Hey there, fellow trailblazers!

This is Tom speaking. You might know me by my full name Artem Ermolaev. I am the founder and chief executive of the Digital Disrupt private venture capital club. Technology and the way it revolutionizes the ways we live has always intrigued me. My fascination with digital solutions and its transformative potential spans over 30 years. Managing IT projects in international companies while introducing high-tech solutions both made me a strong believer in progress towards the world we would actually like to live in. So, this is where the Digital Disrupt club, one of my main current projects, roots from, and I put great effort and thought into growing and developing each of the innovative startups that I choose to invest in. I firmly believe that collaboration is the driving force behind this progress and creating this world of the future we all aspire to achieve. The Digital Disrupt private investment club is a testament to this belief, where shared passion for innovation fuels the journey.

The gist of digital disruption is promoting radical transformation of industries, businesses, and everyday routines through innovative application of digital technologies. However, among all of the startups that get regularly launched 90%, unfortunately, will not make it. And 10% of those will not even survive the first year of operation. The stats for digital industry are slightly more optimistic with around 60% fail rate, but I believe this number could significantly decrease, if one common knowledge was implemented into our idea-generating process:

To find a proper product-market fit one should look into both the evolution of the current methods and the expansion to yet uncharted territories, geographically speaking. Personally, I do try to focus my mind on both. Even before I dived deeper into investing, I’ve been teaching, producing and executing all sorts of urban, software and automation projects. An additional aspect to pay attention to that I encountered in each of these cases is the immense impact of teamwork in driving progress and innovation. As we explore the concept of digital disruption, it becomes evident that joining forces is not only essential but also the bridge that connects the chaos of ever-evolving robotized technologies to very understandable, ambitious and human opportunities. In the digital age, the future belongs to those who can effectively navigate disruption through collaborative efforts not only with fellow humans but with the machines as well.

So, how would "digital disruption" be executed in practice, and what does it mean for both projects and investors in today's ever-changing landscape? This whole blog is meant to be a log of a voyage to understand this transformative concept through reflections of my experiences along the way. And sharing it is one of the steps I take in coming together with like-minded folk enthusiastic about new knowledge. With this first article introducing what I deem important in contemporary tech investment scenery.

As a managing partner in investment firms and a CEO, I pay extra attention to digital disruption being a complete makeover of how we do stuff – from working and producing to consuming and communicating. As a result, it means long-distance reimagining of both business operations and individual lives of the customers. If you have your doubts, I must tell you: the concept is more than a marketing decoration! It has been around and reshaping our lives for quite some time now, and also is very well backed by theories.

Among some earlier visionary thinkers who contributed to the topic, there was Joseph Schumpeter, the economist who coined the term "creative destruction". According to him, the key role in this process is played by the startups themselves. Schumpeter compared this market life phenomena to a phoenix rising from the ashes and argued that as new innovations and technologies emerge, they not only disrupt but also create new markets, replacing the old with the new. Following his ideas, the history of the modernized term starts with a Harvard Business School professor Clayton Christensen and his work "Innovator's Dilemma". There, he introduced the concept of “disruptive innovation” to show how smaller companies with a creative approach can rival and overbeat even some of the most established giants, gaining market dominance later on. You could ask me: “Professor, but is it still actually relevant today?” Long story short – yes. For example, the McKinsey data on COVID impact points out that digital products and services are now developed even faster: the global rate progressed by 7 whole years! Counting 6 years in North America, 7 years in Europe, and more than 10 years in Asia-Pacific regions.

So, digital disruption could still be the real catalyst for progress and an engine that propels us into desired futures. And it's beneficial both to investors looking to make profit and to society as a whole. First gain their share from what Christensen described and the big overall human population of Earth could definitely hope to build some new systems on the ashes of what we have. However, the same study shows that the adoption rate of these changes is 2 times less rapid: with 3 years acceleration around the world and only the Asia-Pacific region topping that number. The tricky question is how could I actually know a productive change when I see it? What are the core features of a disruptive approach? (and bear in mind that it’s supposed to build over the outdated old ways, not merely challenge and criticize!) During my university teaching as well as seeing many pitchings, I got a little fond of getting to the point, so I will give you a list of the 4 main factors I personally distinguish here:

Advancements in Technology. At the end of the day, you cannot escape actually inventing or upgrading something. Be it an entirely new mechanism or its creative and niche application, there’s got to be an innovative idea and a high-tech base behind your solution.

Knowing Consumer Behavior. Living up to the consumers’ expectations is tough out there. Modern age demands convenience, personalization, and seamless experiences. The business is supposed to adapt rapidly or to convince the client there is an even better way of doing things. To do that, a thorough research of your target audience is definitely a must, and I will talk about some examples of the ones I conduct with my team in upcoming articles.

