Entrepreneurial experience
The story of five startups
that I founded... but unfortunately they did not become the next Facebook. LOL
"Most of the times—the artists you hear you keep on thinking that artist is new, but that artist has prolly been at it for years" - NF
Let me start off by saying that I am very proud of the fact that I am a serial entrepreneur... because it defines what I consider my style. I focus on 'getting shit done' and can wear many different hats to do that. I contrast that with some of the corporate managers I'd seen early on in my career... who in my view would make horrible entrepreneurs and probably would never even try.
So I actually started my first company in 2000 during the first Dot Com bubble soon after beginning my first job. It was a time when the Internet was blowing up and there was tremendous excitement.
At the time and me and a couple of friends in Boston decided we'd try to see if we could partake and started the concept for EZtenant.com, which was meant to be an 'intranet for apartment communities'. I think we'd built an extremely basic static website and were shopping the business plan around to the first wave of accelerators that were popping up at the time.
Several of them were interested when Boom! The bottom fell out of the market and literally everyone we were talking to just seemed to vanish into thin air.
And thus went EZtenant... as it didn't seem like any funding was possible in the new 'dot com bust' climate and bootstrapping felt like the 'poor man's approach' after all that money that was flowing around just the year before LOL.
And for the next few years I focused on my strategy consulting career which had moved me to Japan... and essentially put the idea of entrepreneurship on the shelf for the time being.
The companies:
Skypetutoring
2006 - 2007
An online marketplace of language tutors from Ukraine
The founding of Skypetutoring.com
Skypetutoring was my first startup that I consider ever went fully operational and I actually ran it for over a year. The idea came from solving my own problem of 'how to most optimally learn the Russian language?" when I moved from London to Moscow in late 2006.
And i'd been waiting in Odessa, Ukraine for my Russian work visa to come through to start my consulting job (in Moscow)... and had taking Russian language classes at a language school. But after the first few weeks I quickly realized... "hey wait a minute.. these teachers are actually happy to come to my apartment and teach me in-person 1-1 for $7/hr and it is far more effective.
So I started doing that and continued using these tutors even when I made the move to Moscow by tranferring our sessions to Skype.
Traction on a model that had crazy good economics!
Now in 2006, most language lessons in America were done either in offline schools, with tutors that would charge $40+ per hour, or with Rosetta Stone (a rudimentary software sold in malls). And i thought to myself... Ok why not offer Americans who are either learning a foreign language or English (as a second language) the option to learn for just $10 per hour using one of my tutors (because actually my Ukrainian tutors were English teachers by profession.
And so I threw together a quick site that someone from Pakistan built for me and started dabbling with some Adword spend. I remember that there was almost no competition for high converting keywords in this space and so I was literally spending like $0.05 a click and paying less than $0.50 per customer.
Now combine that with the fact that we had high repeat purchase (~75% of customers continued and took about 1 session per week, a healthy margin (of $3-5 margin per session)... and you start to see how the economics of this business were mindnumbingly awesome! Probably up there with the narcotics trade!
Only problem was it was incredibly manual at the time...
As converting a customer meant them emailing me, me responding to questions for a few days...and then finally they'd start with their first session. So as I was working 70+ hour weeks in a grueling consulting job... it was burning me out. And after I'd gotten to about 10 tutors and 30-40 clients...
I just put things on autopilot and stopped my marketing. And eventually gave the clients to my tutors and shut down the site. And note that i'd stayed in touch with some of those tutors and remember hearing that even a few years later they were still working with those same students.
In my view the story of Skypetutoring played a role in one of the key pivots of Preply.com
Now... one thing I am proud of about this story is that I also happened to tell this story to a young team in Ukraine called Findguru in 2012-3 when I was part of Eastlabs. They were a local services marketplace that were struggling and ended up pivoting to a tutoring marketplace and renaming to Preply.com.
And even when in the summer of 2013 (when we were both in Eastlabs) they made the pivot to Skype sessions (as you can see in their August 2013 monthly newsletter on the right) there were very few players on the market promoting language tutoring online (by Skype) and to my recollection, absolutely nobody focusing on the arbitrage element of it (ie. using a teacher in a low cost country to tutor students in more developed countries like the US).
So it was no surprise to me when Preply started to figure out the same things i had.. ie. there is a massive market in online tutoring via global arbitrage! And the economics can be quite attractive, thus allowing you to scale your paid marketing spend quickly.
