I once wrote that one way to encourage entrepreneurship is through business-plan competitions. Recently in Moscow I was a judge at just such a competition, sponsored by a number of local vendors, including Rambler, the leading Russian portal. The idea was to honour the spirit of entrepreneurship, to provide visibility for Russia's business start-ups, and to promote Rambler (www.rambler.ru) as a major voice of the new economy in Russia.
We were there not just to pick a winner but to assist all the 200 applicants with feedback and advice, helping them turn a raw idea into a formal business plan. There were four finalists: Russianoilandgas.com, a would-be exchange for oil-field equipment and services; BIDS, a brokerage information and dealing service; Animation Studio, a leading-edge development group with a variety of patents to its name; and Krasota Online, or Beauty Online, with a haircut-simulation tool.
My immediate reaction: enough with the beauty salons - not a serious contributor to the Russian economy and probably a chintzy consumer play with great graphics and little else. The winner? Krasota, of course. As we went through the plans and questioned the entrepreneurs, it proved that a business plan is about as enlightening as a resume.
Krasota's founder, Andrei Zhukovsky, impressed us the most with his focus, the clarity of his vision and his ability to create a real business from nothing, bootstrapping a single piece of technology and a dollars 50,000 loan into a business that should generate about dollars 90,000 in revenues this year.
He's also a fine example of how military expertise can be applied to peaceful activities. He started out as a programmer at the Russian space centre Star City, where he designed a flight simulator for the Soyuz-TM spacecraft.
The design sold to the West, but Andrei saw little personal benefit. That started him thinking, and he ended up designing a haircut simulator, YourStyle.
It allows a hairdresser to create a custom hairstyle and to model it on a scanned-in photograph, full-face and in profile. That was in 1997. Since then, Krasota has grown to 11 employees and its software includes a hair-salon management system, YourSalon. It has helped to automate 250 Russian salons, and the number grows every month. The company has also signed a contract with a chain of Italian salons called ModaModi.
Haircare may not be a fundamental human right, but it supports a civilized society and it employs a lot of people. Every community needs such a service; it's not the sort of thing that works only in Silicon Valley or its Russian equivalents, Moscow and St Petersburg.
Zhukovsky is realistic enough to want to try it out in Russian first, so he can understand the support issues. But if it works, it's an ideal service to export; the content can't be copied, since each simulation is targeted to the individual. It's precisely this kind of personalisation - rather than the practice of targeted advertising - that really creates value online. But if Krasota takes investors' money it will inevitably change the company culture. Zhukovsky will have to hire a chief financial officer and to set targets and meet them. What began as a little project with Andrei's sweat equity and a dollars 50,000 investment may be about to grow up.