In this episode we will talk about Ukraine and how to do business in the country as even during the war it has a tremendous potential for international trade.
And not to be bias about the country I asked the General Manger of Cisco Ukraine, Serhiy Martynchuk to help me with insights.
Sergii has more than 20 years of experience in sales and developing business in Ukraine and several other CIS countries.
We will talk about the following:
- How’s the business in Ukraine doing during the war.
- What is the roadmap for entering Ukrainian market.
- Ukraine does not have other choice than to win.
- How easy it is to reach the decision makers.
- How to find proper partner in Ukraine.
- Is it possible to do business with government.
- How digitalization fights corruption.
- What are the opportunities after the war and why you need to start preparing already now.
- What is the negotiation culture in Ukraine.
- Is there any difference between CIS countries and Ukraine.
- Why many foreign businesses have big interest towards the country despite the war.
And so much more that we definitely want to make another episode about that.
And if you want to hear more about Ukrainian business culture, please, leave us your feedback on Apple podcast or write to the podcast@start-global.biz
Speakers LinkedIn Profiles:
Guest, Sergii Martynchuk https://www.linkedin.com/in/sergii-martynchuk-5a31411/
Host, Dmytro Shvets https://www.linkedin.com/in/dshvets/
This podcast is made in a partnership with Do Business With Ukrainians, the platform of Ukrainian business teams you can work with now Work with verified teams.
Create your international expansion strategy with Start Global, your guide to foreign markets. https://www.start-global.biz/
Listen the Start Global Insights Podcast on all major podcast platforms and YouTube.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I am Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
in different countries about local business secrets and international expansion experience.
Today we will talk about Ukraine and how to do business in this country, as even during
the war it has a tremendous potential for international trade.
To help me not to be biased about the country, I asked to help me the general manager of
(00:31):
Cisco Ukraine, Serhiy Martynchuk.
Serhiy has more than 20 years of experience in sales and developing business in Ukraine
and several other CIS countries.
So I believe that we will have a lot of insights today.
Hi, Serhiy, welcome to the show.
Hi, Dima, it's great to hear you.
(00:51):
How are you today?
I am good, I am good.
Thank you very much.
How are you?
I am fine as well.
So despite the missiles flying over our heads, we are still making business and I think that
it would be a nice and interesting talk today.
You caught me by surprise and I wasn't prepared, so I expect we will not have questions below
(01:13):
the belt.
Yeah, I know that you are still operating in Ukraine as a company, so in Cisco and you
are still selling here.
How would you describe the current situation, current sales?
Is it getting better despite the war and what is the situation right now?
Yeah, we are operating, that's for sure, but definitely sales and the world business changed
(01:38):
significantly.
And the biggest changes, what I can see, our equipment is very much needed, especially
for the government and critical infrastructure companies.
So connectivity and cybersecurity is one of the biggest needs after probably weapon on
(02:01):
the battlefield.
So that's why we are here, we are here to help to the government.
In terms of commercial sector and overall business, yes, for sure, it's struggling,
but what is good, I already see some signs of recovery and what is very much interesting,
(02:23):
I see some projects which are long term.
So companies are planning something much ahead, like after the win and few years ahead, which
is very much surprising.
So I'm always asking, do you know something or you have some insights or what's the conspiracy
(02:44):
about this?
But it is probably it's like human nature, we cannot stay still, so we need to plan something
in order to survive.
And that's really good.
Yeah, I think that this is obvious that Ukraine will win.
The only question is when?
We cannot lose.
Definitely.
(03:05):
And it is a question not of Ukraine only, it is a question of the whole democratic world.
But I see the same situation with foreign interest.
We are now talking a lot with many potential exporters and companies that are looking at
Ukraine as a market, and they are also preparing.
(03:27):
So they understand that, especially in B2B business, it will take time to understand
the market to prepare it for the entry.
And it should be done now, not like we are waiting until the end of the war and then
we start preparing.
So there is a huge interest.
Very true and very interesting observation.
(03:49):
I'm also a board member of American Chamber of Commerce.
And it was interesting for me to observe when starting even from the summer, I see new companies
entering, becoming Chamber members, and those are companies from US, from Europe, who would
like to explore, basically like you said, they would like to understand the Ukrainian
(04:13):
market in advance in order to be ready for huge growth, I would say.
And they are investing.
Some of them already have some presence in Ukraine.
I was recently, I was very much surprised.
I cannot name the company, but it is very big, like blue chip company.
And I haven't heard about their office or whatever in Ukraine, but figure out that they
(04:37):
have several hundreds of people.
Basically those are like research and development, but they have presence here and they are becoming
more and more active.
And I believe business is very much easy to understand.
Business is following the money.
And right now it is quite a big flow of money going into Ukraine from all types of donors
(05:03):
like World Bank, USAD, EBRD, whatever.
And I believe it will be increasing.
So that's why big business definitely looking forward to see the growth in Ukraine and they
are preparing for this.
Serhii, I know that you are selling IT.
(05:24):
So you are selling equipment and software, but doing so, you are dealing almost with
all sectors in Ukraine.
