•••                                                                                                                       ...
•••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........      ...
•••Decades ago, Russian technology began impressing theworld. Now Russia is back!……………………………………………………………………………………………………………...
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, what does th...
•••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••                                                                                    High Voltage Research Installation,...
•••Russia has a strong technological and engineeringculture………………………………………………………………………………………………………………………………………………………………………...
•••…in which social networks have and still play a majorrole……………………………………………………………………………………………………………………………………………………………………...
•••  Russian constraints drive usages and innovation  ……………………………………………………………………………………………………………………………………………………………………………………...
•••This innovation model gave birth to Yandex, a truesuccess story……………………………………………………………………………………………………………………………………………………...
•••Google’s twin brother……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••… that even goes beyond the Google model.………………………………………………………………………………………………………………………………………………………………………………………………………………...
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, what about t...
•••Copy/paste innovation: a perfectly well-accepted path tobusiness success……………………………………………………………………………………………………………………………...
•••We can find many examples of copy-paste innovation inRussia………………………………………………………………………………………………………………………………………………………………...
•••… but they eventually leapfrog their original model.…………………………………………………………………………………………………………………………………………………………………………………...
•••Beyond a simple copycat, Vkontakte beats Facebookbecause of many key features………………………………………………………………………………………………………………...
•••Vkontakte created a very efficient network, far from itsmodel…………………………………………………………………………………………………………………………………………………………...
•••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••                                                                                            International Business Cent...
•••Europe’s largest internet market by number of users...……………………………………………………………………………………………………………………………………………………………………………...
•••… and the market has yet to expand!………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Some Russian com...
•••From a mail-service website to one of Europe’s largestInternet groups……………………………………………………………………………………………………………………………………...
•••Mail.ru Group: the colossus of the Russian Internet……………………………………………………………………………………………………………………………………………………………………………………...
•••Mail.ru has given birth to a top international investmentfund: DST……………………………………………………………………………………………………………………………………………...
•••DST’s Investments (undisclosed shares)………………………………………………………………………………………………………………………………………………………………………………………………………………………...
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••These connection...
•••With rare exceptions, Russian companies don’tinternationalize…………………………………………………………………………………………………………………………………………………………...
•••VimpelCom a Russian mobile operator that has growninto a global telco……………………………………………………………………………………………………………………………………...
•••Kaspersky, a long-date international player…………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Which countries are mostly targeted by Russian firms?………………………………………………………………………………………………………………………………………………………………………………...
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Alongside intern...
•••DST is developing, extending its network to Asia……………………………………………………………………………………………………………………………………………………………………………………………...
•••Mass-scale public investment in innovation in Russia…………………………………………………………………………………………………………………………………………………………………………………...
•••Top VC firms invest in Russia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••                                                                            Skolkovo Innovation Center mockup, Moscow……...
•••Developing tomorrow’s potential…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Up-to-date Russia: mobile phones are extremelypopular………………………………………………………………………………………………………………………………………………………………………………...
•••…and are spreading internet technologies!………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Mobile phones are creating an opportunity: youngerusers are driving mobile internet growth……………………………………………………………………………...
•••… creating a fast-expanding market for mobile content………………………………………………………………………………………………………………………………………………………………………………...
•••Even with homemade solutions, the social networkmarket is catching up fast………………………………………………………………………………………………………………………...
•••The e-commerce market is developing………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••What will be driving Russian e-commerce in the next fiveyears?………………………………………………………………………………………………………………………………………………………...
•••Developing tomorrow’s potential…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••A network of incubators demonstrating the recentdynamism of the startup ecosystem……………………………………………………………………………………………………...
•••HSE Incubator……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….......
•••Academy of National Economy Incubator…………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Moscow State UniversityStudent Business Incubator…………………………………………………………………………………………………………………………………………………………………………………………...
•••Fast Lane Ventures……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Farminers Startup Academy…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Ingria Technopark Business Incubator……………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Tex Drive………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........
•••Skolkovo: Russia’s answer to Silicon Valley…………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Developing tomorrow’s potential…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Already some extremely innovative companies arecoming out of this ecosystem……………………………………………………………………………………………………………………...
•••Yota………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •...
•••Displair………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………............
•••ResumUP……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….............
•••Good Roads………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..........
•••Developing tomorrow’s potential…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••The Russian Business “Folklore” : myth or reality ?……………………………………………………………………………………………………………………………………………………………………………………...
•••Business in Russia still faces many challenges…………………………………………………………………………………………………………………………………………………………………………………………………...
•••Legal Framework……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….....
•••Intellectual property……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Russia’s Underground e-market………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Payments are still an issue……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Corruption still dogs the Russian economy………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••                                                                                                Caviar, the luxurious R...
•••What is specific about Russia?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
•••Lots of constraints means a lot of creativity……………………………………………………………………………………………………………………………………………………………………………………………………...
•••Brilliant mathematicians create an expertise in algorithms…………………………………………………………………………………………………………………………………………………………………...
