What is “life after a pandemic” like? How do we get back to normal pace of life and how does this happen in different industries? Is it “return”, “renewal” or perhaps “discovery of a new world”?
What changes will be irreversible and what new values, traditions in corporate culture and work with people will we see in the world that defeated COVID-19?
We have discussed all these issues together with leading experts from various fields, people who face new challenges and seek solutions on a daily basis. Read answers to these and other important questions from representatives of the American Chamber of Commerce in Ukraine, “Darnitsa Group”, “Nova Poshta”, “Modern-Expo Group”, “Teple Misto”, UCU, “Enzyme”, LvBS, and “One Philosophy ” group of businesses, “!FEST ” holding of emotions and many others.
Andriy Hunder, President of the American Chamber of Commerce in Ukraine
Imagine that the quarantine will end soon. How do you think companies will return to “average pace of life”?
The difference between Ukraine and European countries is that the latter are already returning to work. Why? Because the vaccination there is carried out much more dynamic than here. It seems that our return to average pace of life will take place after other countries. On the one hand, it is good because we can get experience from them and learn from their mistakes. The only question is how much longer we will stay home in slippers, and how soon we will change them into shoes and start wearing ties to the office.Many people missed personal communication, but there are some who got accustomed to the new conditions, as evidenced by performance levels.When the pandemic started, the companies had worries, because it was impossible to control the process remotely. No one knows if a person works or watches TV series on Netflix?
Now there are many questions about returning: how will everything happen, how long will the working day last? I believe that it will most likely be a hybrid format that is supported by many people.Many companies have already agreed to work only from home. In my opinion, it is worthy to wait with that. We can try to test this format for three months and see if it works. The next question is what will the office look like? In our company we have already agreed with the staff that they will work in the office, now we are discussing the number of square meters per person.
Ukraine’s rapid return to normal work depends on how the population is vaccinated. Richer countries have more opportunities, but it doesn’t always work. An example is India, which is now being watched by the whole world. At first it was an advanced country, producing and distributing vaccines, but in recent weeks the situation has not changed for the better (a new strain of the virus has appeared. –the editor’s note).Nevertheless, it is definitely worth preparing for the return to the offices, but we will be able to see the truthful overview of the new model of work only after the test mode. Although, in my opinion, the hybrid format will be closer to the new reality.
If we get vaccinated later, is there a threat to the competitive advantage of business in Ukraine? Due to the slow pace of vaccination, many Ukrainian partners will not be able to travel on business. It will be possible to communicate online, but sooner or later you will have to return to everyday relationships. Doesn’t this distance us as a country in all industrial spheres?
Yes, this will be a certain barrier so businesses should understand the importance of vaccination, because it can affect economic development. On April 21, the United States added Ukraine to the list of countries which are not recommended to visit. However, this list includes 80% of the world. We are waiting for more detailed information on whether vaccination passports will be introduced, as well as when and where you can travel. There is a threat that Ukraine will again be included in the list of countries with a low percentage of vaccinated people.
For industries the return to normal may be different. Which of them will have difficulties with returning to an average life and continuing to develop in the usual conditions? I think that because of the impossibility to travel, it will be difficult for the tourism industries which are related to tourism. However, there were some sectors that were actively developing during the pandemic: sales of dishwashers, food, and alcoholic beverages have increased. A study has been recently published in the UK, which showed that the number of deaths from alcoholism has increased in this country. This proves that the pandemic has affected not only the industry but also people’s mental health.
Returning to the question, it is difficult to say whether those industries that were top requested during quarantine will remain in demand.There are also risks that many of them will not return to their usual way of working. For example, retail has gone online and can stay there. Now many people have successfully adapted to buying with delivery, because it is more convenient. Instead, the agricultural and construction industries will continue to operate as usual and will affect the cement industry and everything related to metal production.
Looking back and having business experience during the pandemic, what three tips would you have given yourself at the beginning of quarantine? We responded quickly to the changes caused by the pandemic. Now we have a whole project “Leadership during the crisis”, where we share our experiences and talk about other partners’ paths. When it comes to advice, the first one is to realize that there are many things you can’t influence on. That’s why you shouldn’t get stuck on and stress about some things you can’t change.The second one is that you can never have too much communication.