So with retail and with production facilities and with mining as well.
So you are covering almost everything.
It is interesting to hear your opinion.
So let's imagine that you are a foreign business and you are looking to enter Ukraine with
(05:49):
some goods, I don't know, with clothes, for example.
And if you were a foreign business looking to enter Ukraine, what would be your way of
entry?
What would you do to be successful here?
Yeah, that's a very good question because we are already here.
We are already on the market.
For us, this job was done.
(06:11):
But still, we are exploring new niches as well.
So Cisco is developing new products.
And sometimes we need to enter new markets as well.
But if to talk, for example, in B2B, if you would like to go into Ukraine, definitely
you should have a plan and you should build a plan in advance.
(06:33):
And this plan should take into account route to market.
So for example, I would encourage to have some local partners or distributors because
we still have local specifics, especially for companies from US and from EU.
All questions with regards to the logistic currency exchange risks, et cetera, et cetera.
(06:58):
So there are a lot of questions that need to be solved before you enter the market,
like where you will have a stock, how you will deliver, what kind of maintenance you
should provide and who will do this, et cetera, et cetera.
So it's better to have some local partners who will help you, at least on the initial
(07:19):
stage because it can take some time for you to be ready for this.
And for example, Cisco is still not with stills.
It's our business model.
We operate through partners.
We have quite a big chain of partners here in Ukraine, more than 200, several distributors.
So that's why we are benefiting out of it a lot.
(07:43):
So that's our way to enter the market.
And I really encourage to have somebody here local, especially on a sales side.
Yes, you can do some sales from abroad, but if you would like to have sustainable business
and you would like to expand, you need to have, sooner or later, you will need to have
(08:06):
people here.
So for example, in our market, when some system integrators from abroad are trying to enter
the market, my first requirement would be you need to have local people and you need
to start from pre-sales.
For example, in order to deliver the value of your product to the customer, in order
(08:28):
to understand customer needs, you need to have somebody who will talk to them.
So that's no brainer.
So that's why you should have this prepared in advance.
You can start, if it is, for example, software as a service, then you can start business
from abroad, but that's like one particular business.
(08:50):
If you have some real products, if you have some services, you need to build a plan how
to enter the market.
For example, yes, so the company would like to find local partner.
Do you have any hints or from your experience, suggestions how to look for them?
To pay attention, what are the filters or criteria of choice of local partner?
(09:16):
Yeah, that's a very tricky point because wrong partner can definitely ruin your business.
That's for sure.
So that's why you should spend some time, you should do due diligence, you should ask
for references.
So for example, you can start from some business communities because being part of a business
(09:36):
community, it is already some sort of credibility, at least not your own, but borrowed from the
union you're joining.
So that's why you can start from there.
But then you should ask for reference, you should give some try to have some trials.
(10:00):
If you're in the business, they can already show some experience working with companies
like yours or working with a market you are entering to or you're aiming to.
So that's why due diligence is definitely needed.
So you should not rely on the first person who you will see in Ukraine saying that, yes,
(10:23):
I can sell your products.
So that's definitely will not fly.
Yeah, I remember we actually started to attract foreign investments to Ukraine already in
2004 or something.
And I remember that time when a foreigner just came to Ukraine and then the first person
he met says that, well, we do everything.
(10:46):
So we will be the best partner.
Trust me, I know everybody.
I know the correct people here.
So you can do business with me.
And then after a couple of months, no notice from this person and totally lost in the country
and in the market.
So definitely I would not advise to give some exclusive right to somebody from the beginning
(11:12):
because you will be trapped.
You should have some ability to make some changes after the trial or after some initial
period.
If partnership is good, it's great.
You should move forward.
But once something goes wrong, you should be able to have this flexibility.
(11:38):
What about the further actions?
So for example, I know that in many cases, companies that enter other countries, they
found a partner, gave them the products.
And then once a year, they're just calling and asking how it's going.
Do you need to support the sales?
Do you need to understand the market by yourself?
(12:00):
Yeah, that's definitely not a good example.
So you should not...
First of all, you should educate your partners and your customers as well.
So if it is your product, you should make first steps.
And you should set some example.
(12:20):
For example, you can have some initial meetings together with them.
You should pick up some...
You can call it bowling pin.
Those customers who should be your first target just to show that you're able to do this and
to show to your partners that your product is super good and they should spend more time
(12:41):
and resources working with you, but not like any other, either your competitors or even
other companies.
So you should definitely spend time, effort, resources in order to explore the market and
to help your partners.
You should pretend that the partner is next to your shoulder or even a bit behind.
(13:05):
So you should not expect that they will do everything for you and you should just relax
and count the money flowing from Ukraine.
No, that's for sure not like this.
That's why it is called partnership, yes, to do some things together.
And yeah, many companies forget about that.
Question.
(13:25):
So I know that you are responsible not only for Ukraine, at least you have been responsible
in several years for other CIS countries like Belarus, Moldova, Armenia, Georgia, and...