•••Brilliant mathematicians know how to crack the code…and protect it!…………………………………………………………………………………………………………………………………………...
•••Crypto AG is a Swiss-based company, but Russian-based technology…………………………………………………………………………………………………………………………………………………...
•••A company specialized in hackproofing: StopTheHacker…………………………………………………………………………………………………………………………………………………………………………………...
•••Telecom sector proves Russian ability to adapt toimportant constraints…………………………………………………………………………………………………………………………………...
•••Inango devised a new way to cut implementation costs…………………………………………………………………………………………………………………………………………………………………………………...
•••Vimpelcom’s rise shows the effiency of Russianinfrastructure development strategy……………………………………………………………………………………………………...
•••The Health sector is proving Russia’s ability to catch up……………………………………………………………………………………………………………………………………………………………………...
•••Maxygen Mobile DNA Tests……  `tagg@
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
Expanding to Russia With Love
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Expanding to Russia With Love

  1. 1. ••• •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... ••• Expanding to Russia with love••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  2. 2. •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... This research was conducted in partnership with Orange and East-West Digital News, the international resource on Russian IT industries. www.ewdn.com.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  3. 3. •••Decades ago, Russian technology began impressing theworld. Now Russia is back!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1956, USSR put in orbit the first ever artificial satellite: Sputnik. 1961, Yuri Gagarin became the first man to orbit the Earth. In 2010, NASA and ROSCOSMOS agreed on a 1 billion dollar deal to send US astronauts to the International Space Station using Soyouz on Baikonur launchpad. Even NASA trusts Russian technology and does business with the former "evil empire." Why shouldn’t you?••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 3
  4. 4. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, what does the new Russiantechnology sector look like ?…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  5. 5. •••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  The Russian Innovation Model 2.  A promising economy 3.  Developing tomorrow’s potential 4.  The Russian Tech Recipes 5.  Summary••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 5
  6. 6. •••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  The Russian Innovation Model 2.  A promising economy 3.  Developing tomorrow’s potential 4.  The Russian Tech Recipes 5.  Summary••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 6
  7. 7. ••• High Voltage Research Installation, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••The Russian innovation model••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  8. 8. •••Russia has a strong technological and engineeringculture…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Mendeleev, Tsiolkovsky… Russia has a long history of scientific research. « To catch up, and to surpass! » Soviet slogan for Science and Technology, introduced by Lenin. Based on these pre-existing conditions, the fate of Soviet civilization has long been linked to its success in its Science and Technology field. The Russian innovation model leverages world-class scientists, famous mathematicians, taught in Moscow or St. Petersburg Universities and science-dedicated schools.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 8
  9. 9. •••…in which social networks have and still play a majorrole………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... After decades of social atomization under a totalitarian regime, Russians now socialize more than ever, using social networking sites. The internet has become, for all modern-oriented Russians, the main free source of information. Sources: ComScore, American Journal of Political Science••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 9
  10. 10. ••• Russian constraints drive usages and innovation ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1 2 80 million Russian- Worldwide rank in time spent on social networks Worldwide rank in size 10 speaking internet of illegal media users sharing ($300 million (Russia + Russian diaspora) in music piracy) Average number of hours spent monthly on internet social networks; world Physical isolation average is 5 Rough climate Poor urban Mistrust in State- planning controlled mediaSources: EWDN, ComScore ••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 10
  11. 11. •••This innovation model gave birth to Yandex, a truesuccess story………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Founded by two Russian mathematicians. Ilya Segalovich They wrote a search algorithm for Arkady Volozh Russian-written files in the early 90s. That’s 6 years before Google’s Page and Brin started their research at Stanford University. With that in mind, you might call Google the US Yandex, rather than the other way around. Sources: EWDN.com, Yandex Corporate Website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 11
  12. 12. •••Google’s twin brother…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 622 million dollars revenues in 2011 60% growth (FY 2010 to 2011) 60% share of search-engine traffic in Russia (Google 2nd with 25%) 60% share of Russia’s online advertising revenues 80 web products in total (mostly the same offer as Google’s) Sources: EWDN.com, Yandex Corporate Website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 12
  13. 13. •••… that even goes beyond the Google model.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Real-time traffic 4 years before Google #1 Photos Web Portal #1 Traffic previsions #1 Weather … •  New products: TV Schedule, E-cards, … •  But most of all, a higher precision algorithm than Google’s due to the specificities of the inflective Russian language. Sources: EWDN.com, Yandex Corporate Website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 13
  14. 14. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, what about the much-criticizedRussian « copy-paste innovation »model?…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  15. 15. •••Copy/paste innovation: a perfectly well-accepted path tobusiness success………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... In its initial version, Russia’s leading daily deal site BigLion not only copied Groupon’s business model, but they also just ripped the site design and navigation off completely, too. The sites looked nearly identical, even down to the smallest details.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 15
