If you want to live, learn how to spin. History of CDNvideo
Any work should be based on principles. From the very beginning, we have been using the "principles of success" of Panasonic founder Konosuke Matsushita from the book of the same name. His view is different from everything that Western business gurus teach, and it seems to me that the advice of the famous Japanese is working in Russia.
The main thing that Matsushita teaches is that all business opportunities can be found right under your nose. Need to find investors and clients for a new business? Ask your friends at Odnoklassniki. Do you need to make a choice - a state grant or private investment? No problem, take both. Did not manage to raise money to start a business? It's okay, work for more successful competitors - wait out the crisis.
All these are real situations that I have been in. And the right decision has always been the most obvious. If you do not want to get wet in the rain, you need to grab an umbrella. If you act reasonably and naturally, then the business will always flourish. Follow the laws of common sense, and you will not be mistaken. This is our story.
The idea to engage in CDN technology (a network of servers that accelerates the loading of "heavy" content) came to me a long time ago. The CDN market was in the West, but it was not in Russia. I gathered a team and decided to try to become the first in the market. I found investors under the CDN company, but the 2008 crisis struck, and they refused to participate in the project.
When this happened, I corresponded with partners via Gmail, and in the contextual ads block I saw an advertisement about the following content: “The first CDN in Russia”. It was an announcement by Ngenix, which launched CDN before us. It was a shame, but I did not get upset and got a job at Ngenix. So I could at least apply the knowledge about CDN that I managed to get in almost a year of preparing my own project.
Of course, I did not abandon the idea of creating my company. In some religions, it is generally believed that you need to work only for yourself, otherwise your existence is not entirely complete. So, after waiting out the crisis with my future competitors, I found new investors and quit. So for me began 2010, the first year of a new decade.
During the search for investors, I realized that the biggest problem is not in finding money, but in coming up with a useful product and a realistic plan for its sale. Some of our failed investors did not give us money, but suggested what the product should be. You can always find a healthy grain in criticism, which I did.
At first, I wanted to sell the CDN service as a boxed solution. It seemed to me that the client needed to supply software and hardware for CDN, for example, for $ 100 thousand. I thought so out of habit - I used to work in an integrator company. But after talking with the very failed investors, I realized that no one would buy a product from a start-up company for that kind of money. But if you sell customers an inexpensive mass service with a monthly payment, then the prospects will be much better.
When we understood this, investors were found. They were my former classmates. They knew me and understood that I would not run away with a bag of money, but I would try to the last to make the project work. I did not even make a presentation for them, although I made a lot of different presentations for other investors. My personal trust and my conviction that the service was needed played out, and I did not have to sell snow at the north pole. If you run your business with smart ideas, you will achieve your goal.
Excess spending at the first stage is contraindicated. It was easy for us to follow this rule, because there was money for five servers and a six-month salary for myself and for the second employee of CDNvideo, our technical director. Of course, selling CDN services with five servers is strange (our competitors already had servers in 10 cities). So the first time we were cunning - we carefully avoided questions about the number of servers.
One of the five servers we installed in Kiev, which allowed us to declare that we work in Ukraine. Subsequently, it turned out that this was the right move. One of the clients contacted us solely for this reason. The company was engaged in specific video advertising: the video “jumped out” and began to play when the mouse cursor was over the keyword in the text on the page. They tried to sell this service in Ukraine, but there the videos did not load quickly, and the service did not work as it should.
During this period of austerity, we learned to negotiate in such a way as to get good prices from partners. We called the telecom operator, were interested in prices and put off the decision. Then the operator called back himself and offered a discount. We said: “Let's think!” After a series of such calls, the operator’s managers became so involved that they wanted to finally sell their service, and it’s not so important at what price.
