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IVI Presentation at UNECE Conference, May 2008
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IVI Presentation at UNECE Conference, May 2008

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Tom Nastas Presentation at UNECE Conference in Moscow Russia

Tom Nastas Presentation at UNECE Conference in Moscow Russia

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IVI Presentation at UNECE Conference, May 2008 IVI Presentation at UNECE Conference, May 2008 Presentation Transcript

  • Scaling Up Innovation in Russia UNECE Conference: Moscow Russia, 23 May 2008 Innovative Ventures Inc. Haslett, MI. USA Moscow, Russia Thomas Nastas President Tom@IVIpe.com www.IVIpe.com 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Today’s Message Part I What’s Happening in the Market? The Good & the Bad Part II GoForward Plan to Accelerate $$ For Entrepreneurs/SMEs For Gov’t Policy Makers 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • IVI History-Direct Invest & Advisory Canada (1992) Europe (1992/94) C$100MM-Canadian TP Fund, $10MM- Bus. Dev. Bank EU, $-Financière St Dominique, Paris USA (1986) Russia (1997) The Michigan Product HP LP, $30MM-EBRD & Dev. Fund ($5MM) USAID Africa (1993/96) E. Africa $5MM, Sub- Saharan, $200MM, South Africa,$30MM, IFC/WB 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • About Me • Founder of IVI,1986. In Russia since 1997 • Moscow Bank, Member, Board of Directors, 2007 • Independent Directors Ass. Member, Board of Directors, 2008 • Moscow MBA Program, Prof of VC & Marketing, 2001 • Moscow, MBA Advising, 2001 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Part I: What’s Happening in the Market? The Good & the Bad 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Successes in the Market Since 2001 PBC Lasers & Wostec Multinationals w/R&D Labs in Russia 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Some Clouds Too: Learning Curve Lessons Optiva ($49M) liquidates: Nanotech's 1st big flame-out Startup doctors ease portfolio pain-Trustworks ($23M) Cybiko Ceases Operations Not Seeing Entrepreneurial SME Creation from MNC R&D Labs Multinationals w/R&D Labs in Russia 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Realities of VC in Russia High Rejection Rates of Russian Tech: Undeveloped Opportunity Lack of Uniqueness/Competitive Advantage in Performance (Customer Benefits) Too much $$$, too much time & too little reward (Alternative Invest Opts & Foreign Competition) Lack of People (mgt/employees) & Transparency Lack of IP/Uncertainty of IP What to do with the SMEs that are rejected? Ignore? Sympathize? Seek New Solutions? 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Reasons for Rejecting Russian Tech Deals 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Reasons for Rejecting Russian Tech Deals 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Realities of VC Investment Ex: Global Spend in Clean Tech (2006) • Corporate R&D Investment = $22 billion • Government R&D Investment = $24 Billion • VC Investment in R&D = $2 Billion Same Pattern Repeated in Most Industries: VCs Fund Commercialization, not Tech Dev. 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Reasons Why Probability Components of SME Success 80% Company has enough $$ 80% Mgt Capable & Focused 80% PD Successful 80% Mfging Successful 80% Competitors Behave as Expected 80% Customers Want Product 80% Pricing is Correct 80% IP Issued 17% Combined Probability of Success Success Rate <10% if Probability of One Event falls from 80% to 50% 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Part II: GoForward Plan to Accelerating VC $$ For Entrepreneurs/SMEs 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Action Item #1 for Entrepreneurs/SMEs 1. Invest in Tech for Domestic Mkt Link w/Corporates: User Pull, Testing, Deployment & Commercialization Solve Tech & Supply Chain Needs Don’t Worry about Small Volumes Build Locally, Upgrade Later for National & Int’l Expansion 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Opts for Russian Tech 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Opts for Russian Tech 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Examples of Domestic Growth $570Bln for Transportation Overhaul 21 May 2008 Combined Reports Ford Will Build 2nd Plant in Russia: Ford European VP Jim Tetreault 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Where’s the Customer Pain (Need) in the Industry? 1. MORE Perf, Execution & Cost Reduction Not GameChangers; blocking/tackling tech so customers meet business plan 2. MORE Local Content More Value-added Tech Tech Sold to Multiple Customers Generate Supplier Sustainability thru Multiple Products/Services 3. What Else? 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Domestic Opts to Build Bio- Tech Supply Chain in Russia Research, Testing, & Agricultural Medical Devices Drugs & Hospitals Medical Labs Feedstock/Chemicals Pharmaceuticals & Equipment Agricultural Medicinal & Laboratory Specialty Biological processing botanicals apparatus & hospitals research furniture Basic organic Pharma- University Commercial chemicals ceutical Surgical, medical medical preparations medical, dental, research research Ethyl alcohol ophthalmic hospitals mfg. Diagnostic Testing & analytical substances Clinical laboratories Organic fiber instruments & research mfg. equipment Biological Medical institutions products laboratories & Fertilizers Irradiation diagnostic apparatus & Pesticides and imaging electromedical other agricultural centers chemicals equipment Product-Oriented www.IVIpe.com Service-Oriented 23 May 2008 Info@IVIpe.com