  16. 16. •••We can find many examples of copy-paste innovation inRussia…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Web initiatives in Russia are often perceived as pure and simple copies of successful Western companies, in which business models, designs and brandings are faithfully replicated. Here are a few examples of the most significant ones : Original company The Russian copy “The Russian Internet could almost be described as tabula rasa with huge potential for opportunity and growth. [So] we just looked at what had been done in other countries, chose the models that proved their relevance and then adapted them to the Russian market.” Marina Treshchova, CEO Fast Lane Ventures, interviewed by EWDN.COM••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 16
  17. 17. •••… but they eventually leapfrog their original model.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Vkontakte looks and feels very similar to Facebook, but… … Vkontakte has developed some specific and local functionalities that might even raise strong barriers for Facebook. This example testifies of how Russian services can emancipate from the original model by leveraging on their own strengths to build a unique capability.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 17
  18. 18. •••Beyond a simple copycat, Vkontakte beats Facebookbecause of many key features………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Launched in 2006, it claims more than 110 million active accounts (vs. 5 million facebook users in Russia). It is the 4th most visited Russian website. •  Facebook faces difficulties penetrating the market for two reasons: •  Facebooks Russian users are generally of the wealthier, well- traveled, cosmopolitan variety, have foreign friends and tend to live in Moscow and St. Petersburg. •  Facebook does not offer content sharing services Sources:Les Echos, ComScore, Vkontakte.ru••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 18
  19. 19. •••Vkontakte created a very efficient network, far from itsmodel………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  It is the most popular content sharing platform, including many illegal files. The search engine also allows users to look for the nearest ‘active’ single woman in the region, and escorts.•  The website also plays its part throughout Russian protests through events like “Revolution Square Saturday” that took place after the December elections Sources:Les Echos, Social Times, BBC••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 19
  20. 20. •••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  The Russian Innovation Model 2.  A promising economy 3.  Developing tomorrow’s potential 4.  The Russian Tech Recipes 5.  Summary••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 20
  21. 21. ••• International Business Center, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........••• A promising economy••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  22. 22. •••Europe’s largest internet market by number of users...………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 57 42 Million Russian Million French internet users internet users (Spring 2012) (Fall 2011) Strong growth potential. e-commerce size: $10 billion e-commerce size: $45 billion Online advertising: $1,5 billion Online advertising: $3 billion Sources: EWDN .com (2011)••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 22
  23. 23. •••… and the market has yet to expand!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... France Europe 64% Russia 58% 39% Total 2011 Evolution of the Internet internet penetration penetration in Russia (Russian Academy of Sciences) •  Almost three quarters of all Russian Internet users live in the European part of Russia: a huge market is still to be conquered! •  The Russian Academy of Sciences, has given a long-term forecast (2025) of 130 million internet users. (at 85% penetration rate) Sources: ComScore, Russian Academy of Sciences••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 23
  24. 24. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Some Russian companies have alreadyseized this appealing opportunity……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  25. 25. •••From a mail-service website to one of Europe’s largestInternet groups………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Mixed growth model: from innovation, one fusion and acquisitions. Multiple sources of investment, both local and foreign. Official objectives: COMMUNITAINMENT INNOVATIVE SERVICES Communications Improve the + Internet market Entertainment Sources: Mail.ru Group Corporate Website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 25
  26. 26. •••Mail.ru Group: the colossus of the Russian Internet………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Email, IM, social Games Navigational Media projects E-commerce networks Services Mail 40 MMO Search News Travel Agent (IM) 47 games for social Answers Weather Goods MyWorld (MIR) platforms Maps Entertainment Property OK Mobile Hi-Tech, Auto, Lady, Money ICQ Rating (Analytics) Kids, Health Work Blogs Cards Headhunter Dating Mailing Free-lance Futubra $325 million revenue in 2010 from diverse sources: Market leader in display 11% advertising, internet Advertising 39% Games communications, and in 20% Paid services social. 30% Other Sources: EWDN.com, Mail.ru Group Corporate Website, Mail.ru Annual Report 2010••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 26
  27. 27. •••Mail.ru has given birth to a top international investmentfund: DST………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... DST then split into a venture arm, DST Global, and a leading Russian internet group, Mail.ru Group. •  DST Global is a major late-stage investment fund •  Invest minimum around $100M, for companies valuated at least $1b •  Goal: to give liquidity to tech companies in order to delay their IPO, so that they can focus on product development instead of liquidity. •  Large network outside Russia via direct partnerships or co-fundings: Facebook, Zynga,… Accel, Greylock, Kleiner Perkins… Sources: TechCrunch’s 2010 Yuri Milner interview••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 27
  28. 28. •••DST’s Investments (undisclosed shares)………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........An impressive portfolio including many of the hottest tech firms of themoment… … probably starting the first bridges between Russian and Western companies. Sources: TechCrunch, WSJ, EWDN.com••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 28
