global startup platform_market research report_2012

Virtual Entrepreneurship Lab TEAM

Global Startup Platform

Market Research Report v.4

18.06.2012

“WHEN ENTREPRENEURSHIP

BECOMES A LIFESTYLE”

Market Research Report ǀ GSP Team

Copyright ©2012 GSP team. All rights reserved. Prepared by Ryzhonkov Vasily.

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Abstract ....................................................................................................... 4

Acronyms .................................................................................................... 4

Introduction ................................................................................................ 4

Objective ..................................................................................................... 5

Summary of Findings ................................................................................... 7 Problems ......................................................................................................... 7 Services ......................................................................................................... 10 Potential Customers ....................................................................................... 11 Market Conditions ......................................................................................... 11 Market Size .................................................................................................... 13

Growth Potential ........................................................................................ 13 Market Niche ................................................................................................. 14 Market Location ............................................................................................. 14 Features of the Platform ................................................................................. 15 Market Channels ........................................................................................... 15

Marketing tools which are popular in Russia Internet ................................. 15

Methodology and Types of Market Research ............................................... 16

Part 1 – Online Survey by GSP Team .......................................................... 16 Methodology .................................................................................................. 16 Results of the Online Survey.......................................................................... 19

Information about respondents ................................................................... 19 Global Startup Platform – testing hypothesis .............................................. 20 Future research and problems with Online Survey ..................................... 26

Part 2 – Analysis of International/Russian Reports on Startups and Internet Economy in Russia .................................................................................... 28

Report 1. Global Entrepreneurship Monitor Russia 2011 ............................... 28 Report 2. Entrepreneurship and small businesses in Russia: A review of empirical research. ........................................................................................ 34 Report 3. OPORA Russia. All-Russian Non-Governmental Organization of Small and Medium-Sized Business 2011 ................................................................. 35 Report 4. Yandex Report – Development of Internet in Russia 2012 ................ 39 Report 5. Internet in Russia 2012 (TNS Agency) ............................................. 43 Report 6. Russia Online: impact of Internet on Russian Economy 2011 (BCG) 45 Report 7. Russia in 2011-2021: diagnosis and trend ...................................... 51 Report 8. OPORA’S INDEX 2010-2011 (business climate report throughout Russian regions). ........................................................................................... 53 Report 9. Startup Genome Report 01 (A new framework for understanding why startups succeed) ........................................................................................... 58



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Part 3 - Research and Analysis of Related Online Surveys .......................... 60 Survey 1 – Online survey “Opinion of Russian Internet audience about career development steps (Russia)” ........................................................................... 60 Survey 2 – Online survey “Types of Ru-net users (Russia)” ............................. 61 Survey 3 – Online survey “Research on IT StartUps (Russia)” ......................... 62

Part 4 – Google KeyWord Tool and Yandex WordStat Analysis .................... 65 Methodology .................................................................................................. 65 Results .......................................................................................................... 67

Process 1 – Determination of related Search Requests and Services ............ 67 Process 2 – Determination of trends in SR .................................................. 73 Process 3 – Determination of potential markets .......................................... 76 Process 4 – Market Size Determination ....................................................... 79

About the Team ......................................................................................... 80

Version of the Document ........................................................................... 81

List of Figures ............................................................................................ 82

List of Tables ............................................................................................. 84



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Abstract

The purpose of this report is to present and analyze results of the Market Research held on in order to understand possible market value of the Startup project called “Global Startup Platform”.

Acronyms

GDP Gross Domestic Product GEM Global Entrepreneurship Monitor GSP Global Startup Platform SR Search Request

Introduction

Entrepreneurship and starting up ventures has been the main driver of innovation in all economies throughout the world and centuries. Solow-Swan Growth Model1 proved that increasing wealth of nation is impossible without innovations in the country. GDP growth is highly dependent on amount of money invested in the Innovation, Startups and R&D. Thus, an innovation is a key factor of success to the country’s prosperity. World is heterogeneous and each country has its unique combination of historical background, economic, political, cultural models, etc. There are examples of countries that prove the theory of Solow into practice, such as USA, Sweden, Germany, Canada, Australia, Singapore and others. These countries are characterized by high levels of investment in innovation, and high level of entrepreneurial activities. They sometimes also referred to as countries with economies of innovation2. However, there are countries with as much potential, but with still immature economic and political systems. BRICI countries are one of the possible examples, where the knowledge, technology, patents, etc. are present but underdeveloped3. One member of BRICIs is Russia. It is a country where there is the lack of innovations due to several reasons such as investment climate, lack of platforms for meeting of Russian entrepreneurs and global businesses, cultural differences, language barriers, lacks of communication with Western and Asian entrepreneurs, lack of international experience, etc. nowadays. 1 http://en.wikipedia.org/wiki/Neoclassical_growth_model 2 http://en.wikipedia.org/wiki/Innovation_economics 3 http://en.wikipedia.org/wiki/BRIC

http://en.wikipedia.org/wiki/Neoclassical_growth_model

http://en.wikipedia.org/wiki/Innovation_economics

http://en.wikipedia.org/wiki/BRIC



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At present Internet provides society with such tools as eCommerce, Social Media and Communities (facebook), Wikis (Wikipedia). All this tools and projects connect millions of people and organizations with different aims, diverse backgrounds and in different ways. This brought to the world many opportunities, one of them is to startup businesses using virtual communities and creating networks of entrepreneurs, mentors, investors, experts. We see tremendous opportunities presented today and still underdeveloped4 in the entrepreneurship world especially in developing and BRIC countries. Global Startup Project (GSP) is the international project which is developing by multinational team that is dedicated for creating such kind of online platform.

Objective

In this report we reveal in-depth research about what is online virtual incubator could be, what problems it should solve, services contain and market address. The report is 2 month work of 80+ pages analysis based on data from 4 online surveys, 9 reports on startups, entrepreneurship climate and internet economy in Russia and worldwide, Startup Genome Project, Analytical Tools of Search Engines (by Google and Yandex). The report was mainly prepared by Ryzhonkov Vasily. Other contributors include Vitaly Moroz, who shared results of his online survey, GSP Team. The report is the Venture Entrepreneurship Lab Team’s first step toward developing GSP project and helping entrepreneurs throughout the world starting up their businesses. The objectives of this survey are:

• to understand the needs of the market (problems, services needed); • to form customer segments; • to estimate market size; • to validate the main ideas and assumptions behind the GSP and to

test the project hypothesis; • to get new insights and ideas about possible added-value services of

GSP; • to get insights on marketing (channels, eMarketing, Social

Marketing, SEO, sites). Main project hypothesis are:

• Developing countries and emerging economies (BRIC, CIS) have lack of innovations. Test Russian market.

• Innovation and startup ecosystems in these countries are developed poorly in comparison with countries with economies of innovation. There is no sufficient amount of incubators in Russia.

4 Will be tested in the survey



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• Particularly, there is no united communication platform which is gathering entrepreneurs, mentors, venture investors, business angels and startup teams locally and internationally.

• There is lack of professional entrepreneurship networks, primarily consisting of private and specialized firms that provide services for start-up projects.

• Internet audience in Russia is quite high. Web startups are popular in Russia.

• Market needs an online platform which will provide customers with online services for startups. Test what kind of services needed.

Global Startup Platform

GSP as a "virtual business incubator" with a wide range of services for entrepreneurs, investors, mentors, teams and companies in Russia, BRIC and CIS economies. Main distinctive feature of this platform is combining social network with different tools and services for startups (such as strategy consulting, financing, online database of projects and entrepreneurs, predeveloped business ideas, tools for managing and developing a startup, etc.).



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Summary of Findings

Main results: 1. Through analyzing the results from our market research we found

that GSP is valuable project for the market. There is lack of innovations in Russian market, which is proved by many indicators. For instance, only 19% of Russians believe that enabling conditions of starting up a business are satisfactory.

2. Set of Problems and Services was revealed after analysis of Reports and Online Surveys. They were classified. This set forms services for GSP value proposition. These problems prove that innovation system and entrepreneurship climate in Russia is weak. Some of the problems couldn’t be solved through GSP Project directly, such as bureaucracy or corruption. But we could address these problems indirectly.

3. Entrepreneurship Online Market in Russia is very young. First organizations of investors or business angels appeared there only few years ago – in 2006. However, there are some projects that could be considered as competitors to our project. This Report will not cover analysis of them and we will devote to this separate work.

4. Internet audience in Russia is the number one in Europe with around 55 mln people.

5. Online Survey showed that there is need in services we proposed. However, the survey was made internationally. Now, we will test market needs locally.

6. We also identified potential market size, niche, channels and tools of the GSP in Russia.

7. Customer segments were identified in Russian market. Summary is structured as follows:

• Problems of Startups • Services of GSP • Potential Customers • Market (Size, Conditions, Channels and Tools, Niche) • Features of the GSP

Startup Problems in Russia (according to Global Entrepreneurship Monitor): 1. Bureaucracy – 1,83 2. The introduction of scientific and technical developments – 1,9. 3. Barriers to market entry – 1,97. 4. Access to financing (Virtually inaccessible to young companies to

obtain investment through public offering on the market) – 2,02. 5. Elementary and secondary education (does not sufficiently encourage

creativity of students, self-sufficiency and personal initiative, entrepreneurial skills) – 2,14.

6. Federal Programs – 2,16. 7. Social and cultural norms – 2,34. 8. Governmental policy – 2,39.

Critical factors are:

Problems



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a. duration to obtain the necessary permits and licenses – 1,44 b. sequence of state policy with respect to small firms – 1,94

9. Commercial infrastructure – 2,77. 10. High education – 2,85. 11. Physical infrastructure – 3,1. 12. Market dynamics – 3,18

Problems revealed through Online survey made by Vitaly Moroz:

1. Team selection problems • team leader qualities; • team members qualifications; • selection of team with the right motivation; • vision of the leader; • commitment of startup team members to business idea, common goals5.

2. Team organization problems

• distribution of roles in the group; • finding a compromise and control / conflicts solving; • consolidation and retention of the team; • insufficient time members spend for startup activities.6

3. Planning and organization of the work

• select the correct model of work; • planning and setting tasks; • coordination and control.

4. Financing problems

• lack of funding; • stops in funding; • lack of funds for marketing.

5. Business Model

• incorrect assessment of the risks. Teams needs a critic to land on the ground and reveal the risks7; • search for a business models may take a long time (years)8.

Startup creation Problems (according to Startup Genome Report): • Startup teams and Founders do not learn in the process (without mentors,

helpful metrics and thought leaders) • Startups don’t change ideas or hypothesis in the process. • Overinvestment. Many investors invest 2-3x more capital than

necessary in startups that haven’t reached problem solution fit yet. • Optimum team size isn’t found or reached. Team size influences time to

reach scale stage.

5 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 6 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 7 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 8 Was added to the survey by Vasily Ryzhonkov while analyzing interviews.



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• Motivation of teams and founders is undervalued. Motivation of founders driven by impact rather than experience or money.

• Overestimation the value of IP. Founders overestimate the value of IP before product market fit by 255%.

• Incorrect Market Analysis. Startups need 2-3 times longer to validate their market than most founders expect.

• Incorrect Market Analysis. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.

