The opportunities that advanced technologies bring to modern entrepreneurship seem truly limitless. In just 9 years in the blockchain industry, which really took shape following the release of Bitcoin in 2008, Ivan Starinin and Alexander Salnikov have not only founded 5 breakthrough startups, but also helped a number of other innovative projects enter the market along the way.
We were able to chat with Ivan and Alexsander, who currently live in Europe, about their experience in this burgeoning new domain over a Zoom call. Despite their extensive track record, the duo are young and in talking with them one gets the sense that they are buoyed by an unshakeable belief in the potential of what they are doing to transform the world.
The story behind Ivan Starinin and Alexander Salnikov’s partnership begins in 2012, when both were students at the prestigious Higher School of Economics in Moscow. By then, they had both already known about Bitcoin and the blockchain technology underlying it. While Ivan, an economic sociology student at the time, was drawn to the space due to his interest in Bitcoin mining, Alexander, who then studied at the faculty of applied mathematics and computer science, had become interested in blockchain and cryptocurrency after reading technical articles about their potential.
Alexander Salnikov
“The emergence of Bitcoin, which conceptualized the use of blockchain, promised a paradigm shift in economic thought, a potential redistribution of wealth in the world, and a libertarian-style self-regulating economy”.
The duo’s first startup and entry into the early blockchain community
When the fledgling entrepreneurs first made their way into the blockchain world, little was known about this industry, and the technology itself was promoted only by a small, though passionate, community of enthusiasts. The sites and forums dedicated to what was being termed “the new, digital money,” became a fertile meeting ground where like-minded people were able to connect and start fleshing out ideas. It was through one of these forums that Ivan got actively involved in crypto, eventually creating one of the industry’s first trading robots.
Ivan Starinin
“It was a kind of remote project, which was a great start for me as a student. I met another developer through the network – we called each other several times, but never actually met. Despite being in different locations, we were able to construct a robot together that consistently generated good profit based on my own trading strategy”.
Ivan and his partner went on to sell the bot starting at $100, before the industry became flooded with similar projects. For him, the experience of developing this project was extremely exciting. While the niche was still relatively unoccupied, a lack of professional experience was no barrier for achieving the desired results. At that time, curiosity more than anything else was the impelling force behind Bitcoin and blockchain, and investors were eager to see where things could go.
“Finding capital was not a big deal then. It may seem strange considering that there weren’t many people interested in the technology, relatively speaking, but those willing to provide their financial support were ready to do so for almost everyone. If you were in the know back then, and had a genuine idea, you could find the support you needed”.
Ivan Starinin
Ahead of the market
After meeting and realizing they had a remarkably similar vision of where this technology could lead, Ivan and Alexander decided to join forces to create an exchange service, which would subsequently go on to become the fastest and most technologically advanced crypto exchange in the world by 2014.
“In addition to our own funding, we also looked for venture capital for our exchange. We actually found an investor on a website that was not Bitcoin-related at all. There was a banner in the corner talking about supporting the Bitcoin economy, and we decided to reach out. Amazingly, we received an answer and an invitation to meet in order to discuss the details right away, and after the meeting we were able to get the amount we needed without having to wait at all, really”.
Ivan Starinin
“So we assembled a small team and for a year we were engaged in software development. At that time there was very little in terms of capital, in the region of $200K a year – pennies today. All the money was spent on employee salaries, and we, as the founders, were taking just enough for sustenance”.
Alexander Salnikov
The exchange was targeted at the Russian market, where there was only one other similar platform, the Metabank crypto-fiat-crypto exchanger, which had already brought its creators about a million dollars. But in terms of technical capabilities, Ivan and Alexander’s exchange was clearly far superior to that of their competitors, and not only within Russia.
Thanks to an agreement with a local bank, Starinin and Salnikov’s exchange was poised to allow users to buy cryptocurrency using bank cards such as Visa or Mastercard, a feature that became ubiquitous in the industry only a few years later. However, a warning from the Russian Central Bank regarding the legal responsibility for exchanging cryptocurrencies for fiat money halted the implementation of this feature, so ultimately the exchange, called MarginCall, operated exclusively on cryptocurrency.
