October Evolution, Episode 2: “We have a business angel, he’ll bring in some more”

Important
May 14, 2013, 19:00 education online

live

On May 14 the Digital October Center with the support of Beeline held the taping of its interactive internet business creation show’s second episode.

Established Russian entrepreneurs again had one hour to create a startup and, along with the participation of the audience, take a bare idea through to a market-ready business model.

The topic was the fast-growing area of social commerce and the collection of featured guests on the program included the following: Ruslan Fazlyev, founder of the popular online store front designer Ecwid.com; Maria Levina, whose project The Furnish is not only an internet furniture store, but also an ideas exchange platform; as well as the old man in the group with 12 years of work experience in the area of social commerce and the founder of KupiVip Oskar Hartmann, who joined the show on his own birthday.

A relative new-comer to the scene by his own admission was Ilya Timchenko, managing partner of dostavka.ru, with four years of experience in this area under his belt.

The World’s Highest Quality Recommendation Service

“What are we selling?” Oskar Hartmann asked his colleagues, as soon as the program hosts began the count down and the team of gurus and their audience were left with forty minutes to find and develop and idea.

 

“I would suggest reinventing the wheel:

 

Let’s build off of models that have already proven to be effective and could take root here in Russia, rather than taking a fresh look at ideas that so far haven’t been given a shot anywhere yet. Of course, our service should be as social as possible. By the way, from my own experience I can say that fashion and the social categories don’t intersect, more like the opposite.

“To give you an example, Amazon purchases mesh beautifully with the GoodReader book recommendation system. As far as I know, in the States concert meet-ups are just as popular; people don’t want to go alone, as that defeats the purpose. What if we created a program that helped people find others to join them at the last minute?

“I think there could be something to the recommendation area,” said Maria Levina, picking up on the idea. “What if we made a service where people can share with their friends, and only their friends, what they’re reading or, for a completely different example, what doctors they go to?”

Ruslan Fazlyev took off in a different direction: “I have three ideas right away. The first is sharing major acquisitions; not collective purchasing, but collective ownership. That kind of service would help facilitate the process.

 

“The second is joint travelling. People would offer rides not for money, but for karma. And finally…”

 

But Fazlyev’s third suggestion was interrupted by the inexorable timer, kept under the watchful eyes of Peter Tatischev (Digital October) and Annelies van den Belt (SUP Media) — in accordance with the Start-up Check-off it was time for the experts to move on.

As it turns out Oskar, Ruslan, Maria and Ilya settled on the idea for a book recommendation project that would be a ready-made add-on for popular platforms and, thanks to an algorithm built to analyze social graphs, would deal a death blow to Amazon’s GoodReader.

Social Networks will Help

“The question really is just what the algorithm will be,” noted Hartmann. “But we’re in luck on that point: the competition to create a recommendation engine for Netflix was won by a Russian team, so we have someone already in the country who could develop our algorithm.

“Though really there are a lot of questions,” butted in one of the hosts, Peter Tatischev. “How many resources you need to get started, where you’ll get the money…”

“…and how you’ll bring in the first users,” added Annelies van den Belt.

“Regarding attracting users, from my experience with Odnoklassniki I know that

 

Social networks are ready to support projects that will help monetize their social graphs.

 

“But by providing ‘inventors,’ not money: for example, free advertising,” shared Hartmann.

The emerging project model began to fill with new functions, with Ruslan Fazlyev thinking of tools to allow more active users to earn money for their recommendations. At the same time the featured October Evolution guests took on the criticism from the audience, explaining, for example, why the project would not be developed exclusively within Facebook.

And Ilya Timchenko, appointed by his colleagues as the general director of the future startup, went ahead and calculated how much it would cost to launch:

 

“A startup is more than anything a dream. Money, well you can just print that.

 

”Of course, not everybody has a magic printer, but I’d like to say that if an idea is worth it, then the financing will take care of itself. We four are ready to work for free the first year and a half or even two years, but we need to spend money on the team of programmers and a lot of other things, even if we don’t earn a single dollar the entire time. I think it will take a minimum of $250000.

“But the founding team we have is great and we’re ready to invest 25%; listen, you investors out there, this is a unique opportunity for you!” Oskar Hartmann tried to pull in the online audience.

Results

The live show was drawing to a close and the viewers had to decide whether or not they wanted to use the product and how much they were ready to invest.

While Ruslan Fazlyev argued with Annelies van den Belt about how long ago commerce turned social, and the rest of the experts talked with the studio guests about whether or not Russia is one of the countries that reads the most in the world, the audience was able to evaluate the attractiveness of the model to the tune of up to $10000 virtual dollars.

The content recommendation service (primarily for books), that will “promote itself” and make money off partner programs with direct sellers in conclusion brought in $32000.

 

“No worries,” said Hartmann, “we have a business angel, he’ll bring in some more.”

 

 

 

Why social commerce?

  •  Over the past two years, this market grew by $6 billion per year; it is predicted that growth in 2014 will weigh in at $16 billion; 
  • According to predictions from Mashable, social commerce will make up half of all internet sales as early as 2015; 
  • Social commerce includes Facebook, Twitter, Nestle, Groupon, Etsy, CafePress, Pinterest, and TheFind; 
  • According to a survey conducted by 8thBridge (USA, 2012), 57% of respondents discussed purchases with their Facebook friends before making them, and 63% of those surveyed periodically share news about their purchases;
  • Last year, Amazon launched Pages, its social commerce service;
  • “If I had to guess, social commerce is next to blow up.” – Mark Zuckerberg.

photo gallery

all photos of event

Oscar Hartmann

Oscar Hartmann

Ruslan Fazlyev

Ruslan Fazlyev

Maria Levina

Maria Levina

Ilya Timchenko

Ilia Timchenko

hosts

Annelies van den Belt, Vice-President at SUP Media
Peter Tatischev, Curator at DO

general partner

Beeline

technical partner

Tekmi-Team

contacts

119072, Moscow, Bersenevskaya Naberezhnaya, 6, str.3

+7 (499) 963–31–10
+7 (985) 766–19–25
do@digitaloctober.com