Other Asian countries like Uzbekistan, Tajikistan, Kyrgyzstan as well.
Do you see the difference?
(13:47):
Because in my experience, the major attitude to all post-Soviet countries, the CIS countries
is kind of the same.
You are all from the USSR.
So do you see any particular differences between Ukraine and the rest of CIS countries?
(14:07):
I started to work with those countries in 2013, as far as I remember, in 2014.
My biggest mistake was exactly like this.
So I thought that we have the same post-Soviet Union legacy.
So we are almost the same.
We can use the same language, which is quite a big advantage.
(14:28):
So I don't need to use English or I don't need to learn the Russian language in order
to work with them.
So that was my assumption, I would say.
Not very strong, but there was kind of assumption.
And then I learned that every country has its own flavor, I would say.
(14:55):
So some of them, they used to have it before.
In Soviet Union, we just simply were not acknowledging this, I would say.
Some of the countries, I believe, they've got this flavor for the last 30 years, considering
all the movements.
(15:16):
And it was very interesting.
My experience, my first year was like every country, it was like eye-opening experience
for me.
To have some general, I would say, hints, if you are moving to East, you can be amazed
by the hospitality.
(15:37):
But that's the trick.
It's very hard to separate wheat from chaff.
So you need to spend some time.
Sometimes you need to spend a lot of time in order to build such relationships that
you clearly understand that yes, it's yes and no, it's no.
Because on the first meeting, most likely you will not hear no, because it's quite
(16:02):
rude for them to say no, because you're the guest.
But by this amazement, you can be misled, I would say.
In countries like Belarus, for example, what I observed and we can see it right now, there
(16:28):
is a level of suspicious a bit higher than comparing to Ukraine due to the reasons we
know already.
In Ukraine, I believe we are more straightforward.
So if it is yes, then yes.
If it is no, then no.
If you would like to do business with somebody, you will do everything and anything possible.
If you don't like to do business, you will not spend time on this person or on this company.
(16:53):
So we are becoming more like, I don't know, US, EU types of business.
Talking about value and coming back to sales in Ukraine, how easy it is to reach a decision
making person currently?
If you have value, of course, you should have something to propose.
(17:16):
I think that it is quite easy right now in Ukraine to reach to almost anybody, especially
if you have some value.
So it's not just like your commu-asers trying to sell some shit.
No, if there is a product and you understand that you can address some business needs of
a company, I believe it is easier to reach a person.
(17:41):
Even cold, cold, cold emails, cold, whatever, still work in Ukraine.
So for example, I read emails, I read messages in LinkedIn.
It doesn't mean that I respond to everybody because if I see that garbage, I will not
(18:01):
respond.
Or if I see that message is not personalized, I will not respond.
But if I see that message is for me and there is a kind of probability that I can, I don't
know, buy this product, I will respond.
At least I will say that it's not a good time or we already have one or something.
(18:25):
So I can understand that sales, that's job.
It should be appreciated.
I believe most of the managers are looking for good people.
So for example, and we are always looking for good salespeople.
If I see that somebody did a tremendous job in reaching me out, I will be interested to
(18:48):
hear or see this person just maybe, maybe we'll have a chance to work together in the
future.
So that's why it's, you know, that's kind of sales flavor.
We are always looking for some good talents.
Well, that also says about the long-term thinking.
Yeah, you also mentioned a very good point for those companies who would like to enter
(19:09):
the Ukrainian market.
You should keep or you should have long-term perspective in your mind.
So if you're like, for example, you see that, yes, after war, there will be business here
and you would like to come here for, I don't know, for a year to take the most out of it
and then leave.
(19:31):
I don't know, you can try, but definitely you will not be so much supported.
You should have long-term perspective in your head and you should act having long-term perspective
in your head.
Then you will be able to build sustainable business and you will be able to get maximum
amount of out of it.
Just yesterday I asked my UK friend what stereotypes does he have about Ukraine?
(19:57):
And he said that in most cases, the stereotype that it is not transparent, it is not legally
transparent, as well, so correct in the country.
But is it possible to make business in Ukraine in a transparent way and still be efficient
(20:17):
and profitable?
Yeah, I clearly believe that it's possible and there are a lot of examples of this, but
I understand why such a perception those people can have.
Because for example, even right now, we have one stream of news about good things that
we are doing for Ukraine on the battlefield and how brave we are, et cetera.
(20:43):
And then you can have second stream of some corruption scandals and that is coming hand
to hand, which is not very good business-wise.
And if you're in business, you can see this, you can feel it.
So definitely there are businesses which are doing something based on or using some corrupt
(21:09):
methods.
But it's not like it is accepted everywhere.
It's not like when you are coming to Ukraine, next day you will have some guy in your door
with a bag begging for a bribe.
But it's not like this.
So right now you can run your business and you can run your business transparently and
(21:32):
you can have high chances that nobody will ask you any bribes.
Or even if they ask, you can not give.
So you have this option.
And some people, they just think that they don't have any options.
So that's why it's a bit of a challenge.
But you should always believe that it's your choice, first of all.
