Government fund of funds
Development institute of the Russian Federation

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Ekaterina Petrova: Accelerator’s Efficiency is Measured by Transactions

Source: Invest Foresight

The GenerationS corporate accelerator has changed the positioning of Russia’s largest accelerator and become a platform to develop the corporate innovation tools both in Russia and abroad. A reporter from Invest Foresight interviewed the Director of the Corporate accelerator, Ms. Ekaterina Petrova, to learn about the working principles and why the Russian public accelerator pursues the foreign market development policy.

Invest Foresight: Ekaterina, could you please tell me what GenerationS is? Last year, the operating model was modified, why?

Ekaterina Petrova: we have been operating since 2013 when the Russian major businesses could not deal with innovations and were unaware of available tools, and startups, in turn, did not cooperate with the mechanisms for attraction of investments and corporate partners. Besides, there have been no advisors who could have helped these parties to find common ground. Our objective was as follows: to create an ecosystem and to measure the demand for innovations in general. In 2015, the first line of corporate accelerators was launched in GenerationS. Corporations that were able to test this tool in a short time and in a safe mode, with minimum investments, became partners to the industrial tracks back then. Over time, the partners have appreciated the advantages of dealing with technology companies. They embarked on development of open-innovations tools on their own by establishing their own R&D centers, in-house accelerators, working with startups on more specific issues. Then came the demand for “closed funnels” and creation of non-typical products. Therefore, RVC decided in 2018 to abandon industrial accelerators in favor of corporate ones; we realized it was time to change the model, to supplement the product portfolio with the technology consulting.

Today we help both corporations to pose correct questions to the startup, and startups to find answers to them. When we receive a specific solution — perhaps, very promising but raw one from a startup - we should possess a project development technology so that it could propose this idea, this technology to the market.

— When you come to a company what do you start the work with?

— To begin with, we need to conduct a strategic session in order to evaluate the partner’s readiness for innovations. Yet, the creation of an own accelerator is not the step a company should begin working with the innovation environment. All startup are different, are at different development stages and may require different support tools. Some of them need private equity, others require a product testing site, and yet others, the industrial expertise.

Before proceeding to a search, we need to determine the innovation strategy and issues the company would like to solve with the technologies. When making a decision on joint work, you need to form a sober estimate on how precisely the partner is able to determine its innovation priorities and to offer the support resources. When we make sure that we are unanimous as to the range of tasks we suggest the implementation strategy. By the way, it may not be necessarily the accelerator in full, it may be even a simpler product.

— Which products, for instance?

— When changing the format, we have developed several products that differ depending on the partner’s “development level”. We do our best to comply with the 12-month period from the launch to the implementation; we elaborate on all stages with all in-house units manually in order to achieve a high-quality outcome. There are some specific intra-corporate educational lines: we train employees, we have our own course to develop intra-corporate entrepreneurship. And we have a separate product that helps study global experience of building up innovation processes in leading corporations of specific industries and plunge into the innovative ecosystem of other countries. A customized program including workshops, exchange of experience with corporations, pitch sessions for startups is set up to meet the partner’s objectives. For instance, we prepared a program for VTB and Otkrytie banks to introduce them into Singapore’s fin tech ecosystem. Our colleagues visited the offices of largest banks that shared their experience of dealing with innovations (e.g. DBS Bank, ОСBC, etc.) and that of foreign accelerators (Techstars, Plug and Play).

— To what extent in general are Russian companies ready to deal with startups; what kind of difficulties do they experience while working with them?

— The main difficulty in our work is that the accelerators’ supply currently exceeds the corporations’ demand. That is why, it is important for us that the corporate customer has an idea of what result the customer is willing to achieve, and to form an innovation implementation team. We are tasked not only to find innovative solutions in the market but also to create an environment that would help employees continue working with innovations. Acceleration of startups is really a very fashionable and sought-after trend; everyone seeks to launch corporate accelerators, however it often happens that an innovative solution is found but no infrastructure for its integration in the Company is yet available.

