Russia, like China, is a market full of tech promise, but in the face of strong local competition, it is one that has also proven to be tough nut to crack for big U.S. companies looking for international growth.
But according to one IT leader in the country — Alexander Turkot, executive director of the IT Cluster at Skolkovo, Russia’s multi-billion dollar Silicon Valley-like work in progress — the game is not over for the likes of Facebook and Google. In a briefing this morning, he also had some good insights into what is happening in early-stage investing in the country, and what Russian startups need to be doing to get ahead.
The search market is still largely dominated by Yandex, which as of this month has a 61.3 percent share of all searches to Google’s 24.9 percent, according to LiveInternet. Mail.ru is the third-largest with an 8.5 percent share. In web mail, Google doesn’t even make the top-ten providers, with mail.ru holding over 90 percent of the market.
But there appears to be a sign that Google is looking to redouble its effort in the country, perhaps as a route to growing a more local operation that can better tackle the market here.
According to Turkot, Google may soon also be joining other Western companies like Microsoft, IBM and Intel in the Skolkovo initiative.
Turkot notes that Eric Schmidt, Google’s chairman and ex-CEO, already sits on the board of directors of Skolkovo, and “our guess is that sooner or later Google is going to start [at Skolkovo].” Ironically, he added that Google’s other obvious Russian connection, co-founder Sergey Brin, has almost worked in the “opposite direction” for Google doing more in Russia. “Sergey’s memories of Soviet Russia do not help us much with Google,” he said.
Facebook, meanwhile, has an arguably bigger challenge ahead of it. The social network currently only has less than five percent market share in the country, according to figures from LiveInternet, with Vkontakte leading the market with a 63.6 percent share this month, and Odnoklassniki at 13.8 percent.
Turkot says that the best thing for Facebook to do, if it wants to get serious about entering a market like Russia, is not to invest in existing rivals (or try to acquire them outright) but to focus on building up its own business in a more locally-focused way.
“Facebook as a platform has a lot of technology,” he said, and that needs to be used to make investments not in basic socializing — “not an attraction any more in Russia” — but in media and content partnerships.
This would also help it chase business that its main competitor, Vkontakte, has been cornering at the moment. Whereas three years ago Vkontakte “was a complete copy” of Facebook, now it has become more content-oriented — sometimes illegally, but always with a lot of traction, bringing in close to a billion dollars in revenue in the process.
Turkot speaks from experience: one of his past role was as the head of MySpace in Russia, a project he says failed for two reasons: not enough local content and a simple fact of being late to the market.
Some other interesting points from our meeting earlier today:
Angel investing. This is still in its early stages in Russia, Turkot says. There has been some development in this early-stage funding — for example Yuri Milner and Pavel Durov’s StartFellows project, giving grants of $25,000 to select early-stage companies, with Milner in Moscow just last weekend to promote the program. And Skolkovo is offering grants of $50,000 to companies, with an annual budget of $50 million and last year distributing some $45 million in grant money.
But by and large what passes for angel investment here is discouraging, Turkot says. “There is no culture of seed or angel money available here yet,” he said. “You cannot call it a civilized market when an investor wants to take a 45 percent share in a business in return for a $60,000 investment. They’re killing the business and the idea if from the first round they take control of the business right away.”
He seems frustrated, too, that Skolkovo hasn’t done more in this area. He says that when he came on board to run the IT cluster, the question of whether Skolkovo should also consider investing in projects was still being considered. So the moment, Skolkovo can only give grants, with the only hope of influence on a project being a slow release of funding with goals set throughout the process.
That’s something that Turkot says he will be looking to change soon, by getting involved in investing himself. He says that this is a recently new development: permission was only granted “a week ago” for those involved in Skolkovo to invest money directly into Skolkovo startups. He cannot be a general partner in any investment vehicle but he will be able to contribute. He says this is an important thing to do: “It’s a public show of my approval, that I believe in what I do,” he says.
And if it’s not already clear: this is also a signal to investors from abroad that there may be a lot of opportunity in angel investing here.
