UNIT.City should be the first place to visit for the foreigners frightened by the Ukrainian reality.
This place is an antidote to pessimism and “zrada” (betrail – Ukr.).
It helps in a hundred cases of a hundred.
Programming school with Jobs’ “icon”, a coffee shop with cold Coca-Cola and a campus with live residents. And other attributes in trend – young bearded visionaries, a beautiful construction site and “Chasopys” coworking.
You can get out a notebook without attracting a hostile attention of your fellow residents in the sleeping area.
It was just there – a cozy coworking cell – where the chief editor of Leadership Journey met with Max Yakover, managing partner of UNIT.City.
We talked about the big construction, life, and “their morals”.
Leadership Journey (LJ): Max, the construction of the UNIT.City is the most prominent development project in Ukraine. The project is related to education, innovations, and the future. Every time I come here, I see the construction underway, which is a pleasure in itself. Would you say you have a fast-growing business?
Max Yakover (M.Ya.): We are building a large innovation park on 25 hectares, and such projects are usually implemented around 8-10 years. We are only two years old.
If we were living in the UK and were building such a project, say, in London, then we would now be at the stage of ideas. Then another two years would be spent negotiations with local authorities and residents. Then another four years would be spent on design. Only then would we start a construction. Therefore, we are moving really fast. Although we would like to move on faster.
If we were living in the UK and were building such a project, say, in London, then we would now be at the stage of ideas
Over the past two years, we have built three business campuses, we have the UNIT.Factory institute, and we have the first 90 residents. Among them are several truly iconic companies such as Snapchat (Mobile messaging application with attached photos and videos. – Ed) and Syngenta (a Swiss company, one of the leaders in the production of plant protection products and seed production. – Ed). But we still are a startup.
During the last year, we were testing many hypotheses of our operations. What do we sell? Who is our customer? How much should we earn? What services should we provide? What do we like? What do we dislike? Where are the problems? Now we are in the phase of replication. We have launched a large business campus this year. By the end of the year, two more campuses will be launched. We started building housing; we have already dug a huge ditch. By the end of the year, we will finish the central square of the “city”.
LJ: What is your role in the whole process?
M.Ya.: We have three managing partners, and each has a segment of work. My main task is the creation and development of the Park’s ecosystem: everything related to brand building, PR, events, communication with the community of residents. I was also responsible for preparing the UNIT.City strategy.
LJ: Does any part of the project need your daily involvement? What task do you pay more attention to?
M.Ya.: Project management is similar to piloting a ship from point A to point B. To reach the destination, we need a coordinated work of many services. It is like asking a captain of the ship: what is his focus now? Does he now hold the steering wheel or check the porridge in the cook-galley? If you take a wider view, we have the main task, which fulfillment we all contribute. We need to launch several campuses by the end of the year. This will attract residents to strengthen the park.
Project management is similar to piloting a ship from point A to point B. To reach the destination, we need a coordinated work of many services.
For example, people working with the ecosystem, they implement programs with start-up entrepreneurs in various fields so that large companies become interested in the park and look at us differently. Everyone in the team has his role.
LJ: I heard different assessments of what is happening in the country. Some people insist that Ukraine is almost the birthplace of the best startups. Other people consider this a clear exaggeration. I wonder, when you with your partners started this project, was it evident there would be enough people willing to participate in it?
M.Ya.: We started out small. First, a small complex was built — an institute for 300 people, a business campus, where 30 residents drove in, an event site, 3 laboratories, the first cafe, and the first gym.
We then checked the market to see if there was a demand. Was there an interest? Was there a demand, or was it just our idea and Ukraine was not ready. Very soon, we were convinced that our project was really in demand, the country was ready, and we were moving in the right direction. Therefore, we are now moving from the pilot project stage to the scaling stage. Construction of new campuses, housing, and other objects is in full progress.
If you have a big dream and a reputation to make people believe in you, you will get a huge amount of resources
When we announced that we wanted to build one of the largest innovation parks in Eastern Europe, many talented guys wrote to me, “We want to work, we want to be involved in the construction of such a park.” Because it is a unique phenomenon for our country.
Our potential residents and IT companies saw what we were building, and realized that this was not a fantasy, but a very real project. We had a queue of potential residents who wanted to become part of this park and help create its ecosystem.
If you have a big dream and a reputation to make people believe in you, you will get a huge amount of resources.
LJ: Nobody has ever created such parks in our country. Where from have you got the experience? Who has helped to design it?
M.Ya.: I was writing the UNIT.City development strategy together with my Lithuanian colleagues, with whom I was creating the concept of the VDNH expo center 40 years’ development. Therefore, I had invited them to help with analytics and benchmarks, when we had started to work at the UNIT.City project.
The Poles helped us to make the master plan. The Israelis prepared the security concept. The park’s ecosystem creation was advised by Professor Rick Rasmussen (a professor at the University of Berkeley and Head of the Sutardja Center for Entrepreneurship and Technology. – Red.). We are actively working with foreign expert community.