— Is competition beneficial or prejudicial for the technology consulting?

— Competition gives us a chance to improve our products and create new valuables in order to set ourselves apart from others. We customize demands of each client, we endeavor to avoid ready-made and one-size-fits-all solutions. At first, we elaborate on a strategy with the corporation, based on the existing problems and already implemented solutions or programs and, depending on that, we build up the “roadmap” for product implementation.

— You have created a huge technological platform. Do you apply it in work as well or do the companies build their own platforms?

— We continue using it, it is one of our competitive advantages. Not only the platform enables corporations to see the incoming “funnel” of startups; it combines studies in online courses, expert examinations, acceleration programs, trackings, etc. Moreover, we provided a chat option for corporations to communicate with the startup online to promptly address all the objectives.

— Do other accelerators have similar platforms?

— Many accelerators have different platforms to deal with startups. Some of them collect applications, others address other objectives locally. But there is no comprehensive platform on the market that would incorporate all of the accelerator’s available functionality. By the way, when addressing this objective, we held interview sessions with our partners, accelerators from the U.S.A., Canada and Europe, and discussed with them features of an effective platform to make it convenient for a corporation – what steps should be taken.

— As for startups, what do you teach them? You were the pioneers in establishment of accelerators; has the acceleration program suffered any changes over that time?

— Unlike many other programs, we place stake on search for and “packing” of complex process solutions. The acceleration program comprises several lines: educational, the one focusing on the business development and technological intended to implement the technology in corporation’s business.

The educational part includes a series of lectures and workshops on business modeling, financial models, legal processing of transactions, etc. This program enables the projects to supplement their product or technology in terms of business, for successful interaction with other customers in the market.

The technological part is the piloting of developments using the corporate partner’s infrastructure. Corporations grant projects with access to data, customers, technical expertise, laboratories; if necessary, GenerationS resources may promote the use of external sites in order to pilot the solution on the premises of the leading universities and technoparks.

In addition, there is mentor support that includes customized work of the project with the industrial or business mentor. Piloting is also supported by both Russian and foreign external industrial experts who had an experience in implementing similar or related solutions and are able to support the corporation.

The startup teams passing successfully the acceleration program and meeting the key performance indicators (KPIs) following piloting receive an opportunity either to raise investments or to establish long-term partnership with the customer. We measure our efficiency by particular deals, products, which the corporation launches together with the startup that produces the product.

— Are there any prejudices that you are still a public development institution?

— Of course, there are. We must recognize that. Our partners have many questions and proposals as to the operation procedure and the red tape. But when our team starts working as the accelerator and achieves the result we are estimated as the team having competencies, professionalism, quick feedback and flexibility, rather than as a public development institution. Besides, the public accelerator can afford things a private accelerator cannot. For instance, we do not obtain stakes in startups, and the acceleration program is free to them. The projects have access to all RVC options, from dealing with venture funds to gaining support from the National Technology Initiative (NTI).

— Apart from shifting the priority from business acceleration to corporate acceleration, you started very active operations on the global market. Why do you need that segment?

— I don’t believe innovations can be practiced locally. Any more or less technological solution requires global cooperation, and all our global operations focus on establishing a global integrated innovative space. That is why, it was resolved at the end of the last year to expand the footprint of GenerationS beyond Russia. Having reviewed the successful accelerators’ development strategies, we resolved to apply for participation in the Global Accelerator Network (GAN) as the first step.

It is an independent association created by Techstars in 2011 in partnership with the U.S. public program for development of technological startups, StartupAmericaPartnership. The network encompasses the biggest accelerators from all over the world, it is 90 accelerators from 30+ countries now, and GenerationS is the only representative from Russia.

