Don�t want to have too many days between blogs � it backs up the ideas. Today�s is the big one; is it possible to build a business investing in Russian tech? It is after all what I do for a living and gets me out of bed with more or less a spring in my step every day.
The facts (or as many as you can get in the Irish bar at Moscow Airport waiting for a delayed flight); there are today no successful examples of Russian built technologies that have become $1bn companies. There are a number of (mostly) ex-Russian-entrepreneurs who have built great companies � Sergei Brin (Google,) the guys at Parametric Technologies, Paragraph (Stepan Pachikov,) despite the fact that Transcriber drives me insane daily. Then a number of more or less successful companies of which the latest is Optiva, founded by Pavel Lazarev. Should the fact that it took him 10 years to get to Series D be really frightening?
The facts continued; the number of Russian tech companies that cause the hairs on the back of your neck to really stand up is, well, one every blue moon. Not a great hit rate. Maybe the tech is great, but investable tech cannot exist in isolation from its market. It would be fair to say that it�s pretty difficult to build a tech business if you don�t really comprehend the market you are addressing.
One of my favourite bizarre investment opportunities is a holographic storage company in Akademgorodok in Novosibirsk � go east from Moscow and keep going. Two strange Professors doing some of the coolest research but with little if any contact to Moscow, let alone to the rest of the world. How are we going to get them to build products? Other, that is, from paying them a living wage and taking the IP and running to the Valley.
So maybe we could do 3 deals a year � can we make long term money on that? It is clear that there is some very cool technology however, getting it to be accepted is unbelievably difficult � to describe the tech world as parochial would be as correct as describing the UK as a class ridden society.
With only a few investors actively targeting Russian tech the opportunities for spreading the word are few and far between.
Are we doing the wrong thing?
12 March 2003
04 March 2003
I suspect that it is the way with the rest of the world but it does not make it any more right; demand for reasonably priced voice and, particularly, data communications is growing rapidly. However, the market is being held back by the incumbents who are more interested in providing communications to high end corporate customers than tracking down the dispersed SME market, but still insist on making it difficult for others to enter the market. Note that in Moscow / Russia incumbent has a slightly different connotation to the rest of the world - incumbents may be CLEC's but if they have the right level of political support they very definitley display the same qualities of boneheaded denial of market opportunities that their bretheren in the rest of the world have.
Its not as though the basic infrastructure does not exist. In Moscow, which is not like the rest of Russia, the city level backbone exists; its the copper over the last mile (500m?) that is lacking. Thus a potentially lucrative market for broadband wireless serving SME's, consumer outlets and high end retail (believe me there is enough of it.) An example; the Sistema Telecom controlled MGTS (Moscow City Telecom Network - THE ILEC) recently raised carriage prices 9x for Golden Telecom, Moscow's leading business CLEC - economic rape - especially as MGTS would never be able to offer even the paltry service levels of Golden Telecom.
There is no shortage of mom & pops playing local games; not big enough to draw the attention of the big boys, but also not big enough to generate inetrest from the financial community. Strikes me that one of the easiest investment cases to make in Moscow today is aggregating all these mom & pop's to create a really viable ISP / WISP.
Whilst Russia may have one of the most theoretically liberal telecom markets in Europe, the reality is that the incumbents are determined to repeat the mistakes of the west, only without the debt.
Its not as though the basic infrastructure does not exist. In Moscow, which is not like the rest of Russia, the city level backbone exists; its the copper over the last mile (500m?) that is lacking. Thus a potentially lucrative market for broadband wireless serving SME's, consumer outlets and high end retail (believe me there is enough of it.) An example; the Sistema Telecom controlled MGTS (Moscow City Telecom Network - THE ILEC) recently raised carriage prices 9x for Golden Telecom, Moscow's leading business CLEC - economic rape - especially as MGTS would never be able to offer even the paltry service levels of Golden Telecom.
There is no shortage of mom & pops playing local games; not big enough to draw the attention of the big boys, but also not big enough to generate inetrest from the financial community. Strikes me that one of the easiest investment cases to make in Moscow today is aggregating all these mom & pop's to create a really viable ISP / WISP.
Whilst Russia may have one of the most theoretically liberal telecom markets in Europe, the reality is that the incumbents are determined to repeat the mistakes of the west, only without the debt.