  29. 29. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••These connections with the WesternWorld raise the question of theRussian firms internationalization.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  30. 30. •••With rare exceptions, Russian companies don’tinternationalize………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... But why do firms internationalize? Growth & Performance Ideas & Innovation New clients Exclusive information Tax Benefit Cultural mix Economies of scale Technological advantage … … There is plenty of both in Russia! Their weak international presence is not necessarily a concern, as many examples show that Russian tech companies successfully internationalize when needed…••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 30
  31. 31. •••VimpelCom a Russian mobile operator that has growninto a global telco………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A strong international presence, on several continents Europe•  1 8 1 m i l l i o n m o b i l e Russia, Ukraine, Armenia, Georgia, Italy subscribers around the world Asia Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Vietnam,•  $10.512billion dollars Cambodia, Laos, Bangladesh, Pakistan revenue in 2010 Africa Algeria, Burundi, Zimbabwe, Namibia, Central African•  Based in Amsterdam Republic•  10 Brands North America Canada Beeline, Kyivstar, djuice, Wind, Infostrada, Mobilink, Leo, Banglalink, Telecel, Djezzy VimpelCom is showing that there’s no such thing as a Russian tech failure to cross Russia’s borders… Sources: VimpelCom’s 2010 Annual Report, Datamonitor••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 31
  32. 32. •••Kaspersky, a long-date international player………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  One of the world’s leading antivirus research and software companies •  Founded in 1997 in Moscow •  Fast expansion to : India, Germany, France, the Netherlands, the UK, Poland, Romania, Sweden, Japan, China, South Korea, and the USA. They recently enrolled Jackie Chan as their product spokesman in a move to conquer China. Sources: Wikipedia, Official Website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 32
  33. 33. •••Which countries are mostly targeted by Russian firms?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........4 types of links to Russian companies: Historical Technological Strong potential Proximity•  Both cultural and •  Example for innovation •  Market in development •  Land connection geographical proximity management •  Geographical proximity •  Within quick flight reach•  No language barrier •  Experimentation •  Existing networks from•  Existing networks •  Innovation harnessing other industries Ex-soviet countries USA South East Asia EuropeExamples:••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 33
  34. 34. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Alongside internationalization,investment power is developing fastin Russia.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  35. 35. •••DST is developing, extending its network to Asia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... DST Global II Raised in May 2011 A capital of about $1billion to invest Expected to be invested in Asia, following the path of previous investments (Alibaba, 360buy) Russian tech investments are not only focusing on high profile Western companies, they are also getting key shares in soon-to-be Eastern giants. Sources: EWDN.com••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 35
  36. 36. •••Mass-scale public investment in innovation in Russia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  120 billion rubles ($3,72b) from the •  State funded venture capital company Russian Federation created in 2007 •  To give Russia a leading position on the •  $1.25 billion capital to fund VCs nanotechnology sector while accelerating investments using a 5% loan without the commercialization of nanotech asking for stocks in the companies. products (inside and outside Russia) •  Two goals: Investing in Russian tech •  2010: 44 projects approved, 47.1 billion while attracting and developing VC rubles invested, total budget of the networks in Russia. projects 146 billion rubles Sources: Rusnano’s 2010 Annual Report, CNET News••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 36
  37. 37. •••Top VC firms invest in Russia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........Western VC firms’ investment is clearly expanding to Russia… Top 15 VC firms from Forbes 2011 Midas List But also… Accel Partners Kleiner Perkins Caufield & Byers Mangrove Capital Partners Andreessen Horowitz New Enterprise Associates Ventech Benchmark Capital Redpoint Ventures eVenture Capital Partners Bessemer Venture Partners Sequoia Capital General Catalyst Partners First Round Capital SV Angel Tiger Global Management FLOODGATE Union Square Ventures and more… Founders Fund Venrock Greylock Partners Already publicly investing in Russian startups … a move that we can expect even more thanks to the growing relations with DST. Sources: EWDN.com, Corporate websites••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 37
  38. 38. •••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  The Russian Innovation Model 2.  A promising economy 3.  Developing tomorrow’s potential 4.  The Russian Tech Recipes 5.  Summary••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 38
  39. 39. ••• Skolkovo Innovation Center mockup, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••Developing tomorrow’s potential••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  40. 40. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  An overview of the Russian innovative markets 2.  A strong network of incubators supporting new initiatives 3.  The Russian boiling innovative ecosystem: Startups 4.  Some barriers to keep in mind••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 40
  41. 41. •••Up-to-date Russia: mobile phones are extremelypopular…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A strong mobile phone penetration 186 million Total mobile phones 140 million Total population There are 1.5 SIM cards per Russian inhabitant Sources: newmediatrendwatch, emarketer, AC&M••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  42. 42. •••…and are spreading internet technologies!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... While households’ internet access grew by 10% in 2011, the household broadband penetration remained flat: mobile phones internet users account for most of the new internet users Still, only 7% of subscribers have access to the 3G network Smartphones penetration is still low (11%) but is quickly growing: +118% between 2010 and 2011 Sources: informa telecoms&media, newmediatrendwatch••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 42
