Lviv is the only city in Ukraine where authorities fixed at the legislative level a program of cooperation with innovative businesses.
In a relatively short time of development, Ukrainian innovative technology market was divided into a few bright spheres of influence. Now, you can notice what cities, to speak so, will lead the national IT industry development. According to the last year’s Innovation Cities Index rating, the most innovative cities of the country are Lviv (place 350), Kiev (place 361), Odessa (place 397), Kharkiv (place 400), Dnipropetrovsk (place 402) and Zaporizhia (place 420).
The “Day” decided to research Ukrainian IT map and so it’s launching a new project – “GEOGRAPHY OF INNOVATION”. As a part of the project, we will visit the main cities that are centres of information technology.
We decided to start our trip from the most western IT centre – the city of Lviv. Today, there are more than 140 companies, with over 7,000 people engaged in the industry. Moreover, about 20 companies opened offices in the city last year. Among them, there are many “displaced people” from the eastern Ukraine.
COOPERATION WITH LOCAL AUTHORITIES
The main difference between Lviv and other IT centres in the country is that it is the only city that has its own strategy for economic competitiveness since 2010. According to it, information technology is one of the two priorities of the city’s economic development plan.
As a result, Lviv IT Cluster was created in 2011. Its main goal is to unite companies, universities and local authorities to successfully implement various projects. Today, the Cluster has combined more than 25 companies. Among them are Global Logic, SoftServe Inc., ELEKS and Intelex.
«In spite of being a local community, we are one of the largest organisations in Ukraine that deals with the IT industry development. And the city helps us with this,” the CEO of Lviv IT Cluster Stepan Veselovskyy says.
For several years, the organisation has initiated English language classes among IT students based in local universities. Also, the Cluster together with the Business School of Ukrainian Catholic University created the master’s level program of managing technologies (MS in Technology Management). Last autumn, the organisation conducted the largest IT conference in the Western Ukraine – Lviv IT Arena, which attracted more than 800 participants from all over the country and worldwide.
This year, Lviv IT Cluster plans to start building accommodation for Lviv IT sector specialists and working in the legislative sphere. In addition, the IT Cluster will hold the first in Ukraine “on-site” conferences in Kyiv, Kharkiv, Dnipropetrovsk, Mykolayiv and Odessa to share the knowledge of how Lviv residents are creating the IT industry in the city. In addition, the presentation of IT market research will take place in one or two months. After all, as Stepan Veselovskyy explains, a big problem of many IT centres is that there is no specific information about the market status.
Historically, in Lviv, as well as in Ukraine in general, outsourcing prevails over own product development. The first such company that was founded in Lviv in 1993 was SoftServe Inc. Today, it is the largest Ukrainian IT company engaged in software development and it has more than 3,500 employees.
In 1991, another company with the world name – ELEKS – was born here. Its services are software products development, advice, and quality control for market leaders, as well as for companies that aspire to primacy in the technology sphere.
A little later, in 2007, EPAM Systems came to Lviv. Today, more than 9,000 people all over the world work in this company engaged in developing, testing and supporting ordered software and business applications.
The development of one’s own products in Lviv started not so long ago. However, Lviv startups have already managed to establish a nationwide record. It was here that a “smart clock”, LaMetric, using the crowdfunding platform Kickstarter gathered about $370,000 (!) from required $69,000. In addition to time, the device can show news, temperature, important dates and any other handy alerts for life/leisure and work.
The product developer is a team at Smart Atoms. Soon, the buyers from Kickstarter will get the first LaMetric. “Now we are engaged in selling the device on Amazon.com,” the founder of CEO Smart Atoms Nazar Bilous says.
Besides LaMetric, the team plans to launch a product line on an already existing platform, Nazar says. By the way, nine specialists are working on the project today.
The smart clock is the first project of Smart Atoms. Previously, most of the team worked in an agency of web and mobile development Lemberg Solutions, one founder of which is Nazar Bilous.
«If we are talking about the service companies, then it’s true, Lviv is the centre. If we are talking about the ecosystem, then Lviv is far from being advanced. There are no start-up incubators and investment sources. And there are also not many product companies here,” Nazar Bilous explains. According to him, one of the reasons is that the product companies, unfortunately, do not have necessary support in Ukraine yet.
