RSU Visiting Lecturer and Entrepreneur Sergejs Jakimovs: Start-Ups are the Backbone of Modern Economy
The International Business and Start-up Entrepreneurship programme at Rīga Stradiņš University (RSU) provides a great opportunity for anyone aspiring to establish their own business and achieve their ambitions. Sergejs Jakimovs is the founder of several international companies and a visiting lecturer at RSU. He explains how to achieve one’s goals, and how the new study programme can help.
Sergejs Jakimovs. Photo by LETA
How did you start working in start-ups?
The start-ups I have founded have always been based on research, meaning that each business idea has been scientifically examined. My first company Koatum works in the field of orthopaedic and dental implant coating and incorporating medicine into this kind of coating. This was followed by the first Latvian-based oil service company, Vortex Oil Engineering, that works with enhancing the efficiency of water usage on oil fields. The technology we offer ensures a significant increase in the amount of oil that can be extracted. I am a member of the board of a third company, Longenesis, which manages medical data. All three of them are successful, international companies.
Isn’t the workload too high - managing three international companies and lecturing at the same time?
Companies grow and become autonomous at some point. There will then be an opportunity to employ managers that are professional in their fields. I do not, therefore, have to respond to all e-mails myself every day.
I create a company and when it achieves a certain level I can hand the daily management over to managers from within the industry. I still supervise their work, but my involvement isn’t so constant. I can then devote my time to new challenges like teaching at RSU, for example.
Why should students choose the International Business and Start-Up Entrepreneurship programme at RSU?
Our goal is to ensure that students are fully equipped to work in the business environment upon graduation. They will then be able to choose between setting up their own companies, or getting involved in existing companies. It has to be one of the most practical programmes in entrepreneurship currently available, because it’s based in real-world examples and situations.
We will teach about the start-up environment, business basics, types of funding etc. It is common knowledge that theory is often different from practice. In my life, I have often missed being able to get explanations from real business professionals. For example, you could read about a certain scenario in a textbook, but a real situation can deviate from this example considerably. We will substantiate these deviations and explain the causes with specific examples. This will be the contribution that I and other local and international entrepreneurs can bring to this programme.
Our task is to study others’ mistakes. This will make things easier for young entrepreneurs and help them avoid the rocky road of making and resolving their own mistakes.
You cannot teach someone how to become a good entrepreneur. You can only pass on knowledge that might help them think the right way. Succeeding in business before you have significant experience takes a combination of patience and knowledge. The best entrepreneurs are people with extraordinary patience.
What will you teach your students?
Venture capital. This is fundamental for start-ups, because it is all about funding companies. You can read in the media that some start-ups have attracted one million, two million, or even more.
I have attracted over 30 million for my companies. To achieve this, you have to have an understanding of how venture capital funding operates and what requirements entrepreneurs need to comply with in order for funders to agree to supporting your business. In the early stages it’s important for investors to invest in the team, not the product, because the product may change.
You can start with one product, but this could gradually become something completely different. In order to get results, there must be people who are willing to contribute their patience, and this is what investors want to see.
For a start-up to receive funding, all potential investors will ask about scalability. Scalability means the rate of how quickly a company can grow, adapt and how soon it will be able to offer value to international partners. All global start-ups are scalable. Uber, for instance is the largest taxi company operating worldwide, and it has grown to be the largest without having its own fleet of vehicles. This example shows you how to use existing resources in other, innovative ways, and this is one of the challenges start-ups face. Bolt operates in a similar way. Another good example is the company We Work, founded in the USA, which offers technology start-ups workspace worldwide. This is another innovative idea for how to use existing resources, i. e., premises, in a new way.
What are characteristics should a successful start-up founder possess?
Today, I would say that it is education.
Investors are looking for both education and experience, but, if a you are a prospective entrepreneur who doesn’t have any experience yet, they will look at your education.
The second requirement is to have a deep understanding of what you are doing. You must understand what product you are offering and who will need it. Thirdly, having an understanding of what you want to become in five years is also crucial. You must have a team and a vision. The product is important, but it does not have the primary role. The person and their team are at the heart of everything.
Students will be able to participate in Brussels Week, when international entrepreneurs will give lectures and studies will take place in English. How important is the international element of this programme?
Internationality is at the core of everything, because it is accompanied by capital, experience exchange, understanding other markets etc. Start-ups are not founded to develop only within the boundaries of one country, and no investor will fund such companies. Your own country provides a good base to start from, but you must enter other markets and this is why we must communicate globally. You have to clients and investors and communicate with them. You won’t achieve anything by sitting and waiting.
Are young Latvian students willing and ready to found start-ups, in your opinion?
This depends on their personality and the degree to which people are willing to become involved in a business, i. e., to manage, take risks and to potentially suffer losses in the beginning. I do not believe in a business gene, or that everything should start with an aspiration to change the world. Those concepts are too unclear. Many people consider a career in the corporate world to be much more stable and foreseeable than having their own company that may, or may not be successful.
From my experience, I can say that right now founding a company and starting to work is much easier than it was five years ago, because now we have the right infrastructure. There is more funding available, both public and private, as well as multiple support programmes. Overall this is a good time to start your own business.
Are start-ups beneficial to society and consequently also to the national economy?
Of course! We currently have many initiatives in Latvia that facilitate start-ups, for example vouchers, programmes by the Investment and Development Agency of Latvia and acceleration fund programmes in collaboration with Altum. A lot of work has been done to ensure the growth of this sector of the economy, in my opinion. I am often asked if a company will stay in Latvia after it is worth several millions and my honest answer is ‘more likely no, than yes’. However, this does not mean that we should stop working on building an infrastructure, working on our tax system and making the business environment more friendly. Up to a certain point, start-ups will still give money to the Latvian economy, pay taxes here and create employment.
I would very much like for my companies to remain in Latvia, but there can be situations when another economic space provides better access to resources, infrastructure, industry, contacts, clients or other opportunities. Nowadays, ambitious entrepreneurs want to break into the global market and, as you say, make a place for themselves in the world — founding a start-up in Latvia is a great starting point.
The International Business and Start-Up Entrepreneurship study programme is one of six new internationally competitive study programmes that the university is developing by 2023 with financing from the European Social Fund and the state budget within the project Reducing Study Programme Fragmentation and Promoting the Internationalisation of Studies at Rīga Stradiņš University (project No. 184.108.40.206/18/A/014). This programme will be distinctly international with international students and lecturers, and travel abroad. The plan is for the first students to enrol in autumn 2020.