  43. 43. •••Mobile phones are creating an opportunity: youngerusers are driving mobile internet growth…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Users by age (Aug 2011) 100% 90% 80% internet users mobile internet users 70% 60% 50% 40% 30% 20% 10% 0% age 12-17 age 18-24 age 25-34 age 35-44 age 45-54 age 55+ Sources:informa telecoms&media, newmediatrendwatch August 2011••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 43
  44. 44. •••… creating a fast-expanding market for mobile content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... At the end of 2010, touch screen phones accounted for about 30% of all phones sold in Russia The Russian mobile content market could reach as much as $1.8 billion this year In 2013, the overall mobile content market could exceed $3 billion. Sources: EWDN.com, informa telecoms & media, newmediatrendwatch••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 44
  45. 45. •••Even with homemade solutions, the social networkmarket is catching up fast………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... LiveJournal.com Vkontakte Odnoklassniki.ru Blogging, social media Russia’s 1st social network Russia’s 2nd social network Intellectuals express Similarities: facebook Face detection, dating themselves freely 116 million accounts Similarities: Classmates 30 million monthly in Russia 45 million Moi Krug – ‘My Circle’ MoiMir – ‘My World’ Job seeking, pro networking Blogging Similarities: LinkedIn Similarities: Myspace 1 million users (vs 0.5 on Russian 20 million visits per month LinkedIn).••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 45
  46. 46. •••The e-commerce market is developing………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The Russian e-commerce market is still emerging but is expected to grow fast in volume and result. $40 bn $23 to bn $60 To bn $8 bn $10 $30 bn nb 2010 2011 2015 2020 Forecast Sources: 2012 e-commerce report by EWDN.COM••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 46
  47. 47. •••What will be driving Russian e-commerce in the next fiveyears?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  The potential market growth in Moscow and St. Petersburg in terms of new users is reaching its natural limit. •  Most new shoppers will come from other Russian regions, typically recent Internet users from larger cities making initial online purchases. 2010 2015 Moscow+ Started using internet before 5.6 5.1 2011 St. Petersburg Started in 2011 or after 2.5 78 Total 5.6 7.5 Regions Started using internet before 8.4 7.6 million 2011 Started in 2011 or after 13.2 Total 8.4 20.8 Internet users TOTAL RUSSIA 13.9 28.3 in 2015 Sources: 2012 e-commerce report by EWDN.COM••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 47
  48. 48. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  An overview of the Russian innovative markets 2.  A strong network of incubators supporting new initiatives 3.  The Russian boiling innovative ecosystem: Startups 4.  Some barriers to keep in mind••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 48
  49. 49. •••A network of incubators demonstrating the recentdynamism of the startup ecosystem………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A sample of the most active and significant Incubators launched in Russia, that show the willingness and dynamism of an emerging ecosystem dedicated to innovation and entrepreneurship. …••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 49
  50. 50. •••HSE Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •  Founded in 2006 by students and professors of HSE. •  A pool of 6 startups •  Startups get an equipped office space as well as administrative and consulting support. •  HSE(10K) similar to MIT(100K) startup competition •  Former incubated startups: SmartKniga, Skillopedia.ru, Native Speakers Club, Roomix, PensiaMarket, TimePad. (19 startups so far) Sources: Official website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 50
  51. 51. •••Academy of National Economy Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •  Founded in 2010 by the Academy •  Classic incubator : office, advisors, classes, events. •  Provides an “Accelerator” program with early stage funding •  Lot of partners ranging from Microsoft BizSpark to Yandex, includes investment partners and a huge number of information partners Sources: Official website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 51
  52. 52. •••Moscow State UniversityStudent Business Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •  Founded in 2010 with a startup competition aiming at recruiting the first batch of teams (Webils, Maxigen, Introvision, Idata, Web-constructor) •  More than traditional support to its startups, MSU SIB provides exchange programs with US Ivy League’s universities such as MIT and Harvard. •  Partners have invested more than 50 million rubles in the startups •  The advisory board includes representatives from top-level companies and funds : Microsoft, Alliance Rosno, Rusnano, Russian Venture Company,… Sources: Official website, Direct contact••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 52
  53. 53. •••Fast Lane Ventures………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •  Leading developer of internet companies, Fast Lane Ventures was founded in 2010. They target B2C markets. •  Has launched 15 internet start-ups, •  Fast execution: Fast Lane claims it is able to launch a new internet business within 50 days. •  Has attracted $50M from different investors •  The team brings together 700 internet developers, and holds classes and training sessions along with help in finding funds. Sources: Official website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 53
  54. 54. •••Farminers Startup Academy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Founded by former Vice President of Mail.ru, Igor Matzanyuk, in August 2011. The Fund invests in Russian projects. • Selected projects receive up to $150,000 USD to prepare a project prototype, an office space, and computers. • After three months, the prototype will help the Farm find investors for the project. • Farminers will generate funds for a period of three to six months in exchange for a 40 percent stake in the project. • Targets online projects, compatible with mobile devices, and mass-market. Sources: Official website, lenta.ru••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 54
