It’s been a little over a year since I officially emigrated from Amsterdam to Kyiv, Ukraine, to set up my recruitment outsourcing company, MatcHR. With no previous experience in Ukraine, let alone setting up a business in Ukraine, people have often asked, how did you start? Now a year later, it feels like a good moment to share my experience, and I hope it encourages people to take a leap of faith and see the vast opportunities this wonderful world has to offer us…
So, where to start… It all comes down to an idea you are passionate about and think can add value to whatever customer you want to serve.
- Bring a technology or service that has proven itself successful in one country and roll this out in another country (e.g., Rocket Internet)
- Leverage an existing cost structure to out-compete or leverage an existing cost structure (e.g., MatcHR)
- Set up a new business entirely (e.g., Elon Musk with PayPal)
Whatever it is, make sure you are passionate about it and that it is something you see yourself doing for at least the next few years. Do not underestimate this :).
Set the right criteria
Whenever you look for a new country to set up your business, open up a new office or roll out a service/technology, make sure you know your evaluation criteria for each location. With MatcHR, we provide recruitment outsourcing services on a subscription-based model. We hire and train sourcers and recruiters in country X, and they work as virtual recruitment teams for clients worldwide for a fixed monthly fee.
Our KPIs to evaluate whether a country was suitable for us came down to the following six KPIs.
- What is the general level of English?
- How hard is it to set up a business as a foreigner?
- How competitive is the market for the candidates we are looking for?
- Are we able to attract the right people?
- What does the cost structure look like? (wages/office/legal etc.)
- Is there a professional service industry?
Would you like to live and work for a longer period in this city/country?
This sounds easier than it is. Only when we noticed that we kept having discussions of “this doesn’t feel like the right location…” or “this sounds amazing I would love to set up our business there I heard it is a great city to live…” we decided to sit down and come up with these criteria to properly evaluate each location.
Do your research (duh…)
Once you have defined your criteria, it is time to get to work. This is an exciting but very (very) important time (did I say very…?).
Based on our criteria and talking to several industry experts, we quickly came down to two serious countries where we saw an opportunity to set up our company: Romania and Ukraine.
My business partner Maarten and I had never been to these countries. For Ukraine and Romania, we knew only one person but quickly developed a very effective that quickly moved us forward…
We Googled a picture that looked like it belonged to Kyiv or Bucharest, posted it on LinkedIn and Facebook, and simply asked for anyone with contacts in both Romania and Ukraine to help us out.
We received around 15–20 tags for each post with names we could contact. You will be amazed by how many unexpected people will help you explore such an entrepreneurial venture. We talked from bicycle shop owners to CEOs of big corporates to cousins off long forgotten friends.
At the end of each conversation, we always asked, “Do you know anyone else we could talk to that might be relevant for us?” which created a snowball effect. Within a month after our posts, we talked to over 100 people from each country.
Test your assumptions
Romania and Ukraine looked like promising countries, and we slightly preferred Ukraine, so we decided to visit both countries. We made sure that our agendas were completely booked to optimize our visits. I reached out over LinkedIn, Facebook, and Skype to schedule all meetings with people we wanted to meet.
We talked to accountants and lawyers, met with the people that helped us, looked for potential office space, and scheduled meetings with people we potentially wanted to hire.
It turned out that the Romanian market was super competitive and that it was very hard to attract and retain talent. Half of the people never showed up to the meetings we had scheduled because they already accepted different jobs. We also realized that the cost structure in Ukraine was much more favorable and that without even having a website, we were able to get very talented people interested to come work for us. “Glory to Ukraine” since we decided to set up our company in Kyiv. “Bodmo!”(cheers).
Find the right people (you can trust)
When setting up a business abroad, make sure to follow your gut. When you don’t trust something, walk away. There are always people in whatever country you go to who will try to take advantage of you, so make sure you find someone you can trust. I was fortunate enough that the one other person I knew was also a (Ukrainian) entrepreneur I had met at Burning Man the year before. He was able to help me find an apartment, pointed us to our first accountant, and introduced us to his lawyers. More importantly, he was someone with whom I could discuss how to open a bank account over a meal in a not-too-touristy place in Kyiv.
Have the right (business) partner
Living abroad in a foreign country can be very exciting. Everything is new, you meet new people, and you are (still) full of energy to set up your business. However, it can also be pretty lonely. Setting up a business costs a lot of time and hard work, let alone in a foreign country. In the first 6 months, there was hardly anything else to do except for work. With my girlfriend living in New York complicating things further, it is therefore critical to have the right business partner and partner supporting you along the way. You often want to share your experience, vent about the weird food they serve at lunch, the fact that the central heating (what?) only starts to work at the end of October, the interesting people that you have met, and the unlimited amount of business opportunities you see :).
From a personal perspective, it can get very lonely if you don’t have the right (business) partner to support you. I am fortunate to have both, but I realize that I would never have been writing this blog if that wasn’t the case.
Just do it
A year ago, I could not have imagined the current position MatcHR is in. This would not have been possible if we hadn’t just done it. This sounds like a cheesy slogan, but a year into it, I finally understand what is meant by ‘just do it’ from a business perspective. You can plan only so much, but in reality, it is always different. Our initial plan was to launch on the 1st of December 2018, and we felt that the 1st of December was already pushing it.
However, when our first customer, Revolut, asked us that we could only work for them if we could start on the 15th of October, we immediately said yes (thank you, Charles :)). At that moment, we had no office, no employees, no legal entity, and no contract, and I was sleeping in an Airbnb with no hot water. It forced us to get out of our excel and just execute. It was the kick-start we needed. Within a year, we have grown to 20 employees, working for clients all over Europe, and we are looking for our third office space :).
We are excited about the future and the opportunities that lie ahead, not only for our current business but also for the potential we see for other businesses in Ukraine that we would have never thought of if I hadn’t moved here.
That being said, I do see that it is not so much about the destination but the journey that counts, and I am excited to see what next year will bring…