What Will It Take to Build a Real Tech Ecosystem in Ukraine - Ukraine Financial Forum 2018

1. Author of Accelerated Startup (2017)
Contributing Writer @ TechCrunch
Supervisory Board @ Ukraine Venture Capital Association
Previously: Founding Partner and a 3X CEO
B.A. in Computer and Video Imaging @ Cogswell College
Venture Capital @ UC Berkeley Haas School of Business
Vitaly M. Golomb
Managing Director and
Global Head of Principal Investments

2. WHAT WILL IT TAKE TO BUILD A REAL
TECH ECOSYSTEM IN UKRAINE?
VITALY M. GOLOMB
@vitalyg // FB.com/VitalyGolomb // www.AcceleratedStartup.me
2018

3. Lets be friends:
@vitalyg or
FB.com/vitalygolomb

4. 3RD INDUSTRIAL REVOLUTION CHANGES EVERYTHING
2007-
3rd INDUSTRIAL
REVOLUTION
CONVERGENCE,
EXTERNAL NEURAL
NETWORKS
CYBER-PHYSICAL
SYSTEMS
1969-2000
DIGITAZATION
OF ECONOMY
ELECTRONICS,
AUTOMATED
PRODUCTION
1st INDUSTRIAL
REVOLUTION
1760-1840
STEAM, WATER,
MECHANICAL
PRODUCTION
EQUIPMENT
1860-1914
2nd INDUSTRIAL
REVOLUTION
DIVISION OF LABOR,
ELECTRICITY,
MASS
PRODUCTION
COMMUNICATE
+ MANAGE
ECONOMIC ACTIVITY
POWER + FUEL
ECONOMIC ACTIVITY
MOVE
ECONOMIC ACTIVITY
PRINTING PRESS
TELEGRAPH
COAL STEAM OIL FOSSIL
FUELS
TELEPHONE
RADIO
COMBUSTION ENGINE
AUTOMOBILE
STEAM POWERED
RAIL
INTERNET UBIQUITY
RENEWABLE ENERGY
AUTONOMY
WE
ARE
HERE

5. It is easier to startup
anywhere today
Than in 1999
in Silicon Valley

6. Hacker Rank Best Developers
1. China 2. Russia 3. Poland 4. Switzerland 5. Hungary 6. Japan 7. Taiwan 8. France 9. Czech Republic 10. Italy 11. Ukraine
12. Bulgaria 13. Singapore 14. Germany 15. Finland 16. Belgium 17. Hong Kong 18. Spain 19. Australia 20. Romania
Algorithms 1. Russia 2. Poland 3. China 4. Switzerland 5. Taiwan
Artificial Intelligence 1. Japan 2. Belgium 3. Vietnam 4. Russia 5. Ireland
US News & World Report Best Global Universities 2017
BIOLOGY, COMPUTER SCIENCE, CHEMISTRY, ENGINEERING, MATERIAL SCIENCE, MATH, PHYSICS, SPACE SCIENCE
Harvard, MIT, Stanford, Princeton, UC Berkeley, Georgia Tech, University of Texas, Cornell
University of Toronto Cambridge, Oxford Marie Curie University Ecole Polytechnic Federal Lausanne
Fudan, Trinsghua, Peking, Zhejiang, Harbin, Shanghai Jiao Tongu City University of Hong Kong Nanyang, National University of Singapore
THE NEXT WAVE NEEDS GLOBAL TECHNICAL TALENT
COMBINED WITH THE RAPID GROWTH MODEL OF SILICON VALLEY

7. LETS TALK ABOUT
ENTREPRENEURS

8. GET GOOD GRADES
GO TO A GOOD COLLEGE
GET IN A GOOD COMPANY
GET REGULAR PROMOTIONS
RETIRE, PLAY GOLF, DIE
NORMAL CAREER

9. STARTUP CAREER IF SUCCESSFUL
WHAT PEOPLE THINK
IT LOOKS LIKE
WHAT IT REALLY
LOOKS LIKE

10. “AS A STARTUP CEO,
I SLEPT LIKE A BABY.
I WOKE UP EVERY
2 HOURS AND CRIED.”
- BEN HOROWITZ

11. 1YEARTODEVELOPANIDEA
2YEARSTOSEEIFANYONECARES
5-8YEARSTOSEEITTHROUGH
22 30 35
1
2
3
4

12. FOUNDERS
MYGOAL:IMPROVETHEIRODDSOFSUCCESSSURVIVAL…

13. HOW
WHAT
WHERE

14. HOW

15. A STARTUP IS...
AN EXPERIMENT IN SEARCH
OF A BUSINESS MODEL- STEVE BLANK

16. SCALABLE
STARTUP
TRANSITION COMPANY
BUSINESS MODEL FOUND
PRODUCT/MARKET FIT
REPEATABLE SALES MODEL
MANAGERS HIRED
BREAK-EVEN
PROFITABLE
RAPID SCALE
NEW SENIOR MANAGEMENT
~150 PEOPLE
“A STARTUP IS NOT A SMALLER
VERSION OF A LARGE COMPANY”- STEVE BLANK

