Ukrainian startups are back from Las Vegas. And so
Ukrainian startups are back from an electronics show in Las Vegas. Some of them flew straight to Ukraine, while others drove to Silicon Valley and staged a series of presentations in the BootUp incubator / accelerator. This is not the first delivery of Ukrainian startups to Kalifonia, but four years ago, presentations of startups were so weak that it was inconvenient to even describe them in a post about UTGEM-2014, the first ever international conference of Ukrainian high-tech in San Francisco. Since that time, the level of imported startups has significantly increased, and now they can be discussed on the Hamburg account.
Ukraine Venture Capital and Private Equity Association (UVCA) is responsible for bringing startups from Ukraine, which consists of venture capitalist Andrei Kolodyuk (Aventures), Ph.D. Olga Afanasyeva (Ukrainian Academy of Banking), and several investors, not only Ukrainian. For example, a member of UVCA is Alexander Galitsky, most of whose projects (ELVIS, Parallels) are connected with Russia and Zelenograd.
In California, UVCA is assisted by marketer Nikita Safronenko, who, in addition to the social burden of the Ukrainian community, works on Facebook, where he analyzes spam. Here is Nikita with Olga:
')
In general, UVCA and its assistants are a non-profit organization, but at the same time an effective structure. With brought startups, the situation is more complicated:
1. The first speaker was from Kray Technologies, a company that makes drones. Drones fly at a height of 1 meter and spray the field. As the main advantage over competitors stood total cost of ownership. Is this a presentation for venture capitalists? Strange. VC is not impressive words "we are the same as competitors, but cheaper." They want a quality difference that competitors cannot beat lower prices.
The presentation also sounded the words "artificial intelligence" and "precision argiculture", but the speaker did not reveal their meaning. Well, about the "artificial intelligence" could still be guessed from the words that drones are able to fly around obstacles. But the topic of "precision argiculture" was not disclosed at all, but in vain - this could well be a distinct competitive advantage for VC. Usually, “precision argiculture” means the following: on the basis of sensor readings, a field map is drawn up, on which the content of various elements in the soil is marked. For example, in this place there is an excess of phosphorus - not to bring it here (since phosphorus is poorly washed out, a regular excess of phosphorus for several years makes it necessary to replace the entire soil). Then a smart tractor is driving, which puts into each point only what is needed in it. Well, where in the presentation of Kray Technologies sounded the words "communication with sensors"? What kind of precision agriculture in general?
At the end of this case, one of the judges asked the question “you have already shown this presentation in September. How many drones have you already sold in North America? ”It turned out that there were only five. Amid words about a million farmers and a multi-billion dollar business, I experienced cognitive dissonance. Which aggravated when I saw a slide with a dozen potential buyers of the company, including Lockheed Martin. However, I probably misheard, but you can look at the presentation video (it can be found in the UVCA group) and figure it out.
2. The next startup was Kwambio. He was represented not by the founder, but by the investor in this startup, therefore the presentation was stronger than others (the investor understands how the presentation looks from the point of view of other investors). De facto, Kwambio has three different businesses: 1) making ceramic vases and custom cups; 2) designing and selling 3D printers for ceramics; 3) designing a 3D bone printer for medicine, which uses the reaction of precipitation of a compound in reaction with Ca (NO 3 ) 2 .
A ceramic printer costs $ 25K, uses proprietary technology (patent pending to protect against cloning), and requires source material that Kwambio controls. This gives a startup some protection from competition and the possibility of growth. While the startup is growing and receiving medical certification, it is supported by the income of the ceramic factory in Odessa. Well then, let's see.
3. Then came Univrsee, developer of programs for VR cinemas. The idea looks like this: we take a hundred people, we put on them helmets for virtual reality, after which they all work together in this virtual reality. For example, education - Univrsee told about their project with Samsung, which trains sellers using programs from Univrsee.
