Russians in Laos: how to sell technology to a country where there is no money

Why Laos is the perfect place to start tech businesses.

Many tech entrepreneurs follow the startup pattern of developing a "disruptive" technology and head to a country with a huge rich market — The USA, the European state, as a last resort in the getting richer day by day China. But there is another way — unusual, interesting and, perhaps, no less profitable — bring technology to a country where the vast majority of the population lives below the poverty line.

Poor and sparsely populated Laos

Laos —  the country is unusual in every way. In an area that is not much smaller than modern Vietnam (with 90 million people) or Thailand (population 67 million), only 7 million people live. First, centuries ago, Thailand (then Siam) forcibly assimilated the Lao tribes on its side of the Mekong border river for a long time. During the days of French domination, modern technologies did not penetrate into agrarian Laos, and then the reign of socialism and the long war between neighboring Vietnam and the United States influenced the development of the country. At that time, American bombers dropped shells on Laos, which did not reach their destination. All this threw the country back in development for many decades. Poor, sparsely populated by Asian standards, Laos — It would seem that it is definitely not the best place for startups. But it's not.

Heaven for startups?

Weak laws and unformed state regulatory mechanisms have made Laos an extremely interesting territory for testing new technologies. For a number of startups, especially in the field of medicine or construction, the main challenge — adapt to the laws of the country. The necessary certification costs a lot of money. In Laos, there are no such problems: for example, there are no building codes and regulations (SNiPs), there are no standards for asphalt laying, there are almost no requirements for building houses. Perhaps that is why even in the capital of Laos, Vientiane, it is so difficult to see good expensive or high-rise buildings. As the locals say: “We don’t build high ones, they can fall down.” Large companies that could invest in the infrastructure of Laos almost never come here. But in Asia, you can hardly find a more welcoming country for any foreign presence: laws, taxes — everything is very clear and simple, so as not to create barriers for a foreigner. The purchasing power of the Laotians is at a very low level. However, it turned out that this was not a problem.

Medical startup for Laos

Three years ago, a group of scientists from the National Research Technological University MISiS and the Faculty of Chemistry of Moscow State University named after M.V. Lomonosov, headed by professors Sergey Kondakov and Alexander Osipov, received a grant from the Ministry of Education and Science to develop her invention — cards for transportation of biofluids based on membranes. Such cards, when applied to them with blood and other liquid biomaterials, absorb and store them without significant loss of properties for several years, preserving their properties for analysis. The development was tested jointly with leading institutions in the field of veterinary diagnostics, it made it possible to control the effectiveness of vaccination in animals and birds, to monitor the epizootic situation in the wild. But the scope of the technology turned out to be wider: everything that was developed for veterinary medicine is also suitable for medical diagnostics. Having such cards, you do not need to go to the hospital to donate blood for analysis: at home, you can prick your finger with a special miniature instrument (absolutely painless), attach it to the membrane, place the card with the membrane in an envelope and send it by mail to the laboratory where they will analyze . Based on the results, which can be obtained even by SMS, the doctor makes a diagnosis on the spot. No delivery in test tubes, no cold chains when transporting from remote cities — the whole procedure is much cheaper, and for people living in hard-to-reach places, this system would be ideal, for example, during a medical examination.

It was not possible to introduce this in Russia. Scientists are faced with the problem — the state grant went to the development of the technology, but did not cover the costs of the procedures for its implementation in medicine, registration and certification. Then we began to look for private investments to enter foreign markets. As a result, we agreed with the group of companies «Engineering Technologies» (financed by April Capital) and began preparations for entering foreign markets.

Laos choice

From the very beginning, we considered the market of Southeast Asia. Why? The point is its attractiveness: the population of the ASEAN countries is huge — more than 600 million people, and in the hot countries of the region, the rejection of blood tubes is especially relevant. Most people here live in rural areas, where it is difficult to establish laboratories and blood collection points. Cards would be a good solution to problems. Other regions turned out to be less promising. So, China and India are too fond of copying — despite the fact that the population in each country is more than a billion, the risks are unnecessarily high. In addition, corruption is rampant in India, and the field of medicine is especially prone to copying. Latin America is too far away, the USA and Europe are not the best platforms for Russian technologies today.

Then, at an international conference in Seoul, we made a report on the development. It interested practitioners of medical laboratory diagnostics and commercial companies in this field. Experts from Korea, Vietnam, the Philippines, Malaysia and Indonesia were asked the same question: have they already implemented the technology? Answer "In Russia, in agriculture" Few people suited: this is a distant cold country, with a different culture and laws. In addition, the system was never fully launched in Russia due to many bureaucratic problems and a strong system of medical registration and certification that is resistant to innovation. Laos turned out to be a loyal country that helped find a way out of the situation.

Certification of DBS cards in Laos is not required, although even here, in order to change the traditional system of blood delivery, it was necessary to overcome a number of — for example, obtain permission from the mail to send biosamples in an envelope. But the most important factor — country psychology: Laos does not have the opportunity to invest in its own innovations and even buy third-party ones. Now clinics in Laos collect blood in test tubes in large medical centers and spend about $ 3 on one collection (along with the delivery of the material in the refrigerator to the only laboratory in the country). With the introduction of cards, this cost drops four times: the card does not need to be transported in a refrigerator (and Lao refrigerators often break down for transportation).

The country's leadership and its key ministers speak excellent Russian, many studied in the USSR and treat Russia with great warmth. The decision to switch to membrane cards was made instantly. But there is a flip side to the coin: the Laotians are in no hurry, so the project is proceeding at an extremely slow pace. If at least 10 people in Laos have tried to donate blood with a new method, then the innovation can already be considered implemented. No papers and certificates were required, rather, verification was needed — proof that the technology works better than the one it replaces. Nevertheless, there were some problems: there is almost no good infrastructure in Laos, even with a taxi there are often difficulties, so even the delivery of cards turned out to be difficult.

The Laos market is quite small, but it is a great "testing ground" for ASEAN. After testing the technology here, other Asian countries, more populated and "fast", "can make sure that it works, see with their own eyes how it happens. Already there is a result: as soon as dry blood spots were recognized in Laos, Malaysia paid attention to the technology, and the country's largest network of clinics signed an agreement on testing. The Malaysian economy is of a completely different quality, the population is larger, and the standards are different. So, the official religion of Malaysia — Islam, and had to obtain certificates of conformity of the cards to the conditions of halal products, since the material comes into contact with blood. In Laos, no one asked about such intricacies of certification, and the country for the most part is Soviet-style atheistic. In general, the most important thing in the case of Laos was the experience of working in Asia, which allowed me to understand the local mentality. And this, perhaps, is the key to the Asian heart.