Developers have always worshipped Silicon Valley. They regard it as the peak of their careers when they are given the chance to work there. It embodies the notion that hard work and determination can lead to success. The very thought of recreating another 'silicon valley' in Ukraine should inspire us to work hard and with confidence about our success in the future.
Silicon Valley is the home to a number of the companies that remain unrivaled in terms of their products and profit, such as Apple, Google, Facebook, Yahoo, IBM, Intel, Oracle and many others. It is the envy of many other countries. They try their hardest to replicate its success, but with little result. Ukraine is one of those. Despite its tumultuous two years, our country is still attractive for investors, which means IT business could thrive here. Is there a chance to establish in Ukraine next silicon valley? Will we pull it off? What are the odds in our favour?
I found some very interesting research on Silicon Valley prepared by Endevour Insight.
It turns out it has been developing in a four-step cycle:
To rate the chances of building the next silicon valley in Ukraine I will try to analyze the IT business according to these parameters.
Start-ups in Ukraine are founded by tremendously talented and ambitious men, such as D. Zaporozhets (GitLab, A.Neshkin (PetCube), S.Teslenko (iblazr), Jan Koum (WhatsApp), etc. They might be the persons of the next silicon valley as Forbes constant inhabitants. As a rule, a few people have an idea and decide to get it through. They have a strong desire to break into the market and subsequently develop their idea into a viable business. Of course, they could hardly oppose if Singapore or Vietnam could create the next silicon valley. Conversely, there are foreign investors who are looking to fulfil their ideas and Ukraine entice them not only because it helps to keep costs at minimum, but it is also famous for its clever and entrepreneurial engineers. However, as the present Silicon Valley resides in the U.S., such American city as St. Louis could become the next silicon valley.
The majority of startups find either one big or a few smaller customers and start cooperating with them. If they manage to make a breakthrough, they expand. If not, they downsize or shut down altogether. Ukrainians are amazingly resilient and persistent. Not everyone succeeds at the beginning, but they do not give up. They look for new investors, rethink their ideas, and adopt news ways of doing business to achieve their goal. Nevertheless, the question ‘when does the next silicon valley come out’ remains unsettled.
Unlike many other businessmen, who often take early retirement, Ukrainian entrepreneurs remain in business and continue developing it. On the flipside, it may be down to their insatiable appetite for money or lack of success. Well, I wouldn’t dare blame them for that.
Frankly speaking, our IT companies do not consider reinvestment as another way of expanding their business. Several reasons might account for that:
- They have not considered it yet
- They don’t want to risk reinvesting
- They are jealous to support their competitors
- They don’t expect to make a fortune and thus choose not to get involved
On balance, although Ukraine has a big potential, there is still a long way to go; a big room for improvement.
Why have Ukrainian IT specialists have become so popular, sought after, among American and European customers? Why are they so eager to outsource their work to Ukraine?
- First of all our engineers are highly competent and skillful.
- Secondly, they offer the same services at more reasonable prices.
- Finally, they are reliable and flexible which means they can easily adjust their schedules or time zone.
For the time being outsourcing prevails. Small companies spring up everywhere. Nevertheless, it would be preposterous to presume that it is the beginning of a big development centre. It may well just be a fortuitous combination of circumstances. All abovementioned facts strongly hint at answering the question “where will the next silicon valley be established?”