• Premature scaling Internet Penetration and Economy Problems Barriers (from the main to the least significant, according to BCG Report):

• Don’t have resources to develop internet site • Don’t have time to maintain internet site • Internet is not safe • There is no community of practice in the internet • Employees don’t have sufficient skills • Our clients don’t need internet site • We don’t know how internet could contribute to development of the

business • Employees don’t have access to a PC • Etc

SMEs Problems are (according to OPORA Report):

• Low availability of skilled personnel – 61% • Problems with purchasing power – 59% • Limited access to financing – 38% • Problems with infrastructure – 36% • Low availability of highly qualified management – 32% • Difficulties with implementing new technologies – 28% • High personnel costs – 23% • Problems with administrative regulations – 19% • Difficulties with changing the organizational structure of the company –

13% Main Startup problems revealed are (according to OPORA Report):

• Low availability of personnel – 43% • Overall decline in demand in the sector – 33% • Low availability of financing – 30% • Unfair competition – 17% • Corruption – 13% • Undeveloped infrastructure – 12% • Demands of regulatory authorities – 10% • Low availability of real estate and facilities – 9% • Crimes – 1%.



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Table 0 – Category of services Service Number of Voices Overall Percentage

Financing 31 71%

Strategy consulting 18 38%

Business Models' creation 30 64%

The team building 27 57%

Mergers 10 21%

IPO 8 17%

Other 8 17%

Acquisitions 6 13%

Table 0 – Name of potential GSP services

Service Number of Voices

Overall Percentage

Community and network of entrepreneurs, mentors, business angels 34 72%

Mentorship by experienced entrepreneurs from Russia, Silicon Walley, other IT Parks 30 64%

Develop business strategies 27 57% Marketing of new projects 27 57% Legal Advice 24 51% Online database of advices, draft business ideas, predeveloped business plans; Best practices, successes, rules.

24 51%

Lists and collections of funds for venture capital projects 21 45%

Testing new products and services 20 43% Finding teams or team players for your start-up 20 43% Obtain a patent 18 38% Source information and knowledge on management, creation of new businesses (blogs, articles, business courses)

16 34%

Taxation 14 30% Crosscultural analysis and Advices on the Platform 28 57% Accounting 13 28% Professional comm 10 21% Other 5 13% Rationing of resources, 1 Optimization of office rent and other resources, 1

Services



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Use of IT technologies (enterprise information systems for small companies), 1

Coding know how, 1 “I dont get the idea of the platform”. 1 The library of tips, hints, solutions to the major problems startups face along life-cycle (for example, ways to overcome the bureaucracy, options and schemes to reduce the tax burden, etc.)

1

Source of useful materials: books, methodologies, tools, analysis of the success examples – startup stages. (Guy Kawasaki book)

Startup Events Access through platform to American, European and foreign examples and best practices, business ideas from abroad

Startup Education (Videos, audiobooks, texts) Startup Fair (Buy/Sell a startups) Startups Catalogue Business Idea for Countryside Investor Tools (risk assessment, portfolio analysis, goals

Startup Blogs, Forum

• Experts, Entrepreneurs, Mentors, Venture Investors almost equally. No

other role was proposed. Second echelon is Consultants, Business Trainers, Management Bloggers and Management Gurus.

• 92,8% of adult population represents non-entrepreneurs. • Survey shows that 25-44 group is the largest one. • 80% Russian entrepreneurs have high or unfinished university education • In Russia we found 7.78% of potential entrepreneurs in 2011 - usually

in the age range from 18 to 44 years. The average age of potential entrepreneur is 37 years.

• In 2011 in Russia, only 5.8% of respondents planned to start their own business in the next three years.

• 80% of entrepreneurs have unfinished or finished high education or professional education.

• Only 25% of young Russian Internet audience is willing to "Start up a business" (18-30 years).

Potential Customers

Market Conditions



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Russia • 19% of Russia found conditions favorable to startup. Population in Russia

feels lack of knowledge and skills in entrepreneurship, fear of failure and see no good opportunity to startup a business.

• 37% of entrepreneurs in Russia are satisfied with the enabling conditions. • The level of entrepreneurial intentions in Russia is the lowest among

the countries participating in the project (lower only in the UAE). • There is obviously lack of financing by Business Angels and

Colleagues. • The performance and growth potential of Russian small firms is

based mainly on their social capital and network relationships, their intellectual capital, and the human-based resources available.

• The Russian business climate for SMEs osten looks unattractive in the context of international comparisons. Generally speaking (there are, of course, some exceptions), our companies face various complications and barriers more osten than majority of European ones.



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Figure 0 – GSP Market Size Estimation

Growth Potential

Internet Economy. Internet impact on Russian GDP was $19,3 bln or 1,6% of GDP (2,1% of GDP excluding oil and gas industry) in 2009. It is expected that impact of Internet on Russian economy will increase, and it’s contribution to GDP will be up to 3,7% (or 5% of GDP excluding oil and gas industry) by 2015. Pessimistic scenario shows that Internet economy in Russia will grow by 22% each year. We will use this data to estimate cash flows up to 2015.

Market Size



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eCommerce in Russia is $7,4 bln. Internet Investments were $10,3 bln and consist of: telecom-operators investments ($6 bln) and private companies (non-telecom) ($4,3 bln). Governmental expenditures equal to $1,5 bln. Small and Medium Enterprises (firms with number of employees less than 250). SMEs revenues are 25% of total companies’ revenues. This data gives initial data to make the top-down estimation of the market. This will be covered in the next version of Report.

IT and eCommerce with around 70% of voices. Next group is Education, Industrial Organizations and Biotechnology with 49%, 40% and 38% respectively. One new sector was proposed which is Energy & Environment.

Market Location

Country Search Index

1. Singapore 100 2. United States 89 3. Estonia 84 4. Trinidad and Tobago 78 5. South Africa 75 6. New Zealand 73 7. Jamaica 72 8. Australia 70 9. Canada 70 10. Philippines 66 11. India 60 12. Brazil 9 13. Russia 16 14. Indonesia 37

List of cities:

1. San Francisco 2. Singapore 3. Bangalore 4. Sydney 5. New York 6. Melbourne 7. Toronto 8. London

According to Google Insights Tool we received that list of locations and cities which uses the word “startup” more often than the others. Index 100 shows the maximum score.

Market Niche



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According to that Index we could see that Brazilian, Russian market have very low index. This could be due to several reasons. One of them possibly that Google is not so wide spread among Russian Users as local Search Site (Yandex). It could be the same in Brazilia. We didn’t validate that yet. India and Indonesia show quite stable indicator around 60 and 37. In conclusion, we can state that this indicator shouldn’t be the only one. But it give some useful insights on what is happening around the globe.

We came up with the preliminary list of features the Platform should possess: • Long term cooperation • Relative Advantage • Comparability • Simplicity or Easier to Use • Security and Trust • Fun! • Faster! • Sustainability (Social, Economic, etc)

This wasn’t the main purpose of the survey but we found the most popular Internet resources in Russia and also popular marketing tools among Russian Internet Companies. Social Networks seems to be really important channel, because almost 80% of Internet Audience in Russia uses Social Networks. List of the most popular Russian Companies:

1. Yandex.ru 2. Mail.ru 3. Vkontakte.ru (InContact) – social network 4. Odnolklassniki (Schoolmates) – social network 5. Google 6. Social Media

Marketing tools which are popular in Russia Internet

• Advertisement in search systems – 77% • Advertisement mailers – 44% • Banner advertisement – 42% • SEO – 37%

Sales: • Internet orders - 42% • Paying for goods through Internet – 20%

Features of the Platform

Market Channels



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Social resources: • Clients’ comments – 42% • Pages in the Social networks – 23% • Blogs – 19% • Twitter – 5%

Methodology and Types of Market Research

Market research and analysis consists of few parts: 1. Online Survey (International and Russian). 2. Search/Analysis of the Reports of Entrepreneurship Climate and Market in

Russia and Internationally. 3. Search/Analysis of other surveys connected to the main topic. 4. Google Key Word Tool and Yandex WordStat – “startup” key words analysis.

Part 1 – Online Survey by GSP Team

Methodology

This is a semi-qualitative and empirical online-survey of the responses of 46 participants. Google Docs Forms tool was used for creation the Survey and gathering the responses. You could find our Survey by clicking the following link:

https://docs.google.com/spreadsheet/viewform?formkey=dEhHUERGTmxkSXotZlQyRFhNWHMtY1E6MQ

Questions were divided into two categories. First was aimed on gathering information about participants:

• age, • sex, • professional experience, • location, • sector of job.

Second part is about the project itself. Following questions were asked:

1. How would you name this kind of Web platform? 2. What kind of services will you need being an entrepreneur from this

platform? 3. How important could be that solution for you and your organization? 4. What services would you like to see in the global startup platform? 5. What types of specialists would you like to see on the platform?

46 Participants passed through the Online Survey





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6. Will be the physical infrastructure relevant for the platform? If yes, what kind?

7. Which sector of the industry should be addressed by the global startup platform?

8. Do you need a cross-cultural analysis (a systematic comparison of similarities and differences in physical and behavioral aspects of the people from different cultures) in the platform?

9. What is the size of your organization? 10. What could be the period of time your organization can use services of this

platform? In the second version of survey several questions were added about payments. However, we didn’t receive sufficient number of answers and decided to carry out separate survey on this topic. Questions to be asked:

11. Will you pay for the services that you will find in the Platform? 12. How much on average would you spend for the services you will get

through the Platform? 13. What could be your advice for our project? What do you want to see there

additionally? 14. Did you like our survey? What could be improved in the future?

Information about this survey was posted by Ryzhonkov Vasily in the following sources and platforms:

• Facebook contacts and groups, LinkedIn contacts and groups, Gmail contacts;

• Facebook venture groups, Management Engineering Students group, International Management in Industrial Management (IMIM) Group, LinkedIn group

• IMIM Professors • Colleagues from NVisionGroup, T-Platforms (Russian Companies).

This survey was available to the public since 15th of May 2012. Results for this report were collected on 31th of May 2012. New surveys will be designed to test hypothesis about payment possibilities of customers in local markets.

Figure 1 – GSP Online Survey. Number of daily responses

Main assumptions behind online-survey were:

• Time period of survey was 16 days.

Survey was published on 18th of May. Second set of results was collected on 31st of May.



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• In questions 2, 4, 5, 6, 7, 9,10 people were allowed to select more than one variant, so percentages may add up to more than 100%.

• One respondent will participate only once (however, analysis showed that at least one participant passed it twice).

• On-site interviews in Russia and WorldWide will be carried out separately. • Interviews with entrepreneurs and inventors Russia and Worldwide will be

carried out separately and additionally to the online-survey. • Audience interviewed is general public and not entrepreneurs specifically.



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Information about respondents

Mainly all participants were from Europe with dominating figure around 60%, North America (6%), South America(4%), Africa(4%) and Asia & Pacific region took equally 15%. 72% of respondents were men.

Age of participators lies between 18 and 45 years with prevailing group of people from 25-35 age group (55%), which indicates a sample of respondents as “productive age”.

Participants with little experience (no experience and less than a year) consist only 21% of a sample. Whereas around the half of sample has professional experience more than 3 years.

