Innovation in Russian

    I am a professional participant in the innovation industry. Together with our colleagues, over the past 10 years we have been participating in the creation of new technologies.

    And I have to say about the reason why you should not engage in innovations in Russia. Here you can speculate about a poor investment climate, inefficiency of state programs, the size of the domestic market, biased motivations of participants. But besides this there is also a poorly controlled risk, which lies in the possibility of being behind bars. And it’s not customary to talk about it out loud, but you need to. Under the cut of the top 5 innovative companies according to the investigation committee, I know, and their misadventures were not previously mentioned on the hub

    Motivation


    Warning: For me, this is a personal story. My friend, who participated in the creation of a truly competitive innovation company as a technical director and co-founder, is now in jail. But, in spite of this, I will try to describe and recall several stories that have happened with the founders of innovative companies in Russia, in the industry in which we work, as unemotionally as possible.

    I don’t think that here you can come up with some hygiene rules so as not to get into similar situations, but it’s still very useful to keep in mind the whole range of risks. Therefore, if you are already in this industry or are thinking of becoming innovative, I recommend reading those examples from our reality that were not mentioned on Habré.

    “I thought that”


    I want to immediately formulate several statements that I sometimes have to hear from colleagues, and subsequently show by examples that all of them are incorrect in our reality:

    • real innovations will not be touched - we are not scammers like everyone else;
    • they will not touch us, because the state is interested in us - a strategic industry, maybe they are even connected with the military, and indeed everything is under control;
    • while we are small and below the radar, everything will be fine, we will grow up - we will think.
    • we will not conduct business directly with the state, only through a couple of intermediaries, nothing threatens us;
    • we are a commercial company, do not touch the state, hipsters and smoothies, we work exceptionally clean, everything will be fine;
    • I am not the general director and not the chief accountant, it is unlikely that any problems of a criminal company will concern me;

    These strategies are guided by those whom I asked about the risk of not being convicted of a criminal offense by doing innovative business in Russia.
    I selected examples so that in each of them there was a real innovative component.

    T platforms


    Vsevolod Opanasenko, CEO and founder of T-Platforms, was sent to jail on March 26, 2019.

    T-platforms is a company created in 2004 and specializing in special computing platforms. There are two of their unconditional achievements: the export of supercomputers to Germany, the creation of the Baikal processor and computers based on it (a subsidiary) .


    Image from the Zeptobars blog

    According to a publication in Vedomosti , his detention was due to failure to fulfill obligations under the contract for the supply of computers to the Ministry of Internal Affairs, which could have been caused by a late advance payment. The dispute in the arbitration court passed into the criminal plane.

    The founder remained the majority owner of the company (which is quite unusual for companies of this magnitude), created today a domestic processor (although the share of “domesticity” can be estimated differently, since production is not in Russia) and a competitive computer for office needs (as per performance and price), and all this against the background of import substitution in software in the Russian Federation and not the best state of the microelectronics industry.

    Almost certainly, the arrest of the main owner and CEO of the company will lead to a halt in the development of the T-platform, or maybe just to the destruction of the company.

    “Strategic industry” does not help.

    ECAT


    ECAT is a Skolkovo resident since 2014, the founder of the company is Alexander Makarov. The latest news that I found on the status of the criminal case from 10.2018 .

    The company is engaged in thermocatalytic gas purification systems; they develop, manufacture and supply them to final consumers.


    An open presentation slide from www.slideshare.net

    As far as I understand from the description of their technology, the main innovation is the use of foams for the production of catalysts. The production technology of such catalysts (possibly from different compositions for different catalytic reactions) can be truly unique and innovative.

    At the beginning of the company's life, a rather paradoxical charge was brought against the owner. A few years after the round of investments from the state fund, the valuation of the company fell and the fund offered to buy back 75% of the company's shares to the founder for 6 million rubles. The investigation considered all the losses in the cost of shares to be theft of public funds, which would create a terrible precedent, provided that most startups simply do not succeed. In other words, by agreeing to invest from a state fund, investigators can be expected if he allowed a decrease in the company's value estimate.