There was no budget for marketing, but we still actively promoted our services - dating and imagination were used. A classmate made us a site for 5 thousand rubles. For another 3 thousand. They painted a logo:
Only then we redrawed the logo for 100 thousand rubles:
The first serious marketing campaign took place at the exhibition during the RIF conference. One of the investors agreed with a girl - a dancer from a strip club. I hung a large badge with the inscription “CDNvideo” on the stripper and hung it on myself. The two of us walked around the exhibition and handed out my business cards. So we found the first customer - a company well known in the software market. I still keep the first bill for 2100 rubles, which they paid:
To save money, we turned to the help of the state several times, although in an "IT" environment, this is biased. It is believed that getting state support is a difficult task with a bunch of bureaucratic barriers. It is also considered strange to take state money if you have already received it from investors. Both that, and another - complete nonsense.
Our first office was in the state-owned Technopark Strogino. When I was still working “for my uncle,” I was driving past a technopark to work and thinking how good it would be to work in this beautiful building. Oddly enough, getting there turned out to be easy. The requirements of the Technopark Strogino are on the site . If you comply with them, then it remains to download documents from the site and draw them up very carefully.
Technopark also helped us save money. The first year of work, we had to pay 40% of the rental price for the office, in the second year - 60%, in the third - 80%. The rental price included everything that was needed in the office - telephones, computers, the use of meeting rooms. Strogino even had its own small printing house.
Having settled in "Strogino", we received a grant from the Moscow Government. To do this, you had to go to the site, look at other people's business plans and put together a lot of documents. To do this, we hired a student, paying her 6 thousand rubles. She did a great job, and we received money from the state to buy 30 servers. We bought them there, in Strogino, from another tenant, Trinity, and forced them to use the entire office. Later we installed them in many cities of Russia and significantly increased network bandwidth and the quality of our services.
After Strogino and a grant from the Moscow Government, we took up Skolkovo. The status of a Skolkovo resident also allows saving. VAT becomes zero, and contributions to the pension fund - 14%. In addition, for some government agencies that we wanted to see among customers, it was important to work with Skolkovo residents.
The task was to fill out a questionnaire in Russian and good English. We consulted with current Skolkovo residents and filled out this questionnaire. But Skolkovo residents managed to become only on the third attempt. One of the requirements is to engage in scientific development. Therefore, the first time we were refused, because we did not have a single patent for scientific invention, we soon received the necessary patent. And the second time they refused, because the charter of the company did not say anything about scientific activity, although we actually did it. There were no other problems.
By the way, against the background of other Skolkovo residents, we looked very good. It's hard to believe, but when we went to Skolkovo, CDNvideo was immediately in the top ten among 400 residents by income.
The early composition of our team at the corporate party. I am at the top left:
Of course, maintaining investors 'interest in business and hunting for state support are important tasks, but starting life on clients' money is the most important task. We reached self-sufficiency quite quickly - 9 months after the start. We tried to seize on everything that is possible in this matter. At some point, we realized that Dmitry Medvedev, who was the president at that time, could help us, although he, in fact, did not know about it.
In June 2010, Medvedev met with Apple founder Steve Jobs, and he gave Medvedev an iPhone4. A little later, Medvedev also got an iPad. It so happened that this president’s passion for apple products helped us get the first major customer and all subsequent ones. We are fortunate that Apple devices do not support Flash, and in order to stream video to iPad, we had to use the HLS protocol. Then in Russia they did not know how to do this. This meant that Medvedev and other officials who, after that meeting, also acquired Apple products, could not watch news and videos in Russian on their tablets. We got in touch with VGTRK and promised to solve the problem.
So we got a contract with the largest client, with whom we are still working. Other potential customers found out that we are working with VGTRK, and also became more accommodating. As a result, half a year has not passed since the meeting between Medvedev and Jobs, and we have already reached the payback.
Try to communicate with clients as friends. For example, we have this: one of our managers is currently renting an apartment, and a client is helping to rent it. You need to understand that during working hours, the meaning of the life of employees is to do something good for specific people. This means that employees of other companies who call customers “dumb” for their eyes, deprive their lives of meaning.
Friendship does not contradict the desire to earn more. Our minimum rate is 3 thousand rubles per month. Many customers pay every month, although they use the services only occasionally. For the organization of 3 thousand rubles - a little money. Therefore, it is easier for a client to pay every time than to think when to pay and when not. Let them pay - we do not remind them that you can disconnect. Once I myself paid for the services of two Internet providers in the same way, although I used only one.
