I moved to Kyiv 7 months ago after 17 years spent in Silicon Valley as an entrepreneur, an investor, and a mentor. I had the amazing opportunity to become the CEO of UNIT.City, the smart city dedicated to innovation that we are building a few minutes away from the downtown of Kyiv.
From a burgeoning startup scene…
When I arrived, in September of what seems now another century, I was fascinated by the burgeoning energy of the Tech scene in Ukraine. I strongly felt it in every city I visited, Kyiv, Lviv, or Kharkiv. With a great number of cool startups (more than 2000 in Ukraine), ideas, and good tech and talents working on them. In UNIT.City alone, we have more than 100 startups representing 67% of our residents, coming from all over the world. And we are just 7% built! With almost 1000 students in our coding school, UNIT Factory, imagine the potential! In every event we did, in every meeting I had, I met talented people with cool ideas and great technologies with huge potential. It was a new Spring for me: I felt the same energy and wave of creativity I felt in August 2004, when Google went public and I arrived in Silicon Valley with my few suitcases. It was the beginning of a new era!
… To a global crisis
Until CoVid19. In just a few days the world shut down. And what is bad for regular business is even worth for a startup who is, by construction, a company with very high potential and very little (if any) revenue! A startup is a big bet from the present into the future. But when there is no present anymore, and the future is completely uncertain, how do you bet? Can our very young and still fragile Ukrainian startup ecosystem survive this crisis? To understand, it’s interesting to have a quick look at the recent past to see how startups survived the crisis from 2000 and 2008.
Lessons from the past
You have to be ready at the right time…or be able to wait for the right time to come
I have seen a few crises in my professional life. I clearly remember the tech bubble of 2000. I was in Paris at that time, and I stopped dreaming of creating my startup to stay in my Corporate Consulting firm to help companies kill their startup portfolio. Not fun! But the reason for the crisis was clear: the market was not ready yet for the technology. No matter what your technology was, nobody had a fast internet connection or a mobile phone with data….And the lesson we learned then is: in the startup world it’s about being ready at the right moment or being able to wait for the right moment! When it’s not the time, no matter what you do, you will not succeed. So ask yourselves that question: is it the right time?
Today, we talk a lot about the notion of “market fit” for startup products, and this is the fundamental question every startup owner, especially in Ukraine now, should ask himself:
- Am I solving a real problem, with a large potential of customers?
- Is there a market fit for that product?
- Is this market large enough?
- Is it a local market or a global market?
- What resources (people, money, technology…) do I need to succeed, do I have access to them, and if not, who do I need to ask help for?
To me, the best startups from the Tech Bubble era, Amazon and Alibaba, are the ones who mastered the timing through a period where the market was not yet ready…but they have been able to buy time. So, can you buy time? Buying time is not only cutting costs (which I am sure all of you have done): it’s trying to project yourself in the correct future time frame. And it requires a strong vision and a lot of planning.
You have to grab the opportunities!
Then the 2008 crisis hit. I was in Silicon Valley at that time. It was a financial crisis and the startup world didn’t suffer too much from it. Funding was tough, for sure, and startups who desperately needed to raise money struggled, but so many great entrepreneurs saw the opportunities: from Uber to Airbnb, WhatsApp or Instagram, a brand new generation of startups saw the opportunity of the market to invent new categories, new products and disrupt large markets. We will see those opportunities, at a large scale, happen after this crisis because the incumbent will suffer and the needs have quickly evolved.
We can already predict a lot of the categories that will be in high demand after the crisis: remote work technologies, e-commerce, VR&AR, health tech, automation in general (and all machine learning and AI), and many more we don’t see yet. And in many of those opportunities, I see very strong Ukrainian talents and existing startups with huge potential.
So the question you have to ask yourself quickly are :
- Does my startup currently exist in one of those domains and if yes, how can I move faster?
- If not, do I see any other opportunity for the future that maybe no one else is seeing yet?
In the startups’ world, always remember that there is no bad idea! If an idea seems good it’s probably because someone else already had it. So if you have an idea, follow your vision and your instinct and keep going! Who knows…you might be right?
But there’s one last secret to any successful startup, that is even more useful in difficult times. The ability to pivot.
- How to pivot: learn agility
Today, our crisis has nothing to do with the bubble of 2000 or the 2008 financial crisis. 2020 is not an economic crisis. It’s a sanitary crisis that has a very deep worldwide economical impact, both on the supply side and the demand side, while our production capacity stays intact (unlike what happens in the case of war).
And tech entrepreneurs must understand deeply what this crisis will be about, then learn and adapt. Because for all of the startup, it will not be about the technology, it will be about the market, its evolution, the customer and how do you adapt to that new economic paradigm.
Agility and ability to pivot quickly are an absolute need for any startup at any time. It’s part of the DNA of any startup entrepreneur because a startup is built on the promise of a future, and not on existing reality. It becomes an absolute survival need in times of crisis, especially during this one.
So ask yourself that question: what do I need to change to make my company survive and work? And keep trying. Because you will learn resilience and you will learn how to learn from your failure and turn them into the experience.
And, from what I have learned in a few months from Ukrainian culture and recent history, the crisis is not something Ukrainians embrace with fear. Because we are in a country that believes that the future will be better. And I strongly believe that startups are part of the solution to build that better future. It is our duty, especially at UNIT.CIty, to do everything we can to support the talents who are building that future with us. And we will.
So, please, don’t give up, never, and ask for help, always.
Dominique Piotet, CEO of UNIT.City