LJ: When I talked with Vasily Khmelnitsky, he said that teams from various projects of his holding actively travel the world, adopting useful experience. I know that your team is also actively traveling. Tell us, what useful things have you discovered?
M.Ya.: Once or several times a year we go on educational tours. We visit key companies, universities, and hubs. We were in Silicon Valley, in China, Korea, and Israel. Recently we have visited France, not for the first time. This year we were in Belgium and the Netherlands.
LJ: France? But what about the President-socialist and yellow vests? Somehow it does not fit the image of a country with venture funds and unicorns (unicorns are companies with a capitalization of more than $1 billion — Ed.). Or is it not the case?
M.Ya.: You should look at the statistics. Over the past six years in France, the number of startups has grown from 3,000 to 12,000. This is a huge increase.
A year and a half ago, they have opened Station F – a huge campus of 30,000 square meters, which contains dozens of accelerators, funds, a huge number of startups. Station F has become the home for innovators from all over France. Therefore, it was interesting for us to talk to them, and look at their experience.
It turned out, that the launch of an umbrella initiative called French Tech with 200 million euros of investments for various acceleration programs to develop start-up entrepreneurs six years ago was the first growth driver.
LJ: Was it a state investment?
M.Ya.: Yes, a state investment. Station F is a private initiative with approximately 250 million euros invested. Only on the creation of the campus. There is an active interaction between classical universities and business. We tried to figure out what we can take from them for UNIT.City, and what – for the whole country.
For UNIT.City, we looked at the Station F acceleration programs we can implement; how they build partnerships with global players, thereby attracting the best startups and teams. We were also visiting BlaBlaCar – this is one of the first European “unicorns”. We studied the way and means they have used to grow up. By the way, the Ukrainian market for the company is one of the highest priorities.
They base everything on partnership. No one is working on his own.
In Rotterdam, we have visited the campus for hardware startups, that is, those who are engaged not only in software but also have a hardware component. In Belgium, Leuven, we had meetings in several research institutes that, for example, work with Intel and Toshiba. They create such technologies, that these and other large corporations are lining up for. Such researchers have 0.5 billion euros in income. They base everything on a partnership. Nobody is working on his own.
LJ: In your view, what will the next window of opportunity? Now, this is Fintech, and biohacking is forecasted to be the next powerful trend. Or is the current opportunity window not closed yet?
M.Ya.: This is a good question. In general, what is the future of Ukraine? Let us go from the reverse. Approximately 150 companies in the world define the future in their industries. These are leaders, and they, as a rule, grow in 60% of cases due to mergers and acquisitions. There are promising technologies – artificial intelligence, robots, autonomous driving, eHealth, share economy and so on. Incidentally, I recently wrote about this.
In which of these areas is Ukraine strong? For example, in Belgium, in Leuven research center, they have told us, that their best expertise in the world was in chips and in two other sectors. That is why industry leaders will come to them.
Now, we can be an outsourcing center, that is, supply human resources and thus be part of the global economy
You can read about the trends for the next twenty years in any book, but the question is different. Where are we in these trends? In what area do we have basic research and can give something? Now, we can be an outsourcing center, that is, supply human resources and thus be part of the global economy. But in what areas do we have knowledge centers? This is a very important question. If we have no answer, then for the next twenty years we may have problems.
LJ: Talking about trends. I have recently interviewed one of the pioneers of the domestic IT industry, who at one time was the first in the digital communications market, then survived the collapse of the company, and now is engaged in cybersecurity. He calls it a new trend, but cybersecurity has been actively developing around the world for more than a decade. How far is Ukraine behind world trends? Or is there another reason for such lagging behind?
M.Ya.: We do have technical talents. Take Snapchat, which has opened our R&D center, they highly evaluate the Ukrainian developers. We are absolutely competitive in the world.
We have a problem with entrepreneurship, a huge shortage of business talents. I mean, professionals who can build a global business, who can make product designs, who can build the global marketing of this project, etc.
WE HAVE A LARGE GAP BETWEEN SCIENCE AND BUSINESS
Second, we have a large gap between science and business. The Academy of Sciences and the university environment live in their cocoon. And this is at a time when IT people and large business have an urgent need for scientific research. They, of course, go to universities, helping to organize some small laboratories there. But this has nothing to do with fundamental research, without which in 20-30 years it will be impossible for us to develop.
When science and business work together, it immediately attracts global players. In the meantime, they stand on the border with Poland and do not go here.
LJ: About Poland. At the Kyiv International Economic Forum, I heard you saying that we do not have full-fledged incubators. The Poles, I know, have very strong ones. Why is it so? Why do they have full-fledged incubators, and we do not?
M.Ya.: Poland and the Baltic countries have had funding from the European Union.
Development of startups industry requires a huge number of projects and foundations that help early-stage entrepreneurs.
Slightly less should be the number of organizations to invest in developing business at the stages of the first income. And a very small number of support organizations is needed to help the expansion of large established companies. This funnel allows the business to grow. Our problem is that very few organizations are involved in such support projects for business in the early stages.
I am looking forward to the time when in Ukraine a start-ups’ development fund will begin to invest in the projects at the high-risk initial stage.