Every morning I meet with my team and communicate. We have many reasons for this, for example, coffee with the president of the company or staff meeting. Certain segments of your companies also need the same type of communication; some can even have some “cracks” during this period. This can be the best “treated” by communication.And one last tip – learn to build trust online. It is difficult to keep it when we are united only by monitors, because then many problems seem superficial. Therefore, you need to learn to listen to your employees’ needs.
What new quarantine habits would you like to take with you into the future?
I will say it very simply – I would like to keep the ability to appreciate and find happiness in the little things. Every smile and personal meeting became priceless for me. Recently, the word “empathy” entered my vocabulary, which means sensitivity, compassion. To my mind, this feature is extremely important in the current circumstances, because we do not know what is going on with the person on the other side of the screen.Some people live while repairs are continuing directly above their heads, some work late at night after their kids have been put to beds, so all can’t be equated.
I would also like to keep the basic skills of today – innovation, i.e. the ability to adapt to new realities and flexibility. The time we live now teaches us to look for and try something new. One of the first things to push us to such innovation was digitalization. It is important to mention the leadership, because it is not easy to go ahead in such conditions. The pandemic proved that a leader is not a title or a position, but an activity.
You mentioned earlier that quarantine affects people’s mental health. Workers often feel tired and irritated due to constant stress. How do you think a leader should act in such a situation and manage people effectively? In one of our studies, we found out that employees’ difficulties at work are connected with emotional burnout.In the surveys, this was confirmed by 59% of CEOs. In addition, they noted that the reasons for this burnout are a sense of teamwork privation, lack of communication and digital fatigue.Under these circumstances, it is important to learn to identify not only employees’ wellbeing, but also your own. It is essential to understand when you are tired and irritated, because others soak it up.Therefore, in order to be able to manage employees, it is often necessary to look for a source of inspiration and resources. Then you will be able to support your team. There are many examples of how to achieve that. You can spend time in nature or share your problems with others. There is a stereotype in Ukraine, mostly for men, who must remain strong under any circumstances; they shouldn’t mention their weaknesses and burnout to others. But when you cross this line and start sharing your emotions, you realize that you are not the only one who has difficulties.This problem seemed to be poised over our heads, because we all are vulnerable. The smiles in the photos, which we can see on our computer screens, hide our emotional state.It is this “frontispiece”, because the mask has now acquired a new meaning, which hides a real person who is sensitive, who is worried.We can’t know how this person feels, what the matter with him/her is. Is he /she crying when the camera is off? The pandemic has changed us by teaching us to listen to each other. I wonder if this skill will stay with us or disappear when we return to the office.
Instead, do you think leaders should open hearts to their teams, share their concerns? Are they still trying not to show their weaknesses by holding their defense shields with the words “everything is fine”? It seems to me that many people still hold this shield. Here I recall the faith leader of the Greek Catholics, His Beatitude Sviatoslav, who wept three times. It happened on his deacon’s funeral, later on his mother’s funeral and the last time when he was in Munich and heard about the threat of Russian armed forces invasion, which had approached to Ukrainian borders. His frankness left me open-mouthed then. If we speak about business leaders, I can’t remember anyone who would show emotions like that. It is pretty hard, so not everyone is ready to do that.
Do you think people find excuses for their shortcomings with a pandemic? If a person does not want to do something, he/she will always find a reason for it. Recently, a popular meme “let’s do it after Easter” was popular on social networks, which can be easily paraphrased as “let’s do it after Covid” and it will be our reality. People need motivation to avoid this.
What new values, traditions of corporate culture and work with people will we see in the world that defeated COVID-19?
As I have already mentioned, the pandemic has made us more humane. We have reconsidered what is important in our life and what is minor. The environment, which we all found ourselves in, showed us that everything has its beginning and ending. We started to see the world differently. We ask ourselves more often now: why do I wake up, go to work, do certain things? Ironically, the closed space provided us more opportunities to know our own identity. If we keep these values or not, after we return to offices, depends on leaders. When the pandemic is over it is important for them to look back and remember our state at that time, because this is the lesson we all should remember.
Які шість принципів стали основою «економічного мислення» митрополита Андрея Шептицького. Чарлі Мангер, «Johnson & Johnson», «Costco», «Starbucks»: яка ціна етики?