17. THE TECHNOLOGY LIFE CYCLE “S CURVE”
PRODUCTPERFORMANCE
TIME/EFFORT/INVESTMENT/EXPERTISE
RESEARCH
MATURITY
INNOVATION SWEET SPOT
- RAPID PRODUCT
& MARKET DEVELOPMENT
- NEW SOLUTIONS
- SHORT PRODUCT LIFE CYCLES
- LOWERING BARRIERS TO ENTRY

18. $0
NETREVENUE
TIME
RESEARCH
MATURITY
CONCEPT
EARLY
VALIDATION
MARKET
TRACTION
SCALE
VALIDATION
PREDICTABLE
SCALE
SEED
SERIES
A
SERIES
B
SERIES
N
IPO
Source: Jerome S. Engel 2012
STAGED FINANCING

19. PRODUCTPERFORMANCE
1960s 1970s 1980s 1990s 2000s 2010s
Source: Jerome S. Engel 2012
SILICON VALLEY INNOVATION CYCLES

20. WHAT
ENTIRE INDUSTRIES ARE BEING REINVENTED
“IN 10 YEARS, 75% OF THE FORTUNE 500 WILL BE
COMPANIES THAT HAVEN’T BEEN STARTED YET”
-BCG

21. HEALTHCARE & FOOD
TRANSPORTATION & LOGISTICS
FINANCE & ECONOMICS
MANUFACTURING
MOTIVENTURES

22. Source: CB Insights
30 STARTUPS THAT
CAN CHANGE THE WORLD

23. Source: CB Insights
THE WORLD OF TOMORROW IS BEING BUILT TODAY

24. A.I. IS TRANSFORMING FINANCE
Source: CB Insights

25. 2009-2018 YTD INVESTMENTS IN
ARTIFICIAL INTELLIGENCE
Source: CB Insights
1272 deals / $14.6B
in 2017
890 deals / $10.3B
in 2018 so far

26. THE CAR IS TRANSFORMING
Source: Spoke

27. …AND BIG AUTOMAKERS AREN’T SITTING AROUND
MAJOR PARTNERSHIPS, INVESTMENTS, ACQUISITIONS
Source: CB Insights

28. THE DIGITAL HOSPITAL IS TRANSFORMING MEDICINE
Source: CB Insights

29. …AND A LOT OF IT IS HAPPENING OUTSIDE OF U.S.
Source: CB Insights

30. CURRENT LIVESTOCK PRODUCTION IS UNSUSTAINABLE
Source: CB Insights / World Resources Institute

31. TRADITIONAL MEAT PRODUCTS VS LAB-GROWN
Source: CB Insights / MosaMeat

32. LAB-CULTURED MEAT BRINGS ENVIRONMENTAL BENEFITS

33. THE MOBILE ERA IS OVER. WHAT’S NEXT?
SOURCE: CHRIS DIXON, WHAT’S NEXT IN COMPUTING?

34. 3D TRANSFORMATION
HYPER MOBILITY
SMART MACHINES
34
INTERNET OF ALL THINGS
Blended Reality
Experiences

35. 35HYPER MOBILITY TODAY

36. 36
Source: WIREDSource: Singularity Hub
HYPER MOBILITY TOMORROW

37. 37
Source: PCMag.com
INTERNET OF ALL THINGS

38. SMART MACHINES
38

39. Source: Wired
BETTER GAMER THAN HUMAN
VIDEO GAME PLAYING A.I.

40. Develop a
model for
how the
flatworm
regenerates
Source: Wired Source: Wired
100 YEAR OLD SCIENCE PUZZLE
SOLVED BY ALGORITHM IN 42 HOURS

41. 1000 units of
Pepper, the human-
like robot that feels
emotions, sold out
in a minute.
Source: PC World
2015 - FIRST ROBOT
TO RECOGNIZE AND
MIMIC HUMAN
EMOTION

42. 3D TRANSFORMATION
DRIVING THE NEXT INDUSTRIAL REVOLUTION
Today
Industrial
Revolution
Blueprint design
and mass production
3D
Transformation
Immersive and easier design
and Proto-type & Final Part
“Digital” production
Handmade
and time intensive
Pre-
Industrial
Internet
Computer aided design
and JIT machine production
Next
Industrial
Revolution
Democratization of
Design and Ubiquitous
production

