A Warm-Up for Startups
In late August in Moscow was held an offline-session of the first phase of the GenerationS accelerator of technological startups (organized by the Russian Venture Company). Based on its results, investors and experts have chosen 141 projects (initially there were 2566 applications) to participate in seven different corporate accelerators in such directions as smart city and technologies for the better life, medicine and biotechnologies, technologies in the oil-and-gas industry, in a modern power generation, in aerospace industry and in the telecommunication and robotics. The Izvestia newspaper found out how the accelerator is held and found which were the bonuses that startups received.
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Informal communication was essential, but not the main way to help innovators to conclude lucrative contracts. The most important knowledge participants received during lectures and master-classes, where experts and trainers acted. Teams worked in groups, consulted with mentors, improved their business models and project presentations. Vadim Balashov of GVA LaunchGurus said to participants that before asking investors, it is worth to understand the startup’s goal: "Is the project about science or commerce and making money? — asked he young entrepreneurs. — The experience of previous years shows that combine everything is not possible. If you are about science you should ask universities for grants, if about money — investors and business-angels". Another expert, Andrey Serbant, marketing director of Yandex’es projects stated one of the most terrible mistakes made by young entrepreneurs when they do ask corporations. "When you come to corporation and begin to tell them financial model of your project you make a terrible mistake. You have not come to get finances, but to be bought, — noticed Andrey Serbant. — Tell what you give to people and why a company can make better services if your idea would be boughts".
The next GenerationS‘ step is offline corporate accelerators in seven different sectoral directions. About the half of the projects selected to participate in the sectoral accelerators would reach the final.
Some of them would reach the GenerationS’ Super Final, which will be held at the Corporate Venture Summit on November, 20th in Moscow. According to its results only three projects will become the winners of the accelerator. But the most important thing is the opportunity for startups to improve their products in collaboration with potential corporate customers, to develop relationships among corporations, investors and experts. Corporate partner of the direction can become a strategic investor or a customer of the project, and the development may be included in the corporation’s product line.
A Story That Continues
GenerationS is held for the third time. Accelerator was launched in the year 2013 and became the first federal program of such kind in Russia. GenerationS provoked the emergence of several dozen similar events in different regions. "When we started, we had no understanding of our format, — says Gulnara Bikkulova, board member, director of innovative markets department RVC. — We made the contest, collected 70 projects in the accelerator and every one of them was special. The difference of the preparation between projects from the IT sector and from other industries was oblivious. Internet projects, accustomed to the activities of such formats, grasped everything very quickly, they evolved fast, dominated over the rest of the projects. Companies from other sectors was much more complicated. But later we have noticed the tremendous progress of teams that started from lower positions. So, the resources that the accelerator provided to startups were useful". Immediately, since 2013, the participants began to negotiate with colleagues from other regions, they opened offices in different cities.
The main innovation of the next year was organization of the four sectoral directions of education projects (Industrial, BiotechMed, Cleantech, IT). The number of investors has increased more than in 1.5, the number of applications of participants has increased by almost 300. The largest number of projects came from Moscow, Kazan and St. Petersburg. Projects at different stages of development participated in the accelerator. Different professionals working in large companies and having significant business experience began to interest in startups. For example, the company "NanoServ" in clean-technology of heating equipment from scale and other deposits, was founded by Elena Levin, who was previously CFO at marketing agency "PRM group" in Krasnodar.
Companies, which were established by "mature" entrepreneurs, also involved in the accelerator this year. Among them is "Spetsstroyservis" (engaged in the construction of plants for waste management and introduction of innovations for recycling). Its founders are the companies that are already associated with the delivery of similar technologies in Russia. "We are now launching the project in the Kaluga region, in Kirov city, — says Vladimir Ermolaev, an employee of the company. — We create there a recycling plant and the area of R&D. We plan to bring up a variety of small developments in the field of new materials from garbage to industrial designs on that base. Our priority is commercial money, not government funding. Participation in pre-accelerator for us is an interesting variation of marketing promotion. We hope to meet here partners who could help us to expand the geography of the business".