Then, at the year-end, we attended the global forum of CorporateStartupSummit held in Zurich — we needed to understand if someone is interested in us in Europe, not only in Russia. The European community recognized us to be the best in the TheBestCorporateAccelerator category; Russian GnS surpassed the Swiss F10 FinTechIncubator&Accelerator and the German ProSiebenSat.1 Accelerator, which were also short-listed.

In May, we signed the agreement to develop the line of corporate accelerators in the Kingdom of Bahrain. By the end of the following year, we will launch two programs where Russian and Middle Eastern businessmen will take part. ZainMobileTelecommunications, the biggest telecom corporation in the Middle East, acted as the partner for the first project selection.

— Why did you chose Bahrain?

— We see the potential in Russia’s and the Middle Eastern countries’ cooperation. Bahrain is an excellent starting point for cooperation with the entire region: they provide tax exemptions, have a well-developed fintech ecosystem with the sandbox for startups at the Central Bank’s level, the state supports startups by grants and subsidies. Local partners appreciated GenerationS’s experience in corporate acceleration and want to adapt our model to their market in order to involve Arab corporations to the startup environment to develop the local ecosystem of innovations and also to engage our corporate partners to liaise with Middle Eastern startups. Such partnership would help create the platform of mutually advantageous cooperation between Russia and MENA.

Picture: RVC OJSC. Signing the agreement to develop the line of corporate accelerators in the Kingdom of Bahrain

— Looking at GenerationS customers, you have more Western companies (Unilever, Ferring, Airbus, Enel) that Russian. Why?

— The Western market is more mature. Many of them have already built the innovative policy and they know what they want to find very well. Of course, they are interested in Russian projects, they see their high R&D potential. Dealings with foreign partners promotes Russia’s innovative image to the global arena, which helps Russian startups to expand abroad and allows us to raise more foreign investments for the Russian market.

— How do foreigners perceive Russian technologies?

When you work with the global market you feel very well that the innovations are beyond politics. For instance, if a foreign corporation views several projects from Europe, U.S.A., Israel and Russia, they will be more skeptical about a Russian startup just before other countries have the established image of more mature players in terms of the innovative ecosystem. Nonetheless, it is not true for all industries. For instance, there are industries in a number of areas where Russia is the leader, because there are programs for development of such professionals (e.g. cyber security or aerospace developments).

— Do you engage Russian startups to work in global companies or do you deal with foreign startups, too? Startups from which countries are interested in taking part in the Russian accelerator?

— The startup search geography depends on the corporate customer’s needs. We can engage both Russian and foreign startups. Global corporations come to us for projects from Russia and CIS most frequently because they are well aware of the foreign innovative ecosystem and have their own internal team of innovative “scouts”. But they find it difficult to get technologies from Russia and CIS because our universities do not disclose their information. And we help foreigners to do so. On the other hand, Russian corporations know the Russian landscape very well and are interested in studying the market of foreign projects. For instance, 70% startups were accounted for by foreign projects from such countries as Sweden, Finland, Canada, U.S.A., Finland and Georgia as part of the innovative selection held by the Ilim Group.

As for the total foreign projects in GenerationS statistics, they account for approx. 10%, because we focused on the Russian market more. Now that the demand for global projects increased we seek that they will account for more than 20% in each accelerator.

— What do you see the objectives for the next year?

— Besides working with the new corporate partners, we are tasked with developing the line of regional franchises in Russia; we are just reviewing the regions that might be interested in that. Different constituent entities of the innovative ecosystem, universities, business incubators, techno clusters, business corporations, clusters and the innovation support clusters, may be GenerationS franchisee companies. They will be able to launch the selection and acceleration of GenerationS-branded projects, conclude contracts with corporate partners in their regions on their own.

Another major objective is GenerationSFamily graduates’ club. The community reached the level than GenerationS graduates are interested in sharing the experience and may find support for “newcomers” so we decided to bring it offline. This year, two face-to-face meetings where successful startups shared their experience took place; in turn, we tell about the projects on the support opportunities available to them even after the training completion.

The interview was taken by T. Katkova

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