The IT industry is booming with entry into the market becoming increasingly difficult. Young entrepreneurs have to drastically change existing niches or create some new ones. Sergey Tokarev, the founder of technology company Roosh, shared at the Cyprus IT Forum how startups and their investors can avoid fatal errors.
Sergey is an investor with perennial experience and more than 100 implemented projects. To tell the truth, there are real stars among them. For example, Elon Mask’s well-loved mobile app Reface for swapping faces on your photos and videos.
Since its establishment by Sergey Tokarev, the Roosh Venture Fund has made lots of investments, none of which are banal or prosaic. These include smart tracker Oura Ring, no-code games developer Playco, and the 3D avatar creation company Facemoji, which may soon turn social networks into a full digital universe. The so-called Metaverse is not a madman’s fiction, it is the future, Sergey says.
However, behind the loud success stories lie dozens of mistakes and miscalculations. Sergey Tokarev is not shy about his own defeats. On the contrary, the investor believes them to be the prerequisite for future victories. Since no one is safe from failure. Especially newcomers. The key is to learn the right lessons.
“Your failures will determine your further actions. What wealth of knowledge and expertise you will use in solving new problems. It is pure mathematics: more fails—more new attempts with improved expertise—more success,” Tokarev explains.
Evaluating a startup at the idea stage is always difficult. 99% of the problems lie in the people themselves as well as their vision. Often, startupers are obsessed with immediate profits. Few people care about creating long-term value. Hence incorrect calculations, unrealistic numbers, and fatal errors.
“Your first question for all the founders should be: ‘How do you see the next 10 years of your life within the framework of this project?’ If you get an answer, ‘I’ll do everything quickly in 2 years, and that is all,’ this is definitely a reason to run away. Real success comes to companies only at the age of 6-8,” Tokarev notes.
No less important is the problem the startup seeks to solve. Even the most brilliant idea, at first glance, is worth nothing unless it improves someone’s life. It is easy to check, Sergey says. Talk to people around you, share your vision. Friends and family’s reactions will tell you the right direction.
Let’s move from the idea to the more complex matter, namely analytics. You cannot do this alone. Founders often focus exclusively on the technological side of their product, neglecting other equally important components. To mention only marketing. Even with a finished product on your hand, you still need to know how and where to sell it. Sergey Tokarev advises young entrepreneurs to focus on building a high-quality team of experts from different spheres.
One of such specialists should be a risk manager. He and his team will monitor the situation in your chosen industry and in the market in general 24/7.
“For each company, we always select benchmark companies from the same area and monitor their performance, comparing with ours. When we find significant deviations, we start exploring the reason. We put questions and form a knowledge base. We have a dossier for every investment. Line by line, important parameters are added to it, which then allow us to make appropriate decisions,” shares the founder of technological company Roosh.
Sergey Tokarev advises novice investors to roll their sleeves and get their heads into work with the selected project. Do not observe from the outside. Because a startup does not need motivational speeches (though sometimes they are the right option), but rather your networks, expertise, and experience. That is true support.