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Startup Sauna Goes Hunting in Siberia


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. On the unforgiving plains of central Russia and closer to Mongolia than Moscow, the city, he admits, is not exactly a stop on the tourist trail, even if it is Russia’s third-largest metropolis 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.

CRUCIAL BREEDING GROUND

Ylimutka acts as the “wingman” for Startup Sauna, a Northern European accelerator program that is starting to extend its reach deep into Russian territory in an effort to unearth 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 the country, including not just the top-tier cities but also such places as 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 Saint 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.”

MILITARY INFLUENCE

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 in businesses outside software and the Web. That included high-tech health-care 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 Saint Petersburg’s RosTechnoExport, which makes small autonomous helicopters that can be used by the oil industry.

“The more you move away from Moscow and Saint 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.”

FAMILIAR-LOOKING CLONES

Still, it wasn’t a parade of business ideas spun 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 Russia-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—has almost 200 million people, 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.”

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Johnson is a writer for the GigaOm Network

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