There has been a history of mistrust between Russia and the West for many years, and 2017 has been no exception. While I continue to be dumbfounded by some of the things each side believes about each other, one should not be surprised when so much of what is perceived comes from social media and hearsay. But entrepreneurship is a level playing field and so as someone who has been visiting Russia regularly since 1990, I wanted to report on our current work and partners and my recent visit to speak at the Open Innovations Forum at Skolkovo.
Despite rumors to the contrary, entrepreneurship and innovation are alive in Russia in 2017. I took the time recently to look closely at what is happening at the Skolkovo research park and just spoke at the Open Innovations Forum there. Skolkovo offers an impressive start to scale infrastructure for entrepreneurs and innovators – from a Startup Village with other actors from the ecosystem to various research centers for developing and scaling innovation within difference industry verticals.
At the Open Innovations Forum there were deep discussions around new business models in almost every industry. I joined experts and entrepreneurs from law to space, and witnessed various models for applying artificial intelligence to the energy, health care, education and transportation industries. There were participants from all over the world – from Russians to Americans and Israelis to Europeans – all sharing solutions.
The event attracted entrepreneurs such as Jack Ma from Alibaba, my friend Mark Weinberger from EY, Charles Adler, the Kickstarter co-founder, Ziv Ariram of Mobileye fame (which just sold for $15 billion USD) and is now launching OrCam, as well as Marvin Liao from 500 Startups.
And the work at Open Innovations had the attention of many of Russia’s leadership, and some of whom I met while there, including Dimitri Medvedev, and of course, the leadership team from Skolkovo that included Victor Vekselberg. Also present were entrepreneurship evangelists from other countries, the Prime Minister of Luxenbourg and Jacqueline Poh from GovTech Singapore.
GEN does not have an office in Russia, but supports the work of our longtime partner, the Center for Entrepreneurship (CFE). CFE was with us to launch GEW 10 years ago and continues as the Global Entrepreneurship Week Russia (GEW) Host for Russia. I serve on the board of directors and CFE was instrumental in convincing the Moscow city government to host our Global Entrepreneurship Congress in Moscow in 2014, which welcomed more than 7,000 participants from 163 countries.
Consistent with elsewhere, the focus of our ecosystem building work in Russia has been around cities and local ecosystems. Russia has launched some very high-profile national entrepreneurship initiatives, including the overall work of the Skolkovo Foundation and major events like the GEC and Open Innovations Forum. However, a problem persists on how to develop vibrant entrepreneurial ecosystems in cities outside Moscow and St. Petersburg.
Smaller Russian cities raise and cultivate young entrepreneurs, only to lose them to Moscow, Berlin, and San Francisco once they scale. One of the questions ecosystem builders have been struggling with is how to create an environment that incubates and attracts entrepreneurs and then keeps them in that city.
Successful entrepreneurial ecosystems of course take years to develop. For example, Boulder, Colorado’s thriving startup culture has taken closer to 30 years to mature. It is now approaching the same period of time since the fall of communism and Russian cities still lack traction in developing their own ecosystems. Given this new urgency to accelerate efforts, CFE is implementing a comprehensive plan that identifies the most promising metropolitan entrepreneurial ecosystems and then provides ecosystem builders within these cities new approaches, programming and best practices so that they can realize sustainable, long-term change in their communities through innovation and entrepreneurship. This process includes:
- Identifying key ecosystem builders, whether they are entrepreneurs, investors, accelerator/incubator managers, development agencies, university centers, community builders etc.;
- Providing these stakeholders with best-in-class programming, conducted locally, that engage multiple stakeholders and encourages them to break out of their silos; and
- Measuring outcomes and communicating success, on new company formation, revenue and job growth, new networks formed, and the existence of local role models for policymakers, media, unengaged stakeholders, and the next generation of entrepreneurs.
We are now working in 10 Russian cities, including: Kirov, Krasnodar, Moscow, Nizhny Novgorod, Rostov-on-Don, Tomsk, St. Petersburg, Tyumen, Vladimir and Voronezh. On the ground, CFE offers ecosystem builders a growing number of programs that they implement locally in order to ensure sustainability, including Startup Huddle that builds local community and helps nascent entrepreneurs crowdsource solutions to issues they have in growing their businesses; and of course Global Entrepreneurship Week, where local stakeholders organize and attend events in their city to celebrate entrepreneurship.
Entrepreneurs and others are also invited to attend the annual Global Entrepreneurship Congress and other events such as the G20 Young Entrepreneurship Alliance Summit (CFE is the Russian member of the G20 YEA), where participants can network with peers from around the world. There is already a strong delegation forming from Russia to the GEC 2018 in Istanbul.
But one of the most impactful programs offered to local partners is a ScaleUp accelerator program. ScaleUp was inspired by Dr. Daniel Isenberg and Babson College’s Scalerator programs in Milwaukee and North East Ohio. ScaleUp in Russia is a nine-month acceleration program that immerses entrepreneurs who have been in business between two to five years in trainings and networking events, and then matches them with a mentor to facilitate company growth – in turn building a healthier metro-based entrepreneurial ecosystem.
As with Startup Huddle and GEW, the local CFE teams have developed ScaleUp with sustainability in mind. It is organized by city-based stakeholder teams, and all trainers, mentors and guest speakers are local entrepreneurs and experts. We have finished our first ScaleUp cohort in five cities and the early results are promising. Participants created 110 new jobs with more than 80 percent saw revenue growth, including 57 percent with growth of more than 25 percent. The second cohort of ScaleUp is finishing up this month in eight cities, with the outcomes expected in January 2018. A couple of cities have already launched the third cohort this fall that will end next May.
One thing I like about the approach is that we can choose best-in-class programming and then slowly pass the leadership to the local level. CFE encourages city teams to collect participation fees and attract sponsors to programming and catalyzes the process. Some of the strongest teams are now working to implement programming in nearby cities in their regions. With Russia’s large size, leveraging local teams to help with expansion will allow more cities to benefit from CFE and GEN programming, while helping to promote stronger local entrepreneurial ecosystems and communities in more regions.
GEW Russia has been of particular help in developing this culture. In the early days of GEW in Russia, we relied on national organizations like Junior Achievement who organized hundreds of events in local communities to scale the celebration. Now we have the added dimension, where cities lead from the bottom up on their GEW celebration – laying the groundwork for sustainable year-round community development.
St. Petersburg provides an excellent example of this. For several years now, the St. Petersburg affiliate of OPORA Russia, one of the main Russian business associations, has conducted GEW events. This year they are organizing more than 100 events at Lenexpo, the city’s main exhibition hall, and they have dozens of supporters – from government to private sector organizations. Alexander Kalinin, OPORA’s president, along with representatives of the St. Petersburg government, launched the weeklong GEW activities. Victor Sedov, CFE’s president, read a greeting that I drafted to the participants, and he extended special appreciation to OPORA’s local head, Dmitri Ivanov, for his leadership in organizing the week. A delegation of Indian entrepreneurs joined OPORA at the launch, and they are dedicating Friday’s GEW events to celebrate and support women entrepreneurs.
As we know, there are many ways to build a healthy local entrepreneurial ecosystem. When some localities develop organically, others are curious and seek to make it happen in their city. It will be interesting to see if the CFE approach in Russia to bring together local ecosystem builders, provide them with multiple programs that encourage stakeholder engagement, all the while measuring outcomes and communicating success will become a template for other cities to follow in building their own local entrepreneurial ecosystem.