(This was in a secondary city. You no longer see this sort of thing in Kyiv or Lviv.)
Two months ago I welcomed a delegation of European investors and tech entrepreneurs for the informal 3-day WEF/YGL/GS Ukraine Discovery Tour in Kyiv. I met them at the World Economic Forum in Davos in January and invited to Ukraine despite skeptical views on the “country in war.”
These views weren’t surprising because of the Russian propaganda that displayed the war with the purpose to scare off all business people and investors.
“So how is it in Ukraine? What’s going on with businesses? What was it like before the war?” – these were the first questions I was attacked with. So I told the story straight and fact-full. . . .
We have over 2,000 startups, about 100 global R&D centers, more than 500 outsourcing firms and 100 e-commerce companies. All of them add up to over $5 billion industry’s volume worth as of late 2014. The figure could be higher if it wasn’t for the economic downturn.
Creating an enterprise software startup with 20 people on the team working for at least 2 years would take $10 million if it was in the U.S. In Ukraine, the same team for the same time span will cost 10 times less. Just think about it. It is possible to raise $1 million in the U.S., develop the product here and then return with the developed product to sell it in the U.S. . . .
There are more than 50 Ukrainian companies with valuation of $20-100 million that operate globally.
Now @privatbankua says no online purchases > 700uah ($30) unless its through their service. I need a new bank. see http://romaninukraine.com/i-hate-banking-in-ukraine-rant/.
It seems to be very accurate.
Estimate salaries by city, discipline, and experience.
Russian vs Ukrainian owned businesses.
Ukraine has only had capitalism for 25 years, and unlike in Poland, its development was severely stunted by rent seeking, subsidies, and inertia. Everything is getting better, and it’s been a thrill to watch — from the breadth of goods and services offered, to the quality of customer service, to the reliability of deliveries (I love you, Nova Poshta).
Though you still have the feeling that if the market was more accessible, western businessmen would run circles around the local competition.
You can often tell whether a business is Ukrainian owned or Russian owned.
The UKRAINIAN OWNED businesses tend to be like incompetent families.
– Things don’t happen on time.
– There are no processes — instead of one competent staff person helping you, the entire office will get involved in something that you can’t imagine isn’t a standardized, daily task.
– They may try to hike prices for westerners. (They assume all westerners are millionaires.)
– Customers are asked to accommodate the personal travails of the staff — they have to go next door to get change, they haven’t had time to update the prices on the menu, can they pay you later because they paid for their uncle’s dental surgery.
RUSSIAN OWNED businesses tend to be like the mafia. Everything revolves around rules and status.
– The staff will demonstrate their authority by ignoring you.
– There can never be enough vulgar attempts at sophistication: pleated curtains, lights, rhinestones, and Russian pop music. This, I think is byzantine style. More is better. There is no efficiency or functionality. Perhaps the mentality goes: everything sucks, so more is better. More wins.
– There are rules. Forget the fact that all but one table in the entire place is empty. They are all reserved. The staff will flex their authority by telling you the table you sat beside is reserved, then watch you go to the next one so that they can get another status boost and doing it again. It’s not their fault, they insist. Those are the rules.
– Authority trumps usability. Forget the fact this is the obviously the door to use. It may be the only door, and it won’t have any signs or barriers indicating any restriction. It will only have a grave, suited man standing beside it (not in front of it, but beside it), who say in a guff, irritated manner, as if it’s obvious, that the door is closed. Those are the rules.
I think this is the first of many steps toward increasing Ukraine’s trade with the west.
Now is a great time to be laying the foundations of a manufacturing or export business from Ukraine.
So there’s this great website which shows the USD to UAH “commercial” (read “black market”) rate: http://kurs.com.ua/ua/lvov.
So the official bank rate is 16.4 and the “commercial” rate is 20.8. A pathetic 79% of the actual rate.
But it gets worse. When I use Ukrainian ATM to draw from my American Bank account, the exchange rate is only 15.8! 76% of the actual rate.
I don’t yet know how legally binding this is. It may only be the opinion of Ukraine’s central bank, but nevertheless, it’s bad. It represents exactly the type of corrupt Soviet bureaucratic thinking that Ukrainians rebelled against last winter. Worse, this statement is aimed at the tech industry — the one place talented Ukrainians consistently find refuge from corporate raiders and rent seeking bureaucrats. It’s a very, very discouraging blow at a time when so many Ukrainians have sacrificed so much in a fight that was largely about greater economic freedom. I expect a reaction from the recently formed Bitcoin Foundation of Ukraine.
In connection with citizens about the legality of use in Ukraine “virtual currency / Cryptocurrency” Bitcoin inform that.
According to the Constitution of Ukraine (Article 99), the Civil Code of Ukraine (Article 192), the Law of Ukraine “On Payment Systems and Money Transfer in Ukraine” (Article 3) and the Decree of the Cabinet of Ministers of Ukraine from 19.02.93 № 15-93 “On Currency regulation and Currency control “(Article 3) hryvnia currency of Ukraine as the only legal tender in Ukraine, adopted by all natural and legal persons without any restriction on all territory of Ukraine for the transfer and settlement.
One of the functions of the National Bank of Ukraine is the monopoly of Issuance national currency of Ukraine and the organization of cash circulation (Article 7 of the Law of Ukraine “On the National Bank of Ukraine”).
Volume and turnover in Ukraine other currencies and use of substitutes as a payment prohibited (Article 32 of the Law of Ukraine “On the National Bank of Ukraine”).
Given the above, the National Bank of Ukraine considers “virtual currency / Cryptocurrency” Bitcoin as a money substitute that is not providing real value and can not be used by individuals and entities on the territory of Ukraine as a means of payment, because it is contrary to the norms of Ukrainian legislation.
In addition, when using “virtual currency / Cryptocurrency” Bitcoin is a factor of increased risk associated with this service, operations or supply channels, including anonymous transactions (which may include cash), decentralization operation.
However, the international distribution of such payments for this category of services attractive to illegal activities, including money laundering, proceeds from crime and terrorist financing.
We emphasize that the risks for use in the calculation of “virtual currency / Cryptocurrency” Bitsoin responsible party payments for them. National Bank of Ukraine as a regulator is not liable for risks and losses associated with the use of “virtual currency / Cryptocurrency” Bitsoin.
In order to protect consumers’ rights, safety, money transfer National Bank of Ukraine encourages citizens to use the services of only those payment systems, settlement systems, which included the National Bank of Ukraine in the Register of payment systems, settlement systems, participants in these systems and service providers payment infrastructure.
Power Point Presentation: Intro to Bitcoin Presentation – Oct 2014
I just returned from Ukraine’s first Bitcoin conference, and I’m still buzzing with a sense of endless possibility and a better future. It’s always very inspiring to meet so many people with big ideas.
The general speeches about Bitcoin — how it works, what it means, weren’t as brilliant as what you may get in the US. The thing that impressed me most was the individual talent in the room. I had great discussion about virtual property, mining, and decentralized exchanges. Someone told me the guys behind the famous mega-miner GHash.IO were there, but I didn’t meet them.
I met a very gentlemanly life-long entrepreneur-turned-VC who returned from New York City to his native Ukraine in the 1990s. He told me that OkCupid and WhatsApp are among the IT giants created by Ukrainians. I hadn’t known that.
Who will mine the next block???? Place your bets at http://bettingblocks.com/!