New business or start-up, as it is often called colloquially, is an excellent opportunity to achieve their ambitious goals for diligent and talented people who want to start their own business and gradually turn from Latvian business mourners into sharks in international business.
Scientifically tested business ideas
My start-ups have always been research-based, which means that the business idea has been scientifically tested. The first company is Koatum, which deals with the coating of orthopedic and dental implants and the inclusion of medicines in these coatings. This was followed by Vortex Oil Engineering, the first oil service company from Latvia to deal with the efficiency of water use in the oil field. The technology we offer allows us to significantly increase oil production.
The third one on which I am a board member is Longenesis, which deals with medical data management. All three are international companies and are currently operating successfully.
Help to think correctly
Businesses are growing and at some point they are becoming autonomous. There is an opportunity to hire professional industry managers. On a daily basis, for example, you no longer have to reply to emails. I set up a company, achieved a certain level of development and handed over day-to-day management to managers from an industry whose work, of course, I control. But it is not a continuous involvement, because I can deal with new challenges, for example, to teach RSU students. I will give lectures in the program International Business and Start-ups. Our ambition is to ensure that, upon completion of the program, graduates are fully equipped to work in a business environment. They will be able to choose for themselves – to start their own company or get involved in an existing one. It has to be one of the most practical programs we can get in business. It can be said based on real life.
Let’s learn about the start-up environment and what the basics of business are, what are the types of financing, and much more. It’s no secret that theory is often different from practice. In my life, I missed the explanation of real business professionals. For example, the book is written that way, but in real life there are some 20 percent deviations. We will base it on concrete examples of what they are and why they happen. This will be my contribution and that of other local and foreign entrepreneurs.
Our task is to show progress by pointing out the mistakes of others. To make it easier for the young entrepreneur and not have to go through the whole thorny path of making and overcoming their mistakes. You can’t teach to become a good entrepreneur. Knowledge can be given to help you think correctly. Succeeding in business until you have significant experience is a combination of patience and knowledge. The best entrepreneurs are people with phenomenal patience.
How to attract 30 million
Internationality is the foundation, because it is accompanied by capital, exchange of experience, understanding of other markets, and so on. New companies are not established to develop only in Latvia, and no investor will give money to such a company. Our country is a good place to start, but you have to go to the world, so you have to communicate globally. Start-ups are the story of having to go and talk to customers and investors. Sitting on the ground and waiting, nothing will happen.
It can be read in the media that young entrepreneurs have attracted a million, two or more. I have attracted more than 30 million to my companies. To achieve this, it is necessary to understand how venture capital funds that they expect from an entrepreneur to agree to provide financing. I will teach this to my students.
I believe it is important for the investor to invest in the team at an early stage, not in the product, as the product may change. You can start with one and get to another product. To do this, there must be people who will invest their patience, and that is exactly what the investor wants to see.
In order for a start-up to receive financing, any potential investor will ask for scalability. This means how fast you can grow and how fast some of your value can be offered to partners in other countries. For global start-ups, all cases are scalable.
For example, “Uber” – the largest taxi company in the world, which does not own its own fleet. This is an example of how to use existing resources in another, innovative way, which is one of the challenges for start-ups. Bolt works similarly. A good example is the US-based company “We Work”, which offers workspaces for technology start-ups worldwide. Again, an innovative idea of how to use existing resources – premises – in a new offer.
The product is not primary
You will ask, what is the set of qualities that a successful start-up needs? Today I would say, first of all, education. The investor will look for both education and experience, but if the new entrepreneur does not have experience yet, then education will be important.
Second, a deep understanding of what you are doing. You need to understand which product you want to offer and who will need it. Third, it’s important to understand where you want to be in five years. There must be a team and a vision. The product is important, but not primary. At the center is a man with his team.
What matters is how many people want to do business at all – to manage, take risks and possibly lose in the beginning. I don’t believe there is a host gene and it all starts with a desire to change the world. It’s too cloudy. For many, a career in the corporate world seems much more stable and predictable than their own company, which will either shoot or not shoot. From my own experience, I can say that it is now easier to start a business and start than five years ago, because there is infrastructure, funding is available, partly private or only public, there are support programs already mentioned. Overall a good time to start your own business.
The backbone of the modern economy
New entrepreneurs are important donors to Latvian society and budget. There are currently many initiatives in Latvia that promote the operation of start-ups, such as vouchers, LIAA programs, acceleration funds in cooperation with Altum. In my opinion, quite a lot is being done to make this sector of the economy grow. I am often asked whether the company will stay in Latvia when it will be worth a few million?
I will answer honestly – “no” rather than “yes”. But that does not mean that we should not work to make the infrastructure, tax and business environment more friendly. Until some time, new companies give money to the Latvian economy, pay taxes here, provide jobs.
I would very much like my companies to stay in Latvia, but sometimes it is that somewhere in another economic space there are more funds, infrastructure, industry, contacts, customers or something else, and already the rational laws of development force to change the location of the company. Nowadays, an ambitious young entrepreneur will want to break into the global market, one might say, to conquer his place in the world, and a new company in Latvia can be a good start.