(21:55):
There is this saying, it needs two to tango.
So if you would like to dance, then you need two partners to be in the same mood and the
way of thinking.
And thanks God we have a lot of opportunities.
So we have a lot of companies that you can choose among.
What I wanted to add, it's Ukraine right now is very much famous, especially after the
(22:21):
Greatest Divorce, etc.
We are famous for digital development and for digitizations that we have in our country.
And I believe this will also help to, I would not say eliminate, but that will help to be
less corrupted because once it is digital, you have less power to influence this.
(22:46):
And you will be able to get some permissions, licenses, just in electronic mode, which is
people without any engagement with people who can ask for a bribe or to whom you can
leave a bribe.
So that's definitely helping.
Yeah.
And it is also making your activity in the country much quicker.
(23:13):
True.
True.
So we're talking about that.
And I know that Cisco is doing a lot of business and you actually said in the beginning that
you are doing a lot of business with the government and you are doing that for quite a long time
already.
Do you see the dynamics or some changes in attitude from government to business?
(23:38):
And would you advise to make business or to do business with government and to sell to
them something if you are entering the country?
So right now, government is the biggest customer because what I've told, there is quite a huge,
I would say, injection of money happening into the government.
(24:00):
So that's why if you would like to do business and big business in Ukraine, most likely you
will kind of somehow will be connected with the government.
You can do business, that's for sure.
And what we are telling about, it is more and more digital.
So that's why you can do business even without engaging with hundreds of people just to agree
(24:27):
on something.
Also you can, as I said, you can follow the money, but you can follow like US money or
EU money, which will have more and more like safety in terms of external control.
So if you are participating in some bidding, which is run by World Bank or USAD, you will
(24:56):
basically, most likely you will have the same approach or you will have the same requirements
as you have in all other countries where World Bank operating.
So that's why it is becoming more and more easier to work with the government.
(25:16):
You should not exclude the government sector or government accounts from your target audience.
Yeah, and I know it would be still good to have a local partner for that.
Not because they know somebody in the government, but because they know how to approach, where
(25:36):
to find this information, how to apply.
And also I know that donors that you mentioned, this USID or EBRD, they also nurture this partnership,
this cooperation between a foreign company that would like to enter the country and the
local ones to establish this intercultural and international cooperation for further
(26:01):
business growth.
Yeah, yeah, exactly.
From your experience working for an international company, for actually a foreign company, what
do you think are the biggest mistakes that foreign businesses are making entering Ukraine?
You should check all the assumptions you have.
And basically it would be good even to write down those assumptions because you can have
(26:24):
false assumptions in this list.
And the sooner you will find it and you will fix it, the better results you will have.
Even some of the false assumptions you can hear even from Ukrainians.
And then you should also kind of have in mind that they can overestimate their resources
(26:48):
or their knowledge of the market.
And also quite a big mistake would be to treat Ukraine as a third traded country, believing
that you can come here with some cheap shitty product and we will take it.
That's not true.
We are more and more getting used to good quality, quality of products, quality of services.
(27:13):
So that's why I don't believe that it will be easy job for you.
You just, it's not like you just need to come here and say that I'm here, I'm ready to sell
and everyone will buy it just because you are a foreigner.
That's not true.
We have a lot of examples right now of good products, good services made in Ukraine.
(27:35):
And due to this high level of increasing national interest, for example, I would rather buy
something local, which is good quality comparing to something foreign.
So that's why you should take it into account.
(27:55):
Let's slightly touch the negotiation culture.
Is it still this culture of zero-sum result when there is only one winning party in the
negotiation or is it changing towards this win-win approach or interest-based negotiations
(28:15):
and long-term relationship in communication with your partners, for example, in Ukraine?
It's definitely not zero-sum anymore.
I believe right now business is trying to find some win-win solution for all the parties
involved.
Otherwise, as we said, it will not be sustainable and it will not be long-term.
(28:38):
So if you're just using your partners, if you're just using your suppliers, it cannot
stay forever.
So for example, in our case, if you're a B2B account, you can ask for lowest price and
you can just do anything possible to get just the lowest possible price on the market.
(28:59):
Yes, you can get it, but then you will have a lot of negative side effects of this.
You will have low quality of support because suppliers will not be interested to invest
because they don't have any margin on it.
You will not have support in terms of education, in terms of some knowledge delivery, et cetera,
(29:23):
et cetera.
So I believe long-term, it will not bring you good results.
True, true.
And I also believe that you don't need to underestimate the service requirement that
Ukrainians already have.
So at least what I hear now from those Ukrainians that are now in other countries, they are
(29:48):
lacking that level of service that we are accustomed to already.
The sales of goods in Ukraine is not only goods anymore.
You need to add value in support and in making a good service to your customer.
That's very required now by Ukrainians and you need to be prepared for that as well.
(30:13):
Good.
Thank you for such an interesting conversation.
I would, of course, dig deeper and we could talk several hours more about Ukraine.
I have a small blitz quiz game for you today about the stereotypes about Ukraine.
(30:36):
I will ask some questions.
