Outsourcing and Outstaffing in Ukraine – workshop

We recently ran our first start up competition in Ukraine and while I was aware for at least a decade that Ukraine is an excellent place to outsource software development I was blown away by how sophisticated the offerings have become. One of our longtime MiniBar members Nick Black – who launched his company CloudMade at MiniBar more than ten years ago and exited successfully recently – now has over 120 top engineers in Kyiv (which btw is a very welcoming place and full of surprisingly stylish bars and restaurants and the city has lovely beaches).

We partnered for the competition with two very distinct companies who help tech companies at different stages. One of our partners is Cloud9Solutions who go beyond the traditional outsourcing model where you basically get product/software development cheaper than in lets say London, but you don’t have a dedicated team. They specialise in what has become known as ‘outstaffing’ as they hire a team for you, supervise it, do initial scoping and operate everything from payroll to booking holidays (though they also do more traditional outsourced dev projects). Interestingly they have also developed a specialised software platform for managing software teams and HR processes including billing called PeopleForce (get in touch if you want a demo and a beta account). Another USP of Cloud9Soluitions is that it is managed by an Australian chap called Andrew Cetinic who landed 3 years ago in Kyiv and built the business up from scratch, which helps a lot with bridging the different business cultures.

Our other partner is Alcor BP run by two Berkley law school educated brothers called Dmitry and Sergey Ovarchenko. They have taken the outstaffing model to the next level and essentially build whole back offices and R&D solutions for tech companies that need to rapidly scale up. Jokingly it left me with the impression that the future of tech start ups in a place like London is to have a couple of desks in a WeWork and everything from marketing to sales and development will be in Kyiv, which turns the traditional way of thinking about outsourcing on its head. They operate a whole keyturn solution: from finding office space, hiring talent, payroll to managing visas and every other legal aspect of setting up in Kyiv. We visited their offices and then went upstairs where we ended up on a floor full of developers who exclusively worked for a Silicon Valley company and the place in terms of style and vibe could have been in Shoreditch or the bay area.

With both partners we did a workshop as part of London Tech Week and a great case study was provided by the CTO of People.ai a Silicon Valley company funded by star investors including Andreesen Horovitz and YCombinator. In short they used Alcor BP to set up a whole back office/R&D operation in Kyiv in the presentation below they summarise their experience, lessons learned and why they would recommend this to others.

And here the Alcor BP presentations:


If any of you are interested in speaking to the companies or want to get involved in a future start up competition, or come to Kyiv let us know. We are also planning a tech tour to Kyiv for September.