Bay Area Tech: The Soviet Connection

In a story now typical among math and computer science students, Alexei Stoliartchouk formed a software startup company during his final year in college. He and his friends launched it for fun, but then they started making some decent money. Next thing they knew, a group of what Stoliartchouk calls “bandits” visited the startup, demanding protection money. Then his workers were locked out of the company office Stoliartchouk had already paid to rent in an old printing press building. Intruders demanded more money, on top of the rent, before the workers could get back in.

Those experiences led Stoliartchouk to start on a journey taken by hundreds of well-educated workers and entrepreneurs to the San Francisco Bay area and other U.S. technology hubs. Like them, Stoliartchouk was determined to find a way to leave Russia. It was 1998. Although theoretically, private enterprises should have been easier to form than they had been under the now-defunct Soviet regime, Stoliartchouk had the impression that the Russian government informally colluded with the “bandits” to appropriate private earnings. He didn’t see how he would ever profit from his efforts.

“Nothing you create will be yours,” Stoliartchouk realized.

Alexei Stoliartchouk

Alexei Stoliartchouk

He couldn’t have known it then, but an arduous immigration process would eventually bring him to the Bay area as an engineer for Yahoo, CNET, and other companies. Now a Berkeley, CA-based entrepreneur, Stoliartchouk (pictured left) is part of a sizeable multi-generational group of local tech workers linked by their connections to Russia and other countries of the former Soviet Union. Oddly enough, some of them think their difficult experiences in those socialist homelands prepared them well to leap into the capitalist fray they found here.

By the time Stoliartchouk left, the exodus of well-trained math and science graduates from the Soviet Union, and later from its former member states including Russia, had already been going on for decades. It was spurred by Jewish refugee programs and by the general loosening of restrictions in the late 1980’s that culminated in the collapse of the Soviet Union in 1991. Google co-founder Sergey Brin, born in Moscow in 1973, left Russia with his family in 1979. His parents, both mathematicians, had faced anti-Semitism in their professional lives.

By 1989, the technology revolution was under way in the United States with the rise of personal computers and the Internet, and it was a powerful draw for talented math and science students throughout the world. Ironically, the Soviet Union had made sure its brightest young people would be well qualified to compete for slots in America, its Cold War nemesis.

In 1989, Leonid Litvak was an undergraduate at the Moscow Institute of Physics and Technology (nicknamed “PhysTech”), the premier school for smart kids aiming for the highest salaries and other government benefits under the Soviet regime. For decades, the government had rewarded its top students for going into math and physics—fields that dovetailed with its investments in weapons development and the military industry, Litvak says. At the same time, well-educated families were steering their children toward math and away from other fields such as law, political science, and journalism, where they would be expected to support Soviet power, he says.

“Every smart kid had almost zero choice,” Litvak says. But that forced decision opened doors overseas for graduates versed in subjects like math, solid state physics, and superconductivity.

By 1993, Litvak had left Russia for Stanford—one of thousands of students from the former Soviet Union who found their first stepping stone into the United States by applying to American universities. Litvak, a native of Kiev, Ukraine, had originally aimed for an academic career. But he ended up founding his first startup while he finished his Stanford PhD, and he has “oscillated” between startups and big tech firms ever since. He’s now a product manager at Google.

Sergei Burkov

Sergei Burkov

Another “PhysTech” graduate, Sergei Burkov, had already left by 1989 with a PhD in theoretical physics that helped him secure research positions at Cornell and the University of Wisconsin. Burkov then became a serial entrepreneur, founding product search company Dulance with the help of a development team in Moscow. Dulance was acquired by Google, which hired Burkov to establish a beachhead for its search engine in Russia. He split his time between Moscow and the United States between 2006 and 2008. Burkov is now a mentor for a new generation of startup founders.

Aside from the benefits of a strong technical education in their home country, Burkov says, immigrants from Russia have another trait that makes them well prepared to tackle the rigors of forming innovative or downright disruptive enterprises.