Note that Preply today is a $200m+ valued company and kicking ass. And I am proud of them.
uGift
2010 - 2014
A digital gift card service in Ukraine
I started uGift so my girlfriend would have a job.
The story of Ugift begins probably sometime in late 2010. I was working for Visa Inc. and had been moved by them from Moscow to Kiev to head issuing products for the CIS SEE 15-country region. And my girlfriend from Moscow joined me in the move but didn't have a job. So as I often do, I thought... "hmmm let me create one for her!" lol.
So I came up with the idea of uGift based on my knowledge of the growth of prepaid cards that were blowing up in Visa Inc. You could see these prepaid gift cards for $50, 100, etc all over the place in the US... convenience stores, pharmacies, etc.
And I knew that there were some legal restrictions in the Ukraine that prevented them from being launched there... so I thought to myself... "Ok well perhaps we can simulate it? And thereby tap into the same demand/trend."
So uGift was mean to be like a universal gift card that could be used in all major offline and online retail stores. And my girlfriend and I started it. But she dropped out a few months later because we broke up and so for a few months uGift was in a kind of limbo as I was figuring out what to do with it. And I had moved to become CEO of Groupon Ukraine where I was preoccupied keeping up with a business that was scaling at lightspeed.
In 2011 I handed the CEO keys to Andrey
But sometime in late 2011 I figured out a solution. I had a talented entrepreneur in Groupon that was an ok sales person but I could tell his talents were being wasted as I could see the 'hustler' in him. His name was Andrey Zhivolovich. And when I asked him if he was interested in running his own business that I would bankroll and coach him on, he was all for it
Winning #1 eCommerce Startup in Ukraine in 2013
Over the next couple of years Ugift developed nicely into one of the leading online gifting solutions in Ukraine. And had taken part in the 'Happy Farm Accelerator', had won the #1 eCommerce startup in Ukraine by The Next Web in 2013 and also got a seed round of funding from Semyon Dukach, later founder of One Way Fentures. For awhile things looked really good.
While the company achieved some of its goals and was even close to break-even, in the end it was decided to close shop (after nearly three years) in mid 2014. It was a good run... but it was clear that the model was not gonna blow up anytime soon. The legacy of this story is two things in my view...
1. My gut on Andrey was right and he did an amazing job in his next venture, Precoro, a well -recognized b2b procurement platform
2. uGift was reincarnated by one of the team members as Giftmall.com.ua, which is still alive today.
Diarize
2013 - 2014
An app to capture the everyday moments
Diarize was a child of the rise of Instagram in 2012
It was late 2012 or so... and Instagram was all the rage after having been acquired for $1bn or so. And it was clear that the space was still far from tapped... and lots of startups were popping up to try and capitalize on this new trend.
This is the backdrop upon which the idea for Diarize was formed in late 2012. At first it started out as more of a philosophical question that I wanted to answer for myself...
"What if i took photos of my everyday life at regular intervals? Would this be of any value?" And so I did exactly this without building anything.
It started more like a social experiment
For a couple of weeks I set my timer to every twenty minutes and just took photos of the most interesting thing that was around me. Then I dumped it all into a Dropbox and looked at it... and was like "Wow! Some of this shit is actually useful!" Why?
Because it was photos that I would not have taken. They were photos of my everyday life and the people in it. And to that point (and you gotta remember that it was 2012) the only photos I ever really took and kept were of special events like birthdays and vacations.
I didn't have photos of the people i saw everyday and the everyday moments. And so the hypothesis was... if you could discipline people into taking these photos they would find it of immense value later on (ie. when they reflect on their life).
We threw together a team of 4 and went for it
And so we put together a team that included me, Hrish Lotlikar (founder of SuperWorld app), Tiernan Quinn (recently deceased) and Steve Wu (now a project manager in Hong Kong). I raised some angel funds from a guy I knew, we built a small team, and we started putting our hypothesis to the test. Here is a video (link) of photos that were taken from the app.
Unfortunately one of the core hypotheses turned out to not true. In that it turned out next to impossible to get people into the habit of taking the photos as I had. And therefore the goal of them seeing the value 'later on' was never achieved. Also the LTV-CAC was simply not even close to what we needed it to be. But we built and iterated fast, and also failed fast. So all in all I think it was a good experience for all of us.