Figure 2 – GSP Online Survey. Region of origin & Age

Figure 3 – GSP Online Survey. Sex & Years of professional experience

Due to sources where survey was put and background of project team,

participants mostly with IT and engineering background constitute the biggest groups (17% and 30% respectively). Student’s percentage is 15%. However, there is group “Other” which contributed with 13% (the second largest group). Detailed analysis showed that it consists of 6 different professions: HR, student (pointed out different caption), office workers (2), Media specialist, and empty field. This gives us changes in results, making students the third largest group with 4 people.

Results of the Online Survey



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Figure 4 – GSP Online Survey. Sphere of industry

Global Startup Platform – testing hypothesis

Name of the project In addition to proposed name of the project respondents suggested following:

• Diving Platform or Diving Board Height • Start-up Support • StartMeUp • Launch your idea of business • Platform for Reconstruction and Development • E-Ship • USS (Union of Successful Start-Ups) • Virtual Entrepreneurship LAB • RuConn • Start Helper • Online Technological Incubator • EntreWebPlat • RuCom • Comsinity • Innovation for Start-up companies platform • Entrepreneur Assistance Platform



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• Global Start-up • Guidance Catalogue • Russian High Tech • Launchpad • Startstartup • Start Together • GlobalWork • GSP.com • Launch IT • Entrementorship • Startup Flame • iStartUp • Global Startup Platform • StarTech • SGE – Success Global Entrepreneurship

What kind of services you will need from this Platform? Main expected services by the audience are Strategy Consulting, Financing, Business Models Creation, Team Building (they got 66%, 64%, 57%, 38% respectively). Results are shown in the Table 1. Also audience proposed new kind

of services and comments: • General start-up consulting • Thoughts hygiene (??) • Setting goals • Technical know how • “None of the above. I need

understanding WHAT to sell and HOW to sell it”.

Table 1 – Services by the Platform

Service Number of Voices Overall Percentage

Financing 31 71%

Strategy consulting 18 38%

Business Models' creation 30 64%

Mergers 10 21%

IPO 8 17%

Other 8 17%

The team building 27 57%

Acquisitions 6 13%

Importance of such Solution

Following Project Names were distinguished by our TEAM:

v StartMeUP v GSP or Global Startup Platform v iStartUp

Main general services are:

v Strategy Consulting v Financing v Business Models Creation v Team Building



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Approximately 74% of respondents found this idea useful. This data is shown in the Figure 5.

Figure 5 – GSP Online Survey. Importance of the Platform to the Global

Technology Business

Types of services people expect to get from the Platform Answers were grouped into several categories and presented in a graphical and table form because of the importance of information gathered. Green sector consists of services that got more than 50% (particularly between 51 and 72%). Orange sector consists of services that got 30-50% of votes. Blue area is consisted of services got less than 30% and following comments, services:

• Rationing of resources, • Optimization of office rent and other resources, • Use of IT technologies (enterprise information systems for small

companies), • Coding know how, • “I dont get the idea of the platform”.

Figure 6 – GSP Online Survey. Services of the Platform

74% of respondents found our project valuable and important to the society



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Table 2 – Services of the Platform

Service Number of Voices

Overall Percentage

Community and network of entrepreneurs, mentors, business angels 34 72%

Mentorship by experienced entrepreneurs from Russia, Silicon Walley, other IT Parks 30 64%

Develop business strategies 27 57% Marketing of new projects 27 57% Legal Advice 24 51% Online database of advices, draft business ideas, predeveloped business plans 24 51%

Lists and collections of funds for venture capital projects 21 45%

Testing new products and services 20 43% Finding teams or team players for your start-up 20 43% Obtain a patent 18 38% Source information and knowledge on management, creation of new businesses (blogs, articles, business courses)

16 34%

Taxation 14 30% Accounting 13 28% Professional comm 10 21% Other 5 13% Rationing of resources, 1 Optimization of office rent and other resources, 1 Use of IT technologies (enterprise information systems for small companies), 1

Coding know how, 1 “I dont get the idea of the platform”. 1

It is important to highlight that people perceived this platform as network or virtual tool which will allow mentors, entrepreneurs, business angels to be connected to other interested people all over the world. Important services are also Legal Advice, Developing of Business Strategies, Marketing of new projects and having access to Online database of advices, draft business ideas, predeveloped business plans. What types of specialists you would like to see on the platform?

People perceived the Platform as a social network of entrepreneurs and set of virtual tools which allow mentors, entrepreneurs, business angels to be connected to other people interested in startups all over the world.



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Basically people voted for Experts, Entrepreneurs, Mentors, Venture Investors almost equally. No other role was proposed. Second echelon is Consultants, Business Trainers, Management Bloggers and Management Gurus.

Figure 7 – GSP Online Survey. Services of the Platform

Will be the physical infrastructure relevant for the global technology business? If yes, what kind? This part of survey made the most amount of different proposals coming from the audience. They are listed below (proposals are in italics):

• Rental of a Lab • Rental of an Office (premises) • Clustering (1 vote) • Servers, an office (1 vote) • None (8) • There is no difference between two proposed (1 vote).

Figure 8 – GSP Online Survey. Physical Infrastructure

Industry Sector that should be addressed by the GSP



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Leading sectors are IT and eCommerce with around 70% of voices. Next group is Education, Industrial Organizations and Biotechnology with 49%, 40% and 38% respectively. One new sector was proposed which is Energy & Environment.

Figure 9 – GSP Online Survey. Sector of the industry presented in the Platform

Implementation of Cross-cultural analysis in the Platform

Figure 10 – GSP Online Survey. Cultural analysis and Advices on the Platform

IT, eCommerce, Education, Manufacturing and Biotechnology are sectors which should be addressed by the GSP mainly. This hypothesis will be tested in the future.



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What could be the period of time your organization can use services of this platform?

Figure 11 – GSP Online Survey. Period of time for using the Platform

Voices distributed almost equally between each period of time. However, it is important to state that we also got “None” answer (5 people voted for that option) and following answers:

• Depends on a services provided by the Platform – 1 • Constantly – 1

Future research and problems with Online Survey

1. We tried to correct mistakes we made. They were stated in the previous report and they are:

• Spelling and grammatical mistakes were identified. Corrected. • Participants from Russia and CIS countries were not localized. Will be

done in the next survey. • Need to reach potential customers and respondents from Asia. Will be

done in the next survey. • Sectors of economy could be added (Chemical, Automotive, Energy and

Environment, etc). Corrected. • Professional experience could be expended (HR, Media, Office Worker,

etc). Engineer and Student are very broad concepts – should be detailed. Corrected.

• Section about size of organization is not clear and not obvious how is it linked to testing hypothesis of the Project. Corrected.

• Question about roles in decision-making process is not obvious and irrelevant. Should be explained to audience or eliminated in the future. Corrected, section was eliminated.

• Need to add form for getting feedback of the survey (collect potential areas for improvement, etc). Corrected, section added.

• Clear explanation needed as far as not all participants got the idea behind the project. Corrected.

• Leave a blank field in order to get feedback on each question. Corrected.



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• Eliminate passing the online survey more than once by the same participant. Is not possible to distinguish by tool we used.

2. We added section about payment and possible sources of revenue. Following questions were asked:

1. Will you pay for the services that you will find in the Platform? 2. How much on average would you spend for the services you will get

through the Platform? 3. What could be your advice for our project? What do you want to see there

additionally? 4. Did you like our survey? What could be improved in the future?

Only few answers were received after correction. So, we consider this as possible field for improvement in the future. Useful insight was received saying: “Platform should be oriented on the long-

term cooperation, managing and guiding startups”.

There was one more valuable answer: “It would be useful to create and organize the library of tips, hints, solutions to the major problems startups face along life-cycle (for example, ways to overcome the bureaucracy, options and schemes to reduce the tax burden, etc.). It would be better if this library will be compiled of tips for different countries and will provide information on cultural differences in different countries, specifics of each country.”

3. Future improvement that should be done:

v Get data about customers who willing to pay and for what kind of services. v Localize and increase number of entrepreneurs, mentors, investors, startup

teams participated in the survey, address it to the audience involved in the entrepreneurship activities. In the User Information section more linkages to entrepreneurship could be done. Following questions are proposed to be asked:

Did you participate in startup? • If yes, what was your role (name roles)? • If yes, what was the result of startup project? • If yes, in what sector of industry was it?

v Understanding needs of local markets, as far as our online survey is a bit more biased towards European market.

v Splitting efforts for each market and making surveys more focused o Russian market o UK market o US market o Indian market o New Zeeland and Australia market

v Edit and specify hypothesis to more precise one, we want to have it more focused.



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Part 2 – Analysis of International/Russian Reports on Startups and Internet Economy in Russia

(source http://www.gsom.spbu.ru/en/research/eship/projects/gem/, available only in Russian, year – 2011; year 2010 also available in English) Description - research program is the annual assessment of the national level of

entrepreneurial activity. Started as a partnership between London Business School and Babson College, it was initiated in 1999 with 10 countries, expanded to 21 in 2000, with 29 countries in 2001 and 37 countries in 2002. GEM 2007 conducted research in 42 countries. Now GEM covers 55 countries in the world.

Objective – GEM Research has three main objectives:

• To measure differences in the level of early stage entrepreneurial activity between countries.

• To uncover factors determining the levels of entrepreneurial activity. • To identify policies that may enhance the level of entrepreneurial

activity. Method:

1) Formalized interview face-to-face method. The study did not include: persons undergoing compulsory military service in the army, persons in prison, living in monasteries and other enclosed areas, those living in small villages and towns with fewer than 50 residents, residents of the Chechen Republic and the Republic of Ingushetia , residents of the Far North with a low population density (the Nenets Autonomous District, Yamalo-Nenets, Taimyr, Evenki autonomous area, Chukotka and Sakhalin).

2) National Expert Interviews (36 experts). 3) National Economic and Demographic Statistics.

Sample – multi-stage stratified probability sample, representative of the adult

population of Russia at the age of 18 to 64 years, the volume of 7500 respondents. Sampling error is less than 0.01%.

Age group:

18-64 years Results connected to our project

Report 1. Global Entrepreneurship Monitor Russia 2011

http://www.gsom.spbu.ru/en/research/eship/projects/gem/



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Startup climate Russian startup climate could be characterized by the following framework. 92,8% взрослого на селения России Непредпринимательский слой составляет

Figure 12 – Attitudes of Russian population and entrepreneurs towards

entrepreneurship, 2010, %

Picture is given from 2010 but the figures are pretty the same. In 2011 evaluation of the conditions for starting a business non-entrepreneurial sector of the population was very pessimistic, only 19% of this group found conditions favorable to startup. Entrepreneurs were more optimistic in assessment the environment - about 37% of them called the conditions favorable for starting a business.

Age Attitude There is the difference in perception of entrepreneurs. Thus, career attractiveness of an entrepreneur declines with the age. 63% of young generation below 25 years find it attractive, percentage for respondents above 55 years is lower and around 48%. Entrepreneurial potential

19% of Russia found conditions favorable to startup. Population in Russia feels lack of knowledge and skills in entrepreneurship, fear of failure and see no good opportunity to startup a business. 37% of entrepreneurs in Russia are satisfied with the enabling conditions.



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Potential entrepreneurs are persons who have not started their business, but have a positive view on their own entrepreneurial skills and the prevailing market conditions. In fact, potential entrepreneurs are in a state of "unstable equilibrium", deciding to work them self-employed or start their own business.