“To be a startup entrepreneur, you need to have a good degree of disregard for authority,” Burkov says. In Russia, the government itself raised that kind of skepticism in its citizens, he says. “Whatever the authority tells you, forget it,” he quips.

Even for ex-Soviets who arrived in the United States as children, their cultural legacy can influence careers. Alex Gurevich, a partner at Javelin Venture Partners in San Francisco, was six in 1989 when his Jewish family left Odessa, in the then-Soviet republic Ukraine, to escape religious discrimination. As he grew up, he pressured himself to succeed so he could justify the sacrifices of his elders.

“My parents and grandparents left everything behind—their homes, their friends—essentially to give me a good life here,” Gurevich (pictured at story top) says.

The family boarded a train to Vienna with all the valued possessions they could carry in suitcases, Gurevich recalls. Someone would meet them during the train’s short stop in Vienna, they were told by the Hebrew Immigration Assistance Society, an American group dedicated to helping Jewish refugees. Because the stop was so short, Gurevich’s parents were instructed to throw all their bags out the windows as the train pulled in, and trust the waiting stranger to catch them. It worked, and Gurevich’s grandfather, a photographer, later sold his camera equipment in a flea market to pay for some of the family’s first meals in the West.

The family settled in Los Angeles, and Gurevich had the chance to catch the startup fever during his undergraduate and graduate work at Stanford starting in 2001. As a speaker of Russian, he was one of the Bay area immigrants like Burkov who were given opportunities to form business bridges between the United States and Russia. Gurevich worked with Steve Jurvetson of DFJ Venture to set up a venture fund, DFJ Aurora, investing in high tech companies in Russia and Eastern Europe.

Litvak and Burkov also promoted business ties between the United States and Russia as co-founders of AmBAR, the American Business Association of Russian-speaking Professionals, a networking group for hundreds of Silicon Valley technology professionals that also supports entrepreneurs in the countries of the former Soviet Union.

Nearly 10 years after Gurevich and Burkov came over, embattled college startup founder Alexei Stoliartchouk was able to follow immigration channels to the United States that had been well established by those who came before him. In 1998, friends from the Moscow Institute of Physics and Technology taught him how to apply to American universities and secure student visas. His wife Irina Makkaveeva, who was his fellow graduate of Moscow Aviation Institute, landed a spot first at the University of Memphis. Stoliartchouk followed, and the couple hopscotched from university programs to jobs across the southwest until they settled for good in the Bay area.

Though the path toward U.S. citizenship and careers was challenging, Stoliartchouk says the freedom to maneuver was exhilarating. “You kind of feel you can make it,” he says. In 2012, Stoliartchouk and Makkaveeva became co-founders of Berkeley-based startup ZappyLab with their friend Lenny Teytelman, a Soviet emigre who moved to New York City with his family as a child in 1990.

The three entrepreneurs have been employing student computer programmers at the Moscow Aviation Institute to help with the iOS and Android development of ZappyLab, an online platform where biologists can share experimental protocols and other information. But the current conflict between Russia and the Ukraine may make that international collaboration harder to maintain. Some of the students vehemently support Russia.

“They want to talk about it,” says Stoliartchouk, their supervisor, who has been wearily trying in phone conversations to encourage the students to seek out news accounts that cover all sides.

Gurevich says the struggle over Ukraine’s territory has dampened a Silicon Valley business interchange with Russia that had flourished between 2009 and 2013. The Russian government was then investing in Silicon Valley funds. U.S. venture firms were investing in Russian startups.

“Now it’s on a severe downturn,” Gurevich says, because startup investors fear that political instability will threaten the Russian economy.

But Gurevich doesn’t expect the upheaval to trigger another large exodus to the United States of immigrants from former Soviet countries. He says there’s a lot more national pride and perceived opportunities within their own economies, especially in Russia.

Burkov, however, says more tech workers are becoming uneasy about the possibility that sanctions against Russia for its territorial claims in Ukraine will lead to a recession. He says the United States should open up more work visas to snag another influx of technical talent from the former Soviet states.

“I think it would be a great advantage to the United States to admit more of these people,” Burkov says.

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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