To become more successful and innovative, Ukrainian entrepreneurs need to be less afraid of failure. In fact, failing more could be key to unlocking Ukraine’s innovative potential and its ultimate success.
At least, that was the takeaway message from the final panel discussion at the Kyiv Post Tiger Conference on Dec. 10, where participants put their heads together to consider how Ukraine can become more innovative and achieve the status of a leading tech nation by 2025.
“Failure is not a part of our culture,” said ex-Deputy Economy Minister Nataliya Mykolska, who moderated the panel discussion. “Yes, we failed. And these are the lessons we learned from our failure… we need to preach failure,” she argued.
According to her and the other speakers, Ukrainian business owners, especially startup entrepreneurs, would benefit from embracing their defeats and turning them around into future victories. It is the key to an innovative future for Ukraine, they said.
“My mission is to build bridges between Ukraine and the world.”
Nataliya Mykolska
Ex-Deputy Minister of Economic Development and Trade
The five-year plan
Ukraine has set itself ambitious targets for the next five years, and many of them are focused on technology and IT. An audience survey carried out before the discussion concluded that attendees were divided over whether Ukraine was innovative enough and ready to become a leading tech nation by 2025.
The audience was divided more or less equally into three camps of yes, no and maybe. The panel was also divided, and its members said that, while Ukraine was already innovative, it had some distance to travel to become a leading tech nation.
The audience also concluded, however, that there are three unique selling points that Ukraine has to attract the investors that most experts agree are needed to unlock its innovative potential. Ukraine has a large and quickly-growing talent pool, a developed IT outsourcing sector and a hunger for success.
IT outsourcing already brings in well over $2.5 billion per year and the sector is getting bigger and stronger. The whole IT industry is valued at more than $3.2 billion.
The audience thought that promoting Ukrainian industry abroad and reforming the country’s education system was a top priority in furthering growth. The speakers largely agreed with this, but pointed to other advantageous areas for Ukraine to focus on.
Georgii Sokolianskyi, head of cities for Central and Eastern Europe at the taxi company Uber, said that good quality education and the low cost of labor is helpful, but it is not unique to Ukraine — many places can deliver that. He said that factors such as geography and regulation may play a more integral part in Ukraine’s five-year plan.
“We can be agile in the way we regulate innovations.”
Georgii Sokolianskyi
Head of Cities, Central and Eastern Europe at Uber
“My take is that Ukraine (at the moment) is essentially a European nation which is not subject to EU regulation,” which makes it more agile he said.
“But blindly copying the EU is not a good idea,” he added, suggesting that some European countries suffer because of over-regulation. Uber has struggled in some EU countries, where it has come into conflict with the law and its taxi service has not been granted a license to operate.
“We have to take on an educational role… speaking to the government and explaining what innovation is and… what it can achieve,” Sokolianskyi said.
Failure is helpful
To succeed within any time frame, let alone over the next five years, the Ukrainian entrepreneurs who hope to transform their country will first need to fail — multiple times, probably. And that is fine, the speakers largely agreed.
“Of course we’re going to fail… this is how we are going to learn,” said Dominique Piotet, CEO at the Unit.City innovation park where the Tiger Conference was taking place.
He formerly worked for tech companies in California and has been commended by the President of France for his work in supporting the digital transformation of that country’s economy.
“It (failure) is key,” he added. “We have no choice, because in Ukraine… we don’t have money, don’t have enough entrepreneurs, but we have one thing that really matters — talent.”
Disruptive innovation is critical, Piotet argued.
“The people I see around here, are as passionate… and as talented, as the people I see in Silicon Valley.”
Dominique Piotet
CEO at Unit.City
In Ukraine right now, there are too many outsourcing services for foreign companies, he said. Instead, Ukrainian talent must build great companies and products.
“It is a gold mine,” the French-born entrepreneur said of Ukraine. “Let’s find that pioneer spirit that they had in Silicon Valley. The people are just as talented… we can become the most innovative place… Ukraine is still the best-kept secret.”
According to Max Tkachenko, who has invested in 60 Ukrainian startups related to engineering, space projects, energy and aerospace technology, failure can be helpful but is not always welcome. In the aerospace sector, for example, failure can result in explosions, he carefully reminded the audience.
Tkachenko also pointed out that, on their own, ideas have little value. What matters is making them a reality, which is where the government can be more helpful in terms of enabling and unleashing the potential of its entrepreneurs.
“We need to take our desires and combine them with strategy at a state level,” he said.
“We are ready for a great, huge leap… When should we start? Right now.”
Max Tkachenko
CEO at Space Hub
Priorities ahead
The panel speakers were asked to conclude by making a number of suggestions about areas where Ukraine should prioritize improvements to become more innovative.
Tkachenko pointed out that innovators and entrepreneurs need stable rules from the government and a level playing field, while the country should work on building a culture of investment and financial management where capital is properly valued.
Sokolianskyi argued that Ukraine had to do more to deregulate and liberalize its financial markets: “It is almost impossible to raise capital,” he said, reminding the audience that until recently it was very hard to take money out of Ukraine, a deterrent for foreign investors.
Finally, he said the judiciary needs to be improved, because the courts cannot be relied upon to fairly resolve disputes and “a lot of trade isn’t happening because there is no trust.”
Piotet had provocative suggestions: “We need to make this a dangerous place, because innovation happens by accident,” he said, imagining a Ukraine where creators and their ideas are crashing into each other and spawning new products and businesses.
Finally, the French CEO said, Ukraine must reverse its brain drain and encourage people to return and run or develop a business in their homeland.
“50% of Silicon Valley CEOs are not born in the U.S.,” he pointed out. “We must stop the brain drain, bring people back.”
“Our country needs to develop a strategy of attracting the industries that are only now being born, and new investors.”
Oleksandr Davydenko
Group Chief Innovations Officer at Techiia Holding