In Russia we found 7.78% of potential entrepreneurs in 2011 - usually in the age range from 18 to 44 years. The average age of potential entrepreneur is 37 years. There is no significant gender difference in this group. However, the percentage of males (8.54%) is higher than the level of women (7.09%). The level of entrepreneurial intentions in Russia is the lowest among the countries participating in the project (lower only in the UAE). In 2011 in Russia, only 5.8% of respondents planned to start their own business in the next three years.

Figure 13 – Dynamics of entrepreneurial intentions entrepreneurship 2011, %

40% of respondents with entrepreneurial intentions have already started at least one project; new comers represent only 3,6% of total Russian population in 2011. There is positive trend after 2010-2011.

• Level of entrepreneurial intentions in Russia is the lowest among 55 countries

• 7.78% of potential entrepreneurs in 2011 in Russia aged between 18 and 44

• 5.8% of respondents planned to start their own business in the next three years

• New comers represent only 3,6% of total Russian population in 2011



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Figure 14 – Beginning entrepreneurs: women and men, 2006-2011, %

Gender and age Average age of Russian entrepreneur is 37 years. Evidently, there is a prevalence of “25-34” year’s old group among new entrepreneurs. Among established entrepreneurs the most significant groups are 35-44 – 34% and 45-54 – 33,5%. We think that these people already run a business and potentially are free to open new ones.

Figure 15 – Distribution of established and early entrepreneurs among age

groups, % Education

• Survey shows that 25-44 group has is the largest one

• 80% Russian entrepreneurs have high or unfinished university education



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80% of entrepreneurs have unfinished or finished high education or professional education.

Figure 16 – Education of entrepreneurs in Russia, %

Investments Russian startups are mainly financed by banks and close family members. Federal Programs have less importance and still considered not so effective. There is obviously lack of financing by Business Angels and Colleagues. Friends and Other relatives have improved their figures since 2006, but not significantly.

Figure 17 – Investment in Startups in Russia, %

Experts Interviews



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Experts evaluated conditions and entrepreneurship climate in Russia using 5-grades scale. According to experts’ opinions there are several problems that Russian entrepreneurs are facing now (listed from worst to best):

13. Bureaucracy – 1,83 14. The introduction of scientific and technical developments – 1,9. 15. Barriers to market entry – 1,97. 16. Access to financing (Virtually inaccessible to young companies

to obtain investment through public offering on the market) – 2,02. 17. Elementary and secondary education (does not sufficiently

encourage creativity of students, self-sufficiency and personal initiative, entrepreneurial skills) – 2,14.

18. Federal Programs – 2,16. 19. Social and cultural norms – 2,34. 20. Governmental policy – 2,39.

Critical factors are: a. duration to obtain the necessary permits and licenses – 1,44 b. sequence of state policy with respect to small firms – 1,94

21. Commercial infrastructure – 2,77. 22. High education – 2,85. 23. Physical infrastructure – 3,1. 24. Market dynamics – 3,18

It’s better to concentrate on the main problems which are indicated in red colour.

• There is obviously lack of financing by Business Angels and Colleagues

• Main problems of Russian entrepreneurs according to the 36 experts’ opinions are closely connected to bureaucracy, market entry barriers, and governmental programs and policies for entrepreneurs.



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(authors: Ojala, Arto; Isomäki, Hannakaisa, year - 2011) Objective – paper brings together current knowledge concerning the

phenomenon, and suggests further directions for research. Method – the study consists of a systematic review of forty-eight refereed

empirical articles on entrepreneurship and small businesses in Russia. Results obtained and relevant to our project

The performance and growth potential of Russian small firms is based mainly on their social capital and network relationships, their intellectual capital, and the human-based resources available. Most of the obstacles confronting entrepreneurship and small businesses are related to financial problems and governmental restrictions. It is important to adapt training programs to local cultural values and ways of doing business (Ojala and Heikkilä, in press), since Western practices cannot be applied indiscriminately to the Russian business environment. Russian startups stay locally. There are only few examples of internationalization. Internationalization process of Russian small firms faces many obstacles.

Report 2. Entrepreneurship and small businesses in Russia: A review of empirical research.



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(source – www.opora.ru, year - 2011) Description – OPORA Russia is one of the most major unions of the

entrepreneurship in Russia. The Organization’s goals are to improve existing legislation in Russia, protect entrepreneurs’ rights and interests.

Objective – to state the conditions of the SMEs in Russia in 2010 and 2011. Method – presentation about annual survey. Sample – is not known. Results obtained and relevant to our project 2010 - The key activity indicators of the Russian SME entities in the 1st half of 2010

According to the Federal service of the government statistics (further Rosstat) and the Federal tax service (FTS Russia) implemented activity in 5 650 313 SME entities based on the data July 1, 20109, including: - 1 374 661 micro-enterprise (in accordance with article 1 part 4 of the

Federal law dated July 24, 2007 № 209-FZ «On SME development» statistical analysis of micro-enterprises is conducted once in a year) – number of employees under 15 people and annual turnover up is up to 60 million rubles;

- 219 607 small companies – number of employees is between 16 and 100 people and annual turnover is no more than 400 million rubles;

9 Analytical data on micro-enterprises is based on January 1, 2010

Report 3. OPORA Russia. All-Russian Non-GovernmentalOrganization of Small and Medium-Sized Business 2011

• Russia had 5 650 313 SMEs on July 1, 2010

• 4 037 785 of them are individual entrepreneurs

• 1 374 661 micro-enterprises (up to 15 people, turnover under 60 mln RUR.

• 219 607 small companies – number of employees is between 16 and 100 people and annual turnover is no more than 400 million rubles

• Bank loans to SMEs in 2011 (on 01.03.2011) from 30 biggest banks were around 343 524 mln rubles (equals to $11 450 mln); to individual entrepreneurs – 40 160 mln rubles (equals to $1 338 mln).

http://www.opora.ru/



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- 18 260 medium companies – number of employees is between 101 and 250 people and annual turnover is no more than 1 000 million rubles;

- 4 037 785 individual entrepreneurs. 2011 – Statistical data and trends Bank loans to SMEs in 2011 (on 01.03.2011) from 30 biggest banks were around 343 524 mln rubles (equals to $11 450 mln); to individual entrepreneurs – 40 160 mln rubles (equals to $1 338 mln).

Figure 18 – OPORA Report. Structure of small enterprises, %



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Figure 19 – OPORA Report. Development of small entrepreneurship in a market economy, %

Figure 20 – OPORA Report. Dynamics of SMEs’ development in Russia

Figure 21 – OPORA Report. Federal Program of SME support in Russia



Page: 38

Figure 22 – Vision of innovative system structure in Russia (according to OPORA)



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(source – www.yandex.ru, year – 2012/03) Description – Yandex is the largest project in Russia in terms of number of users

and has 37 projects. It also has around 60 % of search engines’ market in Russia.

Objective – to define and report the structure of internet in Russia. Method – repetitive report (quarter basis). Sample – is not known, but seems to be rellevant. Results obtained and relevant to our project

Number of Internet users – 57,7 mln users above 18 years age. This equals to 47% of the adult population of the country10. Growth is 18% in comparison with 2010. September 2011 was the break-even point when Russia became number one in Europe in terms of internet users (according to comScore).

Figure 23 – Penetration of Internet in different cities in Russia, %

10 Adult population is above 18 years.

Report 4. Yandex Report – Development of Internet in Russia2012

• Number of users – 57,7 mln users above 18 years age. This equals to 47% of the adult population of the country

• Growth is 18% per year • Russia is number one in Europe

in terms of internet users

http://www.yandex.ru/



Page: 40

According to the Figure 22 average penetration of Internet in Russia is 47%. Rows are Moscow, Saint-Petersburg, Cities above 1 mln people, etc. 92% of Internet users live in cities with populations of more than 100 thousand people. And more than 70% of them use broadband (high speed) access. As part of the Internet audience continues to increase the proportion of users who go online every day: according to the Public Opinion Fund, from autumn 2010 to autumn 2011, this figure rose from 69% to 75%. According to Yandex, in 2011 the average cost of the Internet in Russia, reduced more than twice.

Figure 24 – Speed of Internet connection, Mbs

Major players of the Russian Internet Market Yandex (www.yandex.ru) Yandex is Russia’s largest internet company and the oldest one in thischart. Yandex owns the most popular search engine in Russia, has about 50 internet-services, more than 2000 employees and made $278 mln in revenue in 2009. Yandex’ main business model is search and contextual advertising — in this market segment Yandex is estimated to have more than 75—80% of market share. Mail.ru (www.mail.ru) One of the two most visited sites, the largest e-mail and communication portal in country, Mail.ru provides more than 40 services to its audience. It has own social network MoiMir, photo-, blog- and video hostings and one of the most popular instant messaging services — Mail.ru Agent. The main business model of Mail.ru is banner (media) advertising. Mail.ru is a

http://www.yandex.ru/

http://www.mail.ru/



Page: 41

private company and does not publish its inancial statements. In 2008 Mail.ru made $74,5 mln in revenue. Vkontakte (www.vkontakte.ru, www.vk.com) Launched in 2006 as a Russian clone of Facebook, Vkontakte has some very popular features that Facebook doesn’t — e.g., mp3 hosting. It is the largest personal photosharing site and the fastest-growing social network in Russia. Being Portal #3 in the country, in Saint-Petersburg Vkontakte is more popular than any other Russian Internet site. For now there are no clear data about Vkontakte’s proitability. Odnoklassniki (www.odnoklassniki.ru) Odnoklassniki (Russian word “Classmates”) is one of the two most successful social networks in Russia, with more than 50 million accounts, and is one of very few signiicant newcomers in the market. This site tries different business-models, including banner advertising and some original premium services, like micro-payments for using graphical smiles in short text messages. Finance statements of Odnoklassniki.ru are not available publicly. In 2008 company had net income of $6,9mln, Vedomosti newspaper reported. Google (www.google.ru) Google translated its interface into Russian in 2001 and in the last 9 years grew its search market share from 5% to 25%. Now it is the only real competitor to the market leader — Yandex. Company does not separate Russian advertising sales in its global financial statements. Google revenue in the Russian market is estimated at a round $30mln, in 2008 — at a round $15-20 mln.

Global losers of the Russian Internet Market These companies from Quantcast Top-15 are total losers of the Russian Internet market. None of the chart is known by the mass audience in Russia. Yahoo, Live.com, MSN, AOL, Ask Having a lot of local content and smart technologies, Russian domestic portals are extremely good in keeping their dominant positions in the market. Almost none of the major world portals and search engines (except Google) achieved success in the country. Search market share in Russia of any member of this group of companies, according to Liveinternet.ru, does not exceed 0,5%. Facebook, MySpace

http://www.vkontakte.ru/

http://www.vk.com/

http://www.odnoklassniki.ru/

http://www.google.ru/



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Some of the most active users of Russian social networks have their accounts on Facebook and MySpace. But that’s nothing in comparison with dozens of millions of user proiles in the Russian networks Vkontakte and Odnoklassniki. It seems that Facebook and MySpace showed up late with their localized versions and had lost the moment when Russian Internet audience was ready to create accounts anywhere. eBay It’s not eBay fault that online auctions in Russia are probably the form of online business that grows the most slowly. Lack of user confidence in buying used stuff combined with absence of peer-to-peer logistics system seems to be critical — none of local players succeeded much in this sphere too. Blogspot.com Top local blog-hostings — Livejournal.com (Russian-owned) and Live-internet.ru — collected their core audience a lot earlier than Blogspot.com interface was translated into Russian. Besides, standalone blog platforms are not very popular in Russia generally, and Blogspot is not an exception. Craigslist.org Russian online classifieds are still in the embryonic stage. To sell a car, people print their ads in special classifieds newspaper, like ‘ Iz ruk v ruki’ (‘Сhange hands’). It is noteworthy that ‘Iz ruk v ruki’ search query remains in Top-100 most popular searches made by local audience. About.com, Answers.com The major part of content needed by Russian users must be written in Russian, so these sites do not have any audience in Russia. Mapquest.com Content is the king in online maps and other cartographic services. Mapquest.com doesn’t have one for the Russian audience, so it has no audience.