Despite the hangup with the bank, MarginCall was a true milestone. The exchange was ahead of its time, allowing investors to use trading strategies and tools (such as long / short positions, futures and leverage) previously exclusive to traditional financial markets. In addition, the exchange core could process more than a million transactions per second — an unprecedented performance level at the time. MarginCall was able to solidify its position further after Ivan met Vitalik Buterin, the creator of Ethereum at a conference in Brussels. Starinin and Buterin came to an agreement that MarginCall would be the first exchange to list Ethereum, now the second most popular cryptocurrency in the world.
Unfortunately, the world — specifically the Russian legislative world — was not ready for something like MarginCall. Russian authorities clamped down on Starinin and Salnikov, resulting in MarginCall changing hands and Ivan and Alexander looking for new means of bringing their vision to life.
Continuing the revolution: cryptocurrencies, a blockchain bank and a digital art platform
In 2016, Ivan and Alexander went to Israel, where they launched another project, CoinOffering, which introduced into the industry a model for transforming shares into blockchain assets equivalent to one security token issued on Ethereum. This happened long before the concept of the “Security Token Offering” or STO was firmly established in the blockchain community. Once again Starinin and Salnikov were moving steps ahead of their peers.
“Initially, when CoinOffering was just formed, there were no high-profile user cases related to the use of the first crypto-shares. Only recently we learned that our technology formed the basis of the Ambisafe’s OrderBook platform, which has been used to convert shares of giant companies like Airbnb and SpaceX into blockchain assets. This once again proves that breakthrough ideas need time for the society to fully understand how they work and subsequently translate them into reality”.
Ivan Starinin
Ivan and Alexander registered CoinOffering in the Marshall Islands, which made it possible to resolve many regulatory issues, legitimize transactions, put together a corporate charter and make the company completely transparent. However, the young entrepreneurs did not want to limit themselves to software development alone and decided to try hand at marketing in order to help promising start-ups really take off. One of them was Humaniq, a revolutionary blockchain project built to serve those who do not have access to the traditional banking infrastructure. Humaniq was founded by a good acquaintance of Vitalik Buterin, an established entrepreneur and author of the first book on Bitcoin in Russian, Alex Fork.
Humaniq’s Initial Coin Offering (ICO), in which Starinin and Salnikov were directly involved, was only the fifth in the history of the market. With an impressive participation of Ethereum supporters, the project managed to raise significant funds, which were subsequently sent to charity organizations in Africa.
“The main idea of Humaniq was to come up with an affordable blockchain-based banking solution that would lead to a socio-economic boom in underdeveloped and developing regions. The project had a rather interesting emission model – during registration, each user received tokens equivalent to the cost of a basic smartphone, and thus 500 thousand Africans were able to buy a phone. In addition, if we are talking about social impact, Humaniq created more than 300 jobs”.
Alexander Salnikov
The next ICO in which Starinin and Salnikov participated, this time as marketing specialists, was that of the Zenome project, a decentralized network for a free exchange of genomic data, the field of use of which can range from serious scientific research to dating services akin to Tinder, where genes go into compatibility algorithms. At the same time, Ivan and Alexander continued to counsel other entrepreneurs looking to get their feet in the cryptoworld door.
Now Ivan and Alexander are concentrating their efforts on the field of decentralized finance, one of the most promising sectors in the blockchain industry today. Their Rarible platform, which simultaneously serves as a place to create and sell unique non-fungible or NFT tokens, makes digital art which is tied to this class of virtual asset real and significant.
“This type of a token is not yet fully integrated into the blockchain finance system, however, it is extremely useful. For example, you can enclose a whole portfolio, consisting of ERC20 tokens, in a single NFT, which can operate like a stock investment fund. Using Rarible, it is also easy to invest in several works of art at once. In addition, NFT tokens are one option for adding liquidity to illiquid assets. And there are many more use cases that make the NFT market very promising moving forward”.
