Agahuseyn Akhmadov: “All the startups that attended the Seedstars Minsk 2019 bootcamp can go boom”

Seedstars Regional Manager spoke about mindsets of successful founders, building startup ecosystems in Eastern Europe, and his future startup.

The international competition of startups Seedstars was first held in Minsk on September, 20-22. It would be difficult for TheHeroes team to lure one of the largest builders of startup ecosystems in emerging markets into Belarus if not for the openness and flexibility of Agahuseyn Akhmadov, Seedstars regional manager for the region of Central and Eastern Europe and Central Asia.

How did the carsharing startup in Azerbaijan fail?

At first, I entered The Chemistry Faculty but quickly realized that this was not my thing. Thanks to student activity and constant reading I quickly realized that I wanted to become a startup entrepreneur. My partner and I decided to do carsharing. The idea was the default. You left somewhere, and the car stands idle? You can transfer it to another person for money.

But there were two bureaucratic moments in Azerbaijan because of which we decided to stop this business. Firstly, no one can give their car for a while without signing a power of attorney. And this is a whole procedure: you have to go to a notary public, pay a state fee, etc. — user experience is just awful.

The second nuance is insurance. In Europe, carsharing is insured according to the system: you rent a car and pay for the number of rental days. And in Azerbaijan, no one will undertake such insurance because the volumes are low so no one is interested. Insurers are more interested in the standard insurance package. We tried to work according to this scheme but there were cases when insurance did not even cover repairs in the event of an accident.

We made a few pivots (pivot is the change of the business model, product or business area of the startup — TheHeroes), then switched to scheduling. For one thing, many buses are not imported to Azerbaijan because their customs clearance is very expensive. Therefore, the bus owners found this way: they take the buses to Georgia and register them there, then they cross the border in Georgian license plates. And every 30 days they leave and re-enter Azerbaijan.

It became clear that there was a request for buses, they were needed at conferences, weddings, various events. Also, large enterprises had a fleet of vehicles including buses. And we provided buses, for some brands of cars we had the lowest prices in the country. But scheduling was not classic either. It was possible to rent buses only with drivers because the different car makes demanded certain driving styles.

But financing was difficult to attract due to the conditions of the ecosystem in which I existed. As a result, we decided with the cofounder that we would stop and do something else.

Way to the future with Seedstars

Then I crossed the other side of the whole system. I became a community manager of the first Azerbaijani accelerators from their very foundation. For two years we have been issuing good projects and investing. But the moment has come when I know the whole ecosystem and all the participants, processes, mechanisms, environment, and conditions.

The status quo is not comme il faut for me.

And since I already had my network around the world, crossing in the Valley at conferences, it was quite easy to move to Seedstars as an event organizer, and then I grew up to the position of regional manager.

What is Seedstars?

Seedstars is a Swiss group of companies headquartered in Geneva.

At the moment, Seedstars is one of the largest builders of startup ecosystems around the world.

And the ecosystem does not consist only of investors or competitions. This is a combination of a huge number of activities that need to be done.

There are three main areas in which we work:

  1. Direct investments.
  2. Education. We understand that in developing countries, where 80% of the population is located, there are a lot of talents, but, unfortunately, they do not have entrepreneurial thinking and access to the knowledge base. And in Estonia, where about a million people live, more projects are coming out than in Uzbekistan with 32 million population. Therefore, we give access to our huge knowledge base and expertise.
  3. Raising Awareness. We want young people not just to spend time idly, but to learn more about entrepreneurship and be interested in creating their business project in the future. After all, they can create jobs and earn good money.

The companies that won the Seedstars contest get an investment from us. After the victory, we invest up to half a million dollars, but we also have partners who are interested in fintech startups, agricultural technology or health-tech. As a result, investments can reach $1 million.

The Seedstars portfolio now has 236 seed-level startups that raised over $120 million.

The brightest of them are very large for their countries. For example, Acudeen resells unpaid business payments, and Agrocenta connects small farmers to the market directly without an intermediary. Last year’s winner, Blended, is digitizing the schools of Argentina.

One of the interesting projects eFishery from Indonesia created a new fish-tech industry. They were not our winners, but we invited the founder to speak at the global summit of Seedstars 2017. And then he joked that you didn’t select me then, but now I explain to entrepreneurs how to become successful.

But then we did not have scoring that analyzed more than 17 thousand startups and identified more than 300 factors that affect the companies' growth. Based on these factors, we evaluate the projects that applied to us.

What are the principles of successful startup ecosystems?

Success is very dependent on the country, mentality, and ecosystem in which a person lives. The first thing you need to inculcate in yourself is the ability to perceive things happening around and not agree with the status quo.

The second point is the attitude towards failure. There are systems where after a defeat they begin to blame you.

You are an asshole if did not enter the university.

And in the Valley, for example, they judge by your failures. If you had a lot of mistakes, then you learned something, you are worth something.

And the most important thing is that an entrepreneur should have mental and physical forces to often fall and rise. He should have stubbornness, perseverance, and even moderate obstinacy.