The client always wants to play it safe and take more. So why dissuade him? However, when it comes to big money, we always warn against unnecessary spending. One of our clients broadcast yard football and wanted to take a tariff from us for 200 thousand rubles. He tried to convince us that at least 100 thousand people would watch him. But our manager told him: "Man, take a tariff for 3 thousand rubles, well, just in case, pay another 2 thousand for broadcasting to mobile."
As a result, this turned out to be more than enough. Football was watched by several dozen people, and the client saved 195 thousand rubles. Then he returned to us with other projects. In the long term, a good relationship will bring more money.
There was another similar case. One client has a website with several online TV channels. He paid on a postpaid system and always fit into 3 thousand rubles a month. And then suddenly an account of 1 million rubles. Customer calls with complaints. We are trying to figure it out, and we understand that there are no errors. “These bastards started to watch me,” the client said, seeing the statistics. Website traffic has increased dramatically, and he was not ready for this. We went into a position and gave him a 50 percent discount.
The first year, two or three you need to listen to customers, partners, investors, and grab at every opportunity. Our strategy at this time can be called this: "If you want to live, know how to spin." A company, like a growing tree, reaches for light and changes shape. But after three years the trunk appears in this tree, and it is too late to experiment.
In the fourth year of the existence of CDNvideo, we decided to create a subsidiary project - a solution for corporate networks. Banks, retail chains and other large international companies - they all need CDN for internal tasks. For example, for trainings that employees watch from different parts of the world. But this project did not go with us. It was necessary to create a separate company for him with his leader, and not to disperse. Therefore, from now on, we decided to do only what exactly works out well.
* Hereinafter quotes from Konosuke Matsushita’s book "Principles of Success"
The main thing that Matsushita teaches is that all business opportunities can be found right under your nose. Need to find investors and clients for a new business? Ask your friends at Odnoklassniki. Do you need to make a choice - a state grant or private investment? No problem, take both. Did not manage to raise money to start a business? It's okay, work for more successful competitors - wait out the crisis.
All these are real situations that I have been in. And the right decision has always been the most obvious. If you do not want to get wet in the rain, you need to grab an umbrella. If you act reasonably and naturally, then the business will always flourish. Follow the laws of common sense, and you will not be mistaken. This is our story.
“Life is a series of ups and downs. Meet joys and sorrows with humility "*
The idea to engage in CDN technology (a network of servers that accelerates the loading of "heavy" content) came to me a long time ago. The CDN market was in the West, but it was not in Russia. I gathered a team and decided to try to become the first in the market. I found investors under the CDN company, but the 2008 crisis struck, and they refused to participate in the project.
When this happened, I corresponded with partners via Gmail, and in the contextual ads block I saw an advertisement about the following content: “The first CDN in Russia”. It was an announcement by Ngenix, which launched CDN before us. It was a shame, but I did not get upset and got a job at Ngenix. So I could at least apply the knowledge about CDN that I managed to get in almost a year of preparing my own project.
Of course, I did not abandon the idea of creating my company. In some religions, it is generally believed that you need to work only for yourself, otherwise your existence is not entirely complete. So, after waiting out the crisis with my future competitors, I found new investors and quit. So for me began 2010, the first year of a new decade.
“They criticize you, which means that they expect something from you. Condemnation Can Benefit
During the search for investors, I realized that the biggest problem is not in finding money, but in coming up with a useful product and a realistic plan for its sale. Some of our failed investors did not give us money, but suggested what the product should be. You can always find a healthy grain in criticism, which I did.
At first, I wanted to sell the CDN service as a boxed solution. It seemed to me that the client needed to supply software and hardware for CDN, for example, for $ 100 thousand. I thought so out of habit - I used to work in an integrator company. But after talking with the very failed investors, I realized that no one would buy a product from a start-up company for that kind of money. But if you sell customers an inexpensive mass service with a monthly payment, then the prospects will be much better.
