“You Can Beat Global American Companies,” Says VKontakte Founder Pavel Durov

“You Can Beat Global American Companies,” Says VKontakte Founder Pavel Durov

Posted yesterday by Josh ConstineKim-Mai Cutler

International startups shouldn’t call it quits just because a big American competitor tries to muscle into their homeland, said Pavel Durov on stage at TechCrunch Disrupt Berlin. His company, VKontakte, is the top social networking destination in Russia — even bigger than Facebook there. He believes by focusing on “speed, ease of use, and functionality,” you can defeat bloated apps that don’t understand how to localize well.“I think that when you’re small, you can be faster,” he said, giving the example of how VKontakte developed its Android app. It was developed by just one guy, who was 17 years old when Durov hired him. That’s against a team of hundreds of developers behind Facebook’s Android app.

Indeed, even Mark Zuckerberg has given Durov props for keeping Facebook at bay in Russia. Just earlier this month, he mentioned VKontakte in an interview with YCombinator’s Paul Graham at Startup School in Silicon Valley.

Zuckerberg said, “VKontakte are the international Olympiad computing champions. It’s a small team and they did an awesome job of cloning Facebook.” Zuckerberg said VKontakte’s home-turf advantages included “less strict content laws” and allowing illegal file downloads.

The Facebook CEO went on, “We have not been able to beat them. We have linear growth there and I’m pretty sure we’ll pass them eventually. But it’s been almost 10 years and we still have not beat them in Russia.”

Today, Durov said he believes that other European Facebook rivals could have kept up if they didn’t lose faith. He said the German rival StudiVZ just sold too early.

“They sold very early in 2007 and when founders sell, the company goes down,” Durov said. “Why did they lose hope? I think that they were too afraid of a big global competitor like Facebook. They had a chance like we did at VK.”

Durov said the recent NSA scandals around privacy could give international startups some extra ammunition to fight off American invaders. He argued that the United States’ far-reaching surveillance programs could scare people into thinking their data isn’t safe with U.S. companies.

Durov explained “These scandals are just another opportunity we have to promote ourselves as a decent alternative.”

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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