Jeffrey Donenfeld On How Russian Startups Can Enter US Market
Jeffrey Donenfeld, Investment Manager at Boomtown Accelerator, gave an open lecture in St. Petersburg as a part of the Professional Fellows international program. He talked about why it is important to gain support of American advisers, develop your business skills and protect your IP.
In autumn 2017, four specialists from the Kazan IT Park took part in the Professional Fellows program designed to promote collaboration on innovations between specialists from the US, Russia and other countries. The program features a month-long intensive course for young leaders from different countries and fields. As part of the program, one of the experts the Russian team worked with will come to Russia. As Rustem Yunusov, a participant from Russia took part in the program in Colorado, this project was developed in collaboration with Jeffrey Donenfeld, Investment Manager at Boomtown Accelerator in Colorado. Five Russian cities were selected as the most innovative. Among these cities are Moscow, St. Petersburg, Sochi, Kazan and Naberezhnye Chelny.
“The greatest thing about this program is that it gives you an opportunity to share experience and learn more about how technologies work in other countries. The whole event is about giving people a better insight of how to achieve mutual understanding through collaboration in the field of technology and innovation. People expressed serious interest in the way technological processes work both in Russia and in other countries,” commented participant of the Professional Fellows program 2017 Lenar Khalikov, head of the Aida Ventures Accelerator and a co-founder of the REG.FM startup.
Jeffrey Donenfeld, Investment Manager at Boomtown Accelerator and head of the Four North Media Group, has an MBA in Business Administration from the University of Denver’s Daniels College of Business. Jeffrey Donenfeld has played an important role in attracting and managing multimillion-dollar investments in the private sector. He also has experience in technology development and investment analysis. At the presentation of Boomtown Accelerator, Mr. Donenfeld spoke about the key things to keep in mind if you want to enter the American market.
It’s no secret that the US market is the most attractive for startups (especially in the field of IT) and many startups from all over the world want to be part of it. Here are some tips that might help your project enter the American market successfully.
Register your company in the state where you want your business to reside
First of all, you have to incorporate your business in the USA, as this will allow you to work with the American business infrastructure. You can do it yourself or with the help of an accelerator (e.g. Boomtown works with startups on assessing these items all the time).
Build a network of advisors
Russian teams often come to the US thinking that they’ve come up with a cool technology, which they only have to present, and the trick is done. They present it, all the experts say that the technology is good, and that’s it. Nothing happens. No contracts, no money. Some teams give up, while others try their luck at other competitions, but nothing changes. To avoid getting in such a situation, it's necessary to have an advisor, a consultant or a mentor in the US who can recommend you to American investors. It is very difficult to secure a foothold in the international market without an adviser.
Constantly develop both your technical skills and business skills
Experts note that there are quite a lot of skilled and talented developers in the CIS countries, but many of them don’t know how to make money on their projects.
“I was surprised to find out that people there can earn millions of dollars on some simple technologies. And these people ask us why we’ve come up with such a great technology and don’t make money on it. I’ve noticed that we in Russia don’t want to ask for money because our ideas seem too obvious and simple. While in the US, people usually think that if their technology can change someone’s life for the better, it’s valuable and should cost money,” comments Lenar Khalikov.
Apply your idea to the US market
This doesn’t mean that all your ideas and developments must stay in the US forever, but that you should take the country’s infrastructure into account. You can’t just go to DemoDay, present your project, win and go back.
Protect intellectual property rights
One of the first questions you will be asked at any accelerator is “can you protect your ideas?” Remember that your methodology or technology should be protectable. It doesn't necessarily mean that you have to patent it straight away, but you have to be sure whether you’ll be able to protect it.
If you’re launching an app, for example, be able to tell just how many real users you have, and what feedback you’ve gotten from them. This has to be able to prove that your technology works as it should.
The accelerator Boomtown is located in Boulder, Colorado. They invest in startups within 16 industries (IT, media, telecommunications, marketing, finance, transport, medicine, etc.) and across 32 technologies (AI, blockchain, MR, big data, etc.). Twice a year they recruit early-stage startups and over the course of 90 days teach them how to turn their ideas into profitable, scalable businesses. The program ends with a DemoDay during which startups present their projects to potential investors.
On another note, ITMO University's Entrepreneurship Center is going to launch the International Open Startup School for international projects interested in entering the Russian market. The event will take place on August 20-31.