  55. 55. •••Ingria Technopark Business Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... ST PETERSBURG Ingria future technopark •  Founded in 2008 by the Inngria Technopark. •  Among Top 5 most efficient business incubators in Russia (Forbes) •  Two programs: •  Pre-incubation, 6 months (cost 500 RUR/month) •  Incubation, 11-33 months (cost 1500 RUR/month) •  Network of partners •  70 residents: IT, Ecology, Biotech, Medicine, Energy, Material Science. Sources: Official website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 55
  56. 56. •••Tex Drive………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •  Founded in 2011, TexDrive is a member of the Techstars network, and is supported by Springboard, two worldwide well-known start-up accelerators. •  TexDrive offers 12-week programs that help start-ups define a business model, find investors and solve legal issues. Selected projects get $25K at the start, then $100K at the end of the program, while TexDrive gets a small share of the company in return. •  Own funds and TexDrive investors network represent potentially $3B in venture capital funds. Investors are local wealthy individuals, entrepreneurs and investment managers. •  First program launched in January 2012 Sources: Official website, Marchmont Capital, EWDN.com••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 56
  57. 57. •••Skolkovo: Russia’s answer to Silicon Valley………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•  The Skolkovo Innovation Centre, still under construction and completed by 2014, is the most remarkable and emblematic example of the Russian initiatives to foster innovation and put Russia on the global “technology map”.•  The strategic goal of the Skolkovo Innovation Centre is to concentrate international intellectual capital, thereby stimulating the development of break-through projects and technologies. To help Russian innovators liaise with international VCs, Skolkovo has also opened offices in UK and in the Silicon Valley.•  Mainly fund by the Russian government, Skolkovo gathers innovation clusters, a technopark, a university and a city- laboratory, near Moscow. The innovation centre cooperates with a number of foreign tech giants, including Cisco, Ericsson, Nokia. Microsoft and SAP are launching R&D centres in Skolkovo.•  The innovation clusters cover the following fields : •  Information technologies •  Energy Efficient technologies •  Nuclear technologies •  Biomedical technologies •  Space technologies and communication•  At the moment, the Skolkovo Foundation already supports an estimated 350 Russian innovation companies, with 220 of those coming from 30 different regions in Russia. Plans are to increase the number of residents to 500 companies this year.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 57
  58. 58. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  An overview of the Russian innovative markets 2.  A strong network of incubators supporting new initiatives 3.  The Russian boiling innovative ecosystem: Startups 4.  Some barriers to keep in mind••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 58
  59. 59. •••Already some extremely innovative companies arecoming out of this ecosystem………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A selection of some highly innovative start-ups “made in Russia” that offer a disruptive value proposition, and testify of the dynamism of Russian entrepreneurs.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 59
  60. 60. •••Yota………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Yota (4G internet) is the first Russian high-speed wireless network based on Mobile WiMAX. •  Those actors have entered the telecom market by providing access only, differentiating with disruptive distribution models. •  Yota operates in Russia, Belarus and Nicaragua. Yota offers fixed, nomadic, and fully mobile wireless broadband Internet access, through dedicated mobile devices. Yota also offes to stream movies, TV programs, and online music in its mobile services catalogue. It focuses on high density urban areas.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 60
  61. 61. •••Displair………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... DisplAir image technology offers a breakthrough in static and animated 2D and 3D image display with far reaching implications in currently available image and screen technologies. •  Displair’s interface can be seen, heard, smelled and touched in a fully interactive 2D or 3D experience. •  The device shows potential for use in advertising, events, gaming, education, medicine the mobile and the consumer electronics industry. •  A startup from Astrakhan, Southern According to Mashable, DisplAir’s air screen Russia, Displair won numerous technology has made the screenless interactive innovation contests. It has become user interface magic seen with Tom Cruise in a resident of both Skolkovo and Minority Report a working reality. Kazan’s IT Park••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 61
  62. 62. •••ResumUP………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  ResumUP is a service for personal data visualization aimed to set a new standard in career management, online and social recruiting. •  Basically, it gathers your data from multiple sources (LinkedIn and Facebook Connect so far) and transform it into a clear visualization. •  Then with a special algorithm, it can rank your profile and match it to job offers. •  ResumUP is expected to launch as a recruiting service but could expand its services as a plugin to other websites.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 62
  63. 63. •••Good Roads………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Goodroads is a mobile mapping service that collects data about road surface quality. The system is paired with an iPhone application which gathers data and runs an algorithm that evaluates road conditions. The project was launched in 2011 and won the Opera Software Startups Award. The site was created by a team of students at the St Petersburg State Polytechnical University, helped by the QD incubator.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 63
  64. 64. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  An overview of the Russian innovative markets 2.  A strong network of incubators supporting new initiatives 3.  The Russian boiling innovative ecosystem: Startups 4.  Some barriers to keep in mind••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 64
  65. 65. •••The Russian Business “Folklore” : myth or reality ?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Elvira Nabiullina, Russias minister of economic development, left, and Pascal Lamy of the W.T.O at a ceremony in Geneva, on December 6th 2011. WTO membership is expected to shine light on the regulations and corruption that dog the Russian economy.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 65