When we understood this, investors were found. They were my former classmates. They knew me and understood that I would not run away with a bag of money, but I would try to the last to make the project work. I did not even make a presentation for them, although I made a lot of different presentations for other investors. My personal trust and my conviction that the service was needed played out, and I did not have to sell snow at the north pole. If you run your business with smart ideas, you will achieve your goal.
“Everything in this world — life, money, things — has been loaned to you. Do not squander them recklessly. ”
Excess spending at the first stage is contraindicated. It was easy for us to follow this rule, because there was money for five servers and a six-month salary for myself and for the second employee of CDNvideo, our technical director. Of course, selling CDN services with five servers is strange (our competitors already had servers in 10 cities). So the first time we were cunning - we carefully avoided questions about the number of servers.
One of the five servers we installed in Kiev, which allowed us to declare that we work in Ukraine. Subsequently, it turned out that this was the right move. One of the clients contacted us solely for this reason. The company was engaged in specific video advertising: the video “jumped out” and began to play when the mouse cursor was over the keyword in the text on the page. They tried to sell this service in Ukraine, but there the videos did not load quickly, and the service did not work as it should.
During this period of austerity, we learned to negotiate in such a way as to get good prices from partners. We called the telecom operator, were interested in prices and put off the decision. Then the operator called back himself and offered a discount. We said: “Let's think!” After a series of such calls, the operator’s managers became so involved that they wanted to finally sell their service, and it’s not so important at what price.
There was no budget for marketing, but we still actively promoted our services - dating and imagination were used. A classmate made us a site for 5 thousand rubles. For another 3 thousand. They painted a logo:
Only then we redrawed the logo for 100 thousand rubles:
The first serious marketing campaign took place at the exhibition during the RIF conference. One of the investors agreed with a girl - a dancer from a strip club. I hung a large badge with the inscription “CDNvideo” on the stripper and hung it on myself. The two of us walked around the exhibition and handed out my business cards. So we found the first customer - a company well known in the software market. I still keep the first bill for 2100 rubles, which they paid:
“Use the opportunities provided by fate”
To save money, we turned to the help of the state several times, although in an "IT" environment, this is biased. It is believed that getting state support is a difficult task with a bunch of bureaucratic barriers. It is also considered strange to take state money if you have already received it from investors. Both that, and another - complete nonsense.
Our first office was in the state-owned Technopark Strogino. When I was still working “for my uncle,” I was driving past a technopark to work and thinking how good it would be to work in this beautiful building. Oddly enough, getting there turned out to be easy. The requirements of the Technopark Strogino are on the site . If you comply with them, then it remains to download documents from the site and draw them up very carefully.
Technopark also helped us save money. The first year of work, we had to pay 40% of the rental price for the office, in the second year - 60%, in the third - 80%. The rental price included everything that was needed in the office - telephones, computers, the use of meeting rooms. Strogino even had its own small printing house.
Having settled in "Strogino", we received a grant from the Moscow Government. To do this, you had to go to the site, look at other people's business plans and put together a lot of documents. To do this, we hired a student, paying her 6 thousand rubles. She did a great job, and we received money from the state to buy 30 servers. We bought them there, in Strogino, from another tenant, Trinity, and forced them to use the entire office. Later we installed them in many cities of Russia and significantly increased network bandwidth and the quality of our services.
“In life, like in a fairy tale about a turtle and a hare: if you act sequentially you will not fail”
After Strogino and a grant from the Moscow Government, we took up Skolkovo. The status of a Skolkovo resident also allows saving. VAT becomes zero, and contributions to the pension fund - 14%. In addition, for some government agencies that we wanted to see among customers, it was important to work with Skolkovo residents.
The task was to fill out a questionnaire in Russian and good English. We consulted with current Skolkovo residents and filled out this questionnaire. But Skolkovo residents managed to become only on the third attempt. One of the requirements is to engage in scientific development. Therefore, the first time we were refused, because we did not have a single patent for scientific invention, we soon received the necessary patent. And the second time they refused, because the charter of the company did not say anything about scientific activity, although we actually did it. There were no other problems.