Eastlabs
2013 - 2014
The leading Ukrainian startup accelerator
I joined Eastlabs as a partner in the heyday of Accelerators
Founded in 2012, Eastlabs was one of the first startup accelerators in Ukraine. I joined about a year after its founding in 2013 and was one of four partners. The others being Eveline Buchatskiy (who later went on to Techstars and then airSlate), Olga Bielkova (who became a government official in Ukraine), and Hrish Lotlikar (SuperWorld app). It was a time when accelerators were popping up all over the world and were all the rage.
Altogether Eastlabs invested in at least 15 companies, and there are at least four (Preply.com, Promorepublic.com, Kabanchik.com.ua, and Poptop.co.uk) that are still alive today. And given that the combined valuation of these four companies is probably in the vicinity of $200m... I'd say that it was a pretty good return on the investment of $15k into each of the 15 companies (ie. $200k turned into $200m of valuation... 1000x).
For awhile I tried to create a mobile gaming accelerator
For me, it was a time of exploration. I tried to create a mobile gaming 'accelerator' given that conceptually it seemed like a good idea given the level of gaming talent in Ukraine. But when that proved difficult, in particular in finding high potential teams at the stage that were interested in our level of funding, i instead decided to focus on becoming a 'growth hacker'. It was the early days of growth hacking and before any companies had a 'growth' unit, which only became sexy some years after.
My 'growth hacker' days
So I started reading the popular growth hackers like Sean Ellis and started my own blog, which at the time was called www.kenontek.com. And I would do my best to mentor the teams that were in the incubation program on growth... utilizing experiences from my startups, uGift (which was still running) and Diarize (recently deceased), as well as my experience having run Groupon in Ukraine the past couple years prior. It was fun... and I even did some regional workshops on the topic in various cities around Ukraine to promote Eastlabs.
The 'first' war in Ukraine brings an abrupt end
In the end the war in Ukraine that began at the end of 2013 brought an end to funding and the eventual 'long freeze' of Eastlabs... But I think in hindsight this program would be to the history of startups in Ukraine what Tupac was to the history of rap. It was the vehicle that brought excitement, international attention, and just kinda put Ukraine on the startup global map at the time.
But I anyway had a new path... I was moving to Vietnam and moving to my new life in product management at Rocket Internet's Amazon-play for SE Asia, Lazada.
Goodsberg
2019-20
A crowdfunding investment vehicle for e-Commerce products
Goodsberg was born out of the meteoric rise in Russian e-marketplaces in 2018
In late 2018 I was helping Ozon, a popular Russian marketplace, on contract and realized that the ecommerce marketplace model was blasting off in Russia. Mainly because it hadn't really existed prior to 2018... given that the main players were all retail models (Wildberries, Ozon). But now they'd launched their own marketplaces and the race was on. So they were throwing traffic at the marketplace listings like crazy and everything that was put up there seemed to move easily.
I had a friend, Andrey, that was one of these early marketplace sellers and he'd tell me the stories of buying something from China on Alibaba.com, throwing it up on Ozon, Wildberries and a couple other sites... and having it all move within a few weeks without even changing the content from what he got from the Chinese supplier. And all at a healthy margin!
Fast sales, fast profit... seems too good to be true
So I asked him if I could invest in some of the new products he was sourcing from China so i could check this for myself... And sure enough he was right! We made like a 15% margin on a few thousand dollars of inventory we'd purchased within about 40 days with almost no effort.
This was crazy! I mean this type of market hadn't existed on Amazon in the US since at least 2015 or so... I knew because i got burned a bit dabbling with Amazon FBA selling in 2017... and it had gotten super competitive over there.
So I had the idea of scaling this to some more friends to see if we could buy even more products. And we got a few more friends in, did some calculations in a spreadsheet, and were selling the stuff a few weeks later. And boom it worked again!
At this point.. I was like... "Hey this could be a platform! Let's scale the shit out of this!" I mean we were essentially taking advantage of timing... in that it was the 'rise of ecommerce marketplaces in Russia' and it was gonna grow like crazy for awhile.
So me and a few friends started meeting weekly and threw together a crowdfunding platform that we built ourselves (see the screenshot on the left). It worked a bit like Kickstarter but instead of investing in some brand new idea, you were essentially investing in concrete products that we were about to invest in.
