Tuesday, 02 June 2020

Inside Belarus as Europe's last dictatorship struggles to restyle itself as a Soviet Silicon Valley

Belarus has plenty of clever software developers. But is that enough for an autocratic nation to reinvent itself as a startup success?

Last December, Belarus – Europe’s last communist dictatorship – announced the creation of its own digital and crypto hub. But building the next Silicon Valley by presidential decree is not that straightforward – even though Belarus’ entrepreneurs like Vadim Nekhai hope otherwise.

The nation of about ten million looks like a mini-USSR preserved in amber, thanks to its autocratic president Alexander Lukashenko, who has rigidly ruled the country for the last 24 years. The main intelligence agency is still called the KGB; many farms are still run as collectives; opposition leaders disappear without a trace; the economy is tightly controlled, and Europe’s last executioners shoot death-row convicts in the back of their heads.

Still, Nekhai believes that his startup Banuba – with an office wedged between a seedy casino and a grey Soviet-style concert hall – is part of a technology revolution. His company develops augmented reality apps, which Nekhai says can fundamentally change entertainment, advertising and business-to-business solutions. “We teach a machine to see a human, and that’s what can be very profitable,” says the 35-year-old CEO.

With Banuba’s apps, you can operate your phone or computer just by moving your eyes, and fool around with video selfie filters that allow you to don Uncle Sam or Statue of Liberty masks or make spiders crawl out of your mouth – in an AR experience that is way more sophisticated than Snapchat’s or Facebook’s selfie filters.

Other Banuba software products can identify your age, sex, skin and hair colour – and make it easy for businesses to offer a deeply personalised product experience. The phone or tablet becomes like a realistic mirror image, but customers can see themselves with a new hairdo, glasses, earrings or clothes. Antok Liskevich, Banuba’s product manager, believes that apps like this will take the interaction between a customer and a brand “to a new level.”

Artificial intelligence algorithms are powering the apps and make it possible to read gestures and facial expression. Drivers can be told whether they are too tired to keep on trucking, and game developers will know whether gamers are losing interest in going to the next level.

Belarus is now home to more than a hundred startups like Banuba, which sprung up after Lukashenko signed a decree last December, promising the IT industry tax breaks and other incentives. The digital gold rush is already making it difficult for startups to find good office space.

“Everything’s been rented out, the industry is developing even faster than we expected,” says Viktor Prokopenya, the head of the VP Capital investment, a company that describes itself as the “largest private tax payer in Belarus”.

Even before the decree, the country’s IT industry punched well above the country’s weight. Take World of Tanks, a popular online game that made its inventor Belarus’ first billionaire, and messenger app Viber, which was developed in Belarus. A Belarussian mobile app MSQRD that makes it possible to “don” a celebrity’s face in a selfie video was not long ago bought by Facebook. Google, for its part, bought AIMatter, a Belarussian startup that uses artificial intelligence to transform videos.

Of course, in absolute terms Belarus is nowhere near the size of Silicon Valley, India’s Bangalore or Hong Kong. “I guess Bristol would be more like it,” says Igor Shoifot, a San Francisco-based IT investor and co-founder of several startups. “Their startup scene is small and young, but very impressive, and I think that there is a huge future there.”

Both driving the industry and holding it back are the country’s Soviet-era universities. They have a strong curriculum that churns out good software engineers, but don’t produce enough experts for sales and marketing.

“Belarus has good tech schools which educate talented engineers, but there is a gap in the business component,” says Nikolai Oreshkin, a managing partner at Palo Alto-based Elysium Venture Capital. “That is why we see a number of great outsourcing companies and freelancers out of Belarus, but not that many HQs of large tech companies.”

Still, many engineers now stay in Belarus instead of leaving for Russia, Ukraine or the West, because startup jobs can pay several thousand dollars a month. This is a small fortune in an economy that’s kept afloat by oil refineries processing discounted Russian oil, agricultural products and remittances from labour migrants in neighbouring Russia and Ukraine.

“Lukashenko wants to run a strong country, and Belarus doesn't have much economy-wise,” says Shoifot. “Brainpower there is very impressive, and I wouldn't be surprised if high-tech services [soon generate] quite a significant percentage of exports.”

source: wired.co.uk
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