Univrsee consider STEAM as an example of a business model. Univrsee want to occupy 10% of the market, which they rate as fast-growing - there were figures of 3000 VR cinemas, 8 billion dollars and 45 billion dollars. In order not to be like other companies, Univrsee is trying to vary the way how to take money from a client, for example, by the minute. How it looks from the point of view of VC is incomprehensible to me, but probably for Universee it’s more important to work with major content producers, and not with VC. At the end of the presentation, the blockchain was mentioned.
From communication after the presentations, I realized that Univrsee is an example of a Ukrainian company that is evolving from outsourcing to a product company. At the same time, they are experimenting with AI and communicating with the developer community in the form of hackathon support. Integration with universities and community is one of the strengths of Ukrainian companies.
4. Next was the manufacturer of smart toys Cubomania. I readily believe that if you take an interactive screen, sensors, and write for this program, then all this may appeal to children and even generate some income for the authors. Especially if the developer plays a lot with the children and understands what they need (for example, so that you can attach lego cubes on top). But what have venture capitalists to do with it?
VC-funded startup is a specific business format. VC consider only candidates whose business can bring twenty dollars for each invested. This is called the upside potential. Of course, this does not mean that if VC invests a million dollars in 20 startups, then in three years it will receive 400 million dollars. Most likely one startup will bring him 20 million, twelve will fly into the pipe, the rest will return an average of how much and it was invested. In total, it will turn out 27 million - 40% ROI (return on investment) for three years. On it also live VC.
How can Cubomania generate 20X for VC? To do this, they need to either fill up the whole world with their cubes, or sell Lego, ahead of all other candidates. To do this, it is not enough to win the Vernadsky competition, to receive support from the Ukrainian Ministry of Education, or to catch the fancy of Gromadsky TV viewers - they simply do not have so many children.
From the point of view of a VC, companies like Cubomania are (in the case of an investment) an unambiguous candidate for a so-called zombie startup. “Zombies” in VC jargon are companies that cannot grow or die. Imagine that Kubomania received three million dollars, designed several lines of toys, hired additional employees, paid advertising, and lives the next 50 years happily. Salaries are paid, toys are in stores and they are bought, the Ministry of Health takes foreign delegations to the sponsored kindergarten, “we have no debts,” the founders of Gromadsky TV said happily. Everyone is happy. In addition to VC, in which these three million just hung. VC cannot collect them from Kubomaniya (since it is not money in debt, but ownership of shares), investment bankers (who make IPOs) will not buy these shares either, and Lego also has its own toys.
At the same time, Kubomania may have small private investors who will form S-Corporation and will receive dividends from it. This is a very respectable form of business, but not for VC.
5. After Cubomania, PassivDom appeared in the arena, which prints on a 3D printer at home, along with solar panels, which, according to the presenter, provide the family with electricity even in Alaska and in the north of Canada.
Lord As a Californian homeowner, I regularly receive spam and calls with offers to put solar panels on my roof. I refuse these suggestions because I read that solar panels are economically viable only in southern Arizona, and go to zero in Los Angeles. Even in San Francisco, solar panels are unprofitable, and they suggest that I believe in complete self-sufficiency in electricity from solar panels on the roof in Alaska? Maybe even in the polar night? From the northern lights? Rather, I, as a Soviet man, will believe in the blooming of apple trees on Mars. But first I need (in a presentation) the numbers and the results of independent experiments in peer-reviewed publications.
The presentation also included the words “7D-printing", "-20 ° C outside and + 20 ° C inside", "on the mountains and the oceans", "Eurocomission grant", "Airbnb unit" and (yes, yes! ) “NASA Mars cooperation”.
6. The next company was Senstone. They collected $ 400,000 dollars on a kickstarter for a gadget in the form of a brooch that hangs on your collar and records what you say: self-reminders, insights, freshly written poems that come to us, the representatives of the creative class, anywhere - in Starbucks, in the subway, even in the shower. The company's founder, a lawyer by profession, said that he often reflects on current affairs and takes notes. At some point, he decided that it was better not to write down thoughts, but to dictate to a brooch, so as not to pull the phone out of his pocket.