43. 3D TRANSFORMATION TOMORROW
44
Source: Neotech AMT

44. Bonus: Blockchain

46. TRADITIONAL MODEL
Source: COINDESK

47. NEW MODEL
Source: COINDESK

48. DISRUPTIVE USECASES = DIGITAL TRUST
P IDENTITY
P NOTARY
P DIGITAL ASSETS/SECURITIES
P SMART CONTRACTS
P DIGITAL VOTING
P DISTRIBUTED STORAGE
O AND A LOT OF BULLSHIT THAT HAS TO DIE

49. SOURCE: @josh_nussbaum
BLOCKCHAIN PROJECT ECOSYSTEM

50. WHERE

51. Source: Startup Genome
GLOBAL STARTUP ECOSYSTEM RANKING - TOP 20

52. UKRAINE’S TECH ECOSYSTEM TODAY
*$140M WAS GRAMMARLY AND BITFURY ALONE
*
• WORLD’S 4TH MOST
EDUCATED COUNTRY
• 16K ANNUAL IT GRADS
• 5K ANNUAL AEROSPACE GRADS
• TOP 3 IN CERTIFIED IT PROS
• 100+ GLOBAL CO R&D CENTERS
• #1 SOFTWARE ENG. IN CEE
• 20X OUTSOURCING IN 10 YEARS
• 5X ECOMMERCE IN 5 YEARS
• LARGEST COUNTRY IN EUROPE
• 1/3RD OF WORLD’S TOP SOIL
• #1/#2 AGRO EXPORTER IN
MULTIPLE CATEGORIES

53. YET IT’S NOT EVEN ON THE MAP!

54. Source: Startup Genome
NORTH AMERICA
ATLANTA
AUSTIN
BOSTON
CHICAGO
EDMONTON
HOUSTON
LOS ANGELES
MONTREAL
NEW YORK CITY
OTTAWA
PHOENIX
QUEBEC CITY
SEATTLE
SILICON VALLEY - BAY AREA
TAMPA BAY
TORONTO-WATERLOO
VANCOUVER
EUROPE & MIDDLE EAST
AMSTERDAM-STARTUP DELTA
BAHRAIN
BARCELONA
BERLIN
FRANKFURT
GREATER HELSINKI
ISTANBUL
JERUSALEM
LONDON
MALTA
MUNICH
PARIS
STOCKHOLM
TEL AVIV
ASIA-PACIFIC
BENGALURU
BEIJING
HONG KONG
KUALA LUMPUR
MANILA
MELBOURNE
NEW ZEALAND
SHANGHAI
SHENZHEN
SINGAPORE
SYDNEY
TAIPEI

55. SO, HOW DOES UKRAINE GET THERE?

56. Large Pools of
Private Capital
Source: Jerome S. Engel
WHAT IS AN INNOVATION CLUSTER?
Entrepreneurs
Venture
Capitalists
Major Corps/
Strategic Investors/
R&D Centers/
Potential Acquirers
Universities
Government
Professionals
Management
Public Stock
Markets

57. THE ECONOMIC IMPACT OF
VENTURE CAPITAL
Source: ILYA A. STREBULAEV and WILL GORNALL
VC-BACKED COMPANIES AS A PERCENTAGE OF
PUBLIC U.S. COMPANIES FOUNDED SINCE 1979

58. HOW DID OTHERS DO IT?

59. UK (POPULATION: 66.7M GDP: $2.6T)
TAX PROGRAMS
ENTERPRISE INVESTMENT SCHEME (EIS) - FROM 1994
TAX RELIEF ON DIRECT INVESTMENT INTO SMES BY INDIVIDUALS
VENTURE CAPITAL TRUST SCHEME (VCT) - FROM 1995
TAX RELIEF ON INDIRECT INVESTMENTS INTO SMES BY INDIVIDUALS
SEED ENTERPRISE INVESTMENT SCHEME (SEIS) - FROM 2012
TAX RELIEF ON DIRECT INVESTMENT INTO EARLY STAGE COMPANIES BY INDIVIDUALS

60. UK (POPULATION: 66.7M GDP: $2.6T)
IMPACT
OVER £16B RAISED SINCE 1994 - SUPPORTING OVER 22,000 COMPANIES
20,000+ INDIVIDUAL INVESTORS INVEST THROUGH EIS EACH YEAR
3,000+ COMPANIES RECEIVED £235M+ THROUGH SEIS ALONE SINCE 2012

61. UK (POPULATION: 66.7M GDP: $2.6T)
GOVERNMENT VENTURES
ENTERPRISE CAPITAL FUNDS (ECF)
ADDRESSING THE EQUITY GAP FACING HIGH GROWTH POTENTIAL SMES
UK INNOVATION INVESTMENT FUND (UKIIF)
STIMULATE PRIVATE VC INVESTMENT INTO INTENSIVE R&D SECTORS
ANGEL CO-INVESTMENT FUND (ACF)
ADDRESSING THE SEED AND EARLY STAGE FUNDING GAP POST THE DOT.COM CRISIS