Чому нас учить митрополит Андрей Шептицький у прагматичному світі бізнесу? Розповідає Адріан Сливоцький, один із найвизначніших фахівців сучасного менеджменту, провідний бізнес-консультант і бізнес-футуролог українського походження, який двічі входив до переліку 50 світових бізнес-мислителів «TOP-50 business-thinkers» та до списку 20 провідних бізнес-консультантів світу. Партнер компанії «Oliver Wyman». Автор світових бестселерів із питань стратегічного управління. Член Дорадчої ради Львівської бізнес-школи УКУ.
Запис інтерв’ю відбувся спільно з Центром Шептицького УКУ в межах «Бієнале Шептицький» за підтримки Українського культурного фонду.
Тут ви знайдете попередні випуски бізнес-видання «Insight Inside» від Львівської бізнес-школи УКУ, що виходили в друкованому та онлайн-форматі. Це справжня база знань, повірте!
Dmytro Shymkiv, Chairman of «Darnitsa Group» Board of Directors
How much are companies and employees ready to return to work as normal after the pandemic?
I believe that some part of companies and businesses are ready. Many people will run to the offices because it is quite difficult to work at home with children and household chores combining all that with work. For many people it has become a great challenge to work in such conditions.The latest study “Work performance” from Microsoft shows that during the pandemic the load on people increased, because they communicate more, have online meetings, work 24/7, as a result during the day they try to solve household problems and in the evenings start to read letters and deal with various work requests which massed up during the day. Here the employer faces the question of the working efficiency.
As for people, they are divided into those who are “for” and “against” working at home. Some people feel uncomfortable working at home, and for the others it is comfortable, because they can stay in their favorite pajamas all day long. But all the same it encouraged digitalization of the society, which is gradually becomingnatural for us. People are no longer afraid to use new applications, programs and even don’t feel barriers while communicating online.As a result, companies have started to use technology more in their work. Also, in the post-Covid period, we will face large amounts of data on electronic devices, which can cause certain challenges for cybersecurity.
If we talk about culture, it will change fundamentally. Although, some still want to return to the way things were before, it won’t happen. The working process will be blended. Companies will reconsider the need in office space, as well as the employees’ houses will change, because people will start to design them taking into account the places or areas for work.
As far as communication is concerned, I believe we can’t replace real-life communication, as only one-to-one conversation sets the dynamic to all processes, so it must be. I don’t believe in a complete transition to digitalization, because sometimes a person needs to see colleagues, spend time in the office. Therefore, socialization will gain in popularity. It will be slightly different in the developed countries, because their attitude to their own safety and the others ‘safety is radically different. State guardianship of the citizens will also differ. All this directly shows social relations. If we have a look on Germany and the USA, we will see people wearing masks, because they think not only about themselves, but for the others. Unfortunately, in our country not all understand this because we are still in the process of forming a social agreement and responsibility in society.
What personal habits, acquired during the pandemic, would you like to keep? During the pandemic I started to spend more time with my family and children. These new conditions allowed us to communicate more. If to speak about work, I am more immersed into the studying, in particular into medicine, new trends,issues of immunology and genetics.
Thanks to such self-improvement you can see new horizons on how the society and business can develop. Instead, new skills in the company are system opportunities, which we began to actively apply. New opportunities are constantly opening up, however, there were some moments when we were wrong, but this is also an experience.
Besides, the pandemic period taught us to make decisions quickly and act. Even though, we were digitalized company and before, it seemed to me it was not enough, our rate of progress was still slow. I fired the IT director, replaced many people, and reformatted the team. It is very important to not only wait until the pandemic is over, but to change something and not to be afraid of changes. Also, one should not wait for the moment when everythingreturns to what it was before, because this will not happen, because everyone has taken a step forward. Many companies nowadays have got stuck on this and while waiting they lose the dynamics, motivation and employees.
Don’t you think that some companies should have closed at that time? One example of such a company which did not play the game “we are half open” was the famous chain of restaurants, which belongs to one of my friends…. The owner estimated that it was better to close everything for the period of quarantine and fire some part of staff than invest money in reorganization of his business according to modern challenges. Here I agree that for some companies such a step was the best option.