03 March 2003
First blog on Ruminations on Russian Tech. Not that it is limited to Russian tech, more the thoughts that strike me as we wade our way through the myriad of investment opportunities available. We, Mint Capital, are investing in tech and media opportunities either in Russia or made available and fundable because the quality of Russian programming provides vastly superior price / performance or finally, but unfortunately, less frequently due to brilliant Russian inventions that are available to the rest of the world.
Just to prove that this is really more of tech thoughts with a Russian flavour first thought relates to the closure of Red Herring. Can't remember when I first signed up, and I am not sure how relevant that is, however the last 2 editions sit only partially read in my briefcase along with a pile of other partially interesting material. That is relevant. It was expressed well by Glenn Fleischmann on his 802.11b Yahoo Group - I shamelessly quote "The author now provides an example of why listening to the company you're interviewing too closely causes you to drink the blue zombie soup and repeat their tropes.". Some of the thoughts were insightful, the editorial frequently was. The principal pieces were too often, especially recently the usual repeats of the main line views being espoused.
As an example; surely there could have been few magazines closer to the VC community than RH. Why then mindlessly repeat the quarter-by-quarter performance type analysis of the VC industry repeated in the mainstream press? Surely it was incumbent on RH to point out the crap investments that have been made by all of us and then go on to point out that in mainstream VC investing, early stage can take and usually take 5+ years to come to fruition. Portfolios valuations will generally look lousy during the first couple of years and then, assuming you did not invest in 1999, pick up.
The same basic lack of analysis plagued the recent piece on Cometa; suggesting that Boingo builds out infrastruture as opposed to aggregrating what is there. Its rubbish and we were expected to pay for it. The same is true for far too much that poses as tech journalism - it just reports without insight, or far too frequently, knowledge. Celebrity bloggers may be nice but they generally don't say anything.
The last shot at journalists is fired at Dan Gillmour; petty cheap shots may be amusing but as you are an employee not an at risk owner serve to make you look small not clever.
Just to prove that this is really more of tech thoughts with a Russian flavour first thought relates to the closure of Red Herring. Can't remember when I first signed up, and I am not sure how relevant that is, however the last 2 editions sit only partially read in my briefcase along with a pile of other partially interesting material. That is relevant. It was expressed well by Glenn Fleischmann on his 802.11b Yahoo Group - I shamelessly quote "The author now provides an example of why listening to the company you're interviewing too closely causes you to drink the blue zombie soup and repeat their tropes.". Some of the thoughts were insightful, the editorial frequently was. The principal pieces were too often, especially recently the usual repeats of the main line views being espoused.
As an example; surely there could have been few magazines closer to the VC community than RH. Why then mindlessly repeat the quarter-by-quarter performance type analysis of the VC industry repeated in the mainstream press? Surely it was incumbent on RH to point out the crap investments that have been made by all of us and then go on to point out that in mainstream VC investing, early stage can take and usually take 5+ years to come to fruition. Portfolios valuations will generally look lousy during the first couple of years and then, assuming you did not invest in 1999, pick up.
The same basic lack of analysis plagued the recent piece on Cometa; suggesting that Boingo builds out infrastruture as opposed to aggregrating what is there. Its rubbish and we were expected to pay for it. The same is true for far too much that poses as tech journalism - it just reports without insight, or far too frequently, knowledge. Celebrity bloggers may be nice but they generally don't say anything.
The last shot at journalists is fired at Dan Gillmour; petty cheap shots may be amusing but as you are an employee not an at risk owner serve to make you look small not clever.
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12 March 2003
Don�t want to have too many days between blogs � it backs up the ideas. Today�s is the big one; is it possible to build a business investing in Russian tech? It is after all what I do for a living and gets me out of bed with more or less a spring in my step every day.
The facts (or as many as you can get in the Irish bar at Moscow Airport waiting for a delayed flight); there are today no successful examples of Russian built technologies that have become $1bn companies. There are a number of (mostly) ex-Russian-entrepreneurs who have built great companies � Sergei Brin (Google,) the guys at Parametric Technologies, Paragraph (Stepan Pachikov,) despite the fact that Transcriber drives me insane daily. Then a number of more or less successful companies of which the latest is Optiva, founded by Pavel Lazarev. Should the fact that it took him 10 years to get to Series D be really frightening?
