With the onset of war, investing in startups in Ukraine has become a challenging task. However, this doesn't mean that life and business in the country have come to a halt. Instead, it's a time to shift focus towards more promising sectors and improve the system among entrepreneurial leaders. In an interview with Konstantin Bravo, Yuriy Sereshchenko, the founder of QP Studio, elaborated on these points.
Yuriy, congratulations! You have come a long way in business. Please tell us about your upcoming project and the activities of QP Digital.
Currently, I am the head of the venture investment fund QP Digital, which was the fastest-growing fund in Ukraine in 2021. We have been collaborating with Ukrainian founders and investing in technological and digital startups that have the potential to expand beyond our country's borders. In total, we have worked on 10 projects, each of them being unique and nearly all of them being software-related.
There are exceptions, such as Promin, which focused on developing an engine for fast and cost-effective deployment of small satellites into orbit. However, the main focus has indeed been on seed, IT, and software.
Our investment portfolio amounted to approximately $5 million dollars.
With the onset of war, it has become challenging for startups in Ukraine to raise funds. Moreover, it is often more advantageous for them to develop in their target market. The best option is relocation, meaning moving closer to clients and investors.
How did the idea of creating QP Studio come about?
The work of the studio is closely tied to the activities of the fund. Currently, the question of capitalization in, let's say, five years is less pressing.
What matters most is the question of current liquidity. We are interested in rapid traction. Of course, we're not expecting dividends tomorrow, but it's important to see progress in the project and have tangible results during its implementation, let's say, within the first year.
The volume of investments, the funds we can allocate as a fund, is also decreasing. Consequently, we need to focus on the early stage, which led to the idea of a business studio, the optimal format for today.
QP Studio's focus lies in early-stage projects and direct involvement in their development. Our company not only invests money but also invests in itself: in our employees, operational activities, startup creation, and its formation.
What is so important that QP Studio can give to the entrepreneur?
We have a crucial tool that is essential in the early stages of business. It helps address or circumvent challenges. Our main hack is the ability to construct a project roadmap in such a way that each subsequent hypothesis is based on evidence from the previous ones.
This approach allows us to mitigate risks during startup launch. The value of the startup gradually increases as confidence in its future prospects grows.
Our studio can not only provide funds to test hypotheses, but also help build that chain, assisting in moving towards something significant and intriguing. However, we believe in taking small steps with minimal risk at each stage.
By adopting this approach, we can ensure a steady and calculated progression towards the ultimate goal, minimizing potential setbacks and maximizing the chances of success.
Could you describe the portrait of the entrepreneur with whom you envision collaboration?
This is an important question because my entire focus today revolves around people, specifically entrepreneurs. Ideas may come and go, but the human factor is paramount.
Often, by simply looking into someone's eyes and engaging in conversation, I can already assess whether our collaboration will be a good fit.
Who do we want as our co-founders? We seek entrepreneurs who are driven, individuals who are willing to set goals for themselves, work towards them independently, and take calculated risks.
Certainly, public resonance is important. What a person has been involved in and accomplished prior to joining the studio holds significance. What they can bring to the table encompasses education, past projects, collaborations, social interactions, and how they have demonstrated themselves in the social sphere.
Technical skills are also crucial: how well they know the industry they speak of, how logically they envision the development of their idea, and what gaps they perceive. However, I want to emphasize that the entrepreneurial fire that burns within their heart is the most crucial aspect.
Tell us more about the talent pool within the studio?
For the projects initiated by the studio, we also take on the role of team formation. It's important to understand how individuals perceive themselves, whether as leaders or specialists. If someone sees themselves as a leader, do they already have a developed idea? We have a framework in place to unfold the idea, and based on that, we create a chain of hypothesis testing.
Those individuals who do not see themselves as entrepreneurs can still be valuable as skilled professionals. They represent the potential talent reserve within the studio. They are as important as co-founders. When the idea takes concrete shape, a competent team of professionals is essential.
Is the age of a person who wants to collaborate with you important?
We don't focus on age as a determining factor. While we do welcome young talents, we are open to working with individuals of all ages. Currently, the people we collaborate with are 35 and older. Youthfulness is advantageous, but after the age of 40, individuals have valuable experience from both successful and unsuccessful ventures.
What truly matters is that a person can learn from failures and not repeat own mistakes. They should continue moving forward, developing themselves, and not be deterred by setbacks.
Entrepreneurs who understand that success doesn't come easily and that creating something requires relentless effort are typically the ones who possess this mindset. We are hardworking ourselves, and we seek partners who share the same work ethic.
Tell us more about the types of projects that your studio is interested in the current realities in Ukraine?
Ukraine is currently experiencing a state of war, but people still possess financial resources. This is a time to shift our focus towards more promising sectors and enhance the entrepreneurial system.
We are particularly interested in scalable software projects that require less capital investment. Large-scale investment businesses that necessitate a significant upfront sum are not our current target. Ideally, we would like to engage in digital development and software projects. We possess extensive expertise in this field, and such projects are easier to scale and replicate.
Additionally, they can be detached from the country's risks by pursuing development beyond the borders of Ukraine.
What sectors of the real economy do you consider successful for investment?
The most promising projects for us are those with operational traction and dividends. These include commerce, marketplaces, delivery services – projects that address basic human needs rather than solely focusing on new technologies and development.
It's worth mentioning the agricultural sector, which has remained one of the few areas where banks continue to provide financing, despite the ongoing war. It offers rapid traction: plant watermelons, they grow, harvest them, and earn money. Currently, logistics, supply chains, and interactions are undergoing changes in this sector, but there are plenty of ideas that can be explored.
When it comes to addressing military needs such as humanitarian mine clearing or early detection of mines, it is indeed a challenging topic. The studio's work is focused on building products based on client requirements. However, when the client is a frontline soldier, it becomes crucial to communicate the value of the product effectively.
We need to establish a framework for engaging with such projects, but it has not been developed yet. Therefore, while we are observing the situation, we are not currently ready to invest in military projects.
What if someone with a promising idea approaches you for collaboration, but doesn't want to quit their job?
Do you want to ask if QP Studio provides a salary? No. We offer investments to test the hypothesis. In our studio, everyone works on an outsourcing basis and is tied to the final result.
And what if the idea is new for the person, without previous experience in that field?
The typical development path for business and venture studios, startups, etc., is when a person identifies problems and tasks within a company that cannot be solved from within. They then leave the company, create their own project, and sell it back to their former company. In other words, you "feel some pain" or a need, and now you satisfy it.
We welcome individuals from an enterprise background whose projects are aligned with such development. It is important that the experience they already possess is relevant to the new venture. Venturing into a new territory is risky, and it's desirable to have something to lean on.
Nevertheless, it is not a red flag. We are open to discussion and collaboration.
In summary, what awaits a founder who comes to collaborate with you?
Entrepreneurs, whether current or aspiring, can get a ticket to the world of business with our help, where endless challenges await them.
Yes, our studio is not a pass to the Kingdom of Heaven, but rather a path of long and diligent work. However, we are well aware of the steps that minimize the risks along this journey.
In addition to financial support, we provide tools, resources, and experts to navigate this path together, faster and with better quality. We offer a mutually beneficial business partnership: we help them, and they help us. It becomes a systematic collaboration where no one is left dissatisfied.