Ivan Starinin
Changing the world as a priority for enrichment
In the field of advanced technologies, as in any other field, there are pioneers. Their ideas may not conquer the world in the short term and may not fit in with the current market demands, but after a while the technology that they bring into the world will become a fundamentally new vector for the development of the whole industry. Such is the story of Ivan Starinin and Alexander Salnikov. For fintech entrepreneurs looking to make it in the cutthroat world of blockchain and crypto, Starinin and Salnikov have 5 essential rules:
1. Education is invaluable.
Your ideas need to rest on something. Mathematics, sociology, behavioral and classical economics – all of these fields can help you improve your skills and broaden your horizons. If possible, get an MBA (Master of Business Administration) degree at a good American university — this will greatly increase your effectiveness in attracting capital. You are your greatest asset, so bettering yourself should be considered an investment into your future. Both Ivan and Alexander estimate they each spend about 30% of their time learning new things and trying to improve themselves.
2. Start dialogues with like-minded people.
The relatively small size of this industry can work to your advantage as it is fairly easy to get in contact with industry leaders. The secret to success here lies in communication. At the beginning of their journey, Salnikov and Starinin were able to meet with Vitalik Buterin, and now, working on Rarible, they regularly participate in conferences with top American funds. All you have to do is create an account on Twitter, where you’ll find a sea of analysts, venture capitalists and ordinary dreamers who, like you, are on the cutting edge of their professional development. Write, comment, break down barriers and remember that your connections are your wealth.
3. Give yourself and those who work for you something to believe in.
In addition to rivalry for financing and customers, to make it in this space you’ll have to compete for staff. You’re not going to be able to offer the people who work for you Facebook or Google level salaries when you are starting out. What you can offer them is something these giants don’t have: the belief that they are changing the world for the better. For Starinin and Salnikov, they have been determined to develop projects that use the potential of this new technology to make life better for regular people. In doing so they have been able to attract talent that solely profit-driven companies cannot.
4.When attracting capital, study investors and carefully choose your market.
When building capital, it is essential to understand the exact motivation of any prospective investor, because, should you receive their money, you will then work for this person. Then make sure that you have a detailed exit strategy to convince the investor of the importance of your startup and its preparedness for any situation. It is difficult to make a comprehensive exit strategy in a country where a market has not been formed, so decide in advance exactly where you will center your activities. After less than ideal conditions in their home country, Ivan and Alexander recommend that talented entrepreneurs center their operations in the United States, where the market for advanced technologies is developed enough that everyone has the ability to achieve what they set out to.
5. Prove that the impossible is possible.
The history of this industry is still unwritten. Everything is still left to play for. If you put the work in you will be able to overcome most obstacles along your way, and if you give your employees an example of dedication, you will sow the seeds that will benefit you and the entire industry in the future. Starinin and Salnikov looked for employees all over the world, trained them, motivated them and financially helped some to create their own successful businesses, for example, Maxim Uperyaka, the former PR director of Humaniq, who went on to found the Byzantium ICO agency in collaboration with Peter Bel. After promoting several blockchain projects, including Naga Coin, the advisory board of which included well-known crypto investors Roger Ver and Miko Matsumura, Maxim’s fortune grew to $3 million. At the moment, he is a managing partner of the Make it in Ukraine project, which connects foreign companies with Ukrainian IT talents. Also among the former colleagues of Starinin and Salnikov is Nikita Antonov, who is now an executive director of one of the most unusual hardware startups, Luciding, in addition to many other young developers who, after working with Ivan and Alexander, have gone on to work for Google, Microsoft and other blockchain companies.
Regarding their plans for the future, Starinin and Salnikov mentioned that they are working on developing a neobank, the details of which are currently under wraps. What they did share with us is that they are currently putting a team together and the project will be centered in America.
If history is anything to go by, it is worth paying close attention to what Salnikov and Starinin are working on as it will provide a glimpse into where the industry is headed in the future.
“Alexander and I are convinced that the most significant innovations are always built around an idea that is not purely economic, but rather something that can benefit the humanity, even if it takes a long time for that to happen. In Russia, this kind of thinking is rare, and most projects are honed for immediate results. With time and experience we have come to realize that a supportive and open environment means everything. That’s why we have decided to operate in America, where we can deliver on our vision and contribute to the sector that is changing the way we all live for the better”.
Ivan Starinin
