MIT Experts on Russian Entrepreneurship

MIT Global Startup Labs program started off in the Business Incubator of ITMO University in June. The program goes on for eight weeks and is organized by Massachusetts Institute of Technology. Starting from the year 2000, a similar MIT GSL program has been carried out in 14 countries, altogether 59 times. This summer marks the first time that the program is conducted in Russia. The goal for the students from St. Petersburg, Moscow and Irkutsk is to gather their teams and to come up with a prototype for a mobile application and a marketing strategy with the help of curators from MIT and Sloan School of Management.

The 29 students who participate in the program have been selected from a pool of applicants with different specialties. Among them are students of programming and economics from several Russian universities. For two months the participants will undergo intensive training to develop the skills needed to begin a successful startup. At the same time they are supposed to come up with their own mobile application and a business plan to be able to enter the market. In August the program will end with a demo day, where the teams will present their application prototypes.

The whole process will be supervised by MBA students from MIT representing the Department of Electrical Engineering and Computer Science and students from Sloan School of Management – Khatantuul Zorig Filer, Shruti Banda, Annie Phan and Damian Barabonkov. They shared with us their thoughts about the strengths and weaknesses of Russian entrepreneurs, about how the “hacker mentality” can help in business and what can be helpful when establishing a startup society in the context of a large country.

The program MIT Global Startup Labs started in 2000, and this year it will be carried out in Russia for the first time. Why now, exactly?

Khatantuul Zorig Filer: Actually, there has always been interest in Russia towards these kinds of programs. But this year we managed to find partnership and support from Skolkovo and ITMO University. Last year we did the program in Mongolia, and the results were good. That’s why we had one more reason to continue in the same region this year.

What are your impressions on entrepreneur activities in St. Petersburg and ITMO University?

Khatantuul Zorig Filer: I had read an article about the Business Incubator in ITMO, but I was still surprised by the speed of development of entrepreneurship programs here. In St. Petersburg we have met several specialists and mentors who teach entrepreneurship. I feel that ITMO is doing very well in this area.

Shruti Banda: On top of that I was impressed by the Business Incubator itself. In the previous school where I worked there wasn’t much space for group work. In MIT there are certain areas made for this purpose. Also, here I have noticed that the students have places for group projects on several floors, which seems to be enough. That is really great because students can get together and share ideas. New entrepreneurs need this kind of support from universities, as they don’t have enough of their own resources yet.

In August the students taking part in the program will present their prototypes. What are you expecting to see then? How would the students be able to continue their work?

Khatantuul Zorig Filer: The eight weeks of the program are quite intensive, and the students have a chance to work with their team from the very beginning of the course. The teams will develop their ideas exactly like in real life. In August they must already present their prototype in front of possible investors. In addition to our program here, we are also working on the task of developing global technological entrepreneurship. Our goal is to see the participants continue working on their projects and come up with new ones.

Shruti Banda: The program is based on MIT’s best practice models. We had a good experience with an education system that teaches serial entrepreneurship, and we are now eager to share our experiences with others. During these eight weeks we will focus on both entrepreneurial and technical skills. On top of that, we want to emphasize communication skills, leadership skills and other, so-called “soft skills”.

You already had a chance to chat with the participants. Did you notice any assets the Russian beginner entrepreneurs might have?

Khatantuul Zorig Filer: First of all I would like to mention their good basic knowledge of how to start a business. I was expecting to begin our program with the very basics, but it seems that there is no need for that. The Russian students are also asking very practical and difficult questions.

Russian students are also very straightforward, which helps us to understand how effective our teaching is right away. I think our cooperation with the students is off to a very good and open-minded start.

Shruti Banda: The participants of the program are very interested in what they are doing. We even have some participants who left their jobs for two months to take part in our program. Even the ones who are not yet sure about their skills in this project are planning to work with entrepreneurship in the future. It is very nice to see 21-year-olds who are so determined and motivated.

Is it different in the US?

Khatantuul Zorig Filer: The people we are working with here have the spirits of entrepreneurs, as they are challenging themselves every day. I feel that at this age, the youth in the US are a little less independent. Here, it seems that the students we have talked with really know what they want.

Damian Barabonkov: We have also noticed that the students here are ready to admit their mistakes. They can admit that a project in the past didn’t succeed. In the US, people are usually not as open about unsuccessful projects and mistakes.

Shruti Banda: This openness can be useful, because we can help to analyze the reasons behind the failure. During our lectures some of the students even suggested analyzing these reasons from their own initiative, and that is a very good attitude to have.

What kinds of weaknesses do the Russian beginner entrepreneurs have?

Annie Phan: We noticed that even small groups of students are often ready to go around the rules.

Khatantuul Zorig Filer: Yes, sometimes they can just ignore half of the rules but in the end still get results. It probably looks like a weakness from our point of view, but for them it is a kind of asset. Searching for innovations, too, sometimes requires one to “go against the system”. This ability can be useful in both small and big companies, as well as in life in general.

One more thing that the students might have to work on is their level of English, which we expected to be a little higher. After the first lectures we started to speak a little bit slower and changed our methods a little to make sure that everyone keeps up. But I have to add that the students are constantly making progress.

Shruti Banda: I have also noticed that the knowledge level of the students can vary a lot, as there are students from different parts of the country, from different universities. In the US there are more incubators and programs of this kind around the country, which means there are more possibilities for everyone. In Russia outside the biggest cities these programs are not always available.

In Russia this topic has been discussed a lot lately. Not long ago, the Russian government published on their website a task about developing technological entrepreneurship in the nation’s universities addressed to the Ministry of Education. From your point of view, how effective might this kind of approach be?

Khatantuul Zorig Filer: I believe that this kind of development is possible even without government support. On the other hand, it is no secret that government regulations and laws can affect entrepreneurship a lot, mainly making it more difficult. That is why, all in all, it is a good idea for governments to support entrepreneurship and startups.

Shruti Banda: In addition, developing something on a very large scale is not possible for only one university or organization. Even in MIT the activities are limited to a certain territory. This is why developing a global education system in the field of entrepreneurship is a task that only government and ministries can fulfill, when the people of Moscow, St. Petersburg and other cities are ready for the process.

Is this a unique style of handling the situation?

Shruti Banda: Definitely not. For example in India everything that has been created in the last ten years in the startup ecosystem has come from the governmental initiative. Government has been supporting startups, for example, by reduced tax regimes and through development of business incubators. India is also a huge country where none of the universities or other organizations could handle the situation without help from the government.

What about the cooperation between MIT and ITMO universities – will it be possible to continue working together on the development of technological entrepreneurship?

Khatantuul Zorig Filer: Yes, continuing our cooperation is one of our goals. MIT Global Startup Labs works as a test run to see how we could organize similar programs in the future. We are hoping to get good results this year so that we can get the financial support for next year’s program.

Translated by Mia Eriksson

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