In Russia, they are only just learning to turn ideas into money. To invent something new — domestic inventors have no problems with this, but to bring the product to the market — difficulties still arise here. Sibnovosti.ru talked with corporate innovation expert Ekaterina Petrova, director of the acceleration generator Generation S., about how the world of scientific developments works and what needs to be done to bring them to global markets.
You are committed to finding common ground between technology start-ups and large Russian and international companies. Are they looking for new Zuckerbergs in Siberia? What is the geography of projects now?
A large number of profound scientific and technical developments are concentrated in Siberia, and small business is functioning. The reason for this is a reliable and developed innovative infrastructure. We are actively attracting Siberian regional partners to search for projects in the corporate accelerators, and we know that the regions have great potential in attracting talented technology teams.
The geography of projects directly depends on their industry affiliation. In our practice, energy, mining, and oil production projects should be sought in cities such as St. Petersburg, Yekaterinburg, Irkutsk, Ulyanovsk, and Tyumen. For fintech projects, the leaders are Yekaterinburg, Novosibirsk, Ufa, Tomsk, and Kazan. If we talk about complex production solutions of the market for high-tech industries, then the advantages are Ulyanovsk, Kaliningrad, Yekaterinburg, Saransk, and Ulan-Ude.
An accelerator is essentially a program, a tool to achieve a result. What unites the leaders who successfully pass this program?
Over several years of work, we have identified several characteristics inherent in successful teams and show excellent development dynamics: they increase investment and the number of pilots with corporations. Such projects can determine the actual problems of corporate partners and quickly adapt to the needs and requirements of customers. Besides, participants in such teams are open to new things: they actively attend the educational program and use to the maximum all the opportunities that the accelerator gives them. Another essential skill is the ability to negotiate and the ability to negotiate with a corporate customer to determine favourable conditions for both parties and, if necessary, to compromise.
Do you now have examples of teams from Novosibirsk and Krasnoyarsk who offered interesting and relevant technologies?
Among our graduates, there are eight projects from Krasnoyarsk and twenty — from Novosibirsk, which have successfully passed acceleration and continue to work with corporate partners. These are projects from energy, metallurgy, medicine, and fintech.
Is it difficult to search for projects now? Does demand exceed supply or vice versa?
In general, everything depends heavily on the industry and customer requirements. Most corporate partners who are just starting to work with innovation set ambitious goals. For them, the speed of testing and getting the effect of a start-up is the essential criterion for success. However, in order to find such projects that are at the level of TRL-6 (a fully functional sample was made on a pilot production line, performance is confirmed under conditions close to reality) and higher, it is necessary to spend a lot of time, both for search and for 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 start-up cannot work effectively with all customers at the same time.
Some partners, having implemented one or two programs, realize that they have looked at almost the entire start-up market. Then they form a plan not only of acceleration but also of incubation of projects to develop projects of the early stages and then be the first to conduct a pilot with them. This allows you to gain a competitive advantage immediately. In this case, a reasonably large market of solutions opens up, where demand exceeds the supply and capabilities of the corporation for processing these projects.
Projects of which areas are most attractive to corporations today? What stage should the project be at to qualify?
Lately, we have received frequent requests for a search of projects from the fields of mechanical engineering and robotics, energy efficiency, financial services, and personnel management. Areas of Industry 4.0 are also prevalent (mass introduction of cyber-physical systems in the production and servicing of human needs, including everyday life, work, and leisure) and pharmaceuticals, especially developments in the field of new drugs. I can single out these areas as one of the most popular today.
As for the projects themselves, they must correspond to a technological readiness level of at least TRL ≥5 (a pilot sample was made and tested in real scale using semi-industrial technology), have an innovative component that can be implemented technologically. Also, essential criteria are a competent team and investment attractiveness — the project should have a high probability of growth in market capitalization.
How to understand that you have something to offer the business?
Before you start working with an investor, especially with such a demanding one, like a corporation, you need to evaluate the realism of the product you are offering and answer a few questions that reveal the essence of the project.
What is vital for an investor? First of all, it is a low risk and high project efficiency. Investors should see a realistic and understandable business model; they need to know how well the business is thought out, what its cost is, and the cost of attracting customers. Investors are used to investing in product growth rather than product development, so they will always look at monthly increase.
Is your team ready? Potential investors look at the people behind the idea. Therefore, it is essential for the founder of the project to show that he managed to assemble and inspire the team and that for these people the project is not just a job, but an idea for which they are ready to spend their time and effort. The role of each of you should be clearly defined, especially when there are several co-founders.
What are your funding needs? Describe your financing needs and indicate the investments that were obtained in the previous stages. It is essential to show the difference between debt and capital. The investor must understand how you will be spending money, for what time and at what stage you will achieve your goals. Do not try to be oriented by the investments that your competitors have received around the world. The money collected is not equal to past or future success, and each start-up has its own needs.
Moreover, of course, be ready at any time for the presentation of your project to the investor — this can happen under completely unexpected circumstances and become a turning point for the future of your start-up.
By: Alexey Spiridonov