    As you can see, the company was noticeably lower than any reasonable “radar”, i.e. it was about a very small enterprise.

    “Below the radar” - does not help.

    Baring vostok


    It seems that all the “affairs of the innovators” will be linked to government contracts. But this is not so.

    Investment funds are another “front” of the innovation industry, but they are inextricably linked to technological development and innovation.

    The Baring Vostok Foundation has worked with companies in Russia and the CIS.

    The qualifications and effectiveness of management characterize the list of companies in which they invested: Yandex (35.7% of the shares in 2000, which allowed them to earn $ 4 billion), Ozon.ru, STS Media, 1C, Avito.ru, Tinkoff.ru, Gett, Vkusville, 2GIS.

    After the merger of Vostochny banks (whose share was owned by Baring Vostok) and Uniastrum, the management of Baring Vostok appealed to the London Arbitration Court due to the withdrawal of assets from Uniastrum Bank by 17.5bn rubles. before the merger, the new director of the combined bank “Vostochny”. And he, in turn, turned to the investigative committee.

    Michael Calvey is under house arrest.
    In pre-trial detention center:
    Vagan Abgaryan - partner of Baring Vostok
    Philip Delpal - partner of Baring Vostok
    Ivan Zyuzin - investment director of Baring Vostok
    Alexey Kordichev - former head of Vostochny bank Alexey Kordichev
    Maxim Vladimirov - director general of the First Collection Bureau

    The problem of interpretation in the framework of the criminal code is that arbitrary people may be included in the criminal group; it does not matter what formal position the employee had in the company, or whether he was an employee or a shareholder at all.

    I can’t imagine where now the new generation companies will be able to receive private investments of the second or third round for the scaling and development of the business. After this high-profile case, one does not have to rely on the systematic work of a comparable private investment fund, which means that more and more state funds will have to be attracted (see the logic of the investigation in the case of ECAT).

    “Do not do business with the state” - does not work.

    Swift Telematics


    I personally know the history of this company, from which WavIoT subsequently separated. I am well acquainted with Yevgeny Akhmadishin, who was the co-founder of the company and the technical director in the initial stage of the development of Strizha.

    Sources of company information on Wikipedia .



    The methods of receiving a signal in a radio have been well studied for a long time; everything has been done not far from optimality. But at a certain point in time there were 3 factors that allowed us to create something new in this industry:

    • the accuracy of crystal oscillators has gradually increased and is increasing, allowing increasing the duration of signal coherence;
    • the power of the emitters (namely, power, and not energy per bit of information) is limited by state laws so much that there were problems with signal transmission over distances of more than 100 meters for existing radio protocols;
    • The IoT device market has emerged.

    In Swift, they developed a technology for receiving and processing signals in which 1 bit of information could be transmitted up to 100ms. The probability of receiving a bit of information is determined by the signal-to-noise ratio, in the numerator of which is the signal energy (or power per band, which is equivalent). Due to the improvement of quartz oscillators, it was possible to narrow the transmission band with the previous restriction on the signal power, extending the duration of the coherence of the radio signal.

    In addition, the processing signal band due to the use of special computers and the original processing method was about 1 MHz. One receiver allowed receiving signals from thousands and tens of thousands of sensors (it depended on the transmission intensity, but here it was even better than in LoRa- due to frequency separation). Low consumption of sensors made it possible to create fairly compact devices that operate for years from autonomous power sources. The image shows an example of a water sensor.

    In general, this is a great example of an innovative company that could be created in Russia. Here it is possible to find a qualification in the field of radio and mathematics, and this qualification was absolutely necessary in order to create a competitive technology. I was personally amazed that, in addition to creating the technology, they were able to make a product solution that included everything from direct sales by the housing manager to the front-end client applications.

