The devastation in Ukraine has contrasted the ridiculousness of the startup industry’s obsession with raising capital and marketing hype.
The military metaphors ingrained into our overall corporate strategies become laughable at a time like this. This was best explained by Harvard Business School senior lecturer Frank V. Cespedes in the Harvard Business Review in 2014, when the US still had six years in Iraq and Afghanistan:
“Wait for the element of surprise” will be double the R&D budget; “take the right flank” is increasing production capacity; “providing air cover” is globalizing; and “charging!” is a motivational sales meeting.
It’s untenable, it’s foolish. Building a successful business isn’t about money or hype, and it certainly isn’t about “going into battle.”
In the interconnected world of permanent crisis conditions, building startups is about methodically laying the foundations of a company that, when put under significant stress, can withstand it.
I was born in the Russian city of Rostov-on-Don, about 70 km from the Ukrainian border.
After studying applied mathematics and computer science at the university of my hometown and good luck on my path, I managed to move to Australia in 2006 with my wife. I was 29.
I am Australian and I strongly condemn the so-called special operation of the Russian Federation, a full-scale invasion of Ukraine.
In 2006, you needed an IELTS English Language Test Score of 5.0 to get the Independent Skilled Migration Visa we received. I scored a 7.5. In retrospect it was not enough. It’s been a steep learning curve, it never ends.
Back in Russia and Ukraine there was, well, everything. Family, friends, business contacts.
My wife and I didn’t know anyone when we moved to Australia, and it has been the best decision of our lives.
When people ask me why we moved from our homeland, we say, “You have to live there for 25 years to understand”. Now I don’t have to say anything more.
Today I am devastated as Russia’s political elites are taking the lives of innocent people in Ukraine because of their domestic political problems.
It goes beyond words.
Supporting start-ups in Ukraine
The experience of my family, friends and long-term business relationships in Ukraine is a real lesson for our industry when it comes to building something that can survive.
A startup I work with is called ADAM Bioprinting from Ukraine.
They talk to Australia’s Therapeutic Goods Administration as the first 3D-printed jawbone is tested in Melbourne. ADAM’s manufacturing and R&D is Odessa, Putin’s next target.
We also partner with hyper-casual game development and publishing house Pam Pam Studio,
We invest in and work closely with them. Pam Pam’s base is in Chernihiv, a city that predates Moscow. Pam Pam works from a bomb shelter to help millions of gamers around the world.
We’re doing everything we can to try and get our people out of harm’s way so they can continue building their lives as the madness continues.
What has been amazing is the informal support networks that have been mobilized to get people out of harm’s way and protect what is valuable to them.
These are the same informal networks that follow a company’s journey from birth to success. I’m sure some reading this right now have WhatsApp groups and Telegram channels that track their company’s entire journey with its inner sanctuary. We have those groups too, they are precious.
The Start-War Playbook
What I can tell you about the startups we are trying to help is that a clear script has been created.
Like any crisis, this situation calls for a calm-headed business risk assessment. This time, however, you need to delve into the most fundamental aspects of your business.
This crisis is challenging the very fundamental assumptions of the security of people, relationships, operations, IP and cash flow management.
Starting with the top priority of people’s safety, you need to know where every member of your team is, assess their safety, but don’t stop there – give them help that matters.
In general, eastern Ukraine is dangerous and you need to get out.
You need details on how to do that and where to go. You must take into account individual situations, family members, their state of health, location and circumstances.
In Ukraine, for example, almost all men aged 18-60 are conscripted and are not allowed to leave the territory.
So there needs to be a discussion about who is left behind and what levels of support they need. It’s a logistical nightmare. You have to take care of the people and their families first.
Then you have to focus on the business again. Whether you want to move business to Western Ukraine or stay where it is. Some areas are relatively safer. Find a way to secure key components in your business. Speaking of STEM companies, we are talking about IP, technical infrastructure and assets, source codes, hardware, software, their continuous interconnectivity and security like you could never have imagined.
Consider where your money is stored, at which bank, view and assess each cash flow with the partners and suppliers.
It is a given that some of that will be affected by sanctions or resulting business decisions. Think about who in your company has approval or exclusive privilege access to the critical elements of your business and may be a single point of failure.
The probability of failure has increased dramatically in the past two weeks. You have to be practical about mitigations, but sensitive to individual concerns for the sake of the wider community.
It’s easier said than done, especially under extraordinary pressure and threat to your life. Therefore, any kind of support from key decision-makers and founders is crucial to the success of crisis management.
All of this reflects the kind of smart decisions startup founders must make every day to maintain the health and wellbeing of their employees, while running their businesses efficiently.
It’s inspiring, it can be done without a capital raise or marketing, but it will also go a long way toward helping your next capital raise.
- Den Burykin is a management consultant and STEM investor living in Sydney with his wife and three children.
- If you have friends or family in Ukraine who need help, please contact them at db[at]fastlane-it.com