“Reorient for one and a half years from the local market to the world market. We proved to ourselves that if you wish, the impossible is possible!”, – Roman Katerynchyk, CEO at Artjoker

IT Cluster IT Cluster

Roman Katerynchyk, CEO at Artjoker, tells about his company’s 11-year pass from a student friends team to the well-structured international business. He shares his experience in startup building, compares Ukrainian and Western business cultures, and forecasts future for in-house product projects.

Roman, tell us about Artjoker, please. And, in fact, how did you start up?

It all started from scratch – so to speak. We didn’t understand the core of business processes, knew nothing about customer service, sales, and product. I was 19 and studied at the National Aerospace University. Me and my friend began exerting ourselves as developers while building small websites.

Since then our company has traveled a great distance. We performed a few hundred of projects at different levels and turned into a stable company with excellent management, high-quality product, marketing and clear focus.

We were working just on the Ukrainian and CIS markets for a long time, but during the last few years, we have been rapidly shifting the market, changing our product and ourselves.

At Artjoker we build websites, Internet stores, mobile apps, and custom programs. Our unique feature is that we have an Internet marketing department, so while having come for development, a client stays with our team to promote the product. In the 11 years, we created our unique solution development framework for customers. It consists of methodology, tools, and technologies that we use. All the stuff we visualized in a clear pattern and called it Artjoker Method.

AJMethod_1920 “Reorient for one and a half years from the local market to the world market. We proved to ourselves that if you wish, the impossible is possible!”, - Roman Katerynchyk, CEO at Artjoker

Nevertheless, it was born several startup spinoffs inside the company during this period. Their teams separated from Artjoker and turned into full-bodied independent products. Creating a new product gives us new energy. Product development differs from service business with its processes, approach, team. Regarding company development issues it’s fascinating and helpful concerning our clients’ needs understanding.

What line of business do you see as the most perspective for Artjoker?

 

Viewing globally, now we are aimed at Western startup market. It’s startups who we can bring the greatest value because we have both development, and marketing expertise. That is essential for startups.

I advocate that technology is not so important for vendors as the understanding of client’s business and action awareness. One may use any cutting-edge technology and make a sucky mess. But you can work at the tried-and-true PHP. If programmer understands the purpose of deeds, they bring great value.

Today our primary product is soft building. But more and more we try to pass the way of full-scale startup development working as a startup team. In this case our client  may undertake management and strategy planning tasks, and we are totally responsible for the technical implementation.

Why did you decide to focus on startups?

The answer is simple – Artjoker gives the most value for these customers. We can do the market research, figure out monetization patterns. That is companies’ must have at the start. Our marketing department may consult how to enter the market, determine if it had some free space, prompt what niche to move at. We research web and mobile products – that is needed everywhere. Startups are the products that get maximum benefit from us. Although, it doesn’t mean that we haven’t got any projects of another type.

Since late last year, we’ve launched a Market Research service for startups. It’s a complex investigation, which our specialists conduct for about 1,5 months. And it allows to build an individual business model for the client, to investigate the market, to define the monetization pattern in advance, to estimate the peers. Indeed, we should undeceive a man in various aspects. If we didn’t do that, a project wouldn’t get even launched. The failure may be caused by lack of resources or an idea man could be out of understanding how to gether a team and make it “play”.

How do you appreciate your working experience on the Ukrainian market?

We’ve got another particular feature. Initially, for a long time (about 8 years or so) we worked solely on the Ukrainian market. I think it’s a huge mistake of us that we made in due time. But we felt comfortable here, we grew stronger, performed the project for local businesses and national brands. It’s the very hallmark distinguishing us from the vast majority of outsourcers. Some our peers, when meeting us in Cluster or anywhere else, whenever ask: “are you still alive, “do you work with Ukrainian customers.” I’m able to state: we can do a proper job for Ukrainian clients, and do our job well. There are lots of excellent Ukrainian companies, and it’s possible to earn on IT in house.

But after the crisis, we realized that shift to external market is our matter of survival. To date, I as a leader and an owner spend 90% of my time on the outside business. We do our best to hang on to the West – promote ourselves via freelancing platforms, visit road-shows and conferences. But meanwhile, our stack still contains about 50% of Ukrainian customers. We have built a well-known brand in Ukraine and get lots of clients through the grapevine. I don’t know how long it will be so, and whether we ever leave the in-house market at all

What is the difference between Western and Ukrainian customers’ needs, to your mind? Have domestic customers got any specific features?

The plus point of Ukrainian clients is that they are close to us, and we can easy find common ground. Ukrainian market is almost empty. Wherever you look around, there is mostly no competition. I’m confident, that a smart entrepreneur with the workable business model is able to shoot ahead. You can enter our market at a relatively low price. Getting business off the ground here is out of proportion to doing the same in the West. In Ukraine, you can launch a project for 20-50 thousands of dollars, and it would be a significant player. In the West it’s impossible. Plus, great many our technical specialists can work in the Ukrainian market. There are still lots of programmers with weak English skills.

Certainly, the Western market attracts with its raits. You can deal much more expensive. They need more gravitas products with longer planning terms. While in Ukraine an average product is scheduled for about three months, then in the West it is usually minimum for a year or a year and a half.

