It has recently become trendy to talk about the achievements of the Ukrainian startup industry – about how new projects keep popping up in Ukraine and how their number is growing exponentially.
Still, most entrepreneurs who set out to find a solution to any given issue, get stuck at the stage of shaping the idea. Many of them simply lack the experience and a motivated team to produce an actual, functional model for a potential investor and get funding. Michael Ryabokon, who co-founded the Noosphere Engineering School together with Max Polyakov, pointed out to Forbes the biggest problem of startups today – a lack of understanding why and for whom a certain product is created.
Inspired by other startup success stories, developers have tried to clone successful ideas and head into already overcrowded niches. To do so, entrepreneurs aim at relocating to Silicon Valley, selling their outsourcing skills, or up selling their businesses to Western European markets, virtually anything but stay at home. According to the vision of Noosphere though, the potential for growth in Ukraine is highly promising.
Ukraine still has opportunities to offer innovation enthusiasts, and we can not only encourage them to stay here, but also attract companies from elsewhere to move their businesses to Ukraine. This is because we have top-notch professionals, powerful R&D centers, and every possibility to create a fruitful environment for developing hardware startups. That is the vision Max Polyakov and Noosphere Ventures.
Why hardware? The answer is simple – the amount of investment in hardware development is increasing worldwide. Hardware projects also get 50-60% more funding than software and online services. Besides, we have to remember that the global economy is entering a new industrialization stage, which opens unique opportunities specifically for engineering-related startups that heavily rely on innovation, not only in terms of software but hardware as well.
“The amount of investment in hardware development is increasing worldwide”
The Internet of Things, portable devices, smart home technologies, 3-D printing, and energy efficiency are niches that are quite broad and untapped. Any project capable of improving our lives or facilitating our businesses will be in demand among potential consumers and investors, including Max’s Polyakov Noosphere Ventures.
Admittedly, some garage entrepreneurs have found success in such research and development. Moreover, some of them have even managed to conquer Kickstarter and have been quite successful. Nevertheless, many devices developed by Ukrainian engineers, are manufactured overseas, so we cannot refer to them as entirely Ukrainian.
This poses a problem, because Ukraine does have a lot of talented programmers, testers, and developers (7-8 thousand university alumni in these fields annually). At the same time, we have a critical shortage of industrial designers and engineers who could create not only applications and websites, but devices and appliances. Probably the only exception is ARTKB who often successfully bring to market hardware projects that emerge from local entrepreneurs. We also have no factories and high-tech companies that could produce end products; neither do we have access to the necessary materials and components, so they also need to be imported. Since Max Polyakov launched Noosphere Ventures in 2014, Ukraine has had some investment opportunities to offer, too.
Hence the pressing issue – to revitalize engineering and industrial education and create an environment for a new generation of professionals in mechanical engineering, design, energy management, and wireless technology. These specialists can make the necessary difference needed in the complicated situation with hardware development.
“Any project capable of improving our lives or facilitating our businesses will be in demand among potential consumers and investors alike”
Given this, we fully realize that the state education system is hardly capable of resolving the problem. Schools are underfunded, and, as a consequence, they lack the up-to-date scientific and technical education. However, the all-out efforts by such devoted individuals as Dr. Mikhaylo Zgurovsky (Chancellor of the Kyiv Polytechnic Institute) and Dr. Mykola Polyakov (Rector of Oles Honchar Dnipro National University) make it possible to build long-term relationships with interested companies, in Ukraine and internationally, who are ready to take part in raising highly qualified specialists and to support young bright minds. This support is vital, because there is no shortage of ideas, but the understanding of the market requirements is often lacking.
For instance, in 2015 Noosphere of Max Polyakov visited 17 events all over Ukraine (in Kyiv, Odessa, Lviv, and Kharkiv) and evaluated over 300 projects altogether. Only a few of them were truly promising. Moreover, every entrepreneur who spoke failed to give a comprehensive answer as to when the return on investment could be expected.
The problems of the startup movement are largely rooted in our mentality. For example, in the USA, it is common to tell everyone about your project to get as much feedback as you can. But, in Ukraine people are afraid that their ideas will simply be stolen.
The reasons are trivial. We essentially lack the culture of venture investments. Moreover, all efforts to build startup incubators and accelerators here – like the ones they have in America – have concluded the same way: the system fails. And it hasn’t brought any genuine projects to market. Most ideas were borrowed from techcrunch and localized at best.
“The pressing issue is to revitalize engineering and industrial education and create an environment for a new generation of professionals in mechanical engineering, design, energy management, and wireless technology.”
Nevertheless, Ukrainian hardware is meant to happen. There are a number of examples of Ukrainian hardware startups that have already successfully gone into mass production. To complement this, there is one more cause for optimism – the Vernadsky Challenge, initiated by Max Polyakov, the only contest for hardware projects for devices in agro-industrial systems, alternative energy, defense, medicine, robotechnics, and space technologies. The main point of our attention is the number of participants, which have doubled over last year’s, which is encouraging. And even though many applications can hardly be viewed as full-fledged projects, the developers are motivated, because Vernadsky Challenge finalists are, as of this year, granted the equivalent of $75 000 for development.
The inventors have to believe that their efforts will not be in vain, their inventions will not become museum exhibits in a lab, and that their projects will help them build some sort of business – even if it is through a crowdfunding platform. This is the only way individual development become a trendy profession in Ukraine.
Originally posted on forbes.net.ua Michael Ryabokon opinion section