Also, there are companies in Lviv that are positively working “on two fronts”. That is, they are engaged in outsourcing and they are developing their own products on earned money. Among them there is Rebbix. For three years, the team has tested many iterations and soon it plans to launch a service that will help people travel more comfortably.
“It is very difficult for outsourcing companies to make their own products, because you need to make a product that would earn at least somewhat comparable to how much you can earn on outsourcing,” the CTO of Rebbix Sergey Oplakanets explains.
In addition, venture movement in Ukraine is very weak today. “There is no investment, but only loans from individuals, not from banks. And it is difficult to “reach” the western capital,” CEO Oleksiy Rak adds.
In Ukraine, startup investors are those who do not necessarily understand this business, and have made their fortune in incomprehensible ways, Sergey explains. “It’s an unreasonable investment.” And the “smart” ones are those where you are not only given money to develop a product, but also the investor helps to “promote” your product, because he understands that it will help to earn well on it,” he adds.
The only thing that you can hope for, Oleksiy explains, is the investment brought into the country by native startups that went out into the broader world and made profit. After all, they have already understood how it is “to get investment in Ukraine “, they know what kind of people work here.
TRAINING AND PRACTICE
Every year, over 1,800 IT specialists graduate universities in Lviv. However, as it turns out, the university knowledge, including English language skills, is enough only for working in an outsourcing company.
To create a successful own product additional knowledge and skills are required. A variety of professional courses help to get them. Among them, there is Lviv Code School. “We differ from ordinary courses of large companies with that that you can work anywhere after finishing our classes. We tell our students about the pros and cons of all kinds of work and they themselves decide where they want to work,“ the director of Lviv Code School Dmitro Malyeyev says.
During six months of work, the school had one course and six students graduated it. Two of them started their own products. One of them went to work in a company, another became a freelancer, and two more were already employed, Dmitro Malyeyev said. Currently, Lviv Code School prepares other 12 students.
“Lviv is a city of outsourcing. There are large companies and good universities that provide high-quality mathematical education and companies that have started to teach students for themselves. However, outsourcing is the approach on the part of programming and start-up is a business. It is not taught in universities. You must think about the users and how to sell your product. And we are still learning this,” Malyeyev concludes.
However, if you are brave enough to create your own product and test it on “vitality”, you can get startup skills in Start-Up Depot. This is the first local business incubator and co-working, aimed at increasing the number of product companies in Lviv.
The organisation was created only one year ago with the support of the Lviv City Council. During this time, the founders conducted two start-up schools and about 40 events on startups topics, in which about two thousand people participated, project manager Maksym Lysak told the “Day”. “The essence of our project is to give people understanding of whether or not their business idea is valid. If there is a problem – how to solve it, if there is a market for this product – to find its consumer,” he says. According to his words, most projects do not find their market. However, the founders gain valuable work experience, which further helps to create successful products.
“Now, we are planning to launch a startup school in universities. About 200 students should attend one session. We want to start in Lviv Politechnical Institute and Ivan Franko University and we already have contacted the rectors,” Maksym Lysak shares the plans.
At the same time, there are communities in Lviv that perform all functions simultaneously: help with developing their own product and carrying out outsourcing tasks and they are mostly engaged with it. Such a place is co-working Betaplace. Officially, the organisation was opened in September 2013.
As in a classic co-working environment, they provide here a workplace for a fee per month and a space for holding various events in the IT industry — lectures, master classes, etc. “The idea is that any business or individual with a need who comes to the Betaplace could fully satisfy it,” one of the founders Anton Yatsenko tells. “There were some situations when our joint projects were born with the help of different people who came to work here. Other times, we needed to find people with the necessary skills for a project and eventually such people joined us.”
Often, people who work in outsourcing invest a part of the earned money into developing their own projects. “But until now, our startup movements were not very effective. We only learn to do it,” Anton Yatsenko adds.
On the ground floor of the office there is a true workshop– subproject Hackerspace. “The guys are working with their own hands. Partly, they fulfil commercial orders and simultaneously develop their own products, for example, a large 3D printer,” the co-founder of Betaplace explains.