And for your investment you got a % of the profit (eg. 10% of investment into the inventory equated to 10% of profits). And not just of that initial round of inventory but all follow-on purchases of that product.
You could fail on most products and still make a crazy profit... hypothetically
The numbers looked crazy good in theory. Why? Because if you could make a 10% profit on $1000 investment in inventory within 2 months. Than this was essentially a 60%+ profit over the course of the year. Of course not every product was gonna be successful but even if only 20% were successful... we figured the economics would still rock.
Why? Because for the 20% that were successful you could probably continue to re-run that deal for a couple years... all the while you're listing on the marketplaces would only get stronger and stronger.
And the kicker to this is that you could create some very powerful white label brands in the process (ie. we were running all these products under a couple of brands that Andrey had come up with). In the next few months we ran over 60+ deals, which you can find the details in this spreadsheet on.
We were profitable and things looked beautiful... I spoke to a few friends about an angel investment and two of them wanted to throw about $200k in. But this is where things broke down... and I learned an important lesson.
Three problems killed us
First.. we were all part-time founders who were involved in other things. I had several interesting, high-paid job offers in SE Asia...and wasn't really committed to living in Russia. So it wasn't gonna be me.. and the only person that was willing to jump all-in was Andrey, who was already running his own successful ecommerce business.
The second problem was that were essentially a crowdfunding overlay on top of Andrey's ecommerce business. In that it was his business that had all the headcount and did the actual selection of products, import, listing on Russian marketplaces, etc. And so it was very difficult to separate the two as the crowdfunding part was completely dependent.
Thirdly was the legality of what we were doing... I mean we were essentially selling a % share of profits in products and their future earnings... but there wasn't a proper legal vehicle we could use for this. Later a crypto friend said that we could have used a 'DAO' for this exact purpose but this was a couple years too late.
And so given these issues we decided to sell our inventory and essentially give the business to Andrey who continued to run it for awhile before focusing on his core business when COVID came and his core ecom business rocketed.
Therapada
2021 - Current
A marketplace for paid conversations with licensed therapists from around the world
I started seeing a therapist with no plan of creating a business
So the founding of Therapada came in late 2021 and as with pretty much all the previous startups the idea came out of solving my own problem. You see I'd seen a therapist in Russia back in 2019 after going through some pretty hard health issues... and while I was skeptical at first i'd ended up loving it.
And since I paid out of pocket it really helped that it was so affordable (ie. $35 for a one hour session with a psychologist with 10 yrs of experience). Then in late 2019 when I moved to Bangkok I gave it up for the next couple of years as I didn't really feel I needed it.
When I tried the US models I hated them
But in the fall of 2021 I was thinking to myself... "hmmm I really enjoyed opening up to a therapist... why don't I try again?" And so I looked in the US for sites since I didn't really want to use a Russian one again (in part because my Russian had gotten quite rusty from lack of use).
I tried a couple like Betterhelp and Cerebral (which had a $5bn+ valuation), but I really didn't like their models. In that I could not select the therapist, rather they selected for me. Plus I had to buy a subscription and the sessions costed $80+.
I began using Indian therapists
So out of curiosity I checked some Indian therapist sites and they allowed me to choose my own therapist and pay just $25-30 per session. So I tried a few of them and tried about 6-7 different therapists in the ensuing weeks, before settling on one that I liked the most.
She was awesome. Great english, great listener, and I didn't feel any kind of cultural divide from the fact that she was Indian (perhaps in part due to the fact that I was working with Indian product managers and developers almost all the time on my job).
I continued doing weekly sessions with her for the next 6 weeks or so and really enjoyed them. So much so that I said to myself... "hmm maybe it's time to start another business!" LOL
I applied my 'Open Source Startup' model
By this I mean that I didn't have any co-founders so instead I did what I had done to found Goodsberg in 2019. I asked a couple of friends to give it a try and that we'd decide on equity later. The first couple folks that got involved decided it wasn't for them, but I decided to formalize my iteration on finding co-founders a bit.
I joined starthawk.io (a co-founder marketplace) and started writing to folks. Then if they were interested I invited them to join our weekly standups. All tasks were clearly documented and tracked in Clickup, my tool of choice at that point. And we applied points to all tasks. Once the task was complete the person that did it received the points. And thus the shareholding structure of the company was simply your % of total points.
We threw together a site and just started going for it
To be continued... See www.therapada.com