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(source: http://www.tns-global.ru/rus/data/ratings/index/index.wbp, date – 2012/04) Description – monthly issued survey by Russian agency TNS since January

2007. TNS Agency covers more than 130 internet sites in Russia in its investigation.

Objective – to measure socio-demographic structure of the Internet audience and

audience of the websites, as well as their sections. Method – please refer to TNS Global site. Sample – 150+ internet projects. Cities -100 000+. Month – April 2012. Age: 12-

54. Quantity per month. Results obtained and relevant to our project

Table 3 – Russian Internet Audience Russian

Population 12-54

Men Women 12-17 18-24

Reach Reach Reach Row% Reach Reach

Row% Reach Reach Row% Reach Reach

Row% Russian Population 12-54, '000 45178,7 21771,9 48,2 23406,8 51,8 3692,2 8,2 7857,8 17,4 Internet Audience 12-54, '000 35399,7 17512,1 49,5 17887,7 50,5 3188,0 9,0 7075,4 20,0

Table 3 – Russian Internet Audience (continuation)

25-34 35-44 45-54 Works Doesn't work

Reach Reach Row% Reach Reach


Row% Reach Reach Row%

Russian Population 12-54, '000 12558,5 27,8 9966,7 22,1 11103,6 24,6 31614,7 70,0 13564,0 30,0 Internet Audience 12-54, '000 11042,2 31,2 8157,5 23,0 5936,7 16,8 25132,6 71,0 10267,2 29,0

Report 5. Internet in Russia 2012 (TNS Agency)

• Russian Population 18-54 is 41 486,6 thousand people in cities 100 000+.

• Russian Internet Audience 18-54 is 32 211,8 thousand people in cities 100 000+.

• 90.04% of 18-24, 87.93% of 25-34, 81.85% of 35-44 and only 53,47% of population from 100 000+ cities are present in the Internet.

•

http://www.tns-global.ru/rus/data/ratings/index/index.wbp



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Table 4 – Russian Internet Audience (by jobs)

Russian Population 12-54 (answered the

question about occupancy)

Managers Specialist White Collars

Reach Reach


Row% Reach Reach Row%

Russian Population 12-54 44702,1 100,0 5678,2 12,7 10774,7 24,1 6333,3 14,2 Internet Audience 12-54 35198,1 100,0 5186,7 14,7 10026,3 28,5 5221,6 14,8

Table 4 – Russian Internet Audience (by jobs). Continuation

Blue Collars Students Housekeepers Doesn't work

Reach

Reach Row%

Reach

Reach Row%

Reach

Reach Row%

Reach

Reach Row%

Russian Population 12-54 7898,0 17,7 7659,0 17,1 3404,4 7,6 2954,5 6,6 Internet Audience 12-54 4611,2 13,1 6656,2 18,9 2470,4 7,0 1025,7 2,9

Figure 25 – Internet Audience Dynamics in Russia



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(source - http://dl.dropbox.com/u/1568654/Russia_Online_RUS_final_from_central.pdf, year - 2011) Objective – Google commissioned this report to BTG in order to understand the

nature and extent of commercial activities related to the Internet, as well as to assess the impact of the Internet on the Russian economy.

Method – please refer to the Report. Results connected to our project

Figure 26 – Internet Economy in Russia, 2009

Main figures of Internet economy of 2009 are:

• Consumption – $12,6 bln. • Investments – $10,5 bln. • Governmental expenses – $1,5 bln. • Export - $1,0 bln. • Import -$6,3 bln. • Internet GDP is 1,6% of Total GDP

and equals to $19,3 bln.

Report 6. Russia Online: impact of Internet on Russian Economy 2011 (BCG)

• Internet impact on Russian GDP was $19,3 bln or 1,6% of GDP (2,1% of GDP excluding oil and gas industry) in 2009.

• Private Investments in Internet were $4,4 bln, governmental expenditures - $1,5 bln.

http://dl.dropbox.com/u/1568654/Russia_Online_RUS_final_from_central.pdf



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Figure 27 – Structure of Internet Economy and Invesments in Russia, 2009

Main investments in the Internet economy of 2009 are:

• CAPEX – $6,1 bln by telecom companies (providing infrastructure). • Investments by private companies – $4,4 bln.

Structure of the Consumption: • eCommerce – $7,4 bln. • Access points – $1,5 + $0,8 bln. • Access – $1,6 + $1,2 bln.

Figure 28 – BCG e-Intensity Index in 2009



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Russia got 52 points of e-Intensity index between Brazil (53) and Turkey(48). China got 41, Mexico – 33, India – 22, Indonesia -16.

Figure 29 – Use of network resources and Internet technologies

by companies in 2009 Marketing tools:

• Advertisement in search systems – 77% • Advertisement mailers – 44% • Banner advertisement – 42% • SEO – 37%

Sales: • Internet orders - 42% • Paying for goods through Internet – 20%

Social resources: • Clients’ comments – 42% • Pages in the Social networks – 23% • Blogs – 19% • Twitter – 5%

Results were obtained via survey of 700 SMEs (including 84% which are active in the Internet).



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Figure 30 – Main barriers for more active Internet usage in 2009

Barriers (from the main to the least significant):

• Don’t have resources to develop internet site • Don’t have time to maintain internet site • Internet is not safe • There is no community of practice in the internet • Employees don’t have sufficient skills • Our clients don’t need internet site • We don’t know how internet could contribute to development of the

business • Employees don’t have access to a PC • Etc



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Figure 31– Growth of the Internet economy (prediction up to 2015)

Main conclusions:



Page: 50

1. Companies optimize their business through Internet, giving results of 10%

performance growth and 30% cost reduction. 2. It is expected that impact of Internet on Russian economy will increase,

and it’s contribution to GDP will be up to 3,7% (or 5% of GDP excluding oil and gas industry) by 2015.

3. eCommerce in Russia is $7,4 bln. 4. Internet Investments were $10,3 bln and consist of: telecom-operators

investments ($6 bln) and private companies (non-telecom) ($4,3 bln). Governmental expenditures equal to $1,5 bln.

5. Social Effects. Internet is used by users as a mean for getting information. More than 70% of daily audience read news.

6. Internet Accessibility. Broadband connection in Moscow - 55%, Saint Petersburg – 49%, Russia in average – 20%11.

7. Small and Medium Enterprises (firms with number of employees less than 250). SMEs revenues are 25% of total companies’ revenues. SMEs are not a moving force of national economy, because of the huge impact of oil and gas industries and big corporations.

8. Highly successful Projects: a. WikiMart – online trading center with more than 2000 different shops

available. WikiMart saves time of the customer, have 20 goods categories. Customer can read about good he wants and make an order.

b. EcWid – software which helps to build online-shops, it’s an online-shop constructor. With this software it’s very simple to create your own online shop, embed it into your site. Freemium model. Key startup Tool was Google AdWords, then – search systems optimization, nowadays – social networks (75% of marketing).

c. Avito.ru – the biggest bulletin board in Russia, 3mln goods daily, 50 personnel, 10 mln people daily. Good tool for marketing for out project. The key driver of the project is simplicity – we should do the same with projects, profiles, investors.

9. Main barriers of Internet spread: • Lack of resources and time (could be possible that SME doesn’t

understand advantages of Internet usage) • It’s not safe • The is no communities of practice in the internet for our SME • Lack of personnel skills and experience • We don’t need internet site • We don’t know how internet could help to develop our business • Personnel don’t have access to the Pcs • Low speed of internet connection (or lack of broadband) • Lack of bank credits • Lack of trust

10. Future Trends. Pessimistic scenario shows that Internet economy in Russia will grow by 22% each year

11 Data is not actual and updated in the Report 4. Yandex Report.



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(…to be accomplished…)

Report 7. Russia in 2011-2021: diagnosis and trend



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Figure 32– Russia in 2011-2021: diagnosis and trends



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(source www.opora.ru, year - 2011) Objective – to estimate business climate throughout Russian regions. Method - surveys were conducted as telephone interviews. Only owners the

companies or executives (CEOs, or first vice-presidents) were permitted to take part in the survey.

Sample The survey covered more than 6000 respondents in 40 regions.

Figure 33 – OPORA Survey. Structure of the sample

Figure 34 – OPORA Survey. SME Development environment Index

Report 8. OPORA’S INDEX 2010-2011 (business climate reportthroughout Russian regions).

http://www.opora.ru/



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Figure 35 – OPORA Survey. Spread of corruption in various areas

Figure 36 – OPORA Survey. Illegal payments to government officials

The Russian business climate for SMEs osten looks unattractive in the context of international comparisons. Generally speaking (there are, of course, some exceptions), our companies face various complications and barriers more osten than majority of European ones. One of the main problems is corruption. The most important components are:

• Access to state and municipal contracts – 31,6% • Passing audits and inspections – 31,6% • Allocation of land – 31,1% • Obtaining government support – 29,8% • Connecting to infrastructure – 29,5% • Obtaining certificates and licensees (dealing with technical regulations) –

27,1% • Tax assessment and paying taxes – 16,7% • Passing customs procedures – 16,6% • Legal proceedings – 15,1% • Hiring foreign workers – 9,1%



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Figure 37– OPORA Survey. Barriers for SMEs in Russia during last 2 years

Companies listed following barriers:

• Low availability of skilled personnel – 61% • Problems with purchasing power – 59% • Limited access to financing – 38% • Problems with infrastructure – 36% • Low availability of highly qualified management – 32% • Difficulties with implementing new technologies – 28% • High personnel costs – 23% • Problems with administrative regulations – 19% • Difficulties with changing the organizational structure of the company –

13% Rankings in the figure below depict the situation in 31 countries (including Russia). The share of SMEs that have admitted to facing difficulties or barriers in the last two years is shown to each country. As can be seen in the figures (and the total number of rankings is 9), in most cases Russia gets placed in the lower half of a ranking, and in some factors is an obvious underperformer. As can be seen, Russia is most seriously lagging behind in such areas as access to financing, availability of skilled personnel (and highly qualified management in particular), and the implementation of new technology. Limited access to financing is a barrier for 38% of Russian companies, which corresponds to the next to last position in the ranking shown for each country. For comparison, the EU average is 21%.



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Figure 38 – OPORA Survey. Barriers to business (international comparison)



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Figure 39 – OPORA Survey. Barriers to SME Development

Main problems revealed are:

• Low availability of personnel – 43% • Overall decline in demand in the sector – 33% • Low availability of financing – 30% • Unfair competition – 17% • Corruption – 13% • Undeveloped infrastructure – 12% • Demands of regulatory authorities – 10% • Low availability of real estate and facilities – 9% • Crimes – 1%.