By the way, against the background of other Skolkovo residents, we looked very good. It's hard to believe, but when we went to Skolkovo, CDNvideo was immediately in the top ten among 400 residents by income.
The early composition of our team at the corporate party. I am at the top left:
“If you are sensitive and observant, you can catch where time is flowing.”
Of course, maintaining investors 'interest in business and hunting for state support are important tasks, but starting life on clients' money is the most important task. We reached self-sufficiency quite quickly - 9 months after the start. We tried to seize on everything that is possible in this matter. At some point, we realized that Dmitry Medvedev, who was the president at that time, could help us, although he, in fact, did not know about it.
In June 2010, Medvedev met with Apple founder Steve Jobs, and he gave Medvedev an iPhone4. A little later, Medvedev also got an iPad. It so happened that this president’s passion for apple products helped us get the first major customer and all subsequent ones. We are fortunate that Apple devices do not support Flash, and in order to stream video to iPad, we had to use the HLS protocol. Then in Russia they did not know how to do this. This meant that Medvedev and other officials who, after that meeting, also acquired Apple products, could not watch news and videos in Russian on their tablets. We got in touch with VGTRK and promised to solve the problem.
So we got a contract with the largest client, with whom we are still working. Other potential customers found out that we are working with VGTRK, and also became more accommodating. As a result, half a year has not passed since the meeting between Medvedev and Jobs, and we have already reached the payback.
“If you like someone, most likely, and he will have friendly feelings for you”
Try to communicate with clients as friends. For example, we have this: one of our managers is currently renting an apartment, and a client is helping to rent it. You need to understand that during working hours, the meaning of the life of employees is to do something good for specific people. This means that employees of other companies who call customers “dumb” for their eyes, deprive their lives of meaning.
Friendship does not contradict the desire to earn more. Our minimum rate is 3 thousand rubles per month. Many customers pay every month, although they use the services only occasionally. For the organization of 3 thousand rubles - a little money. Therefore, it is easier for a client to pay every time than to think when to pay and when not. Let them pay - we do not remind them that you can disconnect. Once I myself paid for the services of two Internet providers in the same way, although I used only one.
The client always wants to play it safe and take more. So why dissuade him? However, when it comes to big money, we always warn against unnecessary spending. One of our clients broadcast yard football and wanted to take a tariff from us for 200 thousand rubles. He tried to convince us that at least 100 thousand people would watch him. But our manager told him: "Man, take a tariff for 3 thousand rubles, well, just in case, pay another 2 thousand for broadcasting to mobile."
As a result, this turned out to be more than enough. Football was watched by several dozen people, and the client saved 195 thousand rubles. Then he returned to us with other projects. In the long term, a good relationship will bring more money.
There was another similar case. One client has a website with several online TV channels. He paid on a postpaid system and always fit into 3 thousand rubles a month. And then suddenly an account of 1 million rubles. Customer calls with complaints. We are trying to figure it out, and we understand that there are no errors. “These bastards started to watch me,” the client said, seeing the statistics. Website traffic has increased dramatically, and he was not ready for this. We went into a position and gave him a 50 percent discount.
“Being late for one day today, you can lose a year, or even the rest of your life”
The first year, two or three you need to listen to customers, partners, investors, and grab at every opportunity. Our strategy at this time can be called this: "If you want to live, know how to spin." A company, like a growing tree, reaches for light and changes shape. But after three years the trunk appears in this tree, and it is too late to experiment.
In the fourth year of the existence of CDNvideo, we decided to create a subsidiary project - a solution for corporate networks. Banks, retail chains and other large international companies - they all need CDN for internal tasks. For example, for trainings that employees watch from different parts of the world. But this project did not go with us. It was necessary to create a separate company for him with his leader, and not to disperse. Therefore, from now on, we decided to do only what exactly works out well.
* Hereinafter quotes from Konosuke Matsushita’s book "Principles of Success"