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From the horse’s mouth: Pekka Viljakainen’s tips for Russian startups

Pekka Viljakainen describes himself as a “Finnish stallion.” His other nickname is “The Bulldozer.” In his mission to instill a culture of entrepreneurship in Russia and transform its economy, the indefatigable Finnish businessman has travelled to far more Russian regions in the last few years than most Russians will see in their lifetime – more than 70, at his last count. Viljakainen is the driving force behind the Open Innovations Startup Tour, the Skolkovo Foundation’s roving quest for talented hi-tech startups in Russia’s regions, and its culmination, the massive Startup Village event held at Skolkovo every summer.

Pekka 'The Bulldozer' Viljakainen imparts his wisdom to an audience of budding entrepreneurs in Arkhangelsk. Photo: Sk.ru.

In every city that he visits, Viljakainen – an advisor to Skolkovo Foundation president Victor Vekselberg – addresses the hopeful entrepreneurs and scientists who attend the Startup Tour, sharing his experience and advice. The Startup Tour made its final stop this year in the southern city of Astrakhan last week, and for those unlucky enough to have missed the Pekka experience, Sk.ru has compiled a summary of the successful businessman’s top tips for startups, as presented at the Arkhangelsk stage of this year’s Startup Tour in a masterclass titled “Taking off and falling down in business: the magical world of learning.” The man himself can be seen in person at the upcoming Startup Village on June 6-7, and more of his advice can be found in his book, “No Fear: Business Leadership for the Digital Age.”

Viljakainen, 45, founded his own company when he was 13 years old, in the Finnish village where he lived. In that village, he says, there were about 250 people and about 400 cows – so not the most likely location for an IT company. But by the time he sold the business six years ago, it employed 20,000 people in 26 countries. So what are the secrets of success of the Finnish bulldozer?

1.       Be ready to learn

A lot of the time, we are inventing things that people don’t need or even understand. In 1994, I was launching the world’s first internet bank, for paying bills via the internet. But no one believed in it – even my mother said it was a stupid idea. It took six years to get all Finns to pay their bills online. By the millennium, 97 percent of bank operations were automated in Finland.

But when people didn’t understand it at first, we didn’t just go and buy some vodka and cry for three weeks. We decided to teach the world how to use our products. Apple engineers are still studying how people use the company’s products, in order to make them better. That’s not R&D, that’s learning.

Customer demands are changing all the time, so you have to ask for feedback all the time. You don’t know what customers want, and as soon as you find out, their behaviour has changed. Entrepreneurship is a full-time job of learning. 

Viljakainen on stage with some of the winners of the Startup Tour competition in Arkhangelsk. Photo: Sk.ru.

2.       Don’t believe these three myths

a)      “A good product will always sell itself.” That’s complete bullshit. It’s not the ‘60s or ‘70s anymore, when you could have one product in the world. Now you can find 10 substitutes for any product with a simple Google or Yandex search.

b)      “As an entrepreneur, I know what I’m doing and don’t need any help, just give me some money.” Never give money to anyone who says that. That’s the kind of person who’s not willing to learn, and that’s totally the wrong type of self-confidence.

c)       “Russia is a big country.” Russia makes up just a few percent of the world economy. So when you’re deciding on your product, you can’t only focus on Russia, thinking that that’s enough. Your product should be competitive on the world market. It might sound impossible, but it’s not. It’s easy enough now to get international benchmarking – the borders are open, there are millions of Russian emigrants around the world who can join your team. It’s hard, but you have to do it.

If you overcome these three problems, you’ve already come a long way in your journey. 

"Serial entrepreneurship is like having six girlfriends: it might feel good at the time, but it ends with a lot of trouble."

 3.       Stay where you are

If you live in a Russian region, don’t think that you need to move to Moscow. Labour costs are cheaper outside the capital, giving regional companies a competitive advantage. The idea of the Skolkovo Foundation and its Startup Tour is not to drain the regions of their most talented people; on the contrary, it’s something akin to a business model that can be replicated in the regions.

4.       University isn’t enough

Universities can’t educate students on how to run a business. Great teachers can teach skills, and that’s important, but how do you survive failures and run a business? You learn that from other businessmen and women.

5.       Find a foreigner

Successful tech companies generally have a lot of foreigners in their team, and you should do the same, on a smaller scale. If you’re planning to sell something to an American or a Finn, then have one in your team – or at least a Russian who lives in that country. It doesn’t need a lot of money. 

Viljakainen talking to Arkhangelsk Region Governor Igor Orlov (left).  Photo: Sk.ru.

6.       No man is an island

Make a point of copying accepted best practices. Be part of the entrepreneur community; don’t try to do it by yourself. You don’t have to wait for an order to come from Moscow [to set up support mechanisms for startups], you can have weekly meetings for local entrepreneurs.

7.        Embrace diversity

Assemble a team that includes people who have experience in different fields, and specialists with different skills. And find mentors from different areas of business too.

8.       Don’t hide your success

Now we Finns don’t like to talk about our mistakes, but Russians are simply strange: they don’t even talk about their success! If you’ve invented a great product or service, you need to tell people!

9.       Don’t just go for the money

Avoid investors who are only offering money. It’s tempting to take it, of course, but you need more than an investor – you need a shareholder. Yes, there are horror stories about people who want to gain control of all the shares themselves. But for your company, you need active shareholders who will sit on board meetings and help and advise you.

10.   Don’t spread yourself too thin

Serial entrepreneurship is all very well if you see each project through to the end, but you can’t do lots of projects at once. It’s like having six girlfriends: it might feel good at the time, but it ends with a lot of trouble. When deciding on one project among others, look for long-term growth and international potential.