Ragnar Sass, Lift99: “Estonian startups proudly declare: we are from Estonia. Ukrainians hide their origins”
Estonia in Ukraine
Our tour is given to us by Ragnar Sass, co-founder of Pipedrive and a chain of Lift99 startup centers. The first such center opened in Ragnar’s homeland – Tallinn, Estonia. Kyiv became his second homeland.
“Kyiv boasts great potential in terms of the development of startup community. That is why we picked it for our second Lift99 location. Speaking about numbers, Kyiv has 4.3 developers per hundred population. By comparison, it’s 2.3 in London. At the same time, Great Britain’s investments are 4 times higher than that of Kyiv,” Ragnar explained.
Lift99 is an international community of accomplished startup founders that help each other. It was established in 2016. You can join the community only by invitation. Lift99’s primary mission is to enable local and global entrepreneurs to meet and collaborate. For that end, Lift99 will bring successful startups, large investors and experts to Kyiv.
Sass himself has invested into two Ukrainian startups – AxDraft and Nuka. And he is determined to continue his angel activities in Ukraine. He intends to make at least three more investments in the nearest future.
The first time Ragnar set his foot in Kyiv was back in 2011. He was invited by Maks Ishchenko, DOU’s founder. “It was winter and it was freezing,” he recalls. Since then, he has been frequenting Kyiv, participating and organizing events, hackathons, including his own Garage48.
“Today, I feel myself at home in Kyiv. And I witness all the positive changes you have.”
Last year, Lift99 raised $2.3 million investments to develop a software platform for startuppers and announced its plans to scale up across the entire Central and Eastern Europe. In the future, the team plans to create a pan-European startup community with offices in various countries.
Ragnar does not rule out a possibility of launches in other cities of Ukraine: “let’s see the results of the first space.”
Sass announced Ukrainian location of Lift99 last summer. Back then he said that the opening would not kick off before winter. In reality, the space opened a bit later – the official opening was held on April 24.
Sass had a number of tough requirements to the location selection process: it had to be downtown building well placed for public transport allowing you to quickly commute to an airport. “We will bring here foreign investors, and they value every minute,” he explained.
Ukraine had quite a few pitfalls prepared for Estonians. These included rent and repair issues among others.
“It wasn’t easy for us to make people meet the deadlines. I mean construction workers. We had to put pressure on them, and even scream at them… In Estonia, is there’s an agreement with fixed terms, everyone is working diligently to meet the deadlines. It’s different in Ukraine,” Ragnar explains.
Nevertheless, they managed to kick off the space on time, despite the fact that renovations in some rooms are still on the way.
Yellow means Ukraine
Lift99 occupies 1,800 sq. m. spread across two floors (3, 4) in the building of the new business center “Senator” at Volodymyrska 101. They are also going to have a location on top of the roof by summer. The details of the new location are not disclosed. Perhaps, it would be a lounge area with a space for cocktail parties.
The hall area features a special pride of Ragnar – a Ukrainian military helicopter that was purchased from the military, not without difficulty.
“That is why we are here. Everything is possible in Ukraine, even a helicopter in office!” Ragnar laughs.
The deal almost fell apart when martial law was introduced in November. However, the Estonian managed to locate a middleman who helped buy the helicopter, and Sass eventually got hold of this precious piece of interior. Admittedly, the purchase is only half the work, as it had to somehow fit inside the space. For that, the helicopter had to be disassembled into parts and then reassembled again.
Lift99 has a clean design with graphic puzzles on walls. Each is associated with prominent inventors from Ukraine and Estonia that changed the world with their inventions. The main color of the interior is yellow – the color of the Ukrainian flag.
Hub’s spaces bear the names of the inventors. For example, lounge area featuring the helicopter is called Sikorsky – in honor of Igor Sikorsky, a famous Ukrainian aviation pioneer, inventor of single-rotor helicopter and the first transatlantic hydroplane.
Next to it is the largest event area Mriya, named after the legendary Ukrainian aircraft that, for the record, is 36 times larger than the area of this room.
The third floor features conference rooms for 10 people called Prymachenko (in honor of Ukrainian artist Mariya Prymachenko) and Amosov (in honor of scientist Mykola Amosov).
Offices at Lift99 are designed to accommodate up to 4-6 people: Koum (Jan Koum, Whatsapp), Wozniak and Levchin (in honor of Steve Wozniak and Max Levchin – cofounders of Apple and PayPal, both of Ukrainian ancestry), as well as Ukrainian engineers Korolev (legendary Sergei Korolev who put the first person in space) and Romankiw (inventor of hard drive Lubomyr Romankiw).
