Delivered at a Startup conference in Dnepropetrovsk, Ukraine in September 2013

1. Where are the Opportunities in Ukraine’s
Internet Market?
By Ken Leaver
Dnepropetrovsk Startup Event
September 2013

2. What spheres are interesting in Ukraine?
So many options… how to choose?

3. First examine some of the global trends
1. Mobile taking off
In 2013, mobile devices will pass PCs to be most
common Web access tools. By 2015, over 80% of
handsets in mature markets will be smart phones.
Source: Forbes.com, “Top 10 Strategic Technology Trends for 2013”
2. Social networks becoming a
standard way of communicating
Everyone is on social networks. Now businesses are
figuring out how to make money off them.

4. A few more…
Greater personalization of Internet products and
services than ever before.
Source: Forbes.com, “Top 10 Strategic Technology Trends for 2013”
Cloud will be center of our digital lives. Synch across
devices. Services become more important.
4. Personal Cloud3. Big data opening new
opportunities

5. Some of the trends in Ukraine
1. People getting more accustomed to
purchasing and paying online
Less fear associated with buying online. Paying by
cards and electronic wallets becoming less of a
barrier.
2. Large online shops are scaling and
getting into more categories
Successful first movers like Rozetka are following
the Amazon “own everything” approach

6. So if you’re going to start a new Internet
business in Ukraine, what do you do?
These are the 3 questions I will cover today!

7. Global or Local Model? Look at the
landscape first.
Global Opportunities
Local Opportunities
(Just Ukraine or CIS)
• Strong technical talent that is
less expensive than the west
• BUT mainly 1st generation
entrepreneurs (US = 3rd / 4th gen)
• Language / cultural / immigration
barrier = difficult to distribute in
US & Europe
• Successes will be highly
engineered products (think
Viewdle)
• Market still far from saturated in
most areas
• Western Internet co’s not very
present yet in Ukraine and
unlikely to be in near future
• Market is still small, but this also
makes it cheaper to start
• Marketing (eg. Adword) is 5-10x
cheaper than in the US

8. Local or Global Model? Also look at
yourself.
Have you done an Internet project
before?
Is your product/idea in an area where
there is a lot of western competitors?
Do you have a team that can compete against
experienced US/European teams?
Yes No
Yes No
No Yes

9. E-Commerce: Overview
The big opportunities are already occupied
by big players
Requires relatively large funding
Import problems in Ukraine make certain
models very difficult
The Opportunity:
1. Domestic goods (no import)
2. Niche goods of high quality
3. Direct to customer shipment from
abroad
Selling products from China is already too
crowded
1st Industry

10. eCommerce models to consider
Fab BlueNile
• Groupon-style emails
• Focus on style & taste
• Difficult-to-find products from small
companies
• Huge assortment
• Strong service
• Big investment in brand
1st Industry

11. Marketplaces: Overview
Definition = lots of buyers and sellers
One player typically wins and others lose.
That single player tends to just grow and
grow with time.
Some models being done by international
players already (eg. AirBnB)
The Opportunity:
Niche opportunities (eg. arts & crafts)
Services (eg. TaskRabbit)
2nd Industry

12. Marketplace models to consider
Houzz Etsy
• Home remodeling is very fragmented
(lots of small companies)
• Typical marketing channels not very
effective
• Reviews are very important to purchase
decision
• Also very fragmented merchants
• The story of the maker/seller often
an important component of
purchase decision
2nd Industry

13. Travel: Overview
International players currently dominate
(eg. Booking.com, OneTwoTrip)
Difficult for a Ukrainian startup to
compete with these international
titans on the standard models
Need to focus on models where
having a local presence is a key
success factor
The Opportunity:
1. Online travel agency model
2. Last minute hotel bookings that
require signing local hotels
3. High End travel
3rd Industry

14. Travel Models to Consider
Hotel Urbano
Hotel Tonight
• Online travel agency =
combination of physical
presence + huge email base for
lead generation
3rd Industry
• Sell hotel rooms the night before for
deep discount = difficult for Booking &
Expedia due to existing business

15. Mobile Apps: Overview
1m+ apps on the appstore = Tons of
competition. Tough to be found.
High drop off rates after install.
Need clear, proven way of
monetizing.
The Opportunity:
1. Focus only on models that have
proven themselves in the west
2. Easier compared to other models to
tap entire Russian-speaking region
High user acquisition costs /
virality is often a myth.
Ukraine = low smart phone penetration
4th Industry