Then Stas Hirman, one of the judges of the event, got up and asked: “Do you want to say that your device is continuously recording what is happening around? Do you, as a lawyer, know that this violates several Californian laws at once? ”(In California, recording without the consent of nearby people is illegal, Penal Code 632 PC, a fine of up to $ 2,500, or a prison sentence of up to 1 year).
The speaker said that they have a button to turn it on and off. And that they can filter out other people's voices.
Stas Hirman asked the second question - how do they filter noise, for example, from the shower (in addition to the voices of other people). It also interested me, and I asked on what hardware. At MIPS, we are also involved in processor extensions for implementing DSP sound processing algorithms, and I know that smart filters are not a trivial task. The speaker said that they have a partnership with some kind of Dutch company that writes programs for such filtering, but he doesn’t know if a specialized hardware is used there.
7. And finally, the founder of a Lviv-British startup Blocks, who makes smart watches with interchangeable blocks with sensors, an open platform and software for data analytis, came to the scene. The idea is quite working, and I agree with the presenter that the main market for such devices is plants, hospitals and mines, with industrial IoT. The only point is that in the presentation they showed only WiFi and BlueTooth on the slides, while in the industrial environment other protocols are used more often - LoRa, 6LoWPAN. Then another investor and judge of the event, Vitaly Golomb told me that I just missed when the founder said that they can easily make a module with LoRa in two or three months. Well and good, but about it it is necessary to tell on slides.
In addition to startups, a representative of the Kiev-Mohyla Academy, who agitates for donations to create the Digital University Project in Mogilyanka, spoke. In every way I wish success to the Mugilya in all their endeavors, but in their self-presentation to the Californian audience there are two problems that surely periodically go sideways for them.
First, for the third time I have already met Mogilyants, who say “we are 400 years old, we are the oldest university in Eastern Europe”. Secondly, I met the speaker for the second time, who expressed the thesis “Mogilyanka is the best IT university in Ukraine, based on the average wages of graduates immediately after graduation”.
In the CIS, this can be said, since it is customary to expect any exaggerations and fantasies there from speakers. But in the states and in one and in the other case, the speaker can be accused of manipulation by omission, which casts a shadow not only on Mogilyanka, but on all universities of the CIS. Especially if the Americans hear enough about the “Ukrainian Harvard” and start asking other Ukrainian professors about it. Or Russian professors, some of whom never heard of Mogilyanka. The fact is that:
1. The Kiev-Mohyla Academy, which was founded in 1632, existed only until 1817, after which in 1992 a university with the same name was created. Pass in the continuity of 175 years - this is exactly the same omission. For the American audience it is better to say “Kyiv-Mohyla Academy is the oldest re-incarnation of the 17th Century Academy, the oldest in Eastern Europe”.
2. The problem with the statement “Mogilyanka is the best IT university in Ukraine” is that the range of subjects studied in Mogilyanka is much narrower than at the Kiev Polytechnic University and Kiev National University. Justification by salaries is not impressive. If you use it, then the leader in wages in the states will be for example the little-known Harvey Mudd College. It is much better to rest on particulars, such as that in Mogilyanka, the best in Ukraine courses on Business Computing or on Web Design (in particular, this kind of justification is realistic).
At the end of the UVCA meeting, the start-up judges spoke and expressed their opinions about what they saw. On the one hand, investors expressed their congratulations that Ukrainian startups have greatly improved presentation skills in recent years, and satisfaction that startups are making every effort for development. On the other hand, there were wishes that start-ups would not hurry, better prepare before a quick and intense battle in a very competitive environment, with subsequent business development, sale or IPO. Wishes not to make "me too" decisions, to increase the technical depth. Wishes of better protection from copying their ideas. A wish is better to concentrate (“if you pursue one idea, you will most likely lose, but if you pursue a few, you will surely lose”). I do not want to retell everything, you can see everything on the video.
