Startup Sauna goes to Siberia on the hunt for success

Antti Ylimutka has just returned to his home in Helsinki after a trip to the far-flung reaches of Siberia. In particular, he was visiting the city of Novosibirsk. Nestled on the unforgiving plains of central Russia, and closer to Mongolia than Moscow, he admits it’s not exactly a stop on the tourist trail, even if it is Russia’s third largest city and about the same size as Philadelphia or Vienna.

“Let’s just say at 2 a.m., when it’s cold and dark, you really feel like you are in Siberia,” he says. “Novosibirsk was voted the world’s ugliest city five times in a row.”

The visit wasn’t meant to be part of a commentary on the city’s architecture, however. It was about trying to find startups.

Ylimutka acts as the “wingman” for Startup Sauna, a Northern European accelerator program that is starting to extend its reach deep into Russian territory as a way of unearthing talent. And even though Novosibirsk isn’t officially in Europe at all, Startup Sauna sees cities like it as a crucial breeding ground for future generations of world-changing startups.

That’s why the organization recently toured around the country, including not just the top-tier cities but also places like Novosibirsk, and the more central cities of Yekaterinburg and Kazan. Searching for great companies was interesting, although not exactly easy.

“Finns have so many prejudices about Russia,” laments Ylimutka, “But St. Petersburg is like the Venice of Northern Europe. And Moscow’s such a big city. It is a really distant culture, but on a people level, they are really similar… they want to create awesome startups with awesome products too.”

Startup Sauna’s blog has detailed a few of the companies that were invited to join the program, including Osklad (warehouse inventory software for business) and AppScale, which allows apps to tap into social network APIs more easily.

But a lot of the action came from companies from traditions outside software and the web. That included high-tech healthcare companies such as Maxygen, a vaunted Moscow startup focused on low-cost, rapid DNA testing; and Celoform, a sort of next generation bandage hailing from Yekaterinburg. Then there was St. Petersburg’s RosTechnoExport, which makes small autonomous helicopters that can be used by the oil industry.

“The more you move away from Moscow and St. Petersburg, the more technical it gets,” says Ylimutka. “The high-tech stuff is what really makes Russia interesting. Part of it is probably because there is more of a military influence in these parts of Russia.”

Still, it wasn’t a parade of business ideas that span out of military technologies. Most of the companies Startup Sauna met were clones or versions of other services.

“It’s really difficult getting out of the Russian-centric mindset, and it’s still mostly me-too products. The West has Facebook; Russia has Vkontakte, for example.”

In reality, it’s easy to think that this market is big enough or important enough, even if that’s a mistake. After all, the region that Startup Sauna covers — Finland, Estonia, Latvia, Lithuania, Poland and Russia — have almost 200 million people between them, though admittedly Russia and Poland count for the vast majority of that. Culturally, they are distinct and often suspicious of each other (not surprising given the history of the Soviet Union) but they also have a lot in common.

In the end, Ylimutka says, having broader ambitions is about fostering an entrepreneurial culture that looks beyond borders.

“In our region,” he says, “Since we’re lagging behind in business skills, it is really important to help build them.”

Photograph used under Creative Commons license courtesy of Flickr user mksystem