16. Mobile App Models to Consider
Uber
Yelp
4th Industry
• Yelp model still up for grabs in
Ukraine as no clear leader
• A clear long-term successful model
• Clear efficiency & customer experience
improvement over current taxi system
• Uber, Lyft, Hailo and others scaling
globally quickly, but will be a few years
before they arrive in Ukraine

17. SAAS: Overview
International players quite experienced at this
point but focused on own markets
Easier to focus on the regional /
local market
If focused on global market than choose a
niche you understand very well (ie. have
worked in it)
The Opportunity:
1. Focus on proven areas where int’l
products are too expensive or poorly
localized
2. Focus on Russian-speaking region
Need to find the pain points of
large, local Internet companies
5th Industry

18. SAAS Models to Consider
CureBit Bizible
5th Industry
• Allows you to know the source of
all your customers (PPC, Organic,
Email) and their behavior in your
site
• Ukrainian eCom companies all
working to improve the efficiency
of their marketing spend
• A clear benefit to eCom companies as
they get 5-10% sales lift with no
investment

19. Education: Overview
Most agree the current education model is
not effective. Especially in CIS.
Many professionals need to update their
skills on nights/weekends.
The Opportunity:
1. Focus on localizing proven global
models
2. Content generation is expensive.
Need to license.
Most global models not paying much
attention to Russian-speaking market
so far
6th Industry

20. Education Models to Consider
Lynda.com
6th Industry
Eduson.tv
• Creating high quality content in-
house and selling it many times
• Completely flexible to student as to
when to study and what to study
• Paying for short courses from well known
professors / experts
• Licensing of content
• Pay “a la carte” for specific classes

21. Financial: Overview
Financial services improving at an very
rapid pace globally
Key players are still banks but
online players making key inroads
The Opportunity:
1. Peer-to-Peer lending
2. Online investments
3. Online banking pureplay
Ukraine is still about 5+ years
behind the West…
7th Industry

22. Financial Models to Consider
Wealthfront.com Tinkoff
7th Industry
• Ukrainians still mainly investing in real
estate
• Investing in stocks still perceived as
extremely risky, but much more liquid
• Wealthfront provides a safe and easy
model that requires no financial
expertise
• Pure play online banks are already a fairly
proven model
• Still no “Ukrainian Tinkoff”

23. So many spaces still up for grabs in
Ukraine
Eastlabs wants to help entrepreneurs build the future

24. Eastlabs Unique Value Proposition
Investment
Eastlabs is the only full-
scope startup accelerator
in the region with the
ability to offer seed
investment and beyond.
Ecosystem
Eastlabs offers a
collaborative office
space in central
Kiev, where
driven, talented startup
team members can
interact with other like-
minded startupers.
Comprehensive
Mentorship
Eastlabs combines full-
time, dedicated
mentorship with expertise
from an extensive pool of
entrepreneurs, investors,
and specialists.
Eastone Resources
Eastlabs is backed by
one of the strongest
holdings in Eastern
Europe, and has close
ties with the Viktor
Pinchuk Foundation
charity organization.

25. Online Application
to Eastlabs
Day 1 Day 7 Day 30 Day 45 Day 60
Prepare Pitch
Presentation
Review by
Investment
Committee
Term Sheet
Signing
Acceptance to
Eastlabs Eastlabs
Incubation
Program
Day 15
Interview with
Eastlabs Partners
Selection Process

26. Incubation Program
Startup
Basics
Week 1 Week 2 Week 4 Week 5 Week 6
Value Proposition
Business Model
Prototyping
Financial Modeling
User Experience
Testing
Legal
Executive Summary
Grow
Audience
Week 3
Business Model
Growth Model
Week 7 Week 8
Pivot
VC Mechanics
Week 9 Week 10 Week 12 Week 13 Week 14
Pitching
E-security
Lessons from Failure
Negotiations
Financial Modeling
Pitching
Getting Investments
Pitching
Grow
Audience
Receive
Additional
Investment
Week 11
Pitching
Positioning
Week 15 Week 16
Success Metrics
Marketing
Marketing w/o Money
Partnerships
Growth Management
Pitching
Life after Eastlabs
Define Build Validate
Sell
Test

27. The Team
Eveline Buchatskiy Hrish LotlikarKen Leaver

28. Our Portfolio

29. Eastlabs Results
LAUNCHED 2012
INVESTED IN
12COMPANIES
CASH TO
COMPANIES $500,000
1st COHORT
75% of the companies raised funds
MENTORS
80

30. Raised $300,000
Raised $150,000
Raised $100,00