Moscow’s Tech Mojo Is Working — And Awakening

With our TechCrunch Moscow event coming this week, Monty Munford gives us a flavour of the atmosphere amid Moscow’s tech scene.

The Radisson Royal Hotel in Moscow isn’t a cheap place to eat blinis and caviare, but rather like some people who like to have tea at the Ritz in London for the hell of it, it’s not the worst place to spend a morning.

For people-watching it is wonderful. Decision-makers, ladies of means, ladies of somewhat more dubious means, beautiful people, Americans, Mongolians, Chinese, it feels like the centre of today’s capitalism. Its history, however, is very different.

It was originally built in 1957 as the Hotel Ukraina and for 23 years it was one of the tallest buildings in the world. It was one of Stalin’s nine planned (seven were built) neoclassical skyscrapers known as the Stalinskie Vysotki, translated into English as the ‘Stalin’s High-Rises’, but collectively nick-named variously “The Stalin Gothics” or “The Seven Sisters”.

The project began when Stalin said that ‘We won the war but foreigners will come to Moscow and there are no skyscrapers. If they compare Moscow to capitalist cities, it will be a moral blow to us”. So, rather like the Space Race, a Skyscraper Race was born.

Not all of them were completed, but the seven remaining buildings are testament to a bygone age of grandeur and Cold War competition. However for the Ukraina, and similar to the emerging entrepreneurship of the city, the story does not end there.

The hotel reopened more than three years ago after extensive renovation and was renamed as the Radisson Royal Hotel with 505 bedrooms and 38 penthouse apartments; around the same time that the Skolkovo Foundation was formed and announced its intention to support the Russian start-up scene.

The Foundation is on a mission to change the perception of Russia from that of a mineral-producing country to a technological cluster in Moscow where foreign companies invest and local companies prosper. It is building a huge business park in Moscow that will house hundreds of start-ups as well as blue-chip global companies.

A Russian state edict states that all Russian state companies such as gas company Gazprom have to invest 1% of their profits in R&D. In the second quarter of this year, for example, that company alone generated more than $4 billion in profits, so there is no shortage of funding.

“This is probably the largest R&D project in the world and we are building something that will last for generations. Skolkovo Moscow is incubating more than 700 start-ups but also attracting serious foreign investment from Cisco, IBM and Siemens as well as Russian companies such as oil giant Rosneft.

“We are creating a VC-friendly environment that positions Moscow as the place for foreign companies to invest and a legacy for Russian kids so they become entrepreneurs and stay in Russia, not seek their fortune elsewhere,” said Conor Lenihan, VP External Economic Relations, Skolkovo.

Of the companies that are participants in the Skolkovo project, they work across verticals of biomedicine, energy, IT, nuclear, space technologies and communications. One such IT start-up is Vizerra , a company that has created a software platform for architects, engineers and designers to build in 3D models.

It recently released its disruptive product Revizto at the Autodesk University Show in Las Vegas. Latin for ‘visual check’, Revizto is a Cloud collaboration tool that allows everybody working on a building project to access all parts of the operation. Its clients include the Town Planning Committee in Barcelona, and the Organising Committee of the 2014 Olympic Winter Games in Sochi.

“The entire start-up environment in Russia has been transformed because of organisations such as the Skolkovo Foundation and Digital October Seed Funds. Russians now realise that we are living in a global world and we want to be part of it.

“We have had enough of Russia being seen as a somewhat dangerous place. There are no shootings in the streets any more… even the gangsters are more civilised. Think of the difference between American gangsters in the 1930s and the very different landscape in 1980s America. That’s where we are now,” says Arman Gukaysan, CEO of Vizerra.

Others are more reticent about the job Skolkovo is doing for Russia. Eugene Kaspersky is one of Russia’s most famous entrepreneurs and presides over Kaspersky Lab, the world’s largest privately owner vendor of software security products. It operates in more than 200 territories with 30 offices around the world.

“Innovation centres such as Skolkovo are a usual thing in many countries. I cannot say that Skolkovo is some kind of Russia’s unexpected step in the direction of supporting its IT entrepreneurs. But it is definitely a step that was anticipated for a long time.

“First of all this project is an opportunity for start ups and small companies to find investors or to make a name. Of course, together with other global companies such as IBM or Microsoft we collaborate with Skolkovo, but that is more about consulting,” he says.

With TechCrunch Moscow taking place again later this month, this is another opportunity to see close-up how things work in Russia. While the show will educate and share with presentations and strong networks, there is another way to learn about the stirring of the big Russian entrepreneurial bear.

The alternative way to do so is to spend a couple of well-chosen hours at the Royal Radisson, nee Ukraina, Hotel on the banks of the Moskva river. Some choice observation there will tell you all you need to know about things work in Russia… and the caviare and blinis aren’t bad either.