    Then the company was divided into 3 businesses (Strizh Telematika, WavIoT, NWave), I can’t imagine how each of them is doing, but as far as I hear, everyone’s sales are growing and already reach billions in rubles in one of the companies . NWave successfully conducts business and attracts investments, based in London.

    In the meantime, the investigation has opened a case because of parking sensors for Moscow parking lots, which were developed and produced in the Swift. The company received a contract from FSUE FSO "Sveco", which in turn participated in the state contract. The investigation formulated a criminal community, which included the technical director and co-founder of Strizh, Evgeny Akhmadishin.

    Today, Evgeny Akhmadishin has been in jail for more than 1.5 years, having lost everything he built.

    “Being a technical director” and “not a contractor” does not help.

    NovIT PRO



    The image is taken from an excellent story about what the company is doing.

    The company is developing 3D models necessary for ship repair. This is a huge work, which includes many methods that allow you to restore models from the design documentation and real measurements of the object. In addition, one of the company's products was a mobile repair maintenance center with virtual reality elements.

    In general, 3D modeling, simulators for the preparation of repair crews, repair planning - this is all a modern approach to the efficient maintenance of complex and large-scale technical systems like ships and submarines.

    Obviously, the company indirectly worked with government money.
    As part of the theft case during the construction of the Varshavyanka submarine, the director and owner of the company, Valery Pshenichny, was detained. After three weeks spent in jail, the entrepreneur seems to have been tortured and killed. The official investigation alleges suicide, experts from the forensic medical examination bureau (St. Petersburg State Budgetary Healthcare Institution BSME) unequivocally exclude this version .

    “How will you repair your submarines” - also does not work.

    Risks above


    It seems that innovation should increase the publicity of the company and, in a sense, guarantee protection against ill-founded criminal charges. But I get the impression that this works in the opposite direction - more publicity attracts more attention from investigators. In addition, perhaps the greater noise around the criminal case somehow helps to advance in the intra-departmental hierarchy, “inflating” the matter not with money, but with fame.

    Also mention


    Dauria Aerospace is a private space company , founder Mikhail Kokorich is not in a pre-trial detention center, the company has virtually ceased operations. According to him, the creation of a company in Russia was his biggest mistake in life .

    Dodo pizza - the founder was summoned for questioning due to suspicions of drug trafficking. Exclusively commercial company. I would like to think that someone was just too serious about the Breaking Bad series. But on the day I read this news, I was seriously worried if we would lose their delicious pizzas.

    Conclusion


    If you establish an innovative business in Russia or simply take a significant part in it in any capacity, you run the risk of being in prison even more than in the case of a business that does not have signs of innovation. The risks of product problems after release / sale are higher. It will be easier for the investigation to manipulate the concepts of the value of the company and its products, the amount of damage will always be “especially large”. Those. You will have a unique offer in the market, but its price will be “clearly overstated”.

    And yet, when dealing with the state, do not even allow the thought “they themselves need it”:

    • Sensors "Swift Telematics" were cut off by road services when shifting asphalt after a couple of years, almost all
    • Interior Ministry refused to accept the supply of computers in the case of the “T-platform”

    We often deal with companies that create biometric solutions. This industry in Russia is now just a driver for educating new applied specialists in computer vision and Deep learning. But I'm almost sure that all the equipment that can help catch criminals or better control the state border will not be properly maintained or will not be included in information systems. What will result in criminal cases.

    I think a lot of egregious examples can be dug up when the creators of unique technologies or products were greatly mistaken about the fact that someone actually plans to use all these innovations, to keep solutions workable within the framework of state funding. But the real motive of the organizers was in the development of funds, and not in the creation of new working solutions.

    It seems like I'm focusing too much on government contracts. But, in fact, a huge number of new technologies are locked into state regulation and financing to one degree or another: smart city, biometrics, ecology, automatic car control, communications (telecom operators, Internet), military technologies, and any drones. And in our country, you will also encounter companies owned by the state: industrial and agricultural companies, banks of a notable size.

    So take care of yourself.

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