Doing Business European-style: Optimal Drive Will Accelerate in Helsinki
After winning the Finlanding category at the GoTech forum, ITMO Technopark’s resident Optimal Drive got the opportunity to participate in the NewGo acceleration program in Helsinki. This means that the company will get legal backing and advisory support from the Finnish accelerator that will allow it to enter the European market. Yaroslav Smirnov, the company’s CEO, shared about the peculiarities of launching a business in Finland and the new prospects of his company.
What is Finlanding
Finlanding is a category in the tech projects contest that took place at the GoTech forum for novice entrepreneurs in Moscow, supported by the Helsinki Center in St. Petersburg. The contest’s winners got the opportunity to participate in the NewGo acceleration program in Helsinki or the Level-up program in Kotka, and then launch their pilot projects in the cities of Helsinki, Kotka or Lahti. They will also get advisory support from the Helsinki Center for bringing their product to the market, as well as registering and developing their business in Finland. Also, the winners will get the opportunity to participate in Northern Europe’s biggest startup-event Slush-2017 which will bring together successful startups and representatives of the industry.
Only the more “mature” startups that already have sales in Russia and aim for international markets could participate in Finlanding; another prerequisite was the companies’ focus on projects in the field of Industry 4.0, IT, IoT and smart cities. Optimal Drive became the winner with their odgAssist project - a system focusing on automation and diminishing errors in Industry 4.0.
ogdAssist for medical industry. Credit: youtube.com
The new system will help automize many routine processes like filling in reports and product quality control. For instance, instead of making reports, employees will be able to just launch particular programs via a portable device. This will decrease the time spent on working with documents and thus increase efficiency.
“Some two years ago when we had only launched our company and came to ITMO’s Technopark, we participated in a contest with a similar prize - participation in an acceleration program in Finland. Yet, we were just an immature startup at that time, with only two customers, and I understand now that there was no point for us in going abroad. At that time, the members of the jury told us that there were three factors that showed that our startup was immature: our confidence in that we had no competitors; the inefficiency of our copy protection technology and undeveloped financial model. As of now, we have successful cases in Russia, and are ready for the global market,” comments Yaroslav Smirnov.
Pro’s and con’s on entering European markets through Finland
According to Yaroslav, the main advantage is that Finland has a really transparent economic system. Though it seems more complex from the legal angle, it is a lot easier to “navigate”, as all the participants work in common conditions. For instance, in FInland they are really meticulous about the deals’ legal and accounting transparency, as well as the enterprises’ inner processes. The drawback is that legal and accounting services are very expensive, so financial and legal support plays a great role for Finlanding’s winners.
Secondly, the Finnish industry is more open to innovations and new things in general. In Russia, only major companies have innovation departments that are confident in their survival in the course of some 15 years, and thus are interested in envisioning the future.
Thirdly, Finland is an active member of the European Union, so founding a branch office there can greatly simplify the legal aspects of conquering the European market. Yaroslav Smirnov underlines that working on the global market within the Russian legal framework is very complex. So, Optimal Drive is likely to open a subsidiary in Finland. For Finland, such cooperation is profitable, too, as the company will pay taxes despite returning the profits to a Russian company.
Fourthly, thanks to working in Finland, Optimal Drive will be able to improve its branding strategy - improve its PR-model, presentations, and marketing as a whole. As of now, the company offers particular solutions for particular customers, yet we need to start focusing on our startup’s competitive advantages. For instance, that our company makes use of machine learning and computer vision, and thus allows our customers increase the economic efficiency of manufacturing processes.
Among the drawbacks of working in a Scandinavian country, Yaroslav Smirnov stressed the extremely long processes of effecting contracts between companies. First, they negotiate, then sign letters of intent, and only then take real action. To speed up this process, the business hub in Helsinki organizes meeting between the NewGo’s participants and incentivized representatives of the industry. Thanks to that, the startups, Optimal Drive included, can better understand potential European customers so as to offer more targeted solutions.
“We have a plan, a strategy for up to 2019, yet in our condition, we can’t be 100% sure about anything. The point is that we work with major companies, as well, and this is always risky, as they can create their own development departments, and no longer need our solutions. Also, to work with major companies, startups have to have cases of their solutions’ introduction at enterprises, which we already have and continue working on. Also, we now understand how investment mechanisms work and are planning to attract investments for entering the European market,” comments Yaroslav Smirnov.
He also referred to an example of a visionary’s perception of the future by David Yang, founder of the ABBY company. Based on this example, companies must use modern technologies not just because of the hype around them and “everyone’s doing it”, but for mending the weak areas in their projects.
“Even in a system that’s been organized in a “classical” way, ones based on relational databases, for instance, one can find something that can be improved by using AI technologies. The important thing here is to have a deep understanding of the opportunities offered by modern instruments, the fact that they’ve already matured and are to be considered. If you change your perception from “hype for the point of it”, this can help you better perceive the future and develop really relevant products,” concludes Optimal Drive’s CEO.
The company is planning on going to Helsinki for the NewGo accelerator this spring; the schedule’s details are yet to be specified, but the participants expect it to be some two-week intensive course.