They are short and then you need to answer yes or no.
To do business with Ukrainians, you need to have a strong liver as it is obligatory to
drink to get trust.
Sometimes still yes.
(30:57):
Ukrainians are not following rules or laws when it doesn't suit.
I would not say exactly yes, but for example, there are some rules or laws that can be over
ruled by Ukrainians.
(31:18):
It's not because we are rule breakers.
Just like this.
I think that it is also because of the legacy of Soviet Union laws that are not correctly
written.
They are now changing and it could be better in the future.
Sala and Bors are the national treasures.
(31:41):
Yeah, that's true.
It was not safe to travel in the country even before the war.
No, completely not true.
The last one.
Freedom is one of the highest values among Ukrainians.
Yeah, that's true.
Hi, I am Dmytro Shvets, your host at The Start Global Insights, where I interview experts
(00:11):
in different countries about local business secrets and international expansion experience.
Today we will talk about Ukraine and how to do business in this country, as even during
the war it has a tremendous potential for international trade.
To help me not to be biased about the country, I asked to help me the general manager of
(00:31):
Cisco Ukraine, Serhiy Martynchuk.
Serhiy has more than 20 years of experience in sales and developing business in Ukraine
and several other CIS countries.
So I believe that we will have a lot of insights today.
Hi, Serhiy, welcome to the show.
Hi, Dima, it's great to hear you.
(00:51):
How are you today?
I am good, I am good.
Thank you very much.
How are you?
I am fine as well.
So despite the missiles flying over our heads, we are still making business and I think that
it would be a nice and interesting talk today.
You caught me by surprise and I wasn't prepared, so I expect we will not have questions below
(01:13):
the belt.
Yeah, I know that you are still operating in Ukraine as a company, so in Cisco and you
are still selling here.
How would you describe the current situation, current sales?
Is it getting better despite the war and what is the situation right now?
Yeah, we are operating, that's for sure, but definitely sales and the world business changed
(01:38):
significantly.
And the biggest changes, what I can see, our equipment is very much needed, especially
for the government and critical infrastructure companies.
So connectivity and cybersecurity is one of the biggest needs after probably weapon on
(02:01):
the battlefield.
So that's why we are here, we are here to help to the government.
In terms of commercial sector and overall business, yes, for sure, it's struggling,
but what is good, I already see some signs of recovery and what is very much interesting,
(02:23):
I see some projects which are long term.
So companies are planning something much ahead, like after the win and few years ahead, which
is very much surprising.
So I'm always asking, do you know something or you have some insights or what's the conspiracy
(02:44):
about this?
But it is probably it's like human nature, we cannot stay still, so we need to plan something
in order to survive.
And that's really good.
Yeah, I think that this is obvious that Ukraine will win.
The only question is when?
We cannot lose.
Definitely.
(03:05):
And it is a question not of Ukraine only, it is a question of the whole democratic world.
But I see the same situation with foreign interest.
We are now talking a lot with many potential exporters and companies that are looking at
Ukraine as a market, and they are also preparing.
(03:27):
So they understand that, especially in B2B business, it will take time to understand
the market to prepare it for the entry.
And it should be done now, not like we are waiting until the end of the war and then
we start preparing.
So there is a huge interest.
Very true and very interesting observation.
(03:49):
I'm also a board member of American Chamber of Commerce.
And it was interesting for me to observe when starting even from the summer, I see new companies
entering, becoming Chamber members, and those are companies from US, from Europe, who would
like to explore, basically like you said, they would like to understand the Ukrainian
(04:13):
market in advance in order to be ready for huge growth, I would say.
And they are investing.
Some of them already have some presence in Ukraine.
I was recently, I was very much surprised.
I cannot name the company, but it is very big, like blue chip company.
And I haven't heard about their office or whatever in Ukraine, but figure out that they
(04:37):
have several hundreds of people.
Basically those are like research and development, but they have presence here and they are becoming
more and more active.
And I believe business is very much easy to understand.
Business is following the money.
And right now it is quite a big flow of money going into Ukraine from all types of donors
(05:03):
like World Bank, USAD, EBRD, whatever.
And I believe it will be increasing.
So that's why big business definitely looking forward to see the growth in Ukraine and they
are preparing for this.
Serhii, I know that you are selling IT.
(05:24):
So you are selling equipment and software, but doing so, you are dealing almost with
all sectors in Ukraine.
So with retail and with production facilities and with mining as well.
So you are covering almost everything.
It is interesting to hear your opinion.
So let's imagine that you are a foreign business and you are looking to enter Ukraine with
(05:49):
some goods, I don't know, with clothes, for example.
And if you were a foreign business looking to enter Ukraine, what would be your way of
entry?
What would you do to be successful here?
Yeah, that's a very good question because we are already here.
We are already on the market.
For us, this job was done.
(06:11):
But still, we are exploring new niches as well.
So Cisco is developing new products.
And sometimes we need to enter new markets as well.
But if to talk, for example, in B2B, if you would like to go into Ukraine, definitely
you should have a plan and you should build a plan in advance.