  66. 66. •••Business in Russia still faces many challenges………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Foreign investors and business developers are often prejudiced by the historical barriers that are still attached to the common image of the Russian economy : •  “Rules of law that fail to match countries such as the U.S. and Western Europe”; •  Bureaucracies are confusing and cumbersome; •  Corruption is still a common practice; •  Powerful oligarchs dominate key industries; •  Few Russian people actually speak English; •  And secrecy in R&D is the norm…” Even if those challenges are still somewhat a reality, it’s yet possible and attractive to do business in Russia. Thanks to public and private initiatives to align with Western standards and enable Russia to attract foreign investors and develop international partnerships, those barriers have been substantially lessened.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 66
  67. 67. •••Legal Framework………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The Russian legal framework is undergoing severe and major improvements. But Russia also exhibits a significant implementation gap, meaning that many laws on the books are poorly enforced. Sources: The Global Integrity Report 2010••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 67
  68. 68. •••Intellectual property………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Since the dissolution of the Soviet Union, the Russian Federation has sought to address important issues surrounding intellectual property and its protection. In a number of areas these efforts have led to greater recognition of intellectual property rights and now provide for a greater degree of protection. •  Although the level of IP protection in Russia does not yet match the sophistication of most European jurisdictions, fundamental IP rights are recognized in Russia. A substantial basic regulatory framework exists within which companies may attain protection of their intellectual property assets. The case of pirate softwares Pirated software accounted for 65% of the volume of all software units installed on PCs in Russia for the year — down 2% from 2009 but nevertheless representing a commercial value of approximately $3 billion. A survey conducted by BSA as part of its study of piracy levels in Russia indicates that the majority of Russian respondents understand the benefits of licensed software, including the factors of reliability (86 percent) and access to technical support (69 percent). However, more than half of Russian respondents do not have a clear understanding of what constitutes legal and illegal use of software. Sources: Business Software Alliance (BSA) in its 2010 report on global piracy.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 68
  69. 69. •••Russia’s Underground e-market………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Russian social networks host the biggest illegal media library in the world. Experts estimate that Majors are losing up to 10 million dollars per day on that market. The website was sentenced to fines at the beginning of 2012 for copyright infringement. Informal •  Vkontakte groups enable illegal Commercial Vkontakte groups trades and e-commerce. 150 informal groups have more than 100,000 Dec 2010 Nov 2011 members on the website. Mobile devices 170000 256000 •  Oborot.ru, Russia’s leading online resource and event organizer for e- Fashion 105000 170000 commerce, announced in October 2011 Watches 102000 150000 the creation of the Electronic Commerce Association, which aims “to facilitate the development of online Childrens goods 80000 16000 retail businesses and define the Cosmetics 70000 105000 principles of civilized business.” Services 55000 83000 Jewelry 35000 74000 Sources:Les echos, 2012 e-commerce report by EWDN.COM, thecmuwebsite••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 69
  70. 70. •••Payments are still an issue………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  While the Russian economy is still dominated by cash, electronic payments are on the rise; but due to a lack of standardization, Russia may appear as a payment jungle. •  Russian online businesses face a lack of user trust. Cash-on-delivery is the rule in e-commerce as far as physical goods as concerned. •  A Russian invention, cash payment terminals (e.g. Qiwi) are widely used, essentially for services or virtual goods. •  The e-currency market has been so far dominated by domestic players (Yandex.Money, WebMoney), but PayPal announced it will come to Russia in 2012. •  Mobile payment offers have developed to a considerable exent over the last few years, with commission fees now suitable for all types of goods and services. •  No universal recurring payment solution has been available so far, making impossible the localization of some business models in Russia. Sources: EWDN.com••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 70
  71. 71. •••Corruption still dogs the Russian economy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 147th 25th 24th 75th 73rd••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 71
  72. 72. •••Table of contents………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1.  The Russian Innovation Model 2.  A promising economy 3.  Developing tomorrow’s potential 4.  The Russian Tech Recipes 5.  Summary••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 72
  73. 73. ••• Caviar, the luxurious Russian Specialty………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••The Russian Tech Recipes••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  74. 74. •••What is specific about Russia?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia has a strong scientific culture. Russia is the largest country in the world: with very diverse density of population… and has still to complete the equipment of its low density areas. Russia is facing a social and technology gap inherited from more than half a century of communism. Russia is well-known for its extremely tough weather.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 74
  75. 75. •••Lots of constraints means a lot of creativity………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A sense of emergency in Brilliant mathematicians bridging the technology gap Grigori Perelman, the mathematician Constraints and speed lead to technological who solved the Poincaré Conjecture. breakthroughs such as Displair. New ways to reachIntense indoor usages Health issues underdeveloped areasRussians digging a passage to their Alcoholism is still a major issue in A railroad near Baikal Lake.home after a snow storm. Russia, reducing male life expectancy.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 75