The shared coworking space is called Puluj to honor the prominent Ukrainian physicist and inventor Ivan Puluj. Next to it is a workspace of Lift99 employees – Lina Kostenko. The third floor also accommodates skype rooms named after Ukrainian cities Kharkiv, Odesa, and Lviv.
The fourth floor features only office spaces. The shared coworking area here bears the name of the Ukrainian car Zaporozhets, and the other one is named after actress Milla Jovovich.
Office rooms that accommodate 6-8 people bear the names of Ukrainian actors, islands, inventions, and even historic and cultural symbols and artifacts. For instance, Camouflage, Sonyashnyk, Chaika, Vulyk. There’s even a Stalker game room named after the famous computer game.
In total, the 4th floor accommodates 8 offices, two skype rooms and 4 conference rooms, and several thematic areas.
One of the offices has a mysterious inscription: “No dog, no deal”. There is an interesting story behind it.
When Sass was negotiating the lease terms for Lift99, he told that he was planning to allow entrance with dogs. The developer was against the idea of dogs allowed inside.
“And then I said: no dogs, no deal! And we included a provision in our lease agreement allowing to have up to 10 dogs inside at any given time. So it is officially allowed to enter with your dog.”
Lift99 is positioned as a “place like home”, i.e. a place where you can live (the coworking has kitchens, showers, sleep and rest areas). That is why on the day of opening the guests were asked to wear slippers.
The coworking works 24/7, and the landlord didn’t like it either. But we managed to change his mind. “We explained that our target audience is people working without weekends and often burning the midnight oil,” Sass recalls.
“All in all, making something happen in Ukraine takes twice the effort than in Estonia. It applies to anything. But we like it here. So many talents here!”
According to Ragnar, 50% of offices are already taken by residents, including Ukrainian startups (AxDraft, Nuka, Dooge and others), as well as teams of overseas companies. Some residents are here at Lift99 temporarily (3-6 months) and free of charge.
“This is not our primary business. We charge for residence, but we also have a chance to accommodate pre-seed stage startups free of charge. It is our contribution to ecosystem development, and we will benefit from it, including financially, in the future,” Sass says.
Prices start at $20 per day or $200 per month without a fixed desk ($275 with a fixed desk). The monthly price for an office is $350 per desk. It is not cheap, but Ragnar does not fear competition from Kyiv coworking spaces like Chasopys, UNIT.City, Platforma, and others. He intends to cooperate with them. We all pursue the same mission, which is the development of the startup community and creative economy in Ukraine. The only exception is Creative Quarter.
“Ethics is paramount for us. I did not investigate the details, but in my opinion, Ilya [Editor’s note: Kenigshtein.] was pushed out of business. Everything went the wrong way, it should not be like that. Similar things cannot happen in Silicon Valley.”
Lift99 raised over $1M from investors. The return on investment period is set to 5-6 years. According to Ragnar, it is a long-term project.
Ukraine is politicized through the eyes of an Estonian entrepreneur
Ragnar’s experience of dealing with Ukrainian public authorities has also been somewhat frustrating. Sass came to register his company back in August, but the red tape dragged the process for 8 months. “3-4 weeks to open a bank account, 3-4 to coordinate money transfers from Estonia to Ukraine – it is, undoubtedly, beyond reasonable,” entrepreneur laments.
That being said, they never paid a single bribe:
“I have to say that Ukraine has really changed in terms of corruption. We have never faced corruption here. And that in view of the fact that when you start something, you need a lot of permits.”
Nonetheless, our country still needs to work on many things. In particular, we need to improve the business climate. So far, according to Sass, the environment does not encourage an increase in investment flow into Ukraine, at least as far as startups are concerned.
“Ukraine is teeming with robust startups, but Western investors are reluctant to invest because they are concerned about Ukrainian legislation, courts, and prosecutors… That includes me. I cannot invest in Ukrainian companies. It is too big of a risk. If you have property here, you cannot rely on the law.
That is why Ukrainian startups prefer not to tell that they are from Ukraine. Instead, they say “We are a London startup” or “we are a company with headquarters in Washington.” No such thing in Estonia. Estonian startups proudly declare – we are from Estonia! I sincerely hope that the president-elect will keep his promise to change Ukraine’s justice system.
Here’s an example: you need to go through hell and high water to get a business visa to Ukraine. We really hope that the new government will pay heed to startups and change legislation to benefit them. Other governments have been doing it for a long time – they initiate special programs, etc.”