At the end, the most severe investor made a speech (2 IPO, 15 sales), who said that in no presentation he saw how he could make money. There is no realistic estimate of the size of the market, no estimate of costs. In theory, he could have been answered with a quote from the Soviet Cinderella film “I beg of you, don't be upset. I'm not a magician, I'm still learning. But it seems to me that everything can still end very well. ”It may be objected that for 27 years now we are not Soviet people, but part of the global technological ecosystem, therefore, training could be accelerated. Although over the past four years, the gradient is certainly positive.
Ukraine Venture Capital and Private Equity Association (UVCA) is responsible for bringing startups from Ukraine, which consists of venture capitalist Andrei Kolodyuk (Aventures), Ph.D. Olga Afanasyeva (Ukrainian Academy of Banking), and several investors, not only Ukrainian. For example, a member of UVCA is Alexander Galitsky, most of whose projects (ELVIS, Parallels) are connected with Russia and Zelenograd.
In California, UVCA is assisted by marketer Nikita Safronenko, who, in addition to the social burden of the Ukrainian community, works on Facebook, where he analyzes spam. Here is Nikita with Olga:
')
In general, UVCA and its assistants are a non-profit organization, but at the same time an effective structure. With brought startups, the situation is more complicated:
1. The first speaker was from Kray Technologies, a company that makes drones. Drones fly at a height of 1 meter and spray the field. As the main advantage over competitors stood total cost of ownership. Is this a presentation for venture capitalists? Strange. VC is not impressive words "we are the same as competitors, but cheaper." They want a quality difference that competitors cannot beat lower prices.
The presentation also sounded the words "artificial intelligence" and "precision argiculture", but the speaker did not reveal their meaning. Well, about the "artificial intelligence" could still be guessed from the words that drones are able to fly around obstacles. But the topic of "precision argiculture" was not disclosed at all, but in vain - this could well be a distinct competitive advantage for VC. Usually, “precision argiculture” means the following: on the basis of sensor readings, a field map is drawn up, on which the content of various elements in the soil is marked. For example, in this place there is an excess of phosphorus - not to bring it here (since phosphorus is poorly washed out, a regular excess of phosphorus for several years makes it necessary to replace the entire soil). Then a smart tractor is driving, which puts into each point only what is needed in it. Well, where in the presentation of Kray Technologies sounded the words "communication with sensors"? What kind of precision agriculture in general?
At the end of this case, one of the judges asked the question “you have already shown this presentation in September. How many drones have you already sold in North America? ”It turned out that there were only five. Amid words about a million farmers and a multi-billion dollar business, I experienced cognitive dissonance. Which aggravated when I saw a slide with a dozen potential buyers of the company, including Lockheed Martin. However, I probably misheard, but you can look at the presentation video (it can be found in the UVCA group) and figure it out.
2. The next startup was Kwambio. He was represented not by the founder, but by the investor in this startup, therefore the presentation was stronger than others (the investor understands how the presentation looks from the point of view of other investors). De facto, Kwambio has three different businesses: 1) making ceramic vases and custom cups; 2) designing and selling 3D printers for ceramics; 3) designing a 3D bone printer for medicine, which uses the reaction of precipitation of a compound in reaction with Ca (NO 3 ) 2 .
A ceramic printer costs $ 25K, uses proprietary technology (patent pending to protect against cloning), and requires source material that Kwambio controls. This gives a startup some protection from competition and the possibility of growth. While the startup is growing and receiving medical certification, it is supported by the income of the ceramic factory in Odessa. Well then, let's see.
3. Then came Univrsee, developer of programs for VR cinemas. The idea looks like this: we take a hundred people, we put on them helmets for virtual reality, after which they all work together in this virtual reality. For example, education - Univrsee told about their project with Samsung, which trains sellers using programs from Univrsee.
Univrsee consider STEAM as an example of a business model. Univrsee want to occupy 10% of the market, which they rate as fast-growing - there were figures of 3000 VR cinemas, 8 billion dollars and 45 billion dollars. In order not to be like other companies, Univrsee is trying to vary the way how to take money from a client, for example, by the minute. How it looks from the point of view of VC is incomprehensible to me, but probably for Universee it’s more important to work with major content producers, and not with VC. At the end of the presentation, the blockchain was mentioned.