Looking back on the past year, what would you have done differently? We were quite demanding of our management, but we should have been even more demanding. When our company mobilized, everyone caught euphoria because we had notably pulled away in comparison with our business rivals. Here is the danger, as when the team can see the achievements, it relaxes. That is why the competitions to stay ahead of the curve should be constant.
Many of our competitors used the time of the pandemic to change tactics. Yes, they have lost some part of the market, but they managed to come up. Now I believe that we should have made a decision about changing the team members earlier. I value human relations and my team, but in crisis situations there is no room for chance, you just need to act.
During the crisis, I would have also increased investment in new areas and products. So many things could have been done faster. Why am I talking about speed? Because at that moment many companies stopped working and opportunities cannot be lost, especially new opportunities. Uncertainty kept me from investing, but now I am convinced that I should not have been afraid.
Workers often feel tired and irritated due to constant stress. How do you think a leader should act in such a situation and manage people effectively?
You need to talk to people and it is better to do it face-to-face. When we discuss a problem through the screen, everyone will try to seem better, like in the mirror,but in offline meetings they share the real thing. During the meetings you also need to explain your steps, your decisions and what worries you at the moment. At this point, there is understanding and connection, so it is better to find moments which motivate your employees.
Sometimes there are cases when the company is close to be shutdown. It is better to tell the truth at once because the agony of uncertainty strains relations: people are stressed; they don’t know if they have to work more or look for something else, this can demotivate the most.Therefore, under any circumstances, the team needs regular communication.
Denmark and Scandinavia have a tradition of Friday breakfast.I really liked it, so I brought it to Ukraine and introduced it to my companies. So while enjoying coffee with croissants, employees of a certain sector, management, share with other team members all the events that happened during the week. It should be not a report but just a story. In this way, people have a wider horizon than their work. Some of them make conclusions: “I thought I have big problems, but others have even bigger”. It is important for people to be aware of the work in general, because that is how they define themselves against others ‘successes or failures.
When people are not motivated, it is necessary to look for something that motivates them. Everybody has a purpose when he/she starts working for a company. So it is important to find out what the purpose is and help to achieve it. It is difficult. During the joint meetings I always think about what I should tell my employees. I try to speak about something that makes them smile, makes them think what is important to them. So they become more open and you hear what really worries them, what they want to improve or what they lack. These requests need to be responded to.
Does a leader feel annoyed and unmotivated in such circumstances?
I don’t know anyone in Ukrainian or foreign companies who felt good in such circumstances. Everyone has his/her own worries, because we all are human beings and we all have our own problems. During the pandemics and back to work, I shared all my mistakes, if any, with the team. Joint discussions helped to understand each other and alleviated the problems that loomed over me.
How will the “company-employee” relationship change in post-pandemic times? Employee digital skills will become common sight in the company. I remember when earlier I asked my employees if they know English and if they can work with equipment. Now these things are not in question for me anymore-they should be as standard. I believethat digital skills will also be “by default”, because this way companies will not spend time and money on employee training. The second issue will be the flexibility of the work schedule and work from the office or home. I am convinced that we will leave the office format only partially.
What new values, traditions of corporate culture and work with people will we see in the world that defeated COVID-19? Vaccination, safety and health monitoring will be the norm. All companies follow this practice. Therefore, the issue of employee insurance in companies that have not done that before will be a decisive choice. In response, employees will also demand a flexible schedule and suggest their view on the implementation of this plan.
Interestingly, the work environment for women and men during this period is very different. Women need feelings, conversations, hugs and communication. Instead, it is not an urgent need for men, so it is easier for them to perceive remote working.And this should be taken into account, because women will faster be ready to return to offices.In general, I believe that a pandemic is adaptability to evolution. Companies, and certainly people need to develop.You don’t have to be a dinosaur waiting for the ice age to end – record that thought in your memoirs.
What is “Sheptytskiy’s love management’’? How does the win-win approach work? Why is it rewarding to trust and how much can you save by trusting?
Last year, LvBS together with its partners launched a new project “School of Management by Sheptytsky”.Its purpose is to present Metropolitan Archbishop Andrey Sheptytsky and his ideas to Ukrainians and to the world, to show why his teachings are relevant even today, as well as to disseminate him widely among various audiences. First of all, we want to show Ukrainians the Ukrainian who we must know more deeply about, who we can learn a lot from and who we should all be proud of.