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(Source - http://www.slideshare.net/Startupi/startup-genome-report, date – May 28th, 2011) Description, Sample and Objective:

“In this report we reveal in-depth research about what makes Silicon Valley startups successful. The report is a 50 page analysis based on data from 650+ web startups. The report was coauthored by Berkeley & Stanford faculty members. Other contributors include Steve Blank, the Sandbox Network, and 10 accelerators from around the globe. The goal of the report is to lay the foundation for a new framework for assessing startups more effectively by measuring the thresholds and milestones of development that Internet startups move through. This report is the Startup Genome Project’s first step toward cracking the innovation code of Silicon Valley and spreading it to the rest of the world.”

Results obtained

8. Through analyzing the results from our survey we found that Internet startups move through similar thresholds and milestones of development, which we segmented into stages. Startups that skipped these stages performed worse.

9. We also identified three major types of Internet startups with various sub

types. They are segmented based on how they perform customer development and customer acquisition. Each type has varying behavior regarding factors like time, skill and money

Additional Results 1. Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth. 2. Startups that pivot once or twice times raise 2.5x more money, have 3.6x 87\34`better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all. 3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success. 4. Investors who provide hands-on help have little or no effect on the company's operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)

Report 9. Startup Genome Report 01 (A new framework for understanding why startups succeed)

http://www.slideshare.net/Startupi/startup-genome-report



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5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot. 6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups. 7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams. 9. Most successful founders are driven by impact rather than experience or money. 10. Founders overestimate the value of IP before product market fit by 255%. 11. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely. 12. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new. 13. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves. 14. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.



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Part 3 - Research and Analysis of Related Online Surveys

(source http://voxru.net, year - 2010) Objective – to understand what are attitudes and opinions of Russian young

generation towards career development, socioeconomic values of them. Method – online survey. Sample – 1000 people. Age groups:

18-22 years – 17% of sample 23-26 years – 44% of persons 27-30 years – 39% of total

Results connected to our project

Survey 1 – Online survey “Opinion of Russian Internet audience about career development steps (Russia)”

57% respondents consider career development as an necessary step. 24% - generally inclined to consider career as the main purpose of life. Possible strategies for employment among young Russian Internet audience are:

• "Job in a stable company, organization" - (36% of those surveyed), • Any opportunity to "work hard and earn a lot" (28%), • "Start up a business" (25%). Thus, we can assume that correction factor for our marketing research of young population (18-30 years) could be 25% of total population.

http://voxru.net/



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(source http://voxru.net, date – 2007/11) Objective – to classify types of Runet users. Method - methods of studying Internet life-style VALS, developed by SRI

International. Respondents were asked to express their degree of agreement or disagreement with a set of statements describing the behavior of Internet users.

Sample – no information. Results connected to our project "Experts" (12% of respondents) - the most active and skillful Internet audience. Information technology - a key point of their life style. They are confident with the computer, but does not necessarily have a technical education. Internet access to them - an opportunity to meet both individual needs and resolve issues related to employment or professional activities. "Working horses" (15%) - people who use the Internet primarily for utilitarian purposes. Computers are mainly used in order to more effectively and to work quickly to solve problems. Therefore, for them, the Internet is also primarily a tool for a very special and vocational information. For most of them Internet has evolved into a primary and indispensable source of information. "Power users" (46%). For them, the Internet - is it possible to satisfy both individual needs and resolve issues related to employment or professional activities. Most often they use the Internet from work and concentrate on getting useful information. A significant part of the user time just wandering around on the web. "Sociable" (24%) - a user-oriented social aspects of the Internet. On-line, meet many people. They are often found at conferences that discuss social issues, current problems. Spend a lot of time traveling, surfing the Internet. They want to know more about the web. For them, the Internet - is primarily a place of entertainment and leisure facilities. "Inexperienced users" (3%) - only recently started using the Internet, so familiar with only a limited number of areas of the web.

Survey 2 – Online survey “Types of Ru-net users (Russia)”

In conclusion we can assume that correction factor for Runet users who could potentially reach our Platform is 97% of total Runet population.

http://voxru.net/



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(Author - Vitaly Moroz [email protected], date – 2011/04) Objective – to clarify startup’s characteristics; refine data on motivation people to

participate in start-ups; problems of startups. Method – online survey. Sample – 123 respondents. Link to the survey was distributed randomly among

the employees of IT companies and among the students of Belarusian State University MBA program. The sample does not match the proportions of the society as a whole, but close enough to the set of potential participants in the IT startups. Moreover, this sample is from neighbor country – Belorussia, where investment climate could be slightly different. 50 people participated in a startup as founder, specialist, consultant or investor.

Classification:

1. By the experience of participation in the IT-startup: 1.1 participated in an IT startup – 39 people 1.2 participated in the startup, not related to IT, 10 1.3 does not take part in the startup, 62

2. By age group: 2.1 Younger than 25 years, 28 people 2.2 In the age of 25-30 years, 55 people 2.3 Older than 30 years, 37 people

Results connected to our project Startup characteristics and most important features named are:

• startup is newly opened business; • novelty ("done the first time"), and

enthusiasm - more than 30% of respondents;

• 20% of respondents as a characteristic feature called "business in a lack of funding".

Team size for Startup The majority of respondents favors the variant "from 3 to 9", or “doesn’t matter” option. Experienced IT entrepreneurs believe that optimum size for startup team is between 3 and 9 team members (blue color).

Survey 3 – Online survey “Research on IT StartUps (Russia)”

IT entrepreneurs believe that optimum size for startup team is between 3 and 9 team members



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Figure 40 – Optimal Startup team size Motivation of entrepreneurs The most important factor in motivation for entrepreneurs is interesting business idea. So the idea must be attractive and appear promising. The second motivation factor is to work with friends, but it’s significant to the respondents aged below 25 years and then decreases sharply. The need to increase wages is most pronounced for those aged 25-30 years. The promise of a percent in the future is the third significant factor, especially for those who already have experience in a startup.

Figure 41 – Motivational factors for participation in startup project

Model of work Most respondents would prefer to do a startup without changing current job, until it begins to bring a steady income.



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60% of entrepreneurs in the traditional sectors of business would prefer to work in an office and full-time, while only 26% of IT entrepreneurs are ready for it. Startup Problems The answers to this question are classified in 4 categories: 1. Team selection problems

• team leader qualities; • team members qualifications; • selection of team with the right motivation; • vision of the leader; • commitment of startup team members to business idea, common goals12.

2. Team organization problems

• distribution of roles in the group; • finding a compromise and control / conflicts solving; • consolidation and retention of the team; • insufficient time members spend for startup activities.13

3. Planning and organization of the work

• select the correct model of work; • planning and setting tasks; • coordination and control.

4. Financing problems

• lack of funding; • stops in funding; • lack of funds for marketing.

5. Business Model

• incorrect assessment of the risks. Teams needs a critic to land on the ground and reveal the risks14; • search for a business models may take a long time (years)15.

12 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 13 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 14 Was added to the survey by Vasily Ryzhonkov while analyzing interviews. 15 Was added to the survey by Vasily Ryzhonkov while analyzing interviews.

v IT entrepreneurs believe that optimum size for startup team is between 3 and 9 team members.

v The most important motivational factor for startup members is interesting business idea.

v Most respondents would prefer to do a startup without changing current job, until it begins to bring a steady income.

v Problems survey revealed are mainly connected to financing and team building, effective management.



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Part 4 – Google KeyWord Tool and Yandex WordStat Analysis

Yandex.ru and Google.com are the most popular search sites and portals in Russia (according to Alexa.com). 16 That is why they were used to analyze internet activity of users and search requests that are done by Runet users and users of the Globe. Google KeyWord Tool (https://adwords.google.com) and Yandex WordStat (http://wordstat.yandex.ru/) are instruments that are used for identifying most popular search requests and key words in these two most popular platforms. These tools are intended to help users; companies find keyword and ad group ideas that might be helpful while creating marketing campaigns. For determination of set of related key words Youtube Keyword Tool was used (https://ads.youtube.com/keyword_tool). It allows you to de set of related key words in any region and most popular languages. Google KeyWord is more powerful tool in terms of sorting and analyzing key words. Here is short list of proposed services:

• Target and filter; • Sort your results; • Include or exclude ideas; • Include / Exclude terms; • Keyword matching; • Specify a language and location; • Popular requests; • Regional Interest.

Yandex WordStat is similar to Google tool. It has following distinctions:

• Possibility to classify requests by locations and visualize them on the map; • Boolean logic operators (!, -, +, (), []) to specify your request; • Statistics in graphs and tables.

Objectives of this analysis were:

1. Estimate potential market in terms of Search Requests (Internationally, Locally).

2. Estimate potential market in terms of revenues from Online Advertising. 3. Understand needs of potential customers (Entrepreneurs, Investors,

Mentors, Teams) in order to get insights about new services. 4. Identify needs and potential locations of customers in order to improve

marketing of our Platform in the future. 5. Get insights on our topic looking at related search requests.

16 http://www.alexa.com/topsites/countries/RU

Methodology

https://adwords.google.com/

http://wordstat.yandex.ru/

https://ads.youtube.com/keyword_tool

http://www.alexa.com/topsites/countries/RU



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Method – use set of English/Russian keywords “startup”, “entrepreneur”, “venture”, “entrepreneurship”, etc to get number of requests of these keywords per month, sort them according to region. Compare statistics from 2 tools and come up with average parameters which will help to determine market size:

• Number of customers/users interested in “Entrepreneurship and Startup” topic in Russia / internationally.

• Key topics users are interested in. • Come up with a list of related search requests that could influence list of

services we propose in GSP. • Geographical distribution of users and localization of users/customers.

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Step 1 was described above. Step 2 is determined according to assumptions that market size and share are highly dependent on people. Thus, key people-connected variables should be used, which are:

• Number of users/month (locally, globally) used particular search request • Region and market • Number of search requests/month (locally, globally)

Step 3 was described above. Step 4. Set of key words is determined with the Google AdWords tool. Russian list is broader due to flexibility of the language. You can find terms listed in the Table 5.



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Main problem revealed and unsolved here is how to translate number of search requests into the number of people.

Table 5 – Set of Key Words used English KeyWords Russian KeyWords Startup* Investor Investment Startup Service +Advice Venture Business idea

Бизнес идея Стартап Свое дело Свой бизнес Startup Инкубатор Венчурный Инвестиции/Инвестор* Технопарк

* - added by Vasily Ryzhonkov

Process 1 – Determination of related Search Requests and

Services

Analytic Tools allow us to determine not only related search requests but also give insights on what are people’s demand and needs, how do they search information. Below we provide you with data that could be used to determine key areas of interests related to startups in Russia and worldwide. Google Search Brief explanations of terms used. Competition allows you to analyze the number of advertisers that assign rates for a particular keyword. Based on this information, you can determine how competitive ad placement. Monthly Searches. If you specify a target country, or language to find, this column will indicate the approximate average number of searches for this keyword in this country or the language in the last 12 months. In the calculation takes into account the type of match you specified keyword.

Results



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Table 6 – What do people search in Google?