(06:33):
And this plan should take into account route to market.
So for example, I would encourage to have some local partners or distributors because
we still have local specifics, especially for companies from US and from EU.
All questions with regards to the logistic currency exchange risks, et cetera, et cetera.
(06:58):
So there are a lot of questions that need to be solved before you enter the market,
like where you will have a stock, how you will deliver, what kind of maintenance you
should provide and who will do this, et cetera, et cetera.
So it's better to have some local partners who will help you, at least on the initial
(07:19):
stage because it can take some time for you to be ready for this.
And for example, Cisco is still not with stills.
It's our business model.
We operate through partners.
We have quite a big chain of partners here in Ukraine, more than 200, several distributors.
So that's why we are benefiting out of it a lot.
(07:43):
So that's our way to enter the market.
And I really encourage to have somebody here local, especially on a sales side.
Yes, you can do some sales from abroad, but if you would like to have sustainable business
and you would like to expand, you need to have, sooner or later, you will need to have
(08:06):
people here.
So for example, in our market, when some system integrators from abroad are trying to enter
the market, my first requirement would be you need to have local people and you need
to start from pre-sales.
For example, in order to deliver the value of your product to the customer, in order
(08:28):
to understand customer needs, you need to have somebody who will talk to them.
So that's no brainer.
So that's why you should have this prepared in advance.
You can start, if it is, for example, software as a service, then you can start business
from abroad, but that's like one particular business.
(08:50):
If you have some real products, if you have some services, you need to build a plan how
to enter the market.
For example, yes, so the company would like to find local partner.
Do you have any hints or from your experience, suggestions how to look for them?
To pay attention, what are the filters or criteria of choice of local partner?
(09:16):
Yeah, that's a very tricky point because wrong partner can definitely ruin your business.
That's for sure.
So that's why you should spend some time, you should do due diligence, you should ask
for references.
So for example, you can start from some business communities because being part of a business
(09:36):
community, it is already some sort of credibility, at least not your own, but borrowed from the
union you're joining.
So that's why you can start from there.
But then you should ask for reference, you should give some try to have some trials.
(10:00):
If you're in the business, they can already show some experience working with companies
like yours or working with a market you are entering to or you're aiming to.
So that's why due diligence is definitely needed.
So you should not rely on the first person who you will see in Ukraine saying that, yes,
(10:23):
I can sell your products.
So that's definitely will not fly.
Yeah, I remember we actually started to attract foreign investments to Ukraine already in
2004 or something.
And I remember that time when a foreigner just came to Ukraine and then the first person
he met says that, well, we do everything.
(10:46):
So we will be the best partner.
Trust me, I know everybody.
I know the correct people here.
So you can do business with me.
And then after a couple of months, no notice from this person and totally lost in the country
and in the market.
So definitely I would not advise to give some exclusive right to somebody from the beginning
(11:12):
because you will be trapped.
You should have some ability to make some changes after the trial or after some initial
period.
If partnership is good, it's great.
You should move forward.
But once something goes wrong, you should be able to have this flexibility.
(11:38):
What about the further actions?
So for example, I know that in many cases, companies that enter other countries, they
found a partner, gave them the products.
And then once a year, they're just calling and asking how it's going.
Do you need to support the sales?
Do you need to understand the market by yourself?
(12:00):
Yeah, that's definitely not a good example.
So you should not...
First of all, you should educate your partners and your customers as well.
So if it is your product, you should make first steps.
And you should set some example.
(12:20):
For example, you can have some initial meetings together with them.
You should pick up some...
You can call it bowling pin.
Those customers who should be your first target just to show that you're able to do this and
to show to your partners that your product is super good and they should spend more time
(12:41):
and resources working with you, but not like any other, either your competitors or even
other companies.
So you should definitely spend time, effort, resources in order to explore the market and
to help your partners.
You should pretend that the partner is next to your shoulder or even a bit behind.
(13:05):
So you should not expect that they will do everything for you and you should just relax
and count the money flowing from Ukraine.
No, that's for sure not like this.
That's why it is called partnership, yes, to do some things together.
And yeah, many companies forget about that.
Question.
(13:25):
So I know that you are responsible not only for Ukraine, at least you have been responsible
in several years for other CIS countries like Belarus, Moldova, Armenia, Georgia, and...
Other Asian countries like Uzbekistan, Tajikistan, Kyrgyzstan as well.
Do you see the difference?
(13:47):
Because in my experience, the major attitude to all post-Soviet countries, the CIS countries
is kind of the same.
You are all from the USSR.
So do you see any particular differences between Ukraine and the rest of CIS countries?
(14:07):
I started to work with those countries in 2013, as far as I remember, in 2014.
My biggest mistake was exactly like this.
So I thought that we have the same post-Soviet Union legacy.
So we are almost the same.
We can use the same language, which is quite a big advantage.
(14:28):
So I don't need to use English or I don't need to learn the Russian language in order
to work with them.
So that was my assumption, I would say.
Not very strong, but there was kind of assumption.
And then I learned that every country has its own flavor, I would say.