We are glad to introduce you a series of video interviews with well-known businessmen and intellectuals who will speak about Metropolitan Archbishop Andrey Sheptytsky. As well as a conversation with Myroslav Marynovych, a Ukrainian human rights activist and theologian, a founding member of the Ukrainian Helsinki Union, a member of the Nestor Group, and the UCU Vice-Rector for University Mission.
We are proud to introduce you the stories about brave entrepreneurs, including the UCU Lviv Business School (LvBS)’s graduates, who openheartedly share how they managed to outlive the crisis or even start their own business in the most disadvantageous times.
Oleksandr Penkivsky is the owner of the “City Café” restaurant chain (Ternopil), which consists of five restaurants. Oleksandr opened the last two while studying at the UCU Business School. During the entire period of the Сorona crisis all the chain full-time employees managed to hold down their jobs.
Rostyslav Kulyk, CEO and founder of the “Gastroli.ua” ticket service, shared his own business experience, the challenges he faced during the pandemic, and how, in his opinion, the event industry will recover after the Corona crisis.
Olena Sozanska is the founder of the «Smart Space» project. For seven years she managed «Taor Karpaty Resort & SPA» hotel complex and started her own family business during the pandemic. She spoke about her experience on how to start a business during the Corona crisis and shared her thoughts about the changes in corporate culture in post-Covid world.
This is a co-project of UCU Lviv Business School and Radio «Skovorodа».
We discuss mental health with Igor Zastavny, a family doctor, Head of LvBS Medical Management and Oleg Romanchuk, a well-known psychotherapist, Director of the UCU Institute of Mental Health.
Mental health in the post-Covid future: what should employers pay special attention to?
What moods might people have after leaving quarantine and returning to a new normalcy?
I am an employee. What should I pay my attention to when caring for my mental health in the post-Covid reality?
U.S. software firms are the most successful companies of the 21st century. From software-as-a-service pioneers like Salesforce and Zoom to ads-powered giants such as Google and Facebook, software firms represent close to 30 percent of the S&P-500 index. But despite their ascendancy, these companies have an Achilles’ heel: they make costly and avoidable mistakes when they venture overseas. I know first-hand because I was a Europe-based executive at Google and Twitter from 2005 to 2016, when those companies first expanded abroad. Today I invest in software-as-a-service (SaaS) companies on both sides of the Atlantic.
Europe is the default first stop for U.S. companies for good reason: a well-run SaaS company at IPO derives about 30 percent of its global revenue from the region. In 2019, SaaS companies went public with a median global ARR of $278 million, implying more than $80 million from Europe. Revenue opportunities of this magnitude are rare. To re-create something comparable in the U.S. would usually require a new type of customer or a new product line — both of which are heavy lifts.
By contrast, transporting an already-successful U.S. model to Europe should be relatively straightforward. Nonetheless, even strong software companies make an awful mess of it. One now-public SaaS company initially located its European headquarters on the beautiful Portuguese island of Madeira based on tax advice. Now Madeira has many charms, but as a location to build a sales and support team, it was an unworkable choice. Although the company rectified its mistake, it lost a year doing so.
A blunder like Madeira might be an extreme example, but software companies regularly waste effort and forego tens of millions in revenue. Most do so by making four common mistakes: mis-timing of the expansion, forgetting the root causes of domestic success, hiring the wrong leader, and over-delegation by the CEO. If companies get these big things right, they can afford to get many smaller things wrong. Here are some practical steps that executives can take to overcome each of them.
Timing
Moving too late leads to foregone revenues and risks the emergence of copycat competitors. Moving too early stretches an already thin organization. So, what’s the right time? Having watched the movie of European expansion play a few times — with happy and tragic endings! — Frontline developed a simple checklist. If a CEO can answer “yes” to these questions, it’s time to expand to Europe:
Is your U.S. business humming? The way the product is sold in the home market should be repeatable without heroics.
Is there demand? Early customer wins can be turned into local case studies that kick-start the region.
Is your executive team strong and deep? International expansion is a cross-functional effort that must be shouldered by several members of the CEO’s executive team.