The rise of “me-too” tech projects. One area where Skolkovo will not invest under Turkot is in “me-too” startups, effectively recreating what has been done already. For example, no more social networking sites, he says. “I personally believe that one big social network is enough. It used to be MySpace and now it is Facebook,” he says (notwithstanding the fact that there is still more growth to be had in countries like Russia).
Act locally, think globally. Turkot says that Russia is still trying to recover from the “brain drain” that took place just before the end of the Soviet Union and subsequent years, where talent either left to pursue work in the U.S. and other countries like Israel, or left the field of tech altogether to go into more “prestigious” areas like banking, law and medicine.
This is something that still needs to be repaired, he said. But although he wants a better national culture for tech innovation, he says that when it comes to startups their ambitions should be anything but national — unless they are solving a specific Russian need around an area like biomedicine. Nationally-focused tech startups, he says, are dead-end and need to set their sites further afield if they want to succeed, so this is a chief criteria for when he is assessing Skolkovo grants.
More on Skolkovo from our story last month here.
A ‘smart watch’ that connects to an iPhone or Android to display information that appears on your phone seems somewhat of a no-brainer, but until now few convincing efforts have appeared. Now, a team has developed the “Pebble” project to do just that, and they have clearly untapped a latent need for such a watch amongst smartphone users. After asking for $100,000 on Kickstarter to create a few thousand devices, they’ve raised well over $3 million over a month before their stated goal. Indeed, Pebble raised $1 million in its first 28 hours.
The Pebble is a slim, water resistant, scratch resistant, watch with an e-paper display. This display means it has a 7 day battery life (charged via USB) and is also easily visible in daylight just like a Kindle display. LCD displays would eat up way more power, so the e-paper aspect to this is very much part of this very clever take on a smart watch.
Connecting via Bluetooth to the phone, the Pebble interfaces with the phone via a iOS or Android app. Alerts can be customised for emails, notifications or messages and the Pebble people claim the watch will run apps to cover cycling, golfing or running, and use its accelerometer to monitor your activity, just like the Nike Fitband.
Alerta, the company behind the Pebble, also makes the inPulse smart watch which is a full color LCD screen watch, so it has experience in this arena.
You can back the project in a variety of ways, but you can get an actual watch (basic black) starting with a $115 pledge.
Could the white Pebble become the must-have device? We’ll see, but it’s on its way.
Read more from the original source: Pebble Smart Watch Raises Over $3M On Kickstarter After Asking For Only $100K
The addition of a web-based version of Skype that works without plug-ins could provide a better user experience than today’s Skype Facebook app currently offers, but it could also extend the browser to anyone with a modern web browser who wanted an alternative to running desktop software.
Team at Skype is looking for passionate, team-oriented and self-motivated developers to help us bring Skype experience on to the Web.
You will have a chance to integrate existing Skype solutions on to the web with the support of the backend services build from the ground up using latest Microsoft technologies.
Result [sic] of your work will be used by hundreds millions of thankful users worldwide. You will work in dynamical environment with the team of true professionals participating in defining, designing, developing, testing and documenting one of the most popular applications of the modern world.
You will closely cooperate with colleagues developing Skype cross platform core library in Tallinn, Estonia, audio/video team in Stockholm, Sweden, User management team in Prague and web plug-in team in Palo Alto, US.
So far, the postings refer to jobs in Prague and London only.
In addition to possibly providing an improved experience for Facebook users, the Skype for Browsers experience would also serve to bring Skype to the Metro version of IE10 on Windows 8, which won’t support plugins.
Microsoft acquired Skype for $8.5 billion last spring, finally bringing it to Windows Phone just this February. Skype is also available on Windows, Mac, and Linux, iOS, Android and Symbian, some smart TVs, and more.
Wikipedia and all of its related projects are obviously driven by the work of thousands of volunteers. Interestingly, though, while Wikipedia runs on top of an open-source stack, it’s been traditionally very hard for volunteers to help the organization run its sites. Most of that work is currently done by paid employees. For about a year and a half, though, the Wikimedia Foundation – the organization behind Wikipedia and its sister projects – has been quietly working on Wikimedia Labs, a new project based on OpenStack that will allow volunteers to help the Wikimedia team develop, test and deploy changes to the organization’s back-end infrastructure. Wikimedia Labs launched as a closed beta back in October 2011 and is still in closed beta today.