Keyword (Russian) Keyword (English) Competition Global Monthly Searches

Local Monthly Searches

бизнес идея Business Idea Medium 22,2 12,1

бесплатно бизнес план Business Plan free Low 33,1 22,2

бесплатные бизнес планы Business Plan free Low 18,1 12,1

бесплатный бизнес Free business Low 33,1 22,2

бесплатный бизнес план business plan for free Low 22,2 14,8

бизнес в интернет business in internet Medium 33,1 22,2

бизнес в интернете business in internet Medium 22,2 14,8 бизнес в маленьком городе business in a small city High 4,4 3,6

бизнес готовый predeveloped business High 74 33,1

свой бизнес startup (own business) High 49,5 33,1

как бизнес план Medium 450 301

план бизнес business plan Medium 450 301

бизнес планы business plan Medium 246 165

для малого бизнеса small business Medium 165 135

малого бизнеса small business Medium 165 135

startup

Low 9,140,000 110 000

business plan

Medium 2,740,000 201 000

on startup

Low 9,140,000 110000

startup it

Low 9,140,000 110000

бизнес идеи (�� High 165 90,5

business companies

Low 20,400,000 74

up start

Low 4,090,000 33,1

start up

Low 4,090,000 33,1

start it up

Low 4,090,000 33,1

entrepreneurship

Low 2,240,000 27,1

entrepreneur

Low 2,740,000 22,2

venture capital

Low 2,240,000 22,2

small business

Low 7,480,000 22,2

стартап �� Low 27,1 18,1

стартапы �� Low 22,2 14,8

new business

Low 1,500,000 6,6

бизнес идеи (�� High 165 90,5

startup business loan

High 18,1 16

business startup loan

High 18,1 16

business loan startup

High 18,1 16

business startup funding

High 14,8 12

startup business funding

High 14,8 12



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Keyword (Russian) Keyword (English) Competition Global Monthly Searches

Local Monthly Searches

startup business investors

High 880 < 10

business startup investors

High 880 < 10

business startup grant

High 18,1 < 10

startup business grant

High 18,1 < 10

start up business funding

High 14,8 12

startup business financing

High 9,9 12

business startup financing

High 9,9 12

financing a startup business

High 9,9 12

business startup loans

High 22,2 22

startup business loans

High 22,2 22

startup business grants

High 18,1 12

business startup grants

High 18,1 12

investor

Low 5,000,000 40,5

investor visa us

High 2,9 12

us investor visa

High 2,9 12

find a business investor

High 2,4 170

immigrant investor program

High 1,9 12

offshore investing

High 2,9 16

investor green card

High 1 < 10

invest money

High 135 27,1

small business investor

High 5,4 16

find angel investors

High 1,9 < 10

investor immigration

High 8,1 46

small business investors

High 6,6 16

investors small business

High 6,6 16

Yandex Search In that case we got 10 Excel Sheets for each of the words mentioned in the Table 5. Each Sheet contains categorized information about keywords. We will bring example of only one sheet below:

Table 7 – What do people search in Yandex?

№ Category Keywords Monthly Search

1 Startup стартап 19399 2 Startup стартап скачать 973 3 Startup without expenditures стартап +без бюджета 660 4 Startup стартап бизнес 553 5 Startup. Guy Kawasaki ufaкавасаки стартап 497 6 Startup стартап проекты 419



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7 Startup. Guy Kawasaki гай стартап 416 8 Startup Ideas стартап идеи 411 9 Startup. Guy Kawasaki гай кавасаки стартап 403

10 Startup. Best practices, successes, rules. стартапы 2012 386

11 Startup. Best practices, successes, rules. успешные стартапы 310

12 Startup. Best practices, successes, rules. стартапы 2011 299

13 Startup. Best practices, successes, rules. стартап компании 294

14 Startup. Best practices, successes, rules. лучшие стартапы 284

15 Startup скачать бесплатно стартап 251

16 Startup. Best practices, successes, rules. правила стартапа 249

17 Startup. Guy Kawasaki кавасаки стартап скачать 246 18 Startup. Books стартап книга 213

19 Startup. Guy Kawasaki гай кавасаки стартап скачать

209

20 Startup without expenditures стартап +без бюджета скачать

203

21 Investments and financing инвестиции +в стартапы 193

22 Startup. Best practices, successes, rules. стартап года 192

23 Startup. Buy a startup куплю стартап 188 24 Startup. Competition конкурс стартапов 187 25 Startup. Buy a startup купить стартап 187

26 Startup. Best practices, successes, rules. прибыльные стартапы 179

27 Startup. Best practices, successes, rules.

правила прибыльных стартапов

167

28 Startup Event игра стартап 166 30 Investments and financing финансирование стартапов 162

Each table contains around 200 items which were obtained from Yandex WordStat. Results

1. We realized that words startup and business idea written in English are not popular in Russia and people tend to use more often Russian equivalents. Table 8 proves that by showing amount of monthly searches of each keyword.

2. All keywords were grouped into categories in order to analyze them together. Categories revealed main trends in the search that people carry

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http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%BA%D0%BE%D0%BD%D0%BA%D1%83%D1%80%D1%81%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%D0%BE%D0%B2

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%BA%D1%83%D0%BF%D0%B8%D1%82%D1%8C%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%BF%D1%80%D0%B8%D0%B1%D1%8B%D0%BB%D1%8C%D0%BD%D1%8B%D0%B5%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%D1%8B

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%BF%D1%80%D0%B0%D0%B2%D0%B8%D0%BB%D0%B0%20%D0%BF%D1%80%D0%B8%D0%B1%D1%8B%D0%BB%D1%8C%D0%BD%D1%8B%D1%85%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%D0%BE%D0%B2

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%BF%D1%80%D0%B0%D0%B2%D0%B8%D0%BB%D0%B0%20%D0%BF%D1%80%D0%B8%D0%B1%D1%8B%D0%BB%D1%8C%D0%BD%D1%8B%D1%85%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%D0%BE%D0%B2

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D0%B8%D0%B3%D1%80%D0%B0%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956052&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=403394914a223e5bd2945e93643fc17b&t=%D1%84%D0%B8%D0%BD%D0%B0%D0%BD%D1%81%D0%B8%D1%80%D0%BE%D0%B2%D0%B0%D0%BD%D0%B8%D0%B5%20%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%D0%BE%D0%B2



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out. Search Requests directly lead us to the problems people are facing. The match is shown in the Table 9.

3. New areas were revealed they are highlighted in blue and orange.

Table 8 – Monthly searches of keywords in Yandex


1 Startup стартап 19 399 2 Business Idea бизнес идеи 188 766 3 Own Business cвой бизнес 73 615 4 Own Business cвое дело 197 849 5 Business Incubator бизнес инкубатор 18 498 6 Venture венчурный 23 444 7 SME малый бизнес 285 410 8 Technopark технопарк 102 916 9 Investor инвестор 102 077 10 Startup Service стартап+сервис 21 725

Table 9 – Main search categories vs problems according to Yandex

Category of searches

Number of grouped searches per category

Startup Problems and Needs users tried to solve via search

Startup. Best practices, successes, rules.

31

Get experience of successes and failures, get knowledge about critical success factors of startups, understand how best startups were performing, startup cases, most interesting ideas.

Business Idea 30 Venture Investors/Investments 15

Startup funding, finding investors, funds, or other source of money.

Startup 14

Startup Incubator 13

Access to communities where users can find information, help, support, financing.

Startup. Guy Kawasaki 12 Get access to knowledge from popular author.

Business Idea Catalogue 12 Catalogue or database of business ideas.

Investments and financing 11

Startup funding, finding investors, funds, or other source of money, ways to get investments.

Startup without expenditures 11

Startup the project with lack of finances and funding, access to the popular book with that name.

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956384&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=0fa59c8514d8efff50062d07a2a9ceb3&t=%D0%B1%D0%B8%D0%B7%D0%BD%D0%B5%D1%81%20%D0%B8%D0%B4%D0%B5%D0%B8

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956492&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=c58e6366cf02e5081ee6f3183960a24c&t=c%D0%B2%D0%BE%D0%B9%20%D0%B1%D0%B8%D0%B7%D0%BD%D0%B5%D1%81

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956555&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=8e4490ce6a416eccce006fe6ee656b5c&t=c%D0%B2%D0%BE%D0%B5%20%D0%B4%D0%B5%D0%BB%D0%BE

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956709&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=94265c8a637688e41c7ab49a3b71b6b2&t=%D0%B1%D0%B8%D0%B7%D0%BD%D0%B5%D1%81%20%D0%B8%D0%BD%D0%BA%D1%83%D0%B1%D0%B0%D1%82%D0%BE%D1%80

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956763&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=9bf98663cdc7a04eea35aea2a9100a3e&t=%D0%B2%D0%B5%D0%BD%D1%87%D1%83%D1%80%D0%BD%D1%8B%D0%B9

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225&ts=1337956879&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F&key=016a6ce828a9488fd2bad58f0463e6c9&t=%D0%BC%D0%B0%D0%BB%D1%8B%D0%B9%20%D0%B1%D0%B8%D0%B7%D0%BD%D0%B5%D1%81

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225%2C166&ts=1338059550&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F%2C%20%D0%A1%D0%9D%D0%93%20%28%D0%B8%D1%81%D0%BA%D0%BB%D1%8E%D1%87%D0%B0%D1%8F%20%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8E%29&key=002db03df8dbd14be62da93735aa899c&t=%D1%82%D0%B5%D1%85%D0%BD%D0%BE%D0%BF%D0%B0%D1%80%D0%BA

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225%2C166&ts=1338060104&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F%2C%20%D0%A1%D0%9D%D0%93%20%28%D0%B8%D1%81%D0%BA%D0%BB%D1%8E%D1%87%D0%B0%D1%8F%20%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8E%29&key=1b6a38158d1a8222a86b5c21373c2ce8&t=%D0%B8%D0%BD%D0%B2%D0%B5%D1%81%D1%82%D0%BE%D1%80

http://wordstat.yandex.ru/?cmd=words&page=1&geo=225%2C166&ts=1338060191&text_geo=%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8F%2C%20%D0%A1%D0%9D%D0%93%20%28%D0%B8%D1%81%D0%BA%D0%BB%D1%8E%D1%87%D0%B0%D1%8F%20%D0%A0%D0%BE%D1%81%D1%81%D0%B8%D1%8E%29&key=2373b21db7fbd115e721b7794282934b&t=%D1%81%D1%82%D0%B0%D1%80%D1%82%D0%B0%D0%BF%2B%D1%81%D0%B5%D1%80%D0%B2%D0%B8%D1%81



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Find Investor 10

Startup funding, finding investors, funds, or other source of money, ways to get investments.

Russian Venture Fund 10

Access to communities where users can find information, help, support, financing.

Startup Creation 8 How to create a startup, methodology, rules, technology.

Internet Startups 7 Users are interested in the Internet startups.

Startup Event 7 Startup events, seminars, conferences, Startup Weekend

American Startups 6

Interest in an international experience, access to foreign entrepreneurs.

Startup Education 6 Need for startup schools, courses, master classes,

Business Idea from scratch 6 How to create a startup, methodology, rules, technology.

Russian Startups 5 Startup Promotion 5 Marketing of startup projects.

Startup Video 5

Get knowledge about startups through video, shows, video lectures.

Startup. Buy a startup 5 A need to buy or sell startup project.