  76. 76. •••Brilliant mathematicians create an expertise in algorithms………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The crafting of high precision algorithm is one of the most mathematical part of IT Services. In Russia, the training of top-notch mathematicians in specialized schools has permitted the emergence of a field of expertise in algorithmic. For example: Yandex’s search algorithm is said to be better than Google’s. Why ? Due to the specificities of the Russian language (strong inflectivity of the language), they had to devise a way to understand the meaning of a sentence by splitting the assembled words and then read each one of them. Results ? Even though this technology is not required in Western languages, it has proved to be more efficient on research. Something Google lacks in its Russian search.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 76
  77. 77. •••Brilliant mathematicians know how to crack the code…and protect it!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The expertise developed by Russian mathematicians in algorithmic is not only used in data analysis, it has been used for a long time in cryptology and hacking. Russian hackers are world-known for their creativity and expertise. And when it comes to data security, who is the most relevant expert if not the person who knows how to hack into your system? Even some cryptographic technics are named after Russia: Russian copulation, for example, is a method of rearranging plaintext before encryption. It is now a business in Russia: groups of hackers are paid to test the security of IT infrastructures. Examples of Russian cryptography and hacking expertise: Sources: Friedrich Ludwig Bauer, Decrypted Secrets••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 77
  78. 78. •••Crypto AG is a Swiss-based company, but Russian-based technology………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Crypto Telecommunication Security is «the preferred top-security partner for civilian and military authorities worldwide ». •  Its business office are located in Switzerland, but its technical teams are based in Russia, tapping into one the best security experts pools in the world. •  They conceive and commercialize top-security communication solutions. •  They are about to launch a new product: Nume. It will allow mass market to benefit from encryption-based technology to secure their personal lines. •  Nume is certified on multiple Defense standards across the globe (China, South America, Indonesia, India, Middle-East,…). Sources: corporate website••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 78
  79. 79. •••A company specialized in hackproofing: StopTheHacker………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  StopTheHacker’s proprietary technology helps solve web-scale security problems involving malware on websites, hacker attacks and other types of online abuse. •  It uses machine learning (ML) and artificial intelligence (AI) techniques, which are monetized on a SaaS model. •  StopTheHacker has just received a $1.1 million initial funding from a group of Russian investors but also Brian NeSmith (CEO of Blue Coat Systems). Sources: EWDN.com••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 79
  80. 80. •••Telecom sector proves Russian ability to adapt toimportant constraints………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Even with the high demand of Russian population for telecommunication infrastructure, telecom companies were facing two main issues in their expansion: •  Low solvability of the majority of the population •  High cost of implementation due to •  Ancient buildings •  Foreign and isolated Russian backcountry •  Russia now seems to have tackled these issues and numbers of landlines, internet users and mobile users are skyrocketing. Examples:••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 80
  81. 81. •••Inango devised a new way to cut implementation costs………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  Inango offers complete solutions for service providers looking to connect entire communities to the Internet. •  Inango solutions are targeted at populations living in higher density areas (high-rise apartment buildings) and where sensitivity to cost is high. •  They connect to a high-speed backbone at a local point of presence (typically based on optical fiber) and provide ways of connecting to each individual house- holder. •  They use a simple yet efficient technology: they transmit and receive data over existing coaxial cables.••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 81
  82. 82. •••Vimpelcom’s rise shows the effiency of Russianinfrastructure development strategy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  In 2001, their strategy was to expand Vimpelcom’s infrastructure in all the regions of Russia. They quickly became one of the largest carrier in Russia in terms of subscriber base. They eventually used this experience to expand to emerging markets. Russia Vietnam, Cambodia, Ukraine, Kazakhstan, Laos, Algeria, Uzbekistan, Tajikistan, Bangladesh, Pakistan, Armenia, Georgia, Burundi, Zimbabwe, Kyrgyzstan Namibia, Central African Republic Example of a successful expansion in Cambodia: May 2009: Launch of commercial operations (9th entrant) December 2010: 80% of total population covered 650k mobile subscribers (3rd largest operator) Sources: 2010 Annual Report••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 82
  83. 83. •••The Health sector is proving Russia’s ability to catch up………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... •  The Russian Health sector has been facing many issues: •  A low male life expectancy •  Under utilization of the primary health care system by adult males •  A low quality of pre-natal and natal care •  High abortion rates, most of which performed outside health care facilities •  The Russian government has now seized the issue with multiple plans to modernize the sector. •  Part of which is a 1 billion-dollar bill to digitalize the public health-service. •  And a partnership with the U.S. on health issues •  Many private initiatives have emerged from these opportunities. Examples: InErPharm••• faberNovel 2012 Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 83
  84. 84. •••Maxygen Mobile DNA Tests……  `tagg@
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