From communication after the presentations, I realized that Univrsee is an example of a Ukrainian company that is evolving from outsourcing to a product company. At the same time, they are experimenting with AI and communicating with the developer community in the form of hackathon support. Integration with universities and community is one of the strengths of Ukrainian companies.
4. Next was the manufacturer of smart toys Cubomania. I readily believe that if you take an interactive screen, sensors, and write for this program, then all this may appeal to children and even generate some income for the authors. Especially if the developer plays a lot with the children and understands what they need (for example, so that you can attach lego cubes on top). But what have venture capitalists to do with it?
VC-funded startup is a specific business format. VC consider only candidates whose business can bring twenty dollars for each invested. This is called the upside potential. Of course, this does not mean that if VC invests a million dollars in 20 startups, then in three years it will receive 400 million dollars. Most likely one startup will bring him 20 million, twelve will fly into the pipe, the rest will return an average of how much and it was invested. In total, it will turn out 27 million - 40% ROI (return on investment) for three years. On it also live VC.
How can Cubomania generate 20X for VC? To do this, they need to either fill up the whole world with their cubes, or sell Lego, ahead of all other candidates. To do this, it is not enough to win the Vernadsky competition, to receive support from the Ukrainian Ministry of Education, or to catch the fancy of Gromadsky TV viewers - they simply do not have so many children.
From the point of view of a VC, companies like Cubomania are (in the case of an investment) an unambiguous candidate for a so-called zombie startup. “Zombies” in VC jargon are companies that cannot grow or die. Imagine that Kubomania received three million dollars, designed several lines of toys, hired additional employees, paid advertising, and lives the next 50 years happily. Salaries are paid, toys are in stores and they are bought, the Ministry of Health takes foreign delegations to the sponsored kindergarten, “we have no debts,” the founders of Gromadsky TV said happily. Everyone is happy. In addition to VC, in which these three million just hung. VC cannot collect them from Kubomaniya (since it is not money in debt, but ownership of shares), investment bankers (who make IPOs) will not buy these shares either, and Lego also has its own toys.
At the same time, Kubomania may have small private investors who will form S-Corporation and will receive dividends from it. This is a very respectable form of business, but not for VC.
5. After Cubomania, PassivDom appeared in the arena, which prints on a 3D printer at home, along with solar panels, which, according to the presenter, provide the family with electricity even in Alaska and in the north of Canada.
Lord As a Californian homeowner, I regularly receive spam and calls with offers to put solar panels on my roof. I refuse these suggestions because I read that solar panels are economically viable only in southern Arizona, and go to zero in Los Angeles. Even in San Francisco, solar panels are unprofitable, and they suggest that I believe in complete self-sufficiency in electricity from solar panels on the roof in Alaska? Maybe even in the polar night? From the northern lights? Rather, I, as a Soviet man, will believe in the blooming of apple trees on Mars. But first I need (in a presentation) the numbers and the results of independent experiments in peer-reviewed publications.
The presentation also included the words “7D-printing", "-20 ° C outside and + 20 ° C inside", "on the mountains and the oceans", "Eurocomission grant", "Airbnb unit" and (yes, yes! ) “NASA Mars cooperation”.
6. The next company was Senstone. They collected $ 400,000 dollars on a kickstarter for a gadget in the form of a brooch that hangs on your collar and records what you say: self-reminders, insights, freshly written poems that come to us, the representatives of the creative class, anywhere - in Starbucks, in the subway, even in the shower. The company's founder, a lawyer by profession, said that he often reflects on current affairs and takes notes. At some point, he decided that it was better not to write down thoughts, but to dictate to a brooch, so as not to pull the phone out of his pocket.
Then Stas Hirman, one of the judges of the event, got up and asked: “Do you want to say that your device is continuously recording what is happening around? Do you, as a lawyer, know that this violates several Californian laws at once? ”(In California, recording without the consent of nearby people is illegal, Penal Code 632 PC, a fine of up to $ 2,500, or a prison sentence of up to 1 year).
The speaker said that they have a button to turn it on and off. And that they can filter out other people's voices.