  • Action Item #2 for Entrepreneurs/SMEs 2. Benchmark Your Tech to Competitors & Alternative Often & Early Define Strengths & Weaknesses Test Under Different Operating & Customer Conditions Invest to Overcome Deficiencies 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Part II: GoForward Plan to Accelerating $$ For Gov’t Policy Makers 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #1 for Gov’t Policy Makers 1. Create ‘ Tech Proof of Concept’ Fund Transform ideas = deals Generate data to confirm performance, show weaknesses vs. competition & alternatives. Benchmark to int’l standards 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Chubais Opens Landmark Power Unit But industry players are skeptical about the efficiency and modernity of the Russian-made turbines. 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #2 for Gov’t Policy Makers 2. Capitalize a ‘Mini-Grant’ Program Define biz opts for a technology Cost is US$3,000-US$10,000/technology Not a biz plan, but 3-4 page document on tech’s potential 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #3 for Gov’t Policy Makers 3.Create an IP Fund Fund costs of Filing IP, especially Int’l Pay-back as a Royalty on Sales Funded by Russian Gov’t Initiative/PPP 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #4 for Gov’t Policy Makers 4. Inventory Your Tech & Publish as a Database on the Internet Org by tech, product & mkt Benefits by cost & performance Stage of dev., R&D, PD, Testing, Plan w/Timetable, milestones, budgets IP issued/filed & competing IP 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #5 for Gov’t Policy Makers 5. Establish a Biz Dev Office Scouts for Opts in SMEs & Institutes Develops projects for ‘Mini-Grant’ & ‘Proof of Concept’ Funds Promote to Customers Keeps the Team Focused. Align Interests Sell Data or Provide Answers? Incentives: Cash/Salary or Equity? Transparent or Opaque? Responsive or Egocentric? 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • GoForward Plan: Action Item #6 for Gov’t Policy Makers 6. Organize R&D & Supply Chain Competitions for Users of Tech Go After Corporates & Corporate Investors vs. Financial Investors Interaction between R&D developers & Corporations & Corporate VC Corporations fund R&D, guide development & access opts in the supply chain Lower dev risk & get to market quickly Establish Industry Consortiums 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Technology In Many Places! Just Look & Define Slaughter Raising Genetic Engineering & Breeding Butcher Distribution, Storage & Retail Locations Processing- Ham, Kielbasa Delivery 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Thomas D. Nastas Tom@IVIpe.com www.IVIpe.com Tel. 7.985.923.47.27 Innovative Ventures Inc. Moscow, Russia Haslett, MI USA 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Back-up Slides Follow 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • What’s Working Against Early Stage Tech & VC in Russia Plenty of $: It’s Competition: Domestic Growth, FMCGs, F&B, Retailing, Financial Services, Media, etc. Keeps Entrepreneurs in Non-Tech From Other Asset Classes w/Quicker & > Profits, e.g., Stocks & Real Estate From Israel, Ireland, USA, etc., with Good Deals, Technologies, Entrepreneurs & Successes 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice Success Engaged Institutes engaged in econ dev Institutes with & committed to tech transfer Active Have mechanism for tech Leadership commercialization 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice Success Capital is Programs for Available commercialization, pre-seed, & seed financing gaps (help establish & build SMEs) Active informal angel networks Investors include private & and public entities 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice Success Discretionary Receive significant federal R&D Funding funding Centers serve as anchors for a region’s bioscience base 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice Success Talent Pool Talent is the #1 the variable to build comparative advantage Educational institutions responsive to training students to meet the needs for workers at all skill levels, e.g., scientists, technicians, & production workers 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice Success Specialized Leading bioscience regions Facilities and have private markets that Equipment provide facilities for bioscience SMEs Specialized bioscience incubators and research parks are a growing trend Access to specialized facilities and equipment 23 May 2008 www.IVIpe.com Info@IVIpe.com
  • Best Practices Factors of Best Practice States/Regions Success Patience and Building a critical mass takes Long-term years or even decades Perspective Early technology pioneers took 25 years, now 12 to 14 years to mature 23 May 2008 www.IVIpe.com Info@IVIpe.com