A post by Pekka A. Viljakainen
On Sunday, we started a tour that covers all of Russia. On the tour we’ll be covering entrepreneurship, start-ups, leadership and growth. I got the central institutions andministries, as well as the biggest banks on board. The lobbying process, in and of itself, would make a great short story, but that’s beside the point. To put it bluntly, we used both the carrotand the stick.
As I write this, we’ve put five cities in Tatarstan, Baskirstan and Siberia behind us. And I’veput a lot of effort into trying to understand IT startups. Funnily enough one of the biggestproblems is that Russian culture frowns upon failure of any kind. In a corporate context thismeans that an unbelievable amount of time and resources are spent on the testing, qualitycontrol and documentation of code. This is stressed in school, too.Basically, every little IT thing-a-majig is made like it’s responsible for managing the oxygen supply at the International Space Station. There is nothing wrong with this, per se, but in many projects this results in an imbalance between the code and customer-centeredness. In other words, the oxygen supply is secure,but customers have no idea which pipe it comes out of.
It’s interesting to note that Russians wrote many of the world’s top 100 apps in the AppleStore. They were either made in Russia or by companies run by Russian immigrants in other countries. Outside of games, Finns don’t get a lot of action in Apple’s store. Another fact worth noting is that 95% of the IT ventures we’ve seen presented are B2B projects. Sure, there’s entertainment, games and other consumer ventures, but nowhere near the scale of Finland. Anything related to science, industry and big companies is hot in Russian culture right now. The media doesn’t really mention projects under $100 million. As a result,the only way small software companies can make it in this gigantic country is by aligning themselves with a customer company and making corporate solutions.
Finns should be here, actively taking advantage of all these innovations. The level at whichsmall technology companies are valued is very realistic and the mass is enormous. Models where a Finnish company buys a stake in an interesting Russian company could work quite well. Not only in that good productification will provide us with more to sell to the rest of world, but, as importantly, this model will help sell Finnish innovations in Russia. Many other countries are afraid of Russia and this gives Finnish companies a nice opening here. There are a lot people who speak Russian as their first language in Finland, which provides us witha labor pool for building these relationships. Models where a Finnish company looks forresellers or agents in Russia are basically doomed. As in all successful leadership situations, a working cooperation requires shared goals and dreams.
This 25,000 km tour takes in 16 cities and our audience consists of 200 – 600 growth entrepreneurs in each city. In Finland we work with StartUP Sauna, which is already one ofthe top brands in Finland. The whole tour culminates at the startupvillage.ru event, held in Moscow 27-28.5. This will be an excellent opportunity for Finnish startups to present themselves to international investors. For bigger companies and other stakeholders it’s a chance to see where Russia is really headed. The event is open to all. Registration starts in early April and the first 2996 get in. It’s like a startup Woodstock, Russian-style.
I was interviewed for TV in Omsk today. To end the interview on a light note they asked: “Ourhockey team is called Omsk Avantgard. The head coach is a Finn called Pentti Matikainen.Why do you think Russia hires Finns for jobs like this?” I was tired after a long week andanswered, ”Us Finns, we’re like work horses bred in northern climates. We’ve been designed towork in deep snow and we are totally dependable. Our job is to take the most direct route tothe goal line and get the team there. To win. Maybe that’s why.” Now, guess which commentwas all over the main channels in Russia that evening? This morning the women working at Omsk airport security asked for my autograph.