Global Connectivity. The aforementioned startups and established giants now compete on a level playing field, so geographical boundaries should not prevent you from reaching potentially useful connections. Many teams do not properly define whether their product is meant for a vertical or a horizontal market, simply assuming they know how their stuff is done locally and hoping to seamlessly transfer it to another demographic, region, language -- you name it. To make sure your project is scalable in this sense, you gotta pay attention to the real-world problems you're introducing solutions for, not make them up or assume your current experience is universally applicable.

Science-like Precision. DO NOT IGNORE THE DATA. Its abundance unlocks unprecedented insights, whichever sector you’re aiming for. Analytics, machine learning, testing statistically-driven hypotheses – make it all an advantage and don’t put all your hopes into the basket of magically guessing one day (which also happens, but would you bet on it?)

Now, let's veer our course toward the intersection of digital disruption and venture investment. While digital disruption reshapes industries, it also offers unprecedented opportunities for those willing to invest in innovation. Venture investment in startups at the forefront of digital disruption has become a crucial engine for global economic growth and transformation. It provides the fuel needed to turn creative ideas into reality. What does it take to effectively invest in the digital disruption landscape? Consulting and assisting international companies and later on funding startups on my own would have been a much rougher ride without keeping the following in mind:

1. Visionary Thinking. Effective venture investment requires the ability to see beyond the present and envision a future shaped by innovation.
2. Risk Mitigation. While disruption holds promise, it also carries risks. Prudent investors carefully assess and mitigate these risks while embracing calculated uncertainty.
3. Ecosystem Building. Successful venture investors not only provide capital but also actively participate in building supportive ecosystems that nurture startups and drive innovation.
4. Impactful Decision-Making. Investment decisions should not solely focus on financial returns but also on the potential for positive societal impact.
5. Continuous Learning. The landscape of digital disruption is constantly evolving. Effective venture investors remain committed to lifelong learning and adaptation. To me, understanding digital disruption is not just a matter of intellectual curiosity. It's essential for thriving in our rapidly changing world. It's a journey of adaptation, innovation, and, ultimately, progress. So, let's embrace the smart side of digital disruption and navigate this transformative landscape with curiosity and purpose.

In the world of venture investment, especially for someone with a background in international companies and managing digital projects, assessing startups requires a keen eye and a strategic approach. Having started my career in the IT field in the '90s, I've witnessed the ever-changing landscape of technology. What's fascinating is how modern disruption aligns with the needs of contemporary times. As a startup, it doesn't take being a Google or an Amazon to reach this level of innovation to be considered disruptive at your own scale, niche or territory, but there are also significant criteria to consider and brainstorming to do. There were times, when it seemed like everything was new. Now we are in a slightly different era, so it might help you to run a check for success potential. Modern disruption is speaking to modern times and needs. What I think of when deciding whether to invest in the technology is the benefits it brings to the market.

As summarised by the Global Center for Digital Business Transformation and IMD three core types of value which are: Cost, Experience and Platform. Meaning a lower cost or different material profit, a superior quality of usage or a network enhancing its integration should be offered to a product customer. Ideally adding up on more than one and resulting in what is called a "combinatorial disruption". So, what is the path to finding this value that an ambitious startup should keep in mind?

1. User-Centric Innovation. Innovation is at its best when it addresses real problems for real people. In our diverse world, personalized solutions often outshine one-size-fits-all approaches. To attract a broader audience, the path to individualized experiences may need simplification. Finding the core problem and introducing a customized approach is one of the applicable strategies that includes both of these seemingly contradictory principles.
2. Disruption Beyond Borders. As I mentioned before, digital disruption recognizes no geographic limits. It's not enough to move beyond outdated ways; we must also bring well-established standards to regions that can benefit from the innovations that have proven successful elsewhere. Transcending geographical constraints and ensuring that productive and innovative solutions are accessible to all, regardless of location is one of the goals of IT investment as I see it. That is to say, not only can you find your target audience while researching various social groups, but by browsing whole regions that speak to you as well!
3. Data as the New Gold. In today's data-driven world, information is the most valuable currency. Some projects in my portfolio focus on wielding data analytics to transform raw information into golden insights. A direction I’ve been looking into lately is financial robotization that I will talk more about in the upcoming posts. So, one of the strategies that I reflect upon a lot is how can I actually digitize what I already do and implement the successes already achieved in the industry to boost it by data analysis and automation.
4. Human-Machine Collaboration. Speaking of automation. It's not a human versus the machine; it's a human with the machine. Many startups I’m looking into are reimagining industries by replacing unnecessary human labor with robotic solutions. It's like having a digital sidekick that amplifies your potential. Some investments in these ventures are truly pioneering for specific niche markets.
5. Social Impact. All in all, digital disruption isn't just about profit, it's about creating a positive impact on society, like making healthcare or education more accessible and affordable. I support startups in digital education that promote equality between different social groups by introducing distant learning opportunities and models of specific environments that are hard to reach or build in many places, like laboratories for learning for example. As per the digital health sphere, there is a lot of potential to smoothen the workflow and make information sharing between institutions easy, secure and properly stored, so it stays intact during transfers.

