Why Building A Startup In Russia Is Less Risky Than In The Valley(arcticstartup.com)
arcticstartup.com
Why Building A Startup In Russia Is Less Risky Than In The Valley
http://www.arcticstartup.com/2011/04/27/why-building-a-startup-in-russia-is-less-risky-than-in-the-valley
5 comments
Even assuming that you won't get murdered, there's still plain old corruption: http://news.ycombinator.com/item?id=689205
Yes, as MTW mentioned above as well. It might be less risky up to the point that your business is actually successful. Then apparently, it is significantly more risky.
Not to mention the widespread, ongoing corruption of the local authorities, government employees, and infrastructure managers. Imagine having to constantly pay bribes to keep your Internet connection available, the lights on, and your building open. These are all significant issues in Russia, per my Russian colleague who has now emigrated to the US recently.
I'm with you, I've read that article (and some more of a similar flavour) and I can't believe anyone would recommend starting a business in Russia.
Most importantly, there is less competition and markets are more open for conquest. 'Russia has many markets that are not dominated by anyone while in other countries similar markets have companies that are already worth billions',
If that's the "most important reason," I think I'd rather go to Brazil, Africa, the Middle East, or virtually anywhere else that isn't going to lock me away for trivial things. (Not that the aforementioned countries don't have problems)
If that's the "most important reason," I think I'd rather go to Brazil, Africa, the Middle East, or virtually anywhere else that isn't going to lock me away for trivial things. (Not that the aforementioned countries don't have problems)
I don't think either the rule of law or the corruption situation are significantly better in Africa or the Middle East than in Russia.
As a Russian I am very happy to see what Serge is doing. However, knowing Russia from inside I presume that "building a startup in Russia" in fact means "having an R&D office" not "registering as a Russian firm and planning to grow a to a big corporation". It is not impossible but you have to have some kind of gut and connections to navigate corrupted government on all levels expecting you to bribe your way through, racketeering (attempts) by organized crime, and shady tax practices. For example, in Russia it is quite common to pay part of the salary bypassing the books (so called "gray salary") and as such you are at competitive disadvantage if you want to pay market salary _and_ pay proper payroll taxes.
The market in terms of consumer consumption is also _very much_ different from US one. There aren't many profitable web 2.0 or mobile start-ups here targeted for local market, even copying US ones don't usually work.
The only profitable model I've seen these days are Groupon-clones and i believe they really work just in Moscow & Saint-Petersburg.
My company is also working on the similar services in Russia, but we make products for international brands like Sabre & TUI, and while I like the fact that such start-ups do appear here, I'm not sure it's "less risky".
The only profitable model I've seen these days are Groupon-clones and i believe they really work just in Moscow & Saint-Petersburg.
My company is also working on the similar services in Russia, but we make products for international brands like Sabre & TUI, and while I like the fact that such start-ups do appear here, I'm not sure it's "less risky".
1. Less local competition in adopting Western startups to Russia 2. Easily recruited qualified developers
One point not mentioned in the article, this kind of startup specifically favors someone of Russian origin who has lived and breathed Western startup culture for a few years.
Someone local might have completely different experience, and so would a Westerner without any knowledge of Russia.
Finally, article completely ignores the big white elephant in the room: Russia's rather tenuous grasp on rule of law.
Since the original interview was in forbes.ru it is only fitting to mention http://en.wikipedia.org/wiki/Paul_Klebnikov
Thus, I would argue that it is not less risky to create a successful startup in Russia.