Author Archives: Vladimir Orekhov

The role of growth ecosystems in entrepreneurship

The Google HQ

In this post I want to discuss the role of growth ecosystems in entrepreneurship and innovations and especially focus on the Silicon Valley as the greatest ecosystem of all times. Several months before I’ve listened to the keynote speech of Adeo Ressi from Founders Institute given at the TechCrunch Moscow 2013 event. To put Adeo’s keynote speech in one sentence:

Silicon valley is not a place – it’s mindset and people

As I tend to agree with practically everything he said during his speech and at the same time am sure that this event wasn’t properly promoted in both Europe and US, I will describe his main points and combine it with my own opinion and experience.

Silicon Valley based companies have a huge success over decades so no surprise other countries and even other states in the US want to copy it. The main problem is that they copy the wrong thing. VC money is great, but they can’t work without an ecosystem. If you have VC money but there are no good companies to invest in – VC money doesn’t matter. If there are no great employees company can hire – VC money doesn’t matter. Once company grows and needs to find partners, if there are none – VC money doesn’t matter. More of the same in case there is no merger or IPO market. As Adeo said:

VC money alone is not worth a lot without an ecosystem

Same applies to copying the facilities part – facilities alone or together with VC money can’t create a new Silicon Valley. The example of Skolkovo near Moscow which was meant to be the Silicon Valley of Russia shows that it is not about facilities and VC money.

However, what needs to be copied prior to everything else is the mindset. There are several aspects of mindset that are crucial in Silicon Valley’s success, and Adeo has listed them as follows:

  • Collaboration instead of competition, no zero sum game. In Silicon Valley people do not believe in zero sum game – they are ready to go have a lunch with a CEO of their competitor company and to discuss possible ways of collaboration because they believe that they’re growing and improving the overall market.
  • Flat ownership. Employees need to be outstanding professionals and need to be motivated to make company better every day. The best motivation is not salary but equity. Flat ownership means that the distance between co-founders’ equity and ordinary employee equity shouldn’t be 100:1 or even 1000:1, there are no giant gaps. A lot of equity in Silicon Valley based startups is given away to useful people like advisors, the idea is to bring many people who might be a competitive advantage and will be engaged in the success of the company.
  • Companies begin with the end in mind. Most of the companies are structured to go for an IPO or big exit from day 1. Investors in Silicon Valley are not too aggressive (as it often happens in other parts of the world) and don’t try to own too much in the very beginning. They have the end goal in mind and if the company goes public and no one else will own anything it defeats the whole purpose.
  • Money and knowledge recycling. People give back to the community. When a company makes a big exit, the co-founders become millionaires and do not stop their contribution to the community – they share their knowledge becoming advisors and investors in new startups and recycle their money and knowledge so that the community benefits from it. As I see it, this principle is widely spread in Finland – I’ve been to a keynote speech of Ilkka Paananen, CEO of Supercell, who has shared his philosophy and ideas with Aalto students, I’ve visited Slush which gets a lot of contributors from world famous Finnish companies like Rovio Mobile and their CMO Peter Vesterbacka.
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AaltoES president Elina Uutela: stop planning and just do it!

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We have talked to Elina in Startup Sauna, one of the key places of the whole Otaniemi region. We have discussed not only main AaltoES projects and “start-ups VS corporations”, but also how important passion is in our lives.

Hi Elina, thanks that you’ve found time. Can you tell me a little about yourself and what you do?

My name is Elina and I am running AaltoES this year. I got involved here 1.5 years ago through my friend. I am from Rovaniemi, which is near the Arctic Circle – I am not from the capital area. Moved here 5 years ago to work for a non-profit organization, I then decided to stay. I’ve been working several jobs and then started my studies not long ago – in 2011.

I am not actually studying at Aalto University, rather, I am from the University of Helsinki, where I study communicational and social sciences. I’m also trying to do a minor in Computer Science, so we’ll see how that works out! Here I started doing communications in one project and ended up doing operations at Slush last year, and this year I became the president of AaltoES.

Tell me a little bit more about AaltoES – what are the main goals of it?

