Russia is still learning how to turn ideas into money. Domestic inventors have no problems with coming up with something new, but there are still difficulties with bringing the product to the market. Sibnovosti.ru talked to Ekaterina Petrova, an expert in the field of corporate innovations and director of the Generation S accelerator about how the world of scientific research and development is organized and what it takes to bring them to global markets.
You are in the business of finding points of contact between technology startups and major Russian and international companies. Are they looking for new Zuckerbergs in Siberia? What is the geography of the projects now?
A great number of in-depth scientific and technical R&D projects are concentrated in Siberia, and small businesses are functioning. The reason for this is a strong and developed innovation infrastructure. We actively engage Siberian regional partners to search for projects for corporate accelerators, we know that the regions have a great potential for finding talented technology teams.
The geography of the projects directly depends on the industry they belong to. In our practice, it is worth looking for energy, mining, and oil production projects in such cities as St. Petersburg, Ekaterinburg, Irkutsk, Ulyanovsk, and Tyumen. Yekaterinburg, Novosibirsk, Ufa, Tomsk, and Kazan are leading in fintech projects. When it comes to complex production solutions for the high-tech market, Ulyanovsk, Kaliningrad, Ekaterinburg, Saransk, and Ulan-Ude have advantages.
The accelerator is basically a program, a tool to achieve results. What unites the leaders who successfully pass this program?
Over the years we have identified a number of characteristics inherent in successful teams that demonstrate dynamic development: they increase investment volumes and the number of pilots with corporations. Such projects are capable of identifying the true problems of the corporate partners and quickly adjust to the needs and requirements of their customers. Besides, the members of such teams are absolutely open to new things: they actively attend the educational program and use to the maximum extent all the opportunities that the accelerator gives them. Another important skill is the ability to negotiate and talk with the corporate customer so as to work out the terms favorable to both parties and to compromise when necessary.
Do you now have examples of teams from Novosibirsk and Krasnoyarsk that have offered interesting and relevant technologies?
Among our alumni there are eight projects from Krasnoyarsk and 20 from Novosibirsk, which have successfully passed the acceleration process and continue cooperation with corporate partners. The projects are from the energy, metallurgy, medicine and fintech sectors.
Is it difficult to look for projects now? Does demand exceed supply or vice versa?
In general, it all to a large extent depends on the industry and the customer's requirements. Most corporate partners who are just beginning to work with innovations set ambitious goals for themselves. For them, the speed of testing and getting an effect from the implementation of the startup is the main criterion of success. But in order to find projects that are at the level of TRL-6 (fully functional sample is produced on the pilot production line, performance confirmed in conditions close to reality) and above, it is necessary to spend a lot of time, both on the search and on their implementation in the program. Here, supply often exceeds demand, especially if several companies from the same industry are looking for similar projects: even a relatively mature startup will not be able to work effectively with all customers at once.
Some partners, having implemented one or two programs, understand that they have seen almost the entire startup market. Then they form a program of not only acceleration, but also incubation of projects aimed at developing the projects at early stages and then being the first to do a pilot with them. This makes it possible to immediately gain a competitive advantage. In this case, a rather large market of solutions opens up, where demand exceeds supply and the capacity of the corporation to process these projects.
In which areas are corporations most interested today? At what stage does a project have to be in order to qualify?
Recently, we have been receiving an increasing number of requests for projects in the fields of engineering and robotics, energy efficiency, financial services and human resources management. Also very popular are Industry 4.0 (large-scale introduction of cyberphysical systems into production processes and for human wants satisfaction purposes, including household, labor and leisure) and pharmaceuticals, especially the development of new drugs. I would say that these areas are among the ones that are especially in demand today.
As for the projects themselves, they must comply with the technology readiness level not lower than TRL ≥ 5 (a full-size experimental prototype has been manufactured and tested using a semi-industrial technology), have an innovative component that can be implemented technologically. Other important criteria are a competent team and investment attractiveness - the project must have a high probability of market capitalization growth.
When can one say that it’s time to offer something to businesses?
Before you start working with an investor, especially a demanding one such as a corporation, you should evaluate the feasibility of the product you offer and answer a few questions that reveal the essence of the project.
What is important for an investor? First of all, it is low risk and high efficiency of the project. Investors must be provided with a realistic and clear business model, it is important for them to see how well the business is thought through, its cost and what it will cost to attract customers. Investors are used to investing in product growth rather than product development, so they will always look at the monthly growth.
Is your team ready? Potential investors look at the people behind the idea. Therefore, it is important for the founder of the project to show that he managed to gather and inspire the team and that for these people the project is not just a job, but an idea for the sake of which they are willing to spend their time and effort. Everybody’s role must be clearly defined, especially when there are several co-founders.
What are your funding needs? Describe your funding needs and indicate the investments that you managed to get during the previous stages. It's important to show the difference between debt and capital. The investor must understand how you will spend the money, the time period and the stage by which you will achieve your goals. Do not try to focus on the investments that your competitors around the world have attracted. The money raised is not equal to past or future success, and each startup has its own needs.
And, of course, be ready to present your project to the investor at any time - it can happen under completely unexpected circumstances and be a turning point for the future of your startup.
text: Alexey Spiridonov
Source: Siberian News Agency