Business Idea without expenditures 5 Users don’t have money to spend

Business Idea Creation 5 How to create a startup, methodology, rules, technology.

Startup Catalogue 4 Catalogue or database of startups.

Startup jobs and team 4 Search for startup team members, or jobs in the startup.

Startup Review and news 4 Analysis, review and news about startups.

Startup support 4 Need for consulting services, support.

Investor Aims and Goals 4 Understand investors aims and goals, risks and problems.

Startup stages 3 Analysis of startup, methodology of creation.

Business Ideas from abroad 3




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Business Idea for free 3 Access to business ideas for free.

Business Idea for Countryside 3

There is differentiation between cities and countryside, which leads to different conditions of startups.

Investor Risks 3 Understand investors aims and goals, risks and problems.

Business plan 2 Managing startup 2 New Startups 2

Startup Platform 2

Not clear what users wanted, but may be this is direct search for services we want to create.

Startup Ranking 2

European Startups 1


Predeveloped Startups 1 Startup audiobook 1

Startup Blog 1

Access to knowledge about startups through social media, blogs, forums, etc.

Startup Environment 1 Startup Evaluation 1 Startup Forbes 1

Startup Forum 1

Access to knowledge about startups through social media, blogs, forums, etc.

Startup Ideas 1 Startup search 1 Startup site 1

Startup Woman 1 Not clear what users wanted to find.

Startup. Books 1

Startup. Competition 1 Startup grants through competition.

Process 2 – Determination of trends in SR

Google KeyWord Tool and Insights. Tables 10-11 contain list of ten key trends that were popular in April, 2012. Some of the lines were deleted because terms were connected with software development.



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Thus, we can see that Lean Startup, Startup Weekend, Startup Ideas, Startup Jobs and Startup America are the most popular searches in the world nowadays.

Table 10 – Trends in Search Requests in startup area (March, 2012)

1. the lean startup +1,600%

2. lean startup +350%

3. startup weekend +160%

6. startup ideas +60%

9. startup america +50%

Table 11 – Trends in Search Requests in startup area (April, 2012)

1. the lean startup +1,050%

2. lean startup +350%

3. startup weekend http://www.google.com/search?q=%22startup+weekend%22

+130%

5. startup business ideas http://www.google.com/search?q=%22startup+business+ideas%22

+80%

7. startup ideas http://www.google.com/search?q=%22startup+ideas%22

+60%

10.

startup jobs http://www.google.com/search?q=%22startup+jobs%22

+40%

Yandex WordStat Tool. Few terms were analyzed to determine the trends: «Стартап», «Свое дело», «Свой Бизнес», «Startup». All of them have the same meaning in English but slightly different in Russian. Period of time starts from April 2010 up to February 2012. This period is the maximum period that could be reached using that tool. Results are shown in the Figures below. But we could see is that words: «Startup» and Russian derivative from that - «Стартап» are not so popular. Total amount of searches is 320 109 and 286 856 respectively. Searches per month – 20 000 on the peak for both of the key terms. Whereas terms «Свое дело», «Свой Бизнес» which were more used historically are much more popular and give us 63 831 684 total searches for «Свой Бизнес» with monthly average around 3,5 mln; 502 688 475 total searches for «Свое дело» with monthly average around 35 mln SR.

http://www.google.com/insights/search/?hl=en-US#q=%22the+lean+startup%22&date=today+12-m&cmpt=q

http://www.google.com/insights/search/?hl=en-US#q=%22lean+startup%22&date=today+12-m&cmpt=q

http://www.google.com/insights/search/?hl=en-US#q=%22startup+weekend%22&date=today+12-m&cmpt=q

http://www.google.com/insights/search/?hl=en-US#q=%22startup+ideas%22&date=today+12-m&cmpt=q

http://www.google.com/insights/search/?hl=en-US#q=%22startup+america%22&date=today+12-m&cmpt=q

http://www.google.com/insights/search/#q=%22the+lean+startup%22&date=today+12-m

http://www.google.com/insights/search/#q=%22lean+startup%22&date=today+12-m

http://www.google.com/insights/search/#q=%22startup+weekend%22&date=today+12-m

http://www.google.com/search?q=%22startup+weekend%22

http://www.google.com/insights/search/#q=%22startup+business+ideas%22&date=today+12-m

http://www.google.com/search?q=%22startup+business+ideas%22

http://www.google.com/insights/search/#q=%22startup+ideas%22&date=today+12-m

http://www.google.com/search?q=%22startup+ideas%22

http://www.google.com/insights/search/#q=%22startup+jobs%22&date=today+12-m

http://www.google.com/search?q=%22startup+jobs%22



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Figure 43 – Statistics for the term «Стартап»

Figure 44 – Statistics for the term «Свой Бизнес»

Figure 45 – Statistics for the term «Свое дело»



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Figure 46 – Statistics for the term «Startup»

Process 3 – Determination of potential markets

Google search Google KeyWord Tool provides following potential markets according to the Regional interest (by country):

Table 12 - Regional interest in startups (by country) Country Search Index

15. Singapore 100 16. United States 89 17. Estonia 84 18. Trinidad and Tobago 78 19. South Africa 75 20. New Zealand 73 21. Jamaica 72 22. Australia 70 23. Canada 70 24. Philippines 66 25. India 60 26. Brazil 9 27. Russia 16 28. Indonesia 37

List of cities:

9. San Francisco 10. Singapore 11. Bangalore 12. Sydney 13. New York 14. Melbourne 15. Toronto 16. London



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All these lists were received by using “startup” keyword and related to it.

Figure 47 – Regional interest to “startup” (by country)

Figure 48 – Regional interest to “startup” (by city)

Yandex search Yandex KeyStat Tool gives us different picture (applying English term and Russian one):



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Figure 49 – Affinity Index of Startup key term through Yandex.ru

Interesting point is that Search requests in Russian are coming not only from Russia, but all over the world. For instance CIS countries have searched for “startup” too, even India has searches (around 2000) and rising interest of 254%. This means that we could have Russian speaking customers from abroad. Main results here are:

1. Regional interest to startup is higher where startup culture is more developed and advanced (the USA, Singapore, South Africa, New Zealand). However, there are also new comers such as Trinidad and Tobago, Estonia, Jamaica. Chosen markets of Developing countries (Russian) shows very low index of interest. India seems in this case more attractive market than Russia.

2. Searches for starting up a new business are coming not only from Russian territory but throughout the world.



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Process 4 – Market Size Determination

This section is still under construction and will be presented in later edition of report. Main problem that we found here is how to transfer monthly search requests into potential users and customers.



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About the Team

Vasily Ryzhonkov (Founder and Team Lead) aka the LifeStyler [email protected] Russia, Italy

Mounir El Ogbani (Software Developer) aka The Technophile

[email protected] Morocco

Naveen Bagrecha (Universal team member) aka The Wiz-Kid [email protected] India

Pavel Puchenkov (Designer, Software Developer) aka The

Schmozer [email protected]

Russia, New Zealand

Rajat Pal (Marketing) aka The Brain [email protected] India, UK

Peter Tamer (Marketing, Networking) aka the Showman Egypt

http://venture-lab.org/view_profile/16012

mailto:[email protected]









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Version of the Document

1.0 – Draft of the document. 17.05.2012 1.1 – Report submitted. 18.05.2012 (28 responses sample) 1.2 – Document under construction, (34 responses) 1.4 – Document is enlarged by 3 sections (Parts 2-4), online survey (46 respondents),



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List of Figures

Figure 0 – GSP Market Size Estimation Figure 1 – GSP Online Survey. Number of daily responses Figure 2 – GSP Online Survey. Region of origin & Age Figure 3 – GSP Online Survey. Sex & Years of professional experience Figure 4 – GSP Online Survey. Sphere of industry Figure 5 – GSP Online Survey. Importance of the Platform to the Global Technology Business Figure 6 – GSP Online Survey. Services of the Platform Figure 7 – GSP Online Survey. Services of the Platform Figure 8 – GSP Online Survey. Physical Infrastructure Figure 9 – GSP Online Survey. Sector of the industry presented in the Platform Figure 10 – GSP Online Survey. Cultural analysis and Advices on the Platform Figure 11 – GSP Online Survey. Period of time for using the Platform Figure 12 – Attitudes of Russian population and beginning entrepreneurs towards entrepreneurship, 2010, % Figure 13 – Dynamics of entrepreneurial intentions entrepreneurship 2011, % Figure 14 – Beginning entrepreneurs: women and men, 2006-2011, % Figure 15 – Distribution of established and early entrepreneurs among age groups, % Figure 16 – Education of entrepreneurs in Russia, % Figure 17 – Investment in Startups in Russia, % Figure 18 – OPORA Report. Structure of small enterprises, % Figure 19 – OPORA Report. Development of small entrepreneurship in a market economy, % Figure 20 – OPORA Report. Dynamics of SMEs’ development in Russia Figure 21 – OPORA Report. Federal Program of SME support in Russia Figure 22 – Vision of innovative system structure in Russia (according to OPORA) Figure 23 – Penetration of Internet in different cities in Russia, % Figure 24 – Speed of Internet connection, Mbs Figure 25 – Internet Audience Dynamics Figure 26 – Internet Economy in Russia, 2009 Figure 27 – Structure of Internet Economy and Invesments in Russia, 2009 Figure 28 – BCG e-Intensity Index in 2009 Figure 29 – Use of network resources and Internet technologies by companies in 2009 Figure 30 – Main barriers for more active Internet usage in 2009 Figure 31– Growth of the Internet economy (prediction up to 2015) Figure 32– Growth of the Internet economy (prediction up to 2015) Figure 33 – OPORA Survey. Structure of the sample Figure 34 – OPORA Survey. SME Development environment Index Figure 35 – OPORA Survey. Spread of corruption in various areas Figure 36 – OPORA Survey. Illegal payments to government officials Figure 37– OPORA Survey. Barriers for SMEs in Russia during last 2 years Figure 38 – OPORA Survey. Barriers to business (international comparison) Figure 39 – OPORA Survey. Barriers to SME Development Figure 40 – Optimal Startup team size Figure 41 – Motivational factors for participation in startup project Figure 42 – Method to determine market size via key word tools



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Figure 45 – Statistics for the term «Стартап» Figure 43 – Statistics for the term «Стартап» Figure 44 – Statistics for the term «Свой Бизнес» Figure 45 – Statistics for the term «Свое дело» Figure 46 – Statistics for the term «Startup» Figure 47 – Regional interest to “startup” (by country) Figure 48 – Regional interest to “startup” (by city) Figure 49 – Affinity Index of Startup key term through Yandex.ru



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List of Tables

Table 1 – Services by the Platform Table 2 – Services of the Platform Table 3 – Russian Internet Audience Table 4 – Russian Internet Audience (by jobs) Table 5 – Set of Key Words used Table 6 – What do people search in Google? Table 7 – What do people search in Yandex? Table 8 – Monthly searches of keywords in Yandex Table 9 – Main search categories vs problems according to Yandex Table 10 – Trends in Search Requests in startup area (March, 2012) Table 11 – Trends in Search Requests in startup area (April, 2012) Table 12 - Regional interest in startups (by country)

global startup platform_market research report_2012

Business

resolve issues related

predeveloped business plans

team members qualifications

gdp excluding oil

havent raised money

heavy founding teams

innovative system structure

governmental expenditures equal