Mikhail Fedorenko
strategies for overcoming risks for startups
Presentation on South Summit, 4.10.2018 Madrid
We are at the crossroads of our development. And we didn't expect to have come to this point, we don't really have the experience and understanding how to go through these changes.

Meanwhile the point we are at now will change everything in our lives. It will change the economic, technological patterns of our life and, of course, will influence the society greatly.
First I would like us to refresh in our memory how the world was changing in the last hundred years.
The whole 20th century was invented for more or less than 10 years. During quite a short period of time the world saw great inventions. Assembly line production was invented, Einstein created his theory of relativity, the Wright brothers built an airplane and carried out the first flight, stainless steel and diodes were invented.
All these inventions changed our everyday life, they changed the job market, they changed our social relationships.
It was hard for the society to go through all these changes and eventually the world faced the two world wars.

These changes have had dramatic impact on our lives, both positive and negative. And yet we began forgetting about it.

Scientists are saying that the nearest ten years are going to bring us changes, which are meaningful and significant.
We will create technologies with which the humankind will enter the new epoch and which will be as unknown andamazing for us, people who were born in the sixties, eighties and nineties as mobile communication is for our grandparents.

Each of us has a grandmother and you must remember this person who has never had a smartphone in her hand, who doesn't understand what mobile communication is.

And now look at the modern-day kids… my 3-year-old child easily accesses the internet and goes on you tube to watch her favourite cartoons. She easily googles the songs she wants to listen to and downloads them. And that's our reality.

That's a dramatic gap between generations. And it changes everything, from how they understand what is "good" and "bad" to the way they see who they are in this world.
So I really want us to remember what trends scientist are talking about today.

Let's watch a short video.

So how do you feel about this video? Do you feel anxious, alarmed, nervous?

On the one hand, everything is quite positive. On the other hand you can't help feeling that these changes are not only positive, but also bring something threatening to us. And this feeling is not a mere coincidence. If you look at the sci-fi films, that have been produced in the last thirty-forty years by the world film industry, you will find out an amazing thing. You will find out that almost all these films are about a horrifying, scaring future, they don't have a positive story-line, the humankind is on the edge and is always trying to survive.

If you remember your childhood, if you remember the future that was seen by modernists in the fifties and the sixties in Europe and the USA. You will see that it was a very positive future. The future that was full of joy and great expectations of better and better perspectives.

Now the mood has become completely different and it's not a coincidence.

The most important discussion that we must have is the difference between a machine and a human. This is a question: "you for the computer" or "the computer for you".

The more we go on, the more feeble this borderline is. And we are not ready yet to give a clear response to this challenge either in education or in our social relationships, our families.

This question is of great importance. The things that computers can't do and that only a man can do. What are they? What is this crucial difference?

Can a computer completely replace a man? And if yes then we're going to have another discussion – who IS a man?

Is he just a bio-machine that is capable or not capable of doing something? But if he can be replaced by a computer then what is a man's role? What is his place in the economy, his place in social relationships?

Those are the key questions that the human kind has been facing for the last thousands of years. But nowadays they have become really acute. And it is our generation's responsibility to respond to this question, because if we don't give an answer, the next generation might not even be able to ask it, because they were born in an absolutely different informational and technological field / background.

We are the last generation who remember the world without computers and we must raise this question for the next generations.

But before we start answering this question I suggest that we watch another video, a part of Jack Ma's speech. Jack Ma is one of the leaders of the new economy, the founder of ALIBABA company and one of the richest people in the world. He surely understands what innovations and startups are.

In his speech he talked about his view on how a man is going to be different from computers and why a man will always win… or maybe not always… let's watch…

We've just heard the answer of one of the opinion-leaders to the question of how a man is different from a robot. And he said that a man has heart, soul and belief, which robots will never have. But what are these words for us today? Heart, soul and belief…

As far as you understand, this discussion has a philosophical and even religious character. The technological revolution, startups and innovations, their speed and the way they influence the society are so great that they make us look for clear answers to these questions.

Speaking of startups and investments into startups, we must be able to take into account not only the traditional risks of risk-models, but also risks that have never been thought of before. We must understand what kind of innovations will lead us to the new level of development and will be beneficial for the new generation.

The aim of my speech today is to raise these issues / questions. There are no ready-made answers. But I understand where these answers are to be looked for. And I want to give you this practice.

The thing is that everyone has three categories of basic vocabulary and we build our communication and our mindset on these categories.

The first category of words is "give", "do", "go" – these are words of our everyday communication. We understand these words very well. And it is this category of notions that will be quickly and easily replaced by robots.

The second category of words is represented by words-"systems" that help us build projects, processes and systems. Here we find such categories as effectiveness, quality, process. And thanks God we understand each other on this level as well. We've created the international terminology that helps us communicate with each other.

It is strongly recommended for startups to grasp this category, because even the brightest idea is lifeless without a systematic approach.

But it's quite possible that robots will replace us here as well.

But there is also the third category – social concepts. That's where robots have never set foot, that's where we build social relationships, that's where we become humans. As Jack Ma said, these are heart, belief, soul. Around these words and concepts we build our relationships.

Do a simple test and you will see how weak we are in this respect.

Each of you has about twenty words, on which you build your relationships with other people.

In other words – these are the concepts of your life.

There are not so many words of this kind, let's say them. They are – respect, kindness, responsibility, freedom, happiness, joy, honesty, dignity, belief, soul, spirit, man, woman, child… these are the words that are so important today for every man to be a man. And these are the words that are not available for robots.

But what do we understand by these words?

There is a general formula that helps us to open up the conceptual meanings of these words.

If you can explain the meaning of a word with verbs answering the question "to do what?", then you understand how to apply this concept, you know something about this concept.

If you can't explain the meaning of a word with verbs, then you can't use it.
Words Belief or Love or Relationships or Happiness – what to do – and what not to do? What are they for you?

You must have clear and distinct points. So that you can say "happiness for me is to do this and not to do that", or "love for me is to do this and not to do that" and so on.
It's amazing, if you think for a moment, you will see that you don't have a clear understanding of these words. And I'm sure that your answers and your neighbour's answers will not be the same.
But it's so important to answer these questions, because they open new opportunities of our development.

If we don't analyze these issues, the risks will be dramatic. I sincerely wish us to take into consideration these risk factors in the process of creating and assessing startups.