62. ISRAEL (POPULATION: 8.5M GDP: $374B)
YOZMA (1993-1997)
DIRECT AND FUND-OF-FUND INVESTMENTS
$80M FOR 40% STAKE IN TEN NEW VC FUNDS
INSURED 80% OF DOWNSIDE RISK AND PROVIDED A DISCOUNTED
BUY OUT OPTION TO ENCOURAGE FOREIGN INVESTMENT

63. ISRAEL (POPULATION: 8.5M GDP: $374B)
OTHER PROGRAMS
THE “MANOF FUNDS” (2009)
FUNDS TO STIMULATE CREDIT MARKETS AFTER 2008 GLOBAL FINANCIAL CRISIS
THE “MINORITY FUND” (2010)
PE/VC FUND FOR MINORITY OWNED BUSINESSES IN ISRAEL
BIO-TECHNOLOGY FUND (2011)
TECHNOLOGY TRANSFER COMPANIES (TTC), TECH INCUBATORS, R&D GRANTS, ETC…

64. ISRAEL (POPULATION: 8.5M GDP: $374B)
IMPACT
ISRAELI VC GREW FROM $58M IN 1991 TO $3.3B IN 2000 TO $5.24B IN 2017
YOZMA $20M FUND INVESTED IN 15 COMPANIES OF WHICH 9 IPO’D OR WERE ACQUIRED
IN 2017, $23B IN 112 EXITS (18 OVER $100M, 92 M&A, 13 IPOS, AND 7 BUYOUTS)
70+ VC FIRMS AND 350+ INTERNATIONAL R&D CENTERS
WORLD #1 IN R&D AND #2 IN PRIVATE EQUITY AS % OF GDP, #2 IN CO’S ON NASDAQ

65. SINGAPORE (POP: 5.8M GDP: $324B)
GOVERNMENT VENTURES
$1B TECHNOPRENEURSHIP INVESTMENT FUND (1991)
$250M EARLY STAGE, $500M FUND-OF-FUNDS, $250M STRATEGIC
NATIONAL FRAMEWORK FOR INNOVATION AND ENTERPRISE (NFIE) (2008)
$35M VC MATCHING FUNDS
EARLY STAGE VENTURE FUND (ESVF) (2014)
$96M VC MATCHING FUNDS
CONSOLIDATED AS “STARTUP SG” (2017)
PLUS NUMEROUS OTHER LOAN, GRANT, EQUITY AND TAX INCENTIVE PROGRAMS

66. SINGAPORE (POP: 5.8M GDP: $324B)
IMPACT
WORLD’S 12TH STARTUP ECOSYSTEM IN 2017
GREW FROM 2,800 STARTUPS IN 2003 TO 4,300 IN 2016
$1.2B VC INVESTED IN 2017
$1.6B IN 8 MAJOR EXITS IN 2017

67. UKRAINE (POP: 44M GDP: $119B)
WORLD’S 4TH MOST EDUCATED COUNTRY
16K ANNUAL IT GRADS
5K ANNUAL AEROSPACE GRADS
TOP 3 IN CERTIFIED IT PROS
100+ GLOBAL CO R&D CENTERS
#1 SOFTWARE ENG. IN CEE
20X OUTSOURCING IN 10 YEARS
5X ECOMMERCE IN 5 YEARS
LARGEST COUNTRY IN EUROPE
1/3RD OF WORLD’S TOP SOIL
#1/#2 AGRO EXPORTER IN MULTIPLE CATEGORIES

68. UKRAINE (POP: 44M GDP: $119B)
ZERO GOVERNMENT SUPPORT
=BEST AND BRIGHTEST LEAVE ASAP

69. 3 SPEED WORLD BY 2030:
DIFFERENT REGIONS, DIFFERENT ISSUES
United States
(speed 1)
Brazil
Europe
(speed 1)
India Japan
China
(speed 2)
Sub-Saharan
Africa
(speed 3)
2.1%
Medical, AI, ICT,
Batteries
Global leadership
Innovation
GDP growth
2030
3.68%
Leapfrog technologies
Digital currency
Quality of life
Security
GDP growth
2030 5%
AI, Robotics,
Batteries
Global leadership
Energy & resources
GDP growth 2030
1.62%
Cloud market
Renewable energy
Resource efficiency
Digital single market
GDP growth
2030
Real GDP 2010 Real GDP 2030

70. “Fail to plan,
plan to fail.”
- HILLARY CLINTON

71. GET THE BOOK
WWW.ACCELERATEDSTARTUP.ME
@vitalyg || FB.com/VitalyGolomb
GET THE SLIDES
GOLOMB.NET/UKRAINE