Western business climate differs from ours in a great way. They are more friendly that not a few people mention. These guys somehow look more positive thinking and take your mistakes easier. Ukrainians treat more strictly in that regard. We also appreciate Western projects due to their high technology demands. Here we see almost everyone who mastered a new technology trying to sell the skills to the West. Others work here, I mean those who get onto WordPress, OpenCart and other more standard stuff, which you can use to make wholesale and low-cost products.

18193227_1481880871857086_2510298459624841867_o “Reorient for one and a half years from the local market to the world market. We proved to ourselves that if you wish, the impossible is possible!”, - Roman Katerynchyk, CEO at Artjoker

It’s nice to do business both here, and there. To date, Ukrainian market may be regarded as a take-off site for young specialists – good, great, talented.

The Western market gives very challenging experience. And we make massive efforts to move there. For this purpose, we completely changed our product and its delivery model. What we sell there and here is 90% different products. There we focus on the clients with the technical background – e.g. CTO who needs help in resources. Here our client is an entrepreneur or a marketing director who is completely aware of business, but not of technologies, and wants a product “on a turn-key basis”.

Is there something that you hate about working with startups?

I enjoy working with professionals with arranged business plans, long term vision and planning horizont. Now we’ve got a project where our customer came to onboarding with 40 slides and laid out the whole project’s DNA under the items. It’s cool, but it happens one per 100 cases.

So dealing with startups you do have some disadvantages, but they’ve got lots of creative, romantic aspects. The startup allows you to dig deep, to exercise your team, to work outside the box. Outsourcers may stay at support indefinitely, ensure jobs, pay taxes, etc. Startup means ambiguity, and far from everyone needs the thing – neither risks, nor stresses, and nerves.

I think startups fail owing to low-quality execution. Startups need managers, who can properly run finances, accurately draft a team, able to come out ok when others break up. At startup you get challenged every day, you have to learn something new, search for people, etc.

I believe in a team with qualified managers, in doers, rather than in dreamers. To any dreamer, if he was invested, in the West they try to find a man of action who would shape up the business. The hardest thing in a startup is to operationalize its romantic component (the idea), to digitalize and sort it out. That is what we actually try to do to our clients.

What is the difference between service companies and startups, in your opinion?

Outsourcing and product businesses are different. Some outsourcers try to pretend that they make their own products, which isn’t really true. As long as they sell developers’ working hours, they are the service business. Product and service companies have got different philosophy. I like outsourcers and product companies are compared with sprinters and stayers. Outsourcers are more like sprinters – took the project, hit the distance, delivered the project. The client is satisfied, you are the winner. And product companies are stayers. They have to run despite lack of power, self-confidence, and faith in future. They should finish squeezing out the last centimeter.

I do believe that every outsourcing business dreams to become a product company. outsourcing is at the end of the “food chain”. And everyone wants to be at the top.

Why do you work with startups?

Thus far we deal with startups as technical contractors. Roughly speaking, I mean a house building process, where some contractor is invited to pour concrete for foundation, to put the bricks according to the project plan… And hereafter it starts the most exciting stage. That’s why we take responsibility for doing building proficiently and great. We are also competent at marketing consulting. And then the startup moves independently.

Today we’ve got consultants from Silicon Valley, and they are able to help in investment attracting. Investors also have their own obstacles. It’s always the case: one doesn’t know where to get money, and another seeks where to invest. So we try to solve the problems. It’s much about plans for future, but we’ll definitely perform them.

Now we have a week startup environment in Ukraine, especially it concerns Kharkiv. But the circumstances may change. What do in-house startups need to succeed? In what business domains one should start up?

Yes, the environment has been just developing. I’d like to say, that it makes sense – outsourcing predominates due to risks disproportionate. While building a startup you’ve got entire uncertainty in drafting your team, market, marketing, etc. That’s why Kharkiv ecosystem demands more specialized events, angel investments and consultants with world expertize.

Last month I traveled to the USA and was surprised that there, like, every housewife builds a startup. It’s encouraged and appreciated. Earlier they used to talk about soap operas; now they are about ideas and potential. Zuckerberg encourages in his speeches to create projects, to take risks and to make mistakes. A mindset of the kind demands time and success stories, and all the things will be fine.

What future do you see for Ukrainian startups, in general?

I’m sure that for now, Ukraine has concentrated superpotential. Over the years of outsourcing, we shaped the unique intellectual resources. We have engineers who can solve world class tasks. Our entrepreneurs, investors, and startup evangelists should more and more set the vector towards product building. They ought to explore the yearlong established potential for the sake of the country’s economy.

This background especially well displays success stories such as Looksery, Petcube, Grammarly, and others. I’m confident, within the next 3-5 years we’ll see a new range of effective startups built by Ukrainian engineers.

I enjoy each internationally successful Ukrainian startup as my own victory. It’s our very mutual brand of Ukraine as the country where people create, invent, act. I want us to enter the TOP 10 countries according to quantity and quality of new world-scale products. We’ve got everything to do that.

Comments