Startup ecosystem consists of three main categories:

  • The cultural part. This is thinking, ecosystem dynamics, how much media write about it, etc.
  • Environment. Legislative and tax infrastructure, so that international investors understand that they can invest money, and the government or financial institutions will be able to protect them, take some risks upon themselves.
  • Growth opportunities for talented people. For example, in Georgia, there are only 3 million people, and it cannot provide the output of 130 thousand IT specialists a year like Ukraine. But the availability of methodology, incubators, accelerators, investors can make the ecosystem profitable for startups without the large human resources that can be outsourced.

In emerging markets, all three areas are problematic, but investment in education and talent development saves the situation. A striking example is South Korea, which in the 60-70s of the last century began to invest in the field of education, and this has served its purposes.

Now, for every dollar invested, the country’s economy receives $10.

It is my assessment that Belarus is now at a stage when it has significant technical talent and knowledge, and very successful cases like Viber, Pandadoc, and MSQRD. I mean great products exist here. But Eastern Europe is not good at sales.

This all should change over time. For example, Kazakhstan is creating the Astana International Financial Center, which is an independent economic zone. There are British laws, a court of its own, a charter and a tax code. These cases are very interesting.

What novice entrepreneurs can draw inspiration from?

Here is the list of main books for the beginning startup:

  • “Zero to One: Notes on Startups, or How to Build the Future” by Peter Thiel and Blake Masters.
  • "High output management" by Andrew Grove.
  • "Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth" by John Doerr.
  • "The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers" by Ben Horowitz.

I think that a startup does not need to build its business based on methodology. You need to understand what your goal is, and then find a methodology to achieve your goal. For example, OKR may not work for a company if the there are 20 people and a horizontal structure because the dynamics are different.

It is more important for an entrepreneur to understand the market and read about his sector than to know all possible methodologies.

The methodology is just a wrench, it is more important to determine those nuts that need to be screwed.

What steps should a novice startup entrepreneur do?

  1. Examine the market and identify the problem.
  2. Create a concept for solving this problem. This will be a description of the future product.
  3. Create MVP or prototype. It will be the first version of the product, or even just a hypothesis, framed in a landing page or message.
  4. Test the market where the problem was found. At this stage, it will become clear whether the product is suitable for the market or not. Maybe it’s suitable for another market, or maybe you need to change the product.
  5. If all is well, then the next steps are only promotion and scaling.

How to research the market for problems?

  • A perfect case is to face a problem personally. And then look for who else faced it. You can simply take a directory of companies and ring each one with the question “We conduct a research, could you answer a question please?”
  • Check Google Trends. People often look for solutions to their problems on the Internet, so you can understand if a problem exists by the number of requests.
  • An experiment. Create a landing page with a description of your idea or message, leave some feedback form for potential customers and launch advertising. If people react, then you can further study the market.
  • The market expertise. You should either know the problems of a particular market yourself or find a person who has this knowledge.

But the market cannot be explored quickly and once, it is an ongoing process.

Next, we need to focus on the categories that a businessman shall know.

FIrst of all it is a team that at the initial stage will be respobsible and meeting deadlines. Then a market that needs to be studied constantly. Every day you find new things, communicate with customers, discuss, work. The third step is to find a business model to make money and convince people to follow your idea.

You can apply for international competitions and programs at any stage of startup development. For the entrepreneur, there are business schools and university courses. If there is a prototype and you need to find product or market fit, then you need to contact the accelerator.

A startup should immediately grow as a business that creates a valuable product for its market. This is the most difficult and important.

Who novice startups shall look up to?

The most impressive startups in the world can be seen on Product Hunt, they have the most upvotes there. At the same time, there are products that we are accustomed to but their success is very inspiring as a fact. For example, the success of Instagram or Spotify. I am such a fan of Spotify that somehow I get legal access to the platform even in countries where it cannot be downloaded.

Just yesterday I started using Squad:. It is a social screen sharing service. This startup from the United States has recently begun to grow and offers its customers a messenger with the ability to share their screen. You can just watch YouTube with a friend, part of the screen will show the video.

I really like Notion, it has great potential. This is a super stuffed program, in which there are To-Do-lists, and Kanban-boards, and notepad, and notes, etc.

So many products that interest me, I can not single out one. This is the whole world!

I use some of the projects that are in the Seedstars portfolio. Most often I use Myki, it is a password manager. I also used competitors, but Myki has a very user-friendly interface. In some trainings, I even give Myki as an example. I like how they work with the user, try to get feedback from them and improve the product.

In Belarus, all the projects that got into the Seedstars Minsk 2019 bootcamp are good and can go boom. (Skinive Skinive startup won — TheHeroes)

What startup will Agahuseyn Akhmadov do after the career in Seedstars?

I want to make my startup in the telecommunications industry. I have a personal problem because of the constant travel. I constantly have to buy SIM cards from different operators. There was a time when I lost two SIM cards, one of which was connected to a bank card, and the second to all services. I was shocked.

My product should be the last SIM you would buy.

The main technical task is to create a payment system in all countries and get the lowest latency in data transfer.

If I need to contact Elon Musk for this, thenI can do this within 2-3 handshakes due to my network.

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