All over the world, this support is provided by the state. There are various types of support — grants, joint (public-private) acceleration or incubation programs. I am looking forward to the time when in Ukraine a start-ups’ development fund will begin to invest in the projects at the high-risk initial stage.
Money may also come from people called in the West business angels. These people have earned their capital and invested part of their income in start-up projects. They take the risk. They can unite in associations. Unfortunately, this is not developed in our country either. When will the business angels’ support be developed at a large scale? After the successful progress of a serious project through the described chain. Something very big. The way the PayPal project had “shot”. And the “first hundred” of employees became millionaires.
What were their next steps after buying a cool car and a house? They began to think, “What kind of startups can I invest at an early stage?” The money was back in the business ecosystem. Therefore, they are called “PayPal Mafia”.
Then came Google. When the company entered the IPO, the next hundred people became multimillionaires. And they returned to the market again. But they returned not only with money but with knowledge of how to build big companies. Then Facebook appeared…
There was no case in Ukraine that a considerable number of people would immediately become rich
There is no case in Ukraine that a considerable number of people would immediately become rich, understand the market and begin to return money to it. Someone has to break this chain.
All over the world, the state, realizing that this (money back to the ecosystem) is the future, is an active player in the venture finance market. Because the logic of transformation is universal. If you have a «burned out land» now, you must act first. After this, you encourage. After this, you create the conditions. We must act now. This is our current task, both the task of UNIT.City, and the task of the state.
LJ: A team management question. You have a small team – 15 people – but at the same time, you have a large and fast-growing project. Surely, this requires a certain density of tasks and your direct participation in the process. How do you manage the team and what is your level of delegation?
M.Ya.: I am not a micromanager. With each team in each direction, we have written out a long-term, medium-term and short-term strategy. There are indicators that we measure on a weekly, quarterly and annual basis. Once a week we check.
Besides this, a number of projects are constantly launched. Each direction has a sufficient degree of autonomy in decision-making within the framework of the strategy that we have agreed.
I AM NOT A MICROMANAGER
Of course, we make mistakes. For example, we constantly evaluate what residents think about us. These studies provide feedback from our residents — what we do right and what we do wrong. Where we are good and where we are bad. Naturally, this immediately affects our work plan, and we make adjustments.
I try to pick up a team of people with internal motivation who really believe in the same thing as I do. My main task is to create an environment for growth and provide resources. KPI of every person is necessary in order to understand that we move to the goal at the speed we need.
If a person needs an additional stimulus, we simply do not work with such people. They do not take root. At some point, they leave.
I try to pick up a team of people with internal motivation who really believe in the same thing as I do.
LJ: Can a top manager afford to be an entrepreneur who generates bold and radical ideas?
M.Ya.: There is a great difference between a manager and an entrepreneur. It is not about good or bad. There is a company life cycle. When a project starts up, you face a huge amount of uncertainties. And it is important that people with entrepreneurial thinking were at the helm.
Over time, you need to move to the systematic management of the company by building processes.
When you are an entrepreneur, you work in a zone of great turbulence. You do not fully understand what you will sell, where you will get the money from and what you will do the day after tomorrow.
UNIT.City is now being structured; we are attracting large Western capital, so we are building processes and moving from an entrepreneurial model to classical management. This is a healthy process.
We attract large Western capital, so we build processes and move from an entrepreneurial model to classical management
LJ: Regarding work-life balance, is sports on your daily to-do list?
M.Ya.: I have six workouts a week. I am swimming three times and jogging three times a week. I have just flown back from a half marathon in Riga. Ran for 1 hour 35 minutes.
LJ: Is it a good result?
M.Ya.: For an amateur, this is not bad. I have been practicing for three years. In June, we fly to Italy to swim 4.5 km, and in November, I will participate in the New York Marathon.
LJ: Have you swam across the Bosphorus?
M.Ya.: Twice. You can be trained for swimming across the Bosphorus in 3.5-4 months, swimming for 1-1.5 hours three times a week. I swam my first kilometer 2.5 years ago after two months of training. It is feasible for everyone.
The Bosphorus is the easiest start because you are drifting and you have to swim a bit more than three kilometers. It takes you less than an hour and a half. I was swimming across the Bosphorus an hour and seven minutes.
LJ: Do you have other unclosed gestalts?
M.Ya.: Yeah. I have recently written that I want to find a piano teacher.
LJ: Piano? Does it help business?
M.Ya.: Of course. My first education is “Applied mathematics”. That is, my left hemisphere is obviously more developed. I need to develop the right hemisphere.
I want to find a piano teacher
LJ: About books. What book has influenced you the most?
M.Ya.: This is my “favorite” question. But I do not believe in one book.
LJ: And at the end about your motivation. What motivates you and inspires you every day?
M.Ya.: It was important to me to do not just a development project, but something big. A phenomenon and a driver for the entire ecosystem of the country. A benchmark for all cities of Ukraine. A place, which foreigners will visit and will believe that big and cool projects are possible in Ukraine. This is my motivation to work on this project. I want the project to succeed.
I WANT THE PROJECT TO SUCCEED