By guest authors Irina Patterson and Candice Arnold
Irina: Where do you think entrepreneurs could acquire business skills for building and developing their companies?
Jim: There are lots of organizations. I’m in the Philadelphia area, and the purpose of many organizations here, universities and incubators that run entrepreneurship courses, is to try to help people figure out that it’s not so much about the technology as it is about the business.
In other words, you may have the world’s most wonderful, exciting technology, but unless you have a sense of how to market it, how to scale it, how to get cash flow, chances are you aren’t going to be successful in raising any money at all.
Irina: What was your experience outside of the United States?
Jim: I worked in Ukraine for three years. I lived in Lviv, which is in Western Ukraine, about 15 miles from the Polish border, and I set up and managed a business incubator and a micro lending facility. I set it up from the start.
As I’m sure you appreciate that, being from Russia yourself, working in these challenging environments is very, very difficult. Everybody has their hand out to get paid off; it’s very complicated. I don’t have to tell you that.
What’s exciting to me is that I had been at this particular operation for almost 10 years, but it is self-sustaining and it’s been around.
I had a staff of 15 Ukrainians whom I had hired. They were very talented, bright people who spoke English and were computer literate and everything. My job was to train them to become lending officers, train them about what investing was, how an incubator worked, and so on.
Unlike many other U.S. government–funded programs, this one has lasted and stillcontinues to thrive. There are ways in which you can make this work, but it’s always challenging, as I’m sure you can appreciate that.
Irina: Was the program funded by the U.S. government?
Jim: Yes. It was through an NGO (nongovernmental organization), through a United States agency for international development, which gave a grant to an NGO in Washington. It had three years to spend some money, build an incubator, set up a lending program, and then leave. At that point, we turned it over to the Ukrainians, and they are the ones who have continued with no extra funding.
Irina: How much was the original funding?
Jim: It was probably about $1.5 million over three years, something like that. It wasn’t large, but it was enough to make this work because in Lviv, Ukraine, you don’t need a lot of money to have things happen.
Irina: Was that for running it and lending the money?
Jim: It was for running it all. There was a little fund, $200,000 for a micro-loan fund with which to build a building, pay the people, and all of that. This was not a lot of money, but the point was, it did work.
Irina: What kind of businesses were you funding?
Jim: These were local businesses that we would usually bring into the incubator. It might be a person who would import tea from Poland and want to distribute it in Ukraine. It could be a driving service. There was somebody who needed a truck.
These were small businesses, nothing to do with technology, but having a lot to do with how, in an environment like Ukraine, the people start small businesses. So, we also set up training and consulting programs to help folks understand what businesses were all about.
Irina: Were the training and consulting paid services?
Jim: Did the customers pay for it? Very modestly, not a lot.
Irina: Being from Russia and being very familiar with the situation in Russia and the former USSR, I am happy to hear that it worked and operation is still in business.
Jim: Yes. It’s continued to evergreen. We set it up in such a way that we had a lot of legal help to make sure that loans could be collateralized, which is the key in micro-lending facilities. So, the answer is yes, it’s still in business.
Irina: Thank you, Jim. Fantastic insights.