UGEARS Startup: “Our Goal Is The World Market”
WeLoveUA has visited the UGEARS manufacturing – the Ukrainian company, which creates unusual wooden construction sets. We had a chance to interview the founders – Denys Okhrimenko and Gennadii Shestak.
Customers from all around the world, the lightning-fast project development, joining Kickstarter on November 24 – that’s the result of an original idea to combine wooden construction set and hard work. Kyiv company is a good evidence to confirm these words: in one room, the employees are working at the machines, and in another one, about ten people are framing an already produced constructor set. “We’ve got an order for the ready product as a souvenir,” Denys says.
WeLoveUA: Your production is impressive. How many people work here?
Denys Okhrimenko: 22 people are engaged in the production process, and there are only 30 of us.
How much constructor sets are produced in a month?
Each time the number is somewhat different. For example, in the summer, we made more than 3000 models per month. Actually, it is an average number.
We want to expand. Now, we have 13 machines, each producing a construction set in half an hour. This speed is not satisfying. When the idea appeared, I was planning to use a press, not laser cutting machines. It would have coped with this task for just 90 seconds. But our construction sets are too difficult to be beaten by a press. Therefore, that’s the situation we’ve got. We are going to buy new machines and expand the space.
Such machine costs about $7-10,000. If you buy directly from China, it will be cheaper – about $5,000. Until we’ve established the cooperation, such purchase is a too risky affair for us. Maybe we