Stepan Chernovetskyi: Profitable start-ups do not emerge out of the blue
4
October
2019

Ukrainian IT professionals are an international hot ticket – no wonder that Ukraine is ranked first for IT outsourcing in Europe.

Unfortunately, however, the number of software developers with Ukrainian registration does not match the number of technology companies with Ukrainian “ancestry”. Successful Ukrainian start-up stories reach us mostly from abroad with only the team's origin linking them to Ukraine.

It would be unfair to blame software developers. For the past decades, Palo Alto has been the El Dorado of the tech world — and not only because of the phonetic harmony. Ukraine was not the only one affected by the centralization of technological development in a few global hubs. Scarce domestic investment and low level of business culture also hindered local project development.

These trends are changing. The Global Startup Ecosystem Report 2019 by Startup Genome claims that there will be no second Silicon Valley. It will be replaced by 30 new hubs in different parts of the world. Decentralization of technological entrepreneurship is gradually gaining momentum and the emergence of alternative centers of gravity is a chance for Ukraine. If we are to compete with Google for talented professionals, it is not enough to click “I’m feeling lucky”. You can create your projects, launch them on the international markets and manage them from Ukraine only if there are local education, legislation, courts, money and partners involved.

About 90% of start-ups disappear at the early stages. Often, the reason is not only the lack of funding but also the unwillingness to face market challenges. The academic community has strong intellectual potential but the trench between education and business prevents this potential from translating into real-life technological development.

A business that launches support projects and attracts expert mentors can remedy this. Integrating education into economic processes and creating opportunities for students is the way it works in the technologically advanced countries. Such initiatives are in high demand in Ukraine.

In the two years of the CIG R&D LAB scholarship, more than 70 student projects applied. The combination of financial and expert support works effectively. It encourages students to engage in technological innovation, develop commercialization skills and bring their projects to life. As of today, 14 projects have received support from Chernovetskyi Investment Group specialists. We help students grow their business expertise, entrepreneurial and soft skills desperately needed to compete in the market. We also try to guide them away from the common mistakes made at the beginning of any business endeavor.

In the long run, the program aims to become a part of the Ukrainian start-up ecosystem and contribute to the IT industry as one of the leading sectors of the economy. We saw significant projects, like Digital.NYC, youngStartup Ventures with their New York Venture Summit, or The Startup Scholarship in Portugal, evolve from CIG R&D LAB-like initiatives.

The key is to think and act strategically and not expect fast results. Ukraine has the potential to become a global innovation center. The “one small step — one giant leap” formula may work for us given that business, education and State cooperate on this. Successful start-ups do not emerge out of the blue – they always require an infrastructure with a whole palette of instruments.

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