Entrepreneurship and Change | Michael Lyzanets | TEDxYouth@KIS

Hi. So, today I'd like to talk about entrepreneurship and change. I'm founder of Ukrainian online lending company called moneyvo.ua. So, we operate 24-7 across all Ukraine. And what we do is we provide loans, small micro-financial loans of up to 2,000 hryvnias, up to 30 days, straight to your bank card, within 15 minutes. You can probably remember lots of different situations when you needed cash right here, right now. You were dining at a restaurant and the bill was larger than you'd expected. Or your car broke down in the middle of nowhere and you only had a credit card and a smartphone. Now you know there is a way out, moneyvo.ua. So, after this brief moment of advertising, I would like to talk about personal changes that usually happen to entrepreneurs and some changes businesses usually face. So, one of those, I think that many people become entrepreneurs after some significant life-changing events. For me that was coming back to Ukraine after studying in the UK and working in investment banking. While in Britain, I saw lots of ads of a highly popular online lending company, wanga.com, who were the first to pioneer in this area. They opened up in 2007 and since then they have become super large. They have market valuation of billions of dollars. And I thought that was a great idea to bring back to Ukraine. So, after coming up with the business plan, getting a team and securing funding from the 3Fs, we started developing the product. In case you don't know what 3F means, this is Family, Friends and Fools. And so, after a year or so, our product was ready and we launched. This was the happiest day of my life and the date was quite significant too. It was the 20th of February 2013, which was just the day before Euromaidan started in Kiev. So, going to some personal changes entrepreneurs usually face. They fall into three categories. They are the good, the bad and the ugly. Just like in old Clint Eastwood's movie. So, let's start with the good ones. First is ambition. You start a company not just for fun. You start a company to make it the best company in the world, to rock everyone. Together with creativity, you might find yourself in the middle of the night toiling on a business plan or designing a new product feature, which is great. Another thing is focus. Because there are so many aspects to running an asset company, like logistics, legal, marketing, design. And you need to know the basics of all of them. You don't need to be super competent in all of those areas, but you need to know the basics and be able to go deeper if necessary. So, then goes the bad things that happen to you after you become an entrepreneur. First one is anxiety. The thought of failure will come across every entrepreneur's mind. And sometimes it might take over and get you into a little depression. Another thing that together with less time, you might have some health problems. Bad eating habits, not enough physical activities, smoking or drinking alcohol. They all add up at some point of time. And next goes the ugly changes. First one is too critical. Because you're so ambitious and you want to create the best company in the world, you want only the best stuff for it. So you become overly critical towards other people's ideas or performance. And you might find yourself in a position of a bad guy who is always trying to find something to nag about. Another is suspicion. Because eventually, at some point of time, you'll encounter lies or cheating at work. And this will undermine your beliefs in people a little bit. But let's go to more factual things. What changes do companies face? Just some examples from running our company. After we just started, we were giving out loans on expert methods. So we were basically looking at a person's profile and deciding whether to give him or her a loan or not. We thought we were doing quite a good job until the actual results came in. And it turned out that the default rate, the non-paying loans, was more than 50%. It was 54%. So it was even worse than tossing a coin. We were wrong more times than we were right. After that, we were able to gather statistical data and create a good scoring model. And afterwards, our default rate gradually went down. And right now, it's below market average. Another example, but that's a good example of a change we had. A bad example is when we decided to create a new revenue stream. We wanted to add a small button on our website saying, you don't want 2,000 hryvnias, you want more, 10,000 or even more. Just fill this application and we'll transfer it to some bank and they might give you this loan. But this button stayed on our website slightly less than for a week. Why? Because we saw a sharp decline in our sales. Basically, this little button was cannibalizing our sales because some people who would have taken our loan, they were instead opting for a bigger amount and we had to close this opportunity. In general, I could say that entrepreneurship is a constant race towards adaptation and change. Sometimes you might feel comfortable running your company, but if you don't adapt and change, you might find yourself in big peril. For example, Kodak. They used to be quite popular in the 80s and 90s, but then smartphones came and electronic cameras, and where are they now? They're in big peril. But there are good examples. For example, Nokia. In the early 20th century, Nokia were making all kinds of stuff. Rubber boots, cables, military equipment, personal computers. But then they ditched all of those products in the early 90s in favor of just telecommunication devices. They became super popular. Right now, they might have some other kind of problems, but at that moment, they really rocked. Concerning this kind of topic, pivots, there is a great book by Eric Rice called The Lean Startup. It goes way deeper and I recommend it to anyone who wants to run their own company at some point of time. Concerning doing business in Ukraine, I think right now is quite a good time to start a business in Ukraine. Why? First of all, the business climate is getting better. According to World Bank's doing business ranking, this year Ukraine went 16 positions up. We still got a long way to go from the 96th place, but the situation is really getting better. Another thing is that no one quite knows what is the great place to be in right now, because there is a saying, oh, he or she was just in the right place at the right time. Everyone knew where those right places were a few years ago in some president administration, tax service, or some other murky government agency, but no one does know where this right place is now. So, whatever you do, either copy a business model of some western company or create your own fashion brand or start making donuts, it could be the next big thing. Another thing is that there is funding available. There are lots of different funding programs, both commercial and governmental. There are lots of VC companies, venture capital companies, that are looking to fund a good idea. You just have to come up with one. Finally, for those of you who are thinking of becoming an entrepreneur and not knowing where to start, here is my very short list. First, read adequate media, TechCrunch, Word, everything that has business in it. Another one is go to a conference. Networking is highly important. Meet with people. You might get a good piece of advice or you might find a partner for your business or maybe eventually you might even find an investor. And number three, if you already have an idea, you might consider getting into an incubator. This is something between a school for entrepreneurs and a venture capital company that will help you and fund you and help your business grow. So, that will be it. Thank you for your attention. Thank you.