Okay, since we’re back to the future. Digital tech is everywhere! Think frighteningly smart computers, blockchain wallets, and even robots. These things are changing how we live, work, and have fun. It's making online shopping a big deal, taking over the way we watch movies, changing how we get around with car-sharing. Even education and healthcare are beginning to realize there’s a potential to thrive on the web. Digital transformation doesn't discriminate – it touches every sector. Understanding these technologies is crucial to making informed investment decisions and identifying profitable opportunities. So, some of the avant-garde industries I’ve been focusing on as a venture partner in the Digital Disrupt club include such fields as:

1. Building E-commerce in Africa. Retail has undergone a seismic shift with the rise of online shopping giants like Amazon, forever changing the way we buy and sell goods. Such startups in the club’s portfolio, like Sabi for instance, empower local businesses with full-scale e-commerce and modern structure solutions.
2. Production Automation. Remember how I told you to think about robots? Well, I’ve been working with automation in various fields for more than 20 years, and now support projects that produce robotic solutions too. The metal guys really do accelerate effectiveness and convenience of a mechanical workflow. And smart software brings the potential of digital services beyond limits. I am definitely planning to expand my insights into this topic in future posts.
3. Professional Entertainment. Gaming, once a pastime, has evolved into a multifaceted realm of real sports, education, and even social interaction. Picture it as a digital carnival, where players become architects of their experiences. Startups like Uplify and Monetizr help professional gamers bring their gain to the level of their potential, while LeagiON and ELOPUB is all about spirited competition.
4. Transportation. Ride-sharing services have transformed how we commute, go on vacation or get anywhere already, challenging both the conventional taxi industry and an institute of owning a car. However, I already mentioned that individual personal solutions are on the rise. In my practice, I found a compelling combo of this sort as well! One of the club’s startups is a completely packaged renting experience that makes the luxury of possessing a personal vehicle a universal reality.
5. Healthcare. Digital health startups are making quality care more accessible. Investing in AI-based solutions for self-care, like Openface and Formulate, brings our vision of highly personalized individual products for unique bodies to reality. However, Health is so much broader than personal care. This is an enormous sector composed of institutions, professionals, patients and clients that could greatly benefit from implementation of digital technologies. One of the big projects I work with provides a whole ecosystem of data storing, sharing and processing to make it universally usable and attainable for as much as whole cities or institution chains, as well as across clusters.
6. Education. It’s hard to argue with the point that online learning platforms democratize education. Moreover, it gets easily individualized which often proves to be more effective. Startups like Musico create dynamic, personalized, and universally accessible platforms. Just like that, investments in digital education promote contribution to the quest for lifelong learning – from early age to later years (I would know! I got my share of kids). And if we’re being honest, it is crucial for development in any field: just revisit one of these paragraphs about how everything is constantly changing! In this environment, what could really reshape education is prioritizing the needs of the learners. So, I make sure to include in my portfolio B2C projects as well – to keep on the edge of what the clients find attractive and helpful. Digital Ed is a tricky sector, and one has to provide a very methodical approach to really speak to the audiences. Next month I am planning to talk about important approaches to making a good and accessible educational product, such as virtual science labs that I’m working with right now. And also highlight the importance of research and possible mistakes with an example of another platform I decided not to launch after all.

As an investor and entrepreneur in IT, sometimes I myself get overwhelmed by how chaotic modern digital frequencies may sound. But fear not (or do fear but bear with me), it is also a voice of opportunity and changes for the better. While looking for efficient ways to make profit in the sphere that I truly care about, I clearly see that both the foundation of an ambitious project and the end goal of development is to make our lives better. Innovation is what’s giving us more choices, making things more convenient, and even helping us take care of the planet with greener tech, sometimes even pioneering it in the region, like MAX Drive does for Africa for example. Or making knowledge and experimentation equally accessible for kids and teens with different backgrounds, like virtual labs projects. We cannot escape a world of continuous evolution. But helping startups that align with one’s values grow and reach its purpose is a way to disrupt existing paradigms in a direction that would, hopefully, turn out to be a pleasant surprise. To have a surprise party that is not a complete disaster though, one has to take a fair amount of initiative, do some work and prepare. And, by the way, who in the world does a party alone? Certainly, it is imaginable, but doing it together is both easier and much more fun. That is why I value introducing Digital Disrupt as a club – a collective of savvy investors, management and production specialists, who are all gathered to share their expertise with those who want to join the ride. By collaborating we enhance our ability to identify promising ventures, grow revenues, and nurture startups that embody the principles of digital disruption. As for the ideals of sharing and collaboration, in the future posts I will also be commenting on individual stories and cases from my practice to illustrate how venture investment and digital disruption go hand in hand.