One thing I think we should all be surprised about is how few startups in the Nordics go after the Russian market. Startup opportunities abound. Russian internet services haven’t quite matured meaning there are still holes to fill and a growing market to take advantage of. On top of that, huge funding round numbers are thrown around all the time, hinting at massive valuations and future payouts.
We have a cross-publishing agreement with East West Digital News, and every now and then we’ll try to add in a story from Russia. They have some interesting analysis that we share, but I also try to pick out the big funding stories to show what’s happening in the region.
The size of the market also leads to some interesting investments. Just at the beginning of this month, a dentist appointment startup received $5 million to get off the ground, for example.
It’s maddening how we don’t try to tackle the Russian market considering how little innovation you see in some of these startups. After Fast Lane Ventures invested $1 Million in RentHome.ru, I made the mistake of calling it an Airbnb clone. A representative from Fast Lane corrected me saying that the business model was more similar to HomeAway.com. Their business models weren’t the only similarity – Renthome is a direct clone.
It was strange to point out that the service was a direct clone, but I think the takeaweay is that the U.S.-based Homeaway wasn’t going after the Russian market, so someone had to. Nordic services don’t have any excuses for waiting to get cloned.
The obvious difficulty of targeting the Russian market is figuring out the market and what Russian consumers and businesses need. Even though the American market is thousands of miles away, I think all the U.S. focused startup media helps Nordic entrepreneurs know what the market already looks like and what it needs – but by doing so, ignoring the giant next door.
The rest of the Nordics may be more insulated but I think Finland has little excuse for not targeting more startups towards the east. Around one percent of Finnish citizens speak Russian, so there is a sizable amount of people to hire for localization. St. Petersburg is also only short flight or train ride away.
Maybe this all goes back to a recurring theme- the Baltics are poised to take over the world. With their larger share of Russian speakers and cultural influence, we’re already seeing startups target both the Russian and Western audience. Others, like Eskimi, are tackling Africa – a huge growing market.
Next week we will go into more detail about Helsinki as a Russian business hub for a promoted article for Greater Helsinki Promotions. There will be a lot of good information there, but before I put on more of a PR hat I want to say hey startups – wake up and look next door.
Top image cc licensed by Osipov Georgy Nokka on Wikipedia.