— Julien, tell me why a French accelerator company is now operating on the Russian market?
— To be more precise, it is an international company: some time ago we transformed ourselves from the French Association of Entrepreneurs into the fully-fledged accelerator NUMA. And in 2015, we became a fully-fledged company with a presence in 6 countries, although we have been in existence, by the way, for 16 years already. By 2019, we plan to open fifteen offices all around the world. First, we opened in Russia. There are, in our view, excellent technical experts and engineers in this country but not enough business skills, so we have come to help them. The founding fathers of the Russian branch were two Frenchmen who have already been doing business here for a long time, and I am responsible for the Acceleration Programme.
— What interested you personally about working in Russia?
— My mum is Russian, I have lived in Russia, and I know that the schools and universities in this country are very strong, that they train excellent techies here, but that they don’t teach you how to take technology onto the market and turn it into a business project. I really wanted to make a positive contribution to developing local technological entrepreneurship. Our data says that Russia is the second country in the world for attracting outsourcing. So, there is great potential here, but you have to change your conception of business yourselves.
— What is the conception of business amongst Russian startuppers?
— In Russia, everyone is scared of making mistakes: they don’t understand that gaining new knowledge, especially through making mistakes, is an integral part of business. Our accelerator helps them to do just that: learn from their mistakes with the least possible damage. A fundamental part of the training is the testing of various hypotheses.
— Often there isn’t the time or the money to test hypotheses…
— You are right, and our accelerator gives precisely both one and the other – we invest 1.4m roubles in creating a prototype, in carrying out the necessary tests and, finally, in ensuring that the startuppers can devote 100% of their time to the project and not starve to death at the same time. (Laughs.) In general, entrepreneurs, instead of spending two years making mistakes, spend five months doing so – that’s the exact length of the programme.
— And what do you expect in return?
— After we introduce the startuppers to potential clients or investors, they are then able to attract money for development, find investment. In 8-9 years, the project should become a fully-fledged business, although an investor can buy out our share much earlier than that.
— Tell us more about the programme.
— We spend the first month providing inspiration for the startups and we invite various experts. For example, recently we had Vladimir Kholyaznikov, CEO of KupiVIP (online store for discounted global clothing brands. – Ed.). For the next three months, we research potential clients with the startuppers, and cross-check the hypotheses. And in the final month, we arrange meetings for them with investors and potential clients. At the end of the training, they go to Paris to give a demonstration day in front of more than 300 investors: business angels and investment funds.
— How did you get to know about the startup Joinmamas?
— We saw their profile on F6S (professional online resource where startuppers can submit a request for financing. – Ed.), we met them, chatted, and then they passed through a few more selection stages, including making a pitch (brief, structured presentation. – Ed.) before experts.
— Is it true that the investor attaches a huge importance to the personality of the founder and to their team?
— Yes, of course, I would say that is fundamental. Anna Gaivan made a very good impression, she had been working in PR for many years, and she is a mum herself and really understands the issues her startup tackles.
— But PR and entrepreneurship are two very different things…
— Yes, but on the communication front, promotion plays a huge part. Also, we are not advocates of investing in a ready-made business. We aspire to develop projects at the initial stage, and, what is more, people don’t become entrepreneurs overnight: they often come in from other areas.
— Are there any other reasons why the project was of interest to you?
— In our view, it has great potential as it has a clearly defined target audience and a strong international team: developers, many of whom previously worked at ABBYY, like Anna did herself, and marketing managers in Russia, England, Germany, Ukraine, and Luxembourg. I like that the team is not focused purely on Russia – it is aimed at overseas markets too. Similar projects in Europe have already been successful in drawing investment. Also, this project has a social aspect, too.
— What is your assessment of the risks of investing in a Russian business – are they greater than in Europe?
— The risks everywhere are roughly the same – these are, after all, startups. In Russia, in some ways they are lower (because here there are a lot of smart engineers and programmers, and you don’t have to worry about the standard of their work), and in some ways higher (projects are at much earlier stages and are often lacking an experienced director). And there is another specific characteristic: in Russia, there are more interesting B2B projects, where the development process is clear and there is less dependence on marketing. Here technology is important, which is something Russians don’t have a problem with. Whereas in Europe, it is the other way around – many are aimed at B2C.
— And how does the Russian approach towards running a business differ from the European approach?
— As I see it, the culture of entrepreneurship in Russia is yet to become fully formed. The concepts of “startuppers” and “investors” arose five years ago, the moment that the Skolkovo innovation centre was established. In Europe, this industry is already over fifteen years old. The phenomenon in Russia also has its own negative consequences: being an entrepreneur is still simply fashionable, and not all startuppers take it seriously.
For instance, in France we have already understood for a long time that it is real work and we are ready to devote 100% of our time to a project where people are prepared to help one another, where there are mentors who give feedback and support the startups in all sorts of ways. For example, Xavier Niel set up the first free school for programmers, created the biggest co-working space in Europe and is investing in new projects. In Russia, this is all yet to come – this is still only the second generation of startuppers to have sprung up.
— Are there differences in the approach towards investment in Russia and in Europe?
— Previously, Russian investment funds invested almost without looking. The IIDF (Internet Initiatives Development Fund), for instance, up until now didn’t demonstrate any great attention to detail in its choice of project. Such practice quickly came to nothing, and now they are very careful in choosing who to invest in. We took such an approach ourselves from the start and, furthermore, we sometimes turn down startups with very good prospects because we know that we can’t help them.
— Where can you look for startups in Russia?
— In the universities, through other investors – for example, Runa Capital knows about a lot of startups. Everyone turns to them, but they are forced to turn many of them down. At Skolkovo, Innopolis, IT Parking.
— Should foreign investors be worried about bureaucracy?
— In my opinion, no; for example, here it is easier to open and close a business. Especially, to close one. As for the rest of it, I don’t see any particular obstacles there.
— What role does the government have in business?
— The government today plays an active part in innovation development: infrastructure is being put in place, grants are being awarded. But it is definitely not worth the government’s while interfering in the running of a business or being a direct participant in venture activities.
— What advice can you give the foreign investor who is taking a look at the Russian startup market?
— You should pick one still in its early stages. And that, you know, everyone wants to invest in an already successfully operating business. But that is BUSINESS, not a startup! If you really want to be a participant in and witness of a revolution, you have to be there at the “pre-seed” stage.
— What will NUMA be investing in in the future?
— We are concentrating on startups that will be solving problems in 2030.
— Whoa! And what will people be worried about in as much as 13 years’ time?
— That is what we are trying to fathom. Perhaps augmented reality or machine learning – generally, anything that will change the market or create something new.
— What factors can affect whether a startup is a success or a failure?
— The first thing that a startup needs to do is to work out what problem it is trying to solve. A lot of people think that they know this, when in fact they are creating something which, unfortunately, it turns out nobody needs. The second thing is to accurately calculate how much money is needed for development i.e. to assess in the first place how much it will cost to attract the client. This is necessary in order to know how much money a startup ought to attract. And, well, of course, a team of knowledgeable experts, but everyone says the same about that, so there is no need for me to repeat it.