Is globalizing the company a personal priority? The most successful expansions are passion projects of the CEO.
Are you well-funded? Successful expansions come with significant up-front investment, including senior people on the ground.
Note that capital is not the only readiness requirement. Our research shows that companies expanding overseas in 2021 have raised more than three times more capital than their predecessors from a decade ago. It turns out that company maturity — as indicated by the first four checklist items — is not dependent on capital alone.
Success amnesia
Companies are on average six years old by the time they open their first office in Europe — a lifetime in a startup! Over those few years, organizations tend to fall prey to “success amnesia,” forgetting the dirty work that was required in the early days. Even the best products don’t just take off on their own. They are more often dragged towards success by the whole company.
A lot of this comes down to how startups work in the early days, when walls between functions are porous: engineers talk to customers, salespeople suggest product changes, customer support does market research, everybody recruits. This kind of cross-functional effort can produce amazing results. Yet when companies expand to Europe, many view it as a straightforward Sales effort — and that sets them up to fail. Poor expansions are often caused by a brand-building or partnerships or product issue. The hidden culprit of a poor go-to-market expansion is more often Marketing (or lack thereof) than Sales. Fifty percent of companies don’t have a single marketer on the ground in Europe a year after landing. Sales can only win once those other functions create a tailwind that Sales can ride.
First senior hire
Although getting the first senior hire right is crucial, 46 percent of companies end up replacing that person within two years. This is largely because startups and venture capital firms rely on curated talent networks — their little black book of high performers who have delivered in the past — which rarely extend across the Atlantic.
One now-public SaaS company transferred an early employee from HQ to become its first leader on the ground in Europe. On its face this was not a bad decision — exporting the company’s unique office culture from San Francisco was rightly a priority. But the expat had limited European experience and personal networks. Believing the company’s brand was strong enough to overcome language barriers, the person hired English-speaking sales reps to sell to French and German customers. While that might have worked in the Netherlands or Sweden, it was a mistake in France and Germany and it led to millions of dollars in foregone revenue.
Companies can increase their chances of hiring success in a couple of ways:
Find a Sherpa. In the first year, companies need someone locally who knows the market and has a pre-built network. This could be a Europe-based investor or consultant or executive at another software company. Just make sure their network is relevant and they are incentivized to help.
Visit. A surprising number of CEOs pick a European HQ location without attempting to get to know the city — or the talent pool that lives there. A physical visit is essential, even in a world of remote work, and it raises the likelihood of a good first hire. With a little sourcing in advance, it’s easy to set up 10 informal meetings with potential candidates and begin to build a talent network.
Hiring the right person is the first step; setting them up for success is the next. CEOs can radically enhance the new leader’s prospects by designing two further things well:
Org structure. Functional org structures work at HQ because the CEO aligns functions around the company goals and resolves disputes between them. But when Sales and Marketing bicker eight time zones from HQ, the issue can fester without resolution. One solution is a European General Manager, who directly manages the customer-facing parts of the organization (e.g., Sales, Marketing, Support, Partnerships) with dotted line responsibility for other functions such as Engineering.
Landing team. A winning combination is to kickstart Europe with a senior local hire and some high-performing employees on long-term assignment from HQ. While this approach is used by fewer than 10 percent of companies, it is a proven way to encode cultural DNA in the new operation and mitigate the risks of mis-hiring the European GM.
CEO mindset
International success doesn’t start “over there”; it starts at HQ. Without the CEO’s interest and support, the expansion is doomed. European expansion can seem like a project that only requires CEO attention for a few months until the right people are hired. However, treating it as a short-term project or over-delegating to subordinates is a missed opportunity. Consider it instead to be the first step on a decade-long journey of globalizing the company to fulfill its true potential.
What does a global company look like? The product is engineered from the ground up to be usable worldwide. More than half the company’s revenue comes from outside the U.S., providing an additional growth engine and diversification. Executives based outside the U.S. run global parts of the company. The CEO and executive team at HQ allocate their time to domestic and overseas issues in proportion to the growth opportunities of each. They are well informed about the global business and frequently meet international customers and employees. “International” is not delegated to a VP International or VP Sales. The board and executive team include people who have lived and worked overseas and have run truly global businesses.
