a media consulting agency and own equity in a hip new restaurant in Moscow”. The serial nature of entrepreneurship in Russia is a result of market volatility, and most entrepreneurs are willing to make multiple bets at the same time. Big difference from the U.S. where most young founders dedicate 100% of their time and energy into one startup.
3. They’re on the verge of an entrepreneurial renaissance stemming from open-web, rapid government investment into entrepreneurial ecosystems, and evolutionary startup mentality. The internet has played its role in Russia. It provides the tools necessary to build out modern business models based on e-commerce, online payments, social networks and digital media. What’s even more important is the level at which the municipal and federal government supports the entrepreneurial development of the young generation. Aleksey Komissarov, the Head of the Department of Science, Industrial Policy & Entrepreneurship of Moscow, has pledged to make Moscow the best region for small businesses, and followed through by representing the city at the GSEA Finals and the Open Innovations Forum to interact with, and mentor young entrepreneurs seeking to establish companies in Moscow.
4. They’re not afraid to skip a phase. Who needs a Blackberry when you can jump from an old Nokia directly to an iPhone5. The same goes for other rapidly developing industries in the country. The internet allows entrepreneurs in rapidly developing nations to identify innovative solutions to age-old problems and apply them in their country. By leapfrogging years of iteration, these young founders are able to adapt modern business models and apply them directly to make a noticeable impact in their country.
5. They value relationships. This can mean getting your raw materials or product through customs on time, or securing an important contract. Your reputation as a capable business owner is a critical factor. Just ask Oleg Tinkovwho created a leading brand by building, scaling and selling several successful businesses before launching Tinkoff Credit Systems, which is set to rapidly boost the pervasiveness of credit cards across the entire country. In his book, he accounts countless times when key relationships based on strong reputation meant the difference between failure and success. An important lesson for any international entrepreneur.
On Entrepreneurial Russia:
1. There is little competition, relatively speaking. The vast economy, geographic scale and low population density contribute to a very promising competitive landscape. By adapting a foreign business model or preferably coming up with a new one, you can gain a tremendous foothold in the Russian market before facing competition.
2. There are countless funding opportunities. Russian angel investors are ready to fund hot startups and can be easily accessible at industry events. Joint VC-Funds like DFJ-Aurora or the Virgin Green Fund mobilize Russian capital and international venture expertise to make generous investments. Finally major Russian VC Funds like Rusnano, the Russian Venture Company, Almaz Capital and the Skolkovo Foundation have ample resources to capitalize promising startups, scale medium size businesses and even grow established enterprises.
3. This is the right time. The abundance of resources, access to information and global markets, institutional support and a rapidly developing startup culture create a perfect storm for entrepreneurial innovation in Russia for the next decade. Meanwhile, organizations that empower young entrepreneurs include Skolkovo, OPORA-Russia, the Center for Entrepreneurship and theGSEA. These entities fill the gap by training young people to take their ventures to scale. This year the G20 Young Entrepreneurs Summit is set to take place in Moscow, bringing together top young entrepreneurs from the G20 nations to exchange their experiences with leaders in the global entrepreneurial ecosystem.
The writing is on the wall. The startup environment in Russia is on a fast track, making it worthwhile to consider expanding your company to Russia, or possibly even starting a business there. At the very least become familiar with this culture and community because it will play a much bigger role on a global scale in the coming year.
See you in Russia!
Mikhail Naumov|| Russian entrepreneur, Rockin’ in the Free World!
Culled from Forbes. For original post please go here