We want to create more entrepreneurship in Finland – we feel that young people should actually not think of their working lives as step-by-step careers, as many people do. Many people see it like this: I’ll get a first job, then I’ll get a promotion to the second step, and then, after several years and at the end of the road, there’ll be a magical dream job for the rest of my working life. Well, it is not going to be like this, especially in the future. We want young people to see entrepreneurship as an option and see their working life as a path that has ups and downs, various curves and surprises.

On societal aspects, we wish to keep Finland innovative. We need to have more entrepreneurs to keep us competitive on the world scene. Entrepreneurship is the most agile and the fastest way to create something new, to make it available for wider audience. That is the main reason we think there should be more people in entrepreneurship and also into tech.

What do you think of a classic “startups vs corporations” war?

Working for a corporation is an easy solution and, if we are looking from a money perspective, a better solution. Entrepreneurship is a gamble, a game where you have to fail a couple of times before you can actually succeed, so there is always a risk. From that perspective it is a very insecure world and I very much understand why people who prefer stable companies as great places to work in, but I think there are more and more people who don’t find satisfaction in that. There are people who see that after working for several years in a corporation, all they’ve got is a promotion, which only brings them more money along with more work, and they are not a step closer to their dreams and the things they want to achieve in life – for those people, entrepreneurship is of course a better option.

We have just arrived at the concept of passion. How important is passion for an individual?

Of course, it depends on people. The way I feel is passion is everything and maybe an individual’s life is all about looking for the passion. I think people who say it is not important to be passionate about something are the ones who still haven’t found the thing they are passionate about. And there are usually several things you can be passionate about – and they motivate you more than all the money in the world. That consists of the experience you had, the experience you want to have, and of all the things you want to achieve or see. It is the combination of everything, basically.

Have you found your own passion, or are you still on your way to it?

Well, I have several passions! Dreams and passion go hand-in-hand, but the way I see it is when I get passionate about some topic, it is a way for me to get a step closer to realizing what I dream of. So, I have been passionate about education and still am. I have been passionate about animals’ rights when I was a teenager, was a vegetarian for one year… it didn’t work out for me, and now I eat meat. Me and animals, we didn’t get along. After that I got passionate about entrepreneurship. Looking back, I have always been passionate about working with great people who inspire me.

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Yep, I think Startup Sauna is great place to grow both as a professional and as a person when such people surround you.

Yes, of course. We are not here to tell you how to create a successful company. Actually, no one can tell you, although there are people smarter than us who can give some guidelines. Anyway, the main thing we can do is to pick great people, put them together, shake it up a little bit and see what comes out. What we actually are able to do is help good people meet each other.

What is your general outcome? What are the successful projects of AaltoES?

We do some great projects. We have StartupLife, where we send the most talented people to Silicon Valley; we organize one of the leading tech conferences in Europe, Slush; then there is a well-known accelerator program – Startup Sauna, which is all about hand-picking startups from Nordic countries, northern Europe, Russia – the areas no one else covers. We are super-proud to do those projects, but before all that, we have our “grassroots” level activities, for instance, the “Pitch It” event. Once there were around 20 people, three of them pitching. People may wonder – why organize such small-scale events? Well, during this “Pitch It” there were two more pitches after first three, because people were inspired and decided to share their ideas. When I see this, I realize why we do it. It’s because we give people a spark to take the first step, which is the most important one.

Yes, as far as I know you organize big events like Global Entrepreneurship Week franchise or Ilkka Paananen’s talk, but at the same time you are interested in small events with warm and hospitable atmospheres.

Yes, I think this is the family-like atmosphere we want to create around these events. For example, we had a “Get Involved” event yesterday. I can’t say it was super-organized, but what I think we succeeded in delivering was this feeling, when people understand there is no pressure, it is what it is, we can talk about entrepreneurship, different projects, their goals and just eat pizza and drink cold beer. That is actually the first step people need.

As I understand, AaltoES is not focusing on monetization or scale as is. Can you speak about how you see AaltoES in the future?

That’s a hard question, since of course it is a day-to-day thing to work on, so things I say today might be old tomorrow. Well, what I hope to see is that more and more people who are pro-active and into organizing things see AaltoES as a place to get the experience for their working life, and will come and work for this organization or participate as volunteers. We are interested in people who want to do the things we do.