(14:55):
So some of them, they used to have it before.
In Soviet Union, we just simply were not acknowledging this, I would say.
Some of the countries, I believe, they've got this flavor for the last 30 years, considering
all the movements.
(15:16):
And it was very interesting.
My experience, my first year was like every country, it was like eye-opening experience
for me.
To have some general, I would say, hints, if you are moving to East, you can be amazed
by the hospitality.
(15:37):
But that's the trick.
It's very hard to separate wheat from chaff.
So you need to spend some time.
Sometimes you need to spend a lot of time in order to build such relationships that
you clearly understand that yes, it's yes and no, it's no.
Because on the first meeting, most likely you will not hear no, because it's quite
(16:02):
rude for them to say no, because you're the guest.
But by this amazement, you can be misled, I would say.
In countries like Belarus, for example, what I observed and we can see it right now, there
(16:28):
is a level of suspicious a bit higher than comparing to Ukraine due to the reasons we
know already.
In Ukraine, I believe we are more straightforward.
So if it is yes, then yes.
If it is no, then no.
If you would like to do business with somebody, you will do everything and anything possible.
If you don't like to do business, you will not spend time on this person or on this company.
(16:53):
So we are becoming more like, I don't know, US, EU types of business.
Talking about value and coming back to sales in Ukraine, how easy it is to reach a decision
making person currently?
If you have value, of course, you should have something to propose.
(17:16):
I think that it is quite easy right now in Ukraine to reach to almost anybody, especially
if you have some value.
So it's not just like your commu-asers trying to sell some shit.
No, if there is a product and you understand that you can address some business needs of
a company, I believe it is easier to reach a person.
(17:41):
Even cold, cold, cold emails, cold, whatever, still work in Ukraine.
So for example, I read emails, I read messages in LinkedIn.
It doesn't mean that I respond to everybody because if I see that garbage, I will not
(18:01):
respond.
Or if I see that message is not personalized, I will not respond.
But if I see that message is for me and there is a kind of probability that I can, I don't
know, buy this product, I will respond.
At least I will say that it's not a good time or we already have one or something.
(18:25):
So I can understand that sales, that's job.
It should be appreciated.
I believe most of the managers are looking for good people.
So for example, and we are always looking for good salespeople.
If I see that somebody did a tremendous job in reaching me out, I will be interested to
(18:48):
hear or see this person just maybe, maybe we'll have a chance to work together in the
future.
So that's why it's, you know, that's kind of sales flavor.
We are always looking for some good talents.
Well, that also says about the long-term thinking.
Yeah, you also mentioned a very good point for those companies who would like to enter
(19:09):
the Ukrainian market.
You should keep or you should have long-term perspective in your mind.
So if you're like, for example, you see that, yes, after war, there will be business here
and you would like to come here for, I don't know, for a year to take the most out of it
and then leave.
(19:31):
I don't know, you can try, but definitely you will not be so much supported.
You should have long-term perspective in your head and you should act having long-term perspective
in your head.
Then you will be able to build sustainable business and you will be able to get maximum
amount of out of it.
Just yesterday I asked my UK friend what stereotypes does he have about Ukraine?
(19:57):
And he said that in most cases, the stereotype that it is not transparent, it is not legally
transparent, as well, so correct in the country.
But is it possible to make business in Ukraine in a transparent way and still be efficient
(20:17):
and profitable?
Yeah, I clearly believe that it's possible and there are a lot of examples of this, but
I understand why such a perception those people can have.
Because for example, even right now, we have one stream of news about good things that
we are doing for Ukraine on the battlefield and how brave we are, et cetera.
(20:43):
And then you can have second stream of some corruption scandals and that is coming hand
to hand, which is not very good business-wise.
And if you're in business, you can see this, you can feel it.
So definitely there are businesses which are doing something based on or using some corrupt
(21:09):
methods.
But it's not like it is accepted everywhere.
It's not like when you are coming to Ukraine, next day you will have some guy in your door
with a bag begging for a bribe.
But it's not like this.
So right now you can run your business and you can run your business transparently and
(21:32):
you can have high chances that nobody will ask you any bribes.
Or even if they ask, you can not give.
So you have this option.
And some people, they just think that they don't have any options.
So that's why it's a bit of a challenge.
But you should always believe that it's your choice, first of all.
(21:55):
There is this saying, it needs two to tango.
So if you would like to dance, then you need two partners to be in the same mood and the
way of thinking.
And thanks God we have a lot of opportunities.
So we have a lot of companies that you can choose among.
What I wanted to add, it's Ukraine right now is very much famous, especially after the
(22:21):
Greatest Divorce, etc.
We are famous for digital development and for digitizations that we have in our country.
And I believe this will also help to, I would not say eliminate, but that will help to be
less corrupted because once it is digital, you have less power to influence this.
(22:46):
And you will be able to get some permissions, licenses, just in electronic mode, which is
people without any engagement with people who can ask for a bribe or to whom you can
leave a bribe.
So that's definitely helping.
Yeah.
And it is also making your activity in the country much quicker.