***
As companies emerge from pandemic-enforced retrenchment, CEOs have an unheralded opportunity before them. Until 2020, most American startups were not only U.S.-centric, they were HQ-centric. Decision-making and communication depended on being close to the CEO and executive team at HQ. There were few processes, practices and systems in place to overcome physical distance. One of the reasons they failed overseas had nothing to do with customers or cultures or languages or regulations. It was a failure to operate as a distributed team.
Covid-19 changed all that. Companies had a few weeks to figure out how to work remotely and they have been perfecting their approach ever since. Engineers and salespeople have scattered around the country. The San Francisco Bay Area, which had been a hiring bottleneck for years, started to lose its monopoly on talent. Even C-suite executives that left for lifestyle reasons may stay where they are when the pandemic is over.
For young companies whose cultures are malleable, this shift will be transformational. A huge obstacle to international expansion has been removed. Companies will discover, often to their surprise, that they are much better placed to become truly global companies than they ever were before. The best CEOs will take advantage, because globalizing a company doesn’t really happen overseas. It happens at the CEO’s desk.
Stephen McIntyre is a Partner at Frontline, a venture capital firm that invests in software companies in the U.S. and Europe. He was Vice President of EMEA at Twitter from 2012 to 2016 and an executive at Google from 2005 to 2012. Stephen holds engineering degrees from Trinity College Dublin and Cornell University and an MBA from Harvard Business School.
Ivan Petrenko, CEO of UCU Center for Entrepreneurship:
The mistakes of American startups in the European market, described by the author, are probably universal for all startups which approach foreign markets. However, to my mind, the first and most important mistake, which was not mentioned, is the neglect of new market research, and this is the mistake made by even the most experienced startups. For example, if Uber has masterfully nailed down its leadership in the United States, in the European and African markets it is gradually losing its position in favor of the Estonian Bolt, which when approaching each foreign market adapts the main messages and rules according to local needs. Thus, lower prices for users, almost twice lower commissions for drivers, more cities in countries are covered and localized messages already yield the results for the company in terms of profitability in the ⅔ of the countries where Bolt operates.
If we talk about Ukrainian startups, we, at the UCU Center for Entrepreneurship, have seen a positive trend of increasing the focus on client research over the last year. Before the Covid-19 outbreak, approximately 75% of the teams that applied for acceleration had no experience in communicating with a potential client and had not delved into market research before participating in the program.Over the past year, the percent of the teams that had stayed out of customer development or had not conducted any interviews prior to participating in the program has dropped to 35%.
The dynamic business education development and the formation of a startup community in Ukraine definitely redound to it. With more and more learning opportunities from Ukrainian and foreign accelerators, more thematic events, USF grants and a growing list of success stories with Ukrainian origin, more and more Ukrainian teams are gaining the knowledge essential for their innovative ideas development and , equally important, are increasingly willing to share this knowledge and experience with others. This chain reaction not only strengthens the existing community but also encourages more and more new teams to try to develop their ideas into products.
Besides, one more trend that Covid-19 has accelerated is focus on global markets. I will not argue that local initiatives still dominate, but the percent of startups seeking to expanding into foreign markets or building a global strategy since the establishment is growing, because it becomes clear that you do not need an office in San Francisco to build a global company. I will paraphrase the author’s words in the article “International success does not start “there “, it begins at headquarters” into “Global thinking does not generate somewhere in the garage in Silicon Valley, but generates in the place where the team decides to make a global product.” Kolo.Track, Postello, SellerSkills – since the beginning of the pandemic, we have had teams from each acceleration list that not only think globally, but also take practical steps to implement their market entry strategies such as: market research, hypotheses validation, getting the first customers and opening accounts in the USA while sitting in their home office.
Of course, Ukraine is not Silicon Valley and will not become one. Still, if from the three startup ecosystem pillars our entrepreneurial thinking is developing quite rapidly, the legal framework and venture capital investments are still fragile pillars. However, our startups’ dedication is surprising. While Ukrainian venture funds invest in foreign startups, our startups raise grant, angel and venture investments abroad, open accounts in the US, incorporate in Europe, manufacture products in China and, while selling them in global markets, they do not forget to remind the world that they can be creative, innovative, and successful without having an office next to Google and not meeting investors in a coffee queue.