So far we have established a local portal, which covers the Otaniemi region with its startups, events and infrastructure. Perhaps you can talk about the people you need here?

We always need someone, who is totally different from others, who already works here. Also, the most important thing here is that it doesn’t matter what you have done before. We need hard-working people. People who can show via their volunteer work what are they made of. Working on the projects we already have is not necessary – if you come to AaltoES with a new project that supports what we want to do, that’s totally fine. We also look for people with an entrepreneurial mindset, of course. People who think outside the box and are eager to learn new things. You can be afraid to fail, but here the most valuable experience is to get rid of the fear of failure.

With me having a background in software development, I feel you use some principles and practices of Lean methodology in a way. These ideas – prototyping “grassroots” events, gaining feedback, not being afraid to fail etc. And you have a sense of freedom here – freedom and responsibility.

Yes, for sure. If you come here to organize a project, no one is going to hold your hand all through it; no one is going to send you e-mails everyday asking if this is done. When you ask for help you always get help, but it is different approach. It is a bit difficult to speak about Lean methodology as we are not a startup, but yes, I understand what you mean and I think you are right. We are trying to be Lean in a way. Of course, we don’t think of who our customer is or anything like this, but we want to prototype things. Another key principle we follow is if there are no people willing to organize the event, we probably shouldn’t organize it.

So, you’re not trying to make someone do something here.

We of course try to get people out of their comfort zones. But you know what – there are around 30 active members here and if all of us think that, well, “Pitch It” is shit… then why would we do it? So, that is probably one of the key lessons we learned and try to follow. At some point we realize what works and what doesn’t.

Can you name your favorite project, the most successful project in your opinion? We are not speaking about the most profitable or the biggest one, but instead about a project you really love.

I think it is more of a case of first love. The first project I did here was called “Founders week” and that was my greatest experience so far for one reason – I learned a lot since I had no previous experience on the startup scene, in fact I basically didn’t even know what a startup was before that. During “Founders week” we brought in several entrepreneurs from Silicon Valley to Finland and organized events around that. This project was about entrepreneurial culture.

We strongly believe that Otaniemi is the region of opportunities and the place to find yourself. Maybe you have a message to all young people around this region?

Stop planning and just do it! It sounds like a Nike quote. Basically, we all have our ideas, but ideas are nothing until you start doing. Ideas are worthless. Ideas start to have some value when you start to execute them.

elina


Some words about Real Racing 3

I divide all popular computer games into two groups: it is the implementation of new progressive technologies (read: better graphics, more realistic scenes etc.) behind the popularity of the first group and it is pure idea behind the popularity of the second one.

The development process of the technology-based game is quiet transparent and predictable. Graphics becomes better, requirements become higher. When it comes to a mind-blowing idea, the development process is an absolute mystery. You can spend days and weeks procrastinating and fail all the milestones, and then all of a sudden you get an insight into what you are going to offer to your customer.

Therefore, as I see it, big companies focus on technology-based games and idea-based games are usually avoided as risky or sometimes get a status of a spin-off and a budget of several hundred bucks. At the same time, idea-based games are developed by a handful of enthusiasts with or without strict documentation, timeline, budget and overall strategic planning.

But it is not always like this. At first sight, Real Racing 3 seems to be just another brick in the wall of detailed realistic racing games, which appear here and there every couple of months and more or less demonstrate the possibilities of the newest hardware. Actually, it is beautifully designed and currently seems to be the best iOS racing game ever. At this point developers could have said “That’s it, boys and girls!” – but they didn’t. In fact, they invented the whole new way of playing a game in a multiplayer mode being offline, and it is called Time Shifted Multiplayer (TSM). In a nutshell, TSM downloads other player’s lap times (and, perhaps, their specific paths) while you’re online, and after that you compete with real people being on- or offline. Well, we can’t say these are real people – these are their shadows. But it is still an amazing compromise between multiplayer mode, which requires good Internet access, and single player mode, which is boring as hell.

What I want to point out is that RR3 is a game with both brilliant graphics and a unique idea behind it. It is something out of line. It is something awesome. You shouldn’t blame Firemonkeys for their monetization strategy. You should enjoy.

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