The facts continued; the number of Russian tech companies that cause the hairs on the back of your neck to really stand up is, well, one every blue moon. Not a great hit rate. Maybe the tech is great, but investable tech cannot exist in isolation from its market. It would be fair to say that it�s pretty difficult to build a tech business if you don�t really comprehend the market you are addressing.
One of my favourite bizarre investment opportunities is a holographic storage company in Akademgorodok in Novosibirsk � go east from Moscow and keep going. Two strange Professors doing some of the coolest research but with little if any contact to Moscow, let alone to the rest of the world. How are we going to get them to build products? Other, that is, from paying them a living wage and taking the IP and running to the Valley.
So maybe we could do 3 deals a year � can we make long term money on that? It is clear that there is some very cool technology however, getting it to be accepted is unbelievably difficult � to describe the tech world as parochial would be as correct as describing the UK as a class ridden society.
With only a few investors actively targeting Russian tech the opportunities for spreading the word are few and far between.
Are we doing the wrong thing?
04 March 2003
I suspect that it is the way with the rest of the world but it does not make it any more right; demand for reasonably priced voice and, particularly, data communications is growing rapidly. However, the market is being held back by the incumbents who are more interested in providing communications to high end corporate customers than tracking down the dispersed SME market, but still insist on making it difficult for others to enter the market. Note that in Moscow / Russia incumbent has a slightly different connotation to the rest of the world - incumbents may be CLEC's but if they have the right level of political support they very definitley display the same qualities of boneheaded denial of market opportunities that their bretheren in the rest of the world have.
Its not as though the basic infrastructure does not exist. In Moscow, which is not like the rest of Russia, the city level backbone exists; its the copper over the last mile (500m?) that is lacking. Thus a potentially lucrative market for broadband wireless serving SME's, consumer outlets and high end retail (believe me there is enough of it.) An example; the Sistema Telecom controlled MGTS (Moscow City Telecom Network - THE ILEC) recently raised carriage prices 9x for Golden Telecom, Moscow's leading business CLEC - economic rape - especially as MGTS would never be able to offer even the paltry service levels of Golden Telecom.
There is no shortage of mom & pops playing local games; not big enough to draw the attention of the big boys, but also not big enough to generate inetrest from the financial community. Strikes me that one of the easiest investment cases to make in Moscow today is aggregating all these mom & pop's to create a really viable ISP / WISP.
Whilst Russia may have one of the most theoretically liberal telecom markets in Europe, the reality is that the incumbents are determined to repeat the mistakes of the west, only without the debt.
03 March 2003
First blog on Ruminations on Russian Tech. Not that it is limited to Russian tech, more the thoughts that strike me as we wade our way through the myriad of investment opportunities available. We, Mint Capital, are investing in tech and media opportunities either in Russia or made available and fundable because the quality of Russian programming provides vastly superior price / performance or finally, but unfortunately, less frequently due to brilliant Russian inventions that are available to the rest of the world.
Just to prove that this is really more of tech thoughts with a Russian flavour first thought relates to the closure of Red Herring. Can't remember when I first signed up, and I am not sure how relevant that is, however the last 2 editions sit only partially read in my briefcase along with a pile of other partially interesting material. That is relevant. It was expressed well by Glenn Fleischmann on his 802.11b Yahoo Group - I shamelessly quote "The author now provides an example of why listening to the company you're interviewing too closely causes you to drink the blue zombie soup and repeat their tropes.". Some of the thoughts were insightful, the editorial frequently was. The principal pieces were too often, especially recently the usual repeats of the main line views being espoused.
As an example; surely there could have been few magazines closer to the VC community than RH. Why then mindlessly repeat the quarter-by-quarter performance type analysis of the VC industry repeated in the mainstream press? Surely it was incumbent on RH to point out the crap investments that have been made by all of us and then go on to point out that in mainstream VC investing, early stage can take and usually take 5+ years to come to fruition. Portfolios valuations will generally look lousy during the first couple of years and then, assuming you did not invest in 1999, pick up.
The same basic lack of analysis plagued the recent piece on Cometa; suggesting that Boingo builds out infrastruture as opposed to aggregrating what is there. Its rubbish and we were expected to pay for it. The same is true for far too much that poses as tech journalism - it just reports without insight, or far too frequently, knowledge. Celebrity bloggers may be nice but they generally don't say anything.
The last shot at journalists is fired at Dan Gillmour; petty cheap shots may be amusing but as you are an employee not an at risk owner serve to make you look small not clever.
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