Development of a startup ecosystem and e-commerce market using the example of CentroBit

The end of the year is the time to take stock and reflect on trends that will affect our lives in the future. Today we decided to look at two seemingly different topics - the development of a startup ecosystem and the evolution of the ecommerce market in Russia - illustrating our thoughts with examples from the life of our company.

E-commerce

Domestic ecommerce is developing at a rapid pace - in the first half of 2013 alone, its volume amounted to 160 billion rubles. Analysts point to the "acceleration" of the market - in 2012 it grew by 23-25%, and in this growth will be 29%. According to various forecasts, ecommerce-turnover by 2015 will amount to $ 30 billion. Such growth rates correspond to the US market.

This will inevitably lead to a multiple increase in the number of online stores - now there are about 48 thousand - and to an increase in the number of new startup projects that will help the ecommerce market participants in one way or another to solve various problems, thereby claiming their piece of ecommerce -pirogue.

For example, one of the main problems that online stores face when working with suppliers of goods is the so-called drop shipment model in which the store does not purchase goods at its warehouse, but implements it immediately from the supplier’s warehouse. Only large players, such as Ozon, Enter or Lamoda, can afford their own warehouse.

Startup

To alleviate this situation, we at CentroBit decided to create an Agora cloud platform that contains B2B and B2C commerce models, a content management subsystem and a B2B portal for market participants.

The main idea of the project is to create an online sales office for various companies distributors, dealers, resellers and manufacturers, which would allow you to sell the goods in the channel of online stores. In this case, stores would be spared the need for costs for the purchase of goods at the warehouse.

It was decided to divide the development of the project into two stages:

A cloud service for each Agora Optima supplier, which will allow you to work with a pool of its online stores.
Global trading portal AgoraB2B.ru for the sale of goods suppliers in the channel of online stores. In other words, an online warehouse of suppliers of goods.

Difficulties

Development started in 2011 and was carried out at the own expense of the founders of the company. As a platform, we initially chose PHP. Then the first version of the service and a connector for 1C: Trade Management appeared. Testing on the first clients revealed the problem of the low speed of the framework and the flaw in the 1C connector. As a result, we changed the framework to Python and created a connector for 1C, which connects in two clicks and allows you to adapt to changes in the configuration of 1C.

In mid-2012, a new version of the service was released and official sales started, which made it possible to get the first investment. These funds went to marketing and expanding the staff, but otherwise, we, like any decent startup, optimized the costs as much as we could. So, the whole team worked on Linux, and for working with documents we used OpenOffice. Of course, this was inconvenient, but on the other hand, it saved money.

Here the Microsoft BizSpark program helped us a lot, thanks to which we not only significantly saved on software (according to our estimates, more than $ 70,000 came out), but also got into the Microsoft Startup Accelerator acceleration program. We were able to become winners of this competition, which brought us contacts with potential investors and new customers.

Venture Investment Trends

The domestic startup market, like ecommerce, is developing quite actively. There are more and more venture capital funds that are quite actively investing in new projects, and, notably, the state has also very seriously connected to the process of financing startups at the seed stage in the last year (we can recall RVC and IIDF).

With all this, the majority of investments, as is customary in Russia, take place in a “quiet” mode, when neither the investor nor the startup team once again spread about the deal. Thus, for many beginning entrepreneurs, it becomes a real problem to simply collect information about investors in the market, their exits and areas of work.

In this case, active participation in various events (conferences, forums, exhibitions, start-up parties) can serve a great service to the team of the new project, since there are quite a lot of them on the market now. Despite the fact that you can often hear an opinion about their futility, but as the experience of our company shows, this is not entirely true at startup events, you can not only exchange experience with colleagues, but also establish contacts with investors and find new customers.

To illustrate, only in the last year we have taken part in several diverse events (links include reports from visits):

As a result, in 2013, our company CentroBit and the Agora project entered the list of 100 most promising innovative projects in Russia and reached the final of the Startup of the Year 2013 award - without active networking at events, it would be very difficult to achieve such results.

Conclusion

From all this we can conclude that the field of e-commerce is one of the most promising in order to start a new business. And it’s not at all necessary to create another online store, it’s much more interesting to establish a startup that will really help the participants of this market. This thesis is confirmed by an example of such projects as RetailRocket, which recently received significant investments and was included in the list of the most promising Runet projects.

On the other hand, starting a new project is hard work, which becomes even more difficult given the general closure of the Russian venture industry. In this regard, various events, such as industry exhibitions and conferences, as well as “startup” parties, hackathons and meetings, can be an excellent tool for promoting your project.

We hope that our experience will be useful and one of the readers of our blog will also become a participant in the e-commerce market, which together we can change for the better.

Thank you for your attention, we will be happy to answer questions in the comments. Happy New Year to all, habrausers!

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