(23:13):
True.
True.
So we're talking about that.
And I know that Cisco is doing a lot of business and you actually said in the beginning that
you are doing a lot of business with the government and you are doing that for quite a long time
already.
Do you see the dynamics or some changes in attitude from government to business?
(23:38):
And would you advise to make business or to do business with government and to sell to
them something if you are entering the country?
So right now, government is the biggest customer because what I've told, there is quite a huge,
I would say, injection of money happening into the government.
(24:00):
So that's why if you would like to do business and big business in Ukraine, most likely you
will kind of somehow will be connected with the government.
You can do business, that's for sure.
And what we are telling about, it is more and more digital.
So that's why you can do business even without engaging with hundreds of people just to agree
(24:27):
on something.
Also you can, as I said, you can follow the money, but you can follow like US money or
EU money, which will have more and more like safety in terms of external control.
So if you are participating in some bidding, which is run by World Bank or USAD, you will
(24:56):
basically, most likely you will have the same approach or you will have the same requirements
as you have in all other countries where World Bank operating.
So that's why it is becoming more and more easier to work with the government.
(25:16):
You should not exclude the government sector or government accounts from your target audience.
Yeah, and I know it would be still good to have a local partner for that.
Not because they know somebody in the government, but because they know how to approach, where
(25:36):
to find this information, how to apply.
And also I know that donors that you mentioned, this USID or EBRD, they also nurture this partnership,
this cooperation between a foreign company that would like to enter the country and the
local ones to establish this intercultural and international cooperation for further
(26:01):
business growth.
Yeah, yeah, exactly.
From your experience working for an international company, for actually a foreign company, what
do you think are the biggest mistakes that foreign businesses are making entering Ukraine?
You should check all the assumptions you have.
And basically it would be good even to write down those assumptions because you can have
(26:24):
false assumptions in this list.
And the sooner you will find it and you will fix it, the better results you will have.
Even some of the false assumptions you can hear even from Ukrainians.
And then you should also kind of have in mind that they can overestimate their resources
(26:48):
or their knowledge of the market.
And also quite a big mistake would be to treat Ukraine as a third traded country, believing
that you can come here with some cheap shitty product and we will take it.
That's not true.
We are more and more getting used to good quality, quality of products, quality of services.
(27:13):
So that's why I don't believe that it will be easy job for you.
You just, it's not like you just need to come here and say that I'm here, I'm ready to sell
and everyone will buy it just because you are a foreigner.
That's not true.
We have a lot of examples right now of good products, good services made in Ukraine.
(27:35):
And due to this high level of increasing national interest, for example, I would rather buy
something local, which is good quality comparing to something foreign.
So that's why you should take it into account.
(27:55):
Let's slightly touch the negotiation culture.
Is it still this culture of zero-sum result when there is only one winning party in the
negotiation or is it changing towards this win-win approach or interest-based negotiations
(28:15):
and long-term relationship in communication with your partners, for example, in Ukraine?
It's definitely not zero-sum anymore.
I believe right now business is trying to find some win-win solution for all the parties
involved.
Otherwise, as we said, it will not be sustainable and it will not be long-term.
(28:38):
So if you're just using your partners, if you're just using your suppliers, it cannot
stay forever.
So for example, in our case, if you're a B2B account, you can ask for lowest price and
you can just do anything possible to get just the lowest possible price on the market.
(28:59):
Yes, you can get it, but then you will have a lot of negative side effects of this.
You will have low quality of support because suppliers will not be interested to invest
because they don't have any margin on it.
You will not have support in terms of education, in terms of some knowledge delivery, et cetera,
(29:23):
et cetera.
So I believe long-term, it will not bring you good results.
True, true.
And I also believe that you don't need to underestimate the service requirement that
Ukrainians already have.
So at least what I hear now from those Ukrainians that are now in other countries, they are
(29:48):
lacking that level of service that we are accustomed to already.
The sales of goods in Ukraine is not only goods anymore.
You need to add value in support and in making a good service to your customer.
That's very required now by Ukrainians and you need to be prepared for that as well.
(30:13):
Good.
Thank you for such an interesting conversation.
I would, of course, dig deeper and we could talk several hours more about Ukraine.
I have a small blitz quiz game for you today about the stereotypes about Ukraine.
(30:36):
I will ask some questions.
They are short and then you need to answer yes or no.
To do business with Ukrainians, you need to have a strong liver as it is obligatory to
drink to get trust.
Sometimes still yes.
(30:57):
Ukrainians are not following rules or laws when it doesn't suit.
I would not say exactly yes, but for example, there are some rules or laws that can be over
ruled by Ukrainians.
(31:18):
It's not because we are rule breakers.
Just like this.
I think that it is also because of the legacy of Soviet Union laws that are not correctly
written.
They are now changing and it could be better in the future.
Sala and Bors are the national treasures.
(31:41):
Yeah, that's true.
It was not safe to travel in the country even before the war.
No, completely not true.
The last one.
Freedom is one of the highest values among Ukrainians.
Yeah, that's true.
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