From Russia with Love, Part Dvah (aka II)

By Lisa Suennen
08:26 AM

Hello and Happy New Year everyone!  I am finally putting pen to paper (finger pads to computer keys? whatever) to write about the previously promised second half of my Russian visit.

As luck would have it, I happened to see my freshman year college roommate yesterday (Josie Everett), with whom I took one semester of Russian language classes when she and I were at Berkeley.  For me one semester was hard enough; I decided to stick with English, as it was a much faster track to getting your order delivered correctly at Starbucks. Josie ended up getting a Masters in Russian and now is Executive Director of an extremely cool foundation, the Heart to Heart International Children’s Medical Alliance, which helps bring modern pediatric cardiac surgery programs to Russia. It was fun to share stories (and vodka shots) and talk about the trip with Josie yesterday as she spends a great deal of time in and around the Russian healthcare system about which I am just learning.  Plus, now that there are Starbucks in Moscow so she can order a grande non-fat latte in multiple languages.

Anyway, Josie and I were riffing on the topic that I started to touch on in my last post, From Russia with Love, readable HERE.  The topic at hand is the subtle difference between innovation and entrepreneurship and how that may play out differently in different cultures and settings.

I spoke a lot in my last Russia post about how the Russian government and various public and private entities there are seeking to foster innovation and entrepreneurship.  I used those words interchangeably in that post, which I realize, in retrospect, was really not accurate (not too hard to realize since I got approximate 10,000 emails pointing out to me the difference…guess I didn’t master that English language training either).

Again, I’ll provide a little context for what follows, which I will steal from a nicely concise article I recently read in VentureBeat.  They report that Russia is now the largest Internet and mobile market in Europe.  Software, Nanotechnology, Biotechnology and Clean Teach are all fast growing fields, and the consumer market is speeding forward fast and furious (GDP per capita has grown about 13% annually from 1999 through 2010).  Russia is, of course, known for superior levels of scientific acumen, and it is also becoming a major technology center.  Labor costs are generally low in Russia and early stage funding is becoming more readily available.  As a result, there is a rapidly emerging startup/entrepreneur ecosystem.  VentureBeat adds that there is strong government commitment and support for innovation.

And yet, that difference between “entrepreneurship” and “innovation” keeps ringing in my head.  Not to get all semantic-y on you, but the Webster’s definitions tell the tale:

Entrepreneur:  a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

Innovator:  a person who introduces something new and/or makes changes in anything established.

It is really interesting to be thinking about this because a close friend of mine, John Spongberg, who runs a very successful personal training business in Marin, just last week said to me, “I guess I’m not really an entrepreneur because I have such a small business.”  My reaction to that was to say that he was incorrect; that starting a business from scratch at considerable personal risk was the very definition of entrepreneurship (turns out Webster agrees).  But would I call him an “innovator”?  Probably not in the true sense of the word, as personal training, while great, is not a new idea that changes the world, although I sincerely hope it changes my post-holiday waistline.

And that contrast was what really kept coming back to me as I sat on my first day in Moscow in a room full of entrepreneurs and innovators, public and private sector representatives, Americans and Russians and watched and judged the finals of the Skolkovo Foundation’s Mobile Diagnostic Device Competition.

During the event, the 12 finalists who had made it this far were given a chance to present their answer to a challenge offered by Skolkovo to develop what is essentially their answer to the Qualcomm Tricorder X-Prize. For those of you unfamiliar, the X-Prize Foundation and Qualcomm have issued a challenge to anyone to build a mobile device capable of “making reliable health diagnoses available directly to “health consumers” in their homes.” Whoever can do this and meet the criteria will win $10 million, although it entirely possible that the winner will spend more than that to get to their offering.

Among the requirements of the Tricorder challenge are that the winning device will be a tool capable of capturing key health metrics and diagnosing a set of 15 diseases; will provide metrics like blood pressure, respiratory rate, and temperature; collect large volumes of data from ongoing measurement of health states through a combination of wireless sensors, imaging technologies, and portable, non-invasive laboratory replacements; will weigh less than 5 pounds and provide a great and safe user experience.  It’s a tall order and I am guessing that if there is a Tricorder II challenge, new criteria will include the ability to diagnose disease while making a serviceable cappuccino and vacuuming the house, Roomba style.