Success Will Not Appear Immediately
This time the accelerator’s target is searching for corporate partners. In general, the organizers expected that there will be more GenerationS graduates of previous years (finally there were just 5% of them among other participants). "We took a chance and decided not to pay for participation in the first step of offline stage in Moscow, — says Gulnara Bikkulova. —All of the participants arrived for their money without any guarantees. For me, it means that there are startups aimed at success in Russia, this is very important". Among the participants, for whom a trip to Moscow to participate in GenerationS became a serious challenge refers Oleg Kim, head of the company "Honbin" (Tomsk), engaged in the manufacturing of component base for various electronic devices.
This entrepreneur had to take out a bank loan to come to Moscow. Oleg Kim is not a public person, about himself he tells just what is needed. He wanted to enter the Nautical School in Vladivostok, but at the insistence of his father Oleg went to the Tomsk Polytechnic University, after which he worked under the guidance of Professor Anatoly Kornienko in his mathematical laboratory. "Laboratory worked several years and did not give any results, and then we did it, — says Oleg Kim. — Just because the Koreans people are very persistent, working with electronic circuits has become a thing of my life".
The persistent and hardworking startup from Tomsk is very different from the image how people imagined "an average innovator» a couple of years ago. That time the collective image was as follows: a young man of 22 years with burning eyes. Startup for him is the first working experience. Now the situation has changed, and mainly middle-aged people (35-45 years) are participating in GenerationS. They must be willing to grow over themselves and change all the time. Yes, people are loosing the ability to be flexible over the time. However, in GenerationS-2015 are participating entrepreneurs over 50 years old who are willing to work in the new format, wh ere it is often needed to "break" yourself.
And even projects became "older".
Thus, in the regions this time were selecting projects mainly those companies that already have experience of working with corporations. Corporations passed through a rigorous selection also. For example, everyone knows that in Russian corporations innovations are needed, but the process of attracting them often turns into fiction. Therefore, the organizers of the accelerator cooperated only with those companies that are willing to invest in accelerator and provide their experts to participate in educational activities. "One thing is to hold a competition for a formal report, and quite another thing is to show some results", — summarizes Gulnara Bikkulova.
There Are No Losers
Even at the stage of selecting startups from the general education program into the corporate accelerators, some of them were highly appreciated by experts and received prizes from the organizers and partners of GenerationS. For example, IBM, General Partner of the GenerationS’ first stage, provided cloud mega grants of $120000 to five best projects by the decision of IBM’s experts. Four grants of the same amount were provided by Microsoft. Seed Fund GVA LaunchGurus provided the opportunity to participate in their programs of acceleration to eight startups. Company Nanobotmodels Medical Animation chose three winners who will receive a 3D medical animation. Finally, RVC has selected four teams who will visit two key events in innovation and the venture sphere of Singapore, TechVenture and TechInnovation-2015. A detailed list of the winners of special nominations is available on the official website of GenerationS. "After participating in pre-accelerator startups have learned to think like investors, — says Alexey Yuzhakov, project manager of "Promobot" (the winner of GenerationS-2014 and of the robotics direction of Startup Village 2015). — They were represented to potential customers and clients. But the main thing that participants received is communication with people of their kind. Teams found friends and acquaintances whom they can ask at any moment to clarify something and to improve their projects with the capacity of colleagues".
What will happen to those projects who have not gone further then the first stage of GenerationS, but also impressed the organizers and experts? According to Gulnara Bikkulova, after every accelerator remains 30-40 projects that had no luck during GenerationS, but they begin to evolve quicker after they get into the field of vision of the key investors and market participants. In addition, RVC and the partners of the competition have a line of other interesting programs and activities, about which members of the GenerationS’ community find out earlier than others. "We will continue offering startups some options, but the most important thing is their initiative in it, – concluded Gulnara Bikkulova. —We want to help, but we are not going to run for someone else".
GenerationS became the first federal program of such kind in Russia. GenerationS provoked the emergence of several dozen similar events in different regions.
