Growing a startup into the largest Internet company in the Russian-speaking world is no small feat. But Dmitri Grishin, co-founder and CEO of $7 billion Mail.Ru, has a vision that extends far beyond the social networking, instant messaging, and email conglomerate he manages by day.
He believes startups today aren’t thinking big enough. That’s why he’s investing $25 million of his own money into companies focused on an under-capitalized industry: robotics. Grishin Robotics launches today. Just don’t call it an investment fund. VC funds are too far conservative for the kind of investing he plans to do.
Since Web 2.0, hardware companies have been a sort of unwanted stepchild of the startup world. VCs are reluctant to back them, no matter how good the idea, because of the costs involved and barriers to entry on the retail side.
That’s starting to change, especially as wildly successful Kickstarter projects like the Pebble watch have allowed companies to crowdsource funds and circumvent venture capital entirely.
But robotics companies are another beast. They require even more capital. And they’re not always user-friendly. And to do something truly revolutionary, which is Grishin’s goal, they also need patience and a little TLC.
It’s my job to speak to innovative startups every day, yet it’s still rare that I encounter someone with a big, wild, ambitious vision and 100 percent self-assuredness like Grishin. He immediately reminded me of Elon Musk and Peter Thiel, which became more apparent when he decried the lack of innovations in space exploration and flying cars. If the latter sounds familiar, it’s because it’s part of the manifesto for Founder’s Fund, Thiel’s firm. It opens, “We wanted flying cars, instead we got 140 characters.”
The fund declares that “the shift away from backing transformational technologies and toward more cynical, incrementalist investments” has led to the demise of venture capital. That explains why Founders Fund invested in SpaceX, Elon Musk’s space transport company. Of course, the consumer Web is what pays. Like Grishin, Thiel made the bulk of his money from social networking. Musk himself dropped $100 million of his own money on the project and $80 million into Tesla Motors. Grishin, who’s spent his entire career at Mail.ru, has an equally ambitious point-of-view, but he’s starting slightly smaller with his $25 million investment company.
Grishin recognizes the innovations afforded us by smartphones will have huge implications for personal robotics. The field is poised for a massive leap forward in innovation because, thanks to the proliferation of smartphones, components like sensors and cameras are smaller and cheaper than ever before.
The possibilities for purpose-driven robots are wide open. Outside of military and industrial uses, robots have been limited to novelty uses and the Roomba vacuum. But they could do anything from security to photography to self-driving cars to gardening, Grishin says. DIY drones have already caught on among hobbyists. Grishin wants to help more of these companies take their wild ideas to a mass market.
His expertise in growing a company to massive scale will be an asset to portfolio companies. One thing robotics companies lack is the focus on user experience and the speed of taking products to market, he says. Grishin wants to help teach innovators in the field how to operate their companies like lean software startups.
Perhaps most importantly, he wants them to acknowledge the importance of the software piece of the puzzle. In the early days of the Internet, user experience was an unheard-of concept. Now it’s central to any software. Personal robotics won’t be adopted by a mass audience until the companies building them get that same focus on user experience. Corresponding software that goes beyond a remote control or a few buttons on the hardware will be a big piece of it, Grishin says.
He plans to invest in 10 to 20 companies in any geography, and hopes other investors will take an interest in the sector, too. The next leap in innovation won’t happen without lots of risk-averse capital willing to wait for an exit. “Real, radical innovation happens when people see radical innovation all around them,” he says. Whether it happens may be an uphill battle — VCs have been burned in the past by thinking big. Khosla Ventures’ major focus on focus on cleantech has slowed as of late as the firm jumps into more consumer Web deals, for example.
As for Grishin and his other little job, the one where he runs a $7 billion Internet powerhouse? That’s still his number one focus, he says. The robotics stuff is merely a $25 million passion project.