Focus on your goals to succeed, and herding many little startups will not lead to one eventual big success
Growing up in St. Petersburg in Russia, Serguei Beloussov was intent on becoming a scientist. When a friend approached him in the early 1990’s for help in his business, Beloussov agreed but had his mind fixed firmly on a return to science. Four months and US$20,000 in salary later – “A huge amount of money back then!” – Beloussov expressed his intention to pursue his dreams to be a scientist.
“’You are my partner, and we made this amount of money,’” Beloussov recalls of his conversation with his business partner. “’Here’s $42,000 extra that is your share. You also own 25 percent of this company.’ I couldn’t refuse $42,000 and a 25 percent share in the company but I still perceived myself as a scientist. I soon went full speed into business. By 1994, the company hired more than 1,000 people and generated revenues of $200 million.”
FOCUS, FOCUS, FOCUS
That company was Sunrise, which were among the first companies to assemble and sell Personal Computers (PC’s) in Russia. It has gone on to become one of Russia's largest PC and electronics retailers.
Since then, the Russian-born Singaporean has created numerous companies, from virtualisation firm SWSoft – renamed Parallels in 2007 – to data protection company Acronis, where he is currently the CEO. He also created venture capital funds such as Qwave Capital and Phystech Ventures, and he is constantly on the lookout for new business opportunities.
Beloussov is reportedly worth hundreds of millions of dollars, so one might point to him and say, “Serguei Beloussov became rich by jumping into anything and everything with potential, therefore I can also achieve the same level of success by copying him.”
The man himself might not agree.
“I would advise new entrepreneurs to find opportunities and focus on them,” he said at the recent SMU Institute of Innovation & Enterprise (IIE) event, “The Exciting Journey from Scientist to Entrepreneur: In conversation with Serguei Beloussov”. “If you look at my journey, I’ve created a few mid-sized companies but none very big except for Acronis. The only way to succeed is to focus. I succeeded for short periods of time when I stayed focused.”
That maxim is exemplified by Acronis, the unit Beloussov spun off from what was then SWSoft in 2001. It now generates “a couple hundred million dollars” in annual revenue, putting it on par with Parallels. Acronis works with roughly 300,000 businesses and five million consumers, and its products are available in over 40 languages. The goal, Beloussov says, is to build the company into “a two- or three-billion dollar company, the number one data management software company”.
GROWTH AND EXIT
Beloussov plans to achieve that goal by focusing on Asia because “all the business is going to be here; more than half of the world economy and global growth is here; more than half the world’s population is here”.
“You have business functions, you have product functions, and you have the back office,” Beloussov explains the factors that influenced his decision to build Acronis’ headquarters in Singapore. While Singapore in itself does not represent a big market, it is in Asia “where the customers are”. Beloussov adds, “For the back office, it’s not very important. You can run it from anywhere. However, as you expand you need a well-functioning back office. Singapore is no better or worse than other places in that regard.
"It is very tempting to believe that you can shepherd a bunch of cockroaches that are many small startups, and then they become valuable. That doesn’t work."
“Then there is the product function. It remains to be seen whether Singapore is a good place. We are just starting to hire people here, and we will bring in other people from other locations. Twenty years ago, there was definitely not enough talent here to build the software business. 10 years ago it was challenging, but now you have all these wonderful universities where we can find more talent.”
While Beloussov’s optimism speaks volumes about the Singaporean government's efforts to bring about a creative and knowledge-based economy, the entrepreneur is less optimistic about the startup scene on the island state.
“In the startup industry, the money has always been made on the billion-, ten-billion-, and one-hundred-billion-dollar companies,” Beloussov says while pointing to the lack of such a company. “For the Singapore startup scene to be of any interest, there must be a billion-dollar exit. Without such exits, the system wouldn’t work.
“The important thing isn’t the number of startups or the quality of the startups on average. It is very tempting to believe that you can shepherd a bunch of cockroaches that are many small startups, and then they become valuable. That doesn’t work. You need to look for a billion-dollar company or ten-billion company.”
He adds, “Everybody wants to replicate something. The most common thing is to replicate Silicon Valley. There’s a Silicon Valley in Malaysia, Russia, and India etc. You cannot win in technology by replicating something. You have to be different.”
Changing the company in order to be different is a difficult thing to do. It was also a main reason why Beloussov returned to Acronis to helm the company as CEO.
“For five years, there were three management teams between me and me,” Beloussov recalls the time he was not actively running Acronis. “Hardware, software, internet services, applications, cloud computing, Internet of things etc, all these things are changing. It is very difficult for a professional management team to change the company as effectively as the original founder. One way of overcoming this is by being unrelenting in the desire to improve, read books, and have around you a good management team. Technology is about teamwork.”
Follow us on Twitter (@sgsmuperspectiv) or like us on Facebook (https://www.facebook.com/PerspectivesAtSMU)