Stas Hirman asked the second question - how do they filter noise, for example, from the shower (in addition to the voices of other people). It also interested me, and I asked on what hardware. At MIPS, we are also involved in processor extensions for implementing DSP sound processing algorithms, and I know that smart filters are not a trivial task. The speaker said that they have a partnership with some kind of Dutch company that writes programs for such filtering, but he doesn’t know if a specialized hardware is used there.
7. And finally, the founder of a Lviv-British startup Blocks, who makes smart watches with interchangeable blocks with sensors, an open platform and software for data analytis, came to the scene. The idea is quite working, and I agree with the presenter that the main market for such devices is plants, hospitals and mines, with industrial IoT. The only point is that in the presentation they showed only WiFi and BlueTooth on the slides, while in the industrial environment other protocols are used more often - LoRa, 6LoWPAN. Then another investor and judge of the event, Vitaly Golomb told me that I just missed when the founder said that they can easily make a module with LoRa in two or three months. Well and good, but about it it is necessary to tell on slides.
In addition to startups, a representative of the Kiev-Mohyla Academy, who agitates for donations to create the Digital University Project in Mogilyanka, spoke. In every way I wish success to the Mugilya in all their endeavors, but in their self-presentation to the Californian audience there are two problems that surely periodically go sideways for them.
First, for the third time I have already met Mogilyants, who say “we are 400 years old, we are the oldest university in Eastern Europe”. Secondly, I met the speaker for the second time, who expressed the thesis “Mogilyanka is the best IT university in Ukraine, based on the average wages of graduates immediately after graduation”.
In the CIS, this can be said, since it is customary to expect any exaggerations and fantasies there from speakers. But in the states and in one and in the other case, the speaker can be accused of manipulation by omission, which casts a shadow not only on Mogilyanka, but on all universities of the CIS. Especially if the Americans hear enough about the “Ukrainian Harvard” and start asking other Ukrainian professors about it. Or Russian professors, some of whom never heard of Mogilyanka. The fact is that:
1. The Kiev-Mohyla Academy, which was founded in 1632, existed only until 1817, after which in 1992 a university with the same name was created. Pass in the continuity of 175 years - this is exactly the same omission. For the American audience it is better to say “Kyiv-Mohyla Academy is the oldest re-incarnation of the 17th Century Academy, the oldest in Eastern Europe”.
2. The problem with the statement “Mogilyanka is the best IT university in Ukraine” is that the range of subjects studied in Mogilyanka is much narrower than at the Kiev Polytechnic University and Kiev National University. Justification by salaries is not impressive. If you use it, then the leader in wages in the states will be for example the little-known Harvey Mudd College. It is much better to rest on particulars, such as that in Mogilyanka, the best in Ukraine courses on Business Computing or on Web Design (in particular, this kind of justification is realistic).
At the end of the UVCA meeting, the start-up judges spoke and expressed their opinions about what they saw. On the one hand, investors expressed their congratulations that Ukrainian startups have greatly improved presentation skills in recent years, and satisfaction that startups are making every effort for development. On the other hand, there were wishes that start-ups would not hurry, better prepare before a quick and intense battle in a very competitive environment, with subsequent business development, sale or IPO. Wishes not to make "me too" decisions, to increase the technical depth. Wishes of better protection from copying their ideas. A wish is better to concentrate (“if you pursue one idea, you will most likely lose, but if you pursue a few, you will surely lose”). I do not want to retell everything, you can see everything on the video.
At the end, the most severe investor made a speech (2 IPO, 15 sales), who said that in no presentation he saw how he could make money. There is no realistic estimate of the size of the market, no estimate of costs. In theory, he could have been answered with a quote from the Soviet Cinderella film “I beg of you, don't be upset. I'm not a magician, I'm still learning. But it seems to me that everything can still end very well. ”It may be objected that for 27 years now we are not Soviet people, but part of the global technological ecosystem, therefore, training could be accelerated. Although over the past four years, the gradient is certainly positive.
Source: https://habr.com/ru/post/347004/
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