The Skolkovo challenge was quite similar in its baseline criteria, although the winners could be still in the idea/pre-prototype state while the Tricorder winner will likely be much further along.  Additional criteria stated for the Skolkovo competition were innovation, spirit, commercial viability, scientific value and team talent.  The Skolkovo competition winner received $300K, not quite $10 million, but also the opportunity for further mentoring and assistance from Skolkovo’s innovation center.

Skolkovo leadership described that this challenge was also inspired by a number of digital health companies that are beginning to make a difference around the world, listing CellScope, AliveCor, STI2 (detects sexually-transmitted diseases—perhaps this will lead to safe sexting?), and my personal favorite, the Smart Toilet, which apparently takes urine readings, and weight and blood pressure measurements while one is reading the Sunday Times, if you know what I mean.

During the kick-off of the competition finals, held at a place called Digital October that felt exactly like the kind of space where start-ups grow like mushrooms, one of the Skolkovo BioMedical Cluster leaders made the comment, “I can feel the vibe and smell of innovation in the room.”  That quote kept ringing in my ears as I listened to the 12 finalist presentations, and here’s why:  while there was a tremendous amount of driven, wide-eyed entrepreneurship in evidence on stage from the 12 presenters, the innovation thing was a really mixed bag.  For each of the 12 companies I saw I could think of at least 1 and often more U.S. correlates of the same concept.  There are probably far more, as I am woefully unaware of similar efforts in other countries that might also be duplicates.

So was the vibe and smell of innovation present or was it really the vibe and smell of entrepreneurship—a bunch of guys trying to answer an already defined question that many are seeking to answer similarly, but willing to take significant business risk while doing so?   That was a very difficult question for me to answer from inside this event.  There were numerous “innovations” posited for how to achieve the world’s most powerful diagnostic device, but there was an odd lack of scientific evidence presented about how such ideas might work and how they were truly different than those that came before them.   The 12 finalists spent more time talking about how their devices might be operationalized in the home, how much IP they had and how they will make big money for investors fast (entrepreneurs—same the world over!), but not much time talking about their unique contribution to science and medicine and how their products would truly change the paradigm.

And, just like U.S. entrepreneurs, they often forgot to mention who might pay for such innovations and what the return on that payment might exactly be.  Alas.  So many sensors, so little time, so few business models.   I was reminded once again, as I am at so many of these business plan contests everywhere on earth, of those South Park underpants gnomes and their 3-step business plan:  Phase 1) collect underpants; Phase 2)???; Phase 3) Profit!

In the end, the winner of the day, and you can watch the whole event in its entirety HERE, was an organization called Association Fruct, which offered a cloud-based home unit that was, in many ways, much like Qualcomm’s 2Net device, a piece of infrastructure that allows multiple devices and sensors from multiple vendors to be integrated, communicate and data share to enhance diagnosis and monitoring in the home.  This choice proved once again that with any gold rush, and the digital health movement is nothing if not that, it’s better to be the pick and shovel than the prospector.

A few interesting observations of the day, at least to me:

There was a strong sense of Russian nationalism present in the room and presentations of the day.  It was so interesting, as the efforts to build the new healthcare economy are clearly related at efforts to build an even stronger Russian nation.  One rarely if ever hears that “made in America” kind of talk at U.S. business plan competitions really.  Occasionally you see the flag waving at the challenges sponsored by the U.S. government, but even there it’s usually all business and an unabashed willingness to outsource and sell product outside the U.S. if that is the fastest path to fortune and fame.

In contrast, there was much Russia/U.S. similarity in the diversity quotient evident in the room:  12 companies, 12 white guys, 0 women CEOs.  I note that the underwear gnomes are also entirely male.  Coincidence or correlation?

But, as with all large gatherings of healthcare entrepreneurs everywhere I have been, there was also a sense of great excitement, drive and energy in the room at Digital October on that 12/12/12 (ps—no Mayan apocalypse then or a week later so the Mayans should not be allowed to innovate around time-telling devices).  It is wonderful to share an industry with people who are trying to not only make a buck, but make a real difference in human health.  Whether it is through entrepreneurship, innovation or any other methodology, one can only hope that the wild-eyed dreamers are incredibly successful for the benefit of all.