Surpassing Germany in Internet users: “Russian Invasion” at DLD Women

RussianInvasion
RussianInvasion

To forecast the Russian presence on the global tech scene, three women and WIRED UK Editor David Rowan took to stage for an engaging session entitled “Russian Invasion” (named with “a good sense of German humor,” as Rowan opened, the crowd laughing). As only some in the crowd had recognized, Russia recently surpassed Germany in its number of internet users (at 47 per cent internet-penetration, roughly eight months ago). In 2001 there were less than 6 million people on the internet in Russia. With 70 million of its total 140 million residents using the internet, Russia is, as Rowan says, “primed for success”.

With more Internet users than Germany, Russia is “primed for success”

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The majority of new adopters come from regions outside of the major cities. In St. Petersberg and Moscow, users have been online for years. Based on TNS data in 2011, 5.3 million users are in Moscow alone. With massive new gains in remote areas of the country, Rowan demanded we’re still not hearing about the new break-out startups. “Where is the Russian Spotify, the Russian Skype?”

While there are companies like Evernote, Yandex and Parallels, and slightly less globally-recognized companies like Zeptalop (creators of the “Cut the Rope” game) and Mail.ru (a leader in all of CIS), I had to agree. It seems like Russian companies aren’t thinking nearly global enough, preferring to boast about an entrance into the Turkish market than anything more ubiquitous. “The aim of a Russian country is to become a market leader there,” said Russian media consultant Daria Batukhtina. “The Russian market, like the US market, is so huge that internationalization is often secondary.”

Female leaders in the Russian Internet scene

width="516"From left to right: presenters Victoriya Tigipko, Katia Gaika, Marina Treshchova

On stage was Marina Treshchova, the only female along with a team of men who founded Fast Lane Ventures (similar to Rocket Internet’s business model) in 2010, during a period of significant growth in the Russian marketSince then, it’s invested 100 million dollars in 19 companies, experiencing its first exit after only 18 months. In tune with the conference, Fast Lane Ventures has a 60 per cent female staff. Five of its CEOs are female. With many Russian companies (Games Insight, Oktogo…) naming women as their leads, this characteristically female leadership remains significant.

Another woman on stage was the Ukrainian Victoriya Tigipko, who runs a 50 million fund based in Luxembourg, active in the Ukraine and moreover globally. After one year, they’ve invested in 20 companies (from e-commerce to online travel companies and subscription model options), ranging from companies in Brazil to those in Germany, Eastern Europe, and two in the US (including Mile High Organics, the first online grocery registered by the US Department of Agriculture).

Government support for new startups

Also on stage was Katia Gaika of the Skolkovo Foundation (linking the Kremlin to the Russian startup scene), who spoke of her initiative for Russia to free itself of its dependence on gas and oil and to develop other resources: emerging talent in technology. “Skolkovo is not only investing or building a physical space, though the physical space is what’s easiest to understand about us,” Gaika said, showing us pictures of the enormous construction plan. “The companies that become part of Skolkovo receive tax reductions as well as support and funding (roughly 200 million it total, for the next five to ten years).”

Founded in September 2010, Skolkovo is addressing international political uncertainty by co-investing with foreign VC funds. In Germany, entrepreneurship development comes from ground up, with the government then scrambling to get involved. “In Russia things are very different,” says Batukhtina. “Incentive to develop entrepreneurship is coming from the government down, but not vice versa.” (Though she does mention Digital October, a center in Moscow independent of the government, is actively involved in the startup ecosystem development.)

“Maybe we’ll always look toward America, but maybe we should look more closely at our neighbors,” said DLD Women host Steffi Czerny to set the tone for the session. There’s a DLD Conference in Moscow next year. With the highest social network engagement (the longest time spent on site), Russia will innovate the sphere to meet its new demands.

For related articles, read:

The Top 10 Russian Internet brands to conquer the world

Russia’s Fast Lane Ventures – talking copycats and stereotypes with CEO Marina Treshchova

The Top 10 Russian internet entrepreneurs you need to know about