To be clear, Wikimedia Labs isn’t so much about developing the Wikipedia software, as about running and improving the infrastructure that keeps massive projects like Wikipedia up and running smoothly. Some of the projects the current community of volunteers is working on include the infrastructure that hosts the numerous bots that automatically edit Wikipedia and a collaborative project with OpenStreetMap to improve that organization’s infrastructure and to add OpenStreetMap support to Wikimedia’s projects.
As Ryan Lane, an operations engineer for the Wikimedia Foundation, noted today, in the early days of Wikipedia, volunteers often had root access to the project’s infrastructure. As Wikipedia and its sister sites grew, though, and as downtime became less acceptable, the foundation slowly reduced the degree to which volunteers had access to its infrastructure. According to Lane, Wikimedia hasn’t “had a new volunteer root in years. We haven’t even had a new volunteer with shell access.”
The reasons for this are understandable. While open-source software development tends to scale pretty well, after all, operations doesn’t exactly lend itself to crowdsourcing.
What Wikimedia is doing now then, is setting up an infrastructure that allows volunteers to test and document their contributions. If accepted, that work can then be deployed live to production. This, writes Lane, allows the operations team to regain some of the flexibility it had in the early days of the organization without risking downtime and other issues.
Crowdfunding site Kickstarter has allegedly banned transmedia artist Rachel ‘Haywire’ Marone after one of her projects received too much comment spam from what she describes as a ‘cyberstalker’ almost a year ago.
Marone says she received this email from Kickstarter’s community manager:
Daniella from Kickstarter here. Throughout the duration of your project, Extreme Futurists, there was an incredible amount of comment spam that several members of Kickstarter staff removed on your behalf. It has come to our attention that this comment spam has persisted at an alarming rate, and that you have engaged in conversation with the spammer. There are now over 300 spam comments that include your own engagement on your project.
This kind of activity is not allowed on Kickstarter; it violates our community guidelines. For this reason, we are removing this project from the site as well as suspending your ability to create projects.
Marone’s manager recently noticed that her account was accessible again, and sent Kickstarter an email asking if it was okay for the artist to create a new project on the site. The response, from the same community manager:
Thanks for writing in. If there is any chance that Rachel will receive spam from a stalker on her project, she should not create one. We simply cannot allow a project to become a forum for rampant spam, as her past project became. If this happens again, we will need to discard the project and permanently suspend Rachel’s account.
Marone’s post is currently on top of Hacker News, and the people of the Internet are making up their minds about the situation, some calling out Kickstarter for behaving unreasonably, others accusing Marone of simply trying to grab attention under the digital spotlights by unfoundedly criticizing Kickstarter’s decision.
Ammunition for the latter group: there’s some history of Marone getting banned from websites for different reasons (including Facebook, by her own account).
The sensible thing would be to await Kickstarter’s official response about this before breaking out the pitchforks, but it’s the weekend and Kickstarter is based in New York City, which means it’s still quite early in the day for the team.
A couple of things to keep in mind. According to Marone’s blog post, Kickstarter banned her at the end of April 2011, so it’s worth asking yourself why she waited this long to come forward. On Twitter, she also comments that she was afraid she’d get tons of backlash because so many people love Kickstarter.
If Marone is indeed telling the whole truth, it reflects poorly on Kickstarter because banning would seem like the last resort after attempting to amicably resolve the situation to everyone’s benefit and with a lot more conversation.
We are, however, aware that there are two sides to every story, and it’s a good thing to be familiar with both of them before forming an opinion.
Kickstarter is growing fast and it’s almost inevitable that situations like this arise. Just a few days ago, Kickstarter got heat for rejecting a pro-porn industry film.
We’ve contacted Kickstarter and will update as soon as we receive an official statement from the company.