Expert: The Cost of Creating Startups in Russia Has Dropped Tenfold
“The cost of creating a technology startup in Russia from scratch has decreased on average almost tenfold over the past ten years due to the emergence of contract infrastructure for engineering and production of the first batches of startup products, co-founder of the TechnoSpark Group of Companies (part of the RUSNANO’s FIEP investment network),” Denis Kovalevich told TASS on Friday.
“According to our estimates, while ten years ago it cost RUB 1 to 3 bln to build any material startup, for example, in robotics or medical instrumentation, today it costs almost ten times less to bring a company to the same state of development. This is what can be done through the formation of such a contract infrastructure. Startups don’t have to invest in their own production and get distracted by non-basic engineering activities,” he said.
According to him, in the seven years of its existence TechnoSpark “managed to form campus in a clean field, where as of that day there were more than 100 companies that had appeared from scratch”.
“TechnoSpark has established a tight contract infrastructure for engineering and manufacturing the first batches of the startup products, not in the form of collective use centers, which require constant feeding by various subsidies and grants, but in the form of operationally recouped contract companies,” Kovalevich noted.
The Challenge of the Future for Startups
According to the expert, the main challenge for the next ten years for infrastructure companies is the need for a multiple increase in labor productivity simultaneously with an increase in their production scale.
“This increase in productivity will allow them to enter the most complex industrial segments and learn how to create sophisticated technological products in a very short period of time,” he said.
Kovalevich sees one option for the development of new technologies of the future in the launch of the so-called startup studios.
“On the one hand, Startup studios are replacing the early stages of investment—the finances from family and friends, investments from business angels and incubators. However, the most important thing is that, instead of support, they create companies themselves. A startup studio, in terms of its production capacity, is capable of creating 100 startups in 10 years. In my opinion, a new generation of studios can be created based on courageous universities and corporations,” the expert said.
According to Kovalevich, to provide startups with personnel it is necessary to actively develop technology “to diagnose the entrepreneurial competencies of people in Russia”.
“We need to diagnose half a mln people and train at least 10,000 new technology entrepreneurs. Then, new startups would be staffed. Of course, we need a new quality of management in Russian companies, so that they learn to buy startups in series to enter new markets for themselves,” he said.
According to the expert, another way to develop startups in Russia is to create advanced experimental production facilities around which clusters of dozens and hundreds of new startups would be formed.
“For example, startups that will make patches with embedded electronics or curved screens for smart speakers are already starting to appear around our new flexible electronics factory [at TechnoSpark]. Some of these startups are built by us, and some—by other tech entrepreneurs. Of course, the fundamental issue for this kind of experimental production is their scaling into powerful plants. This cannot be done without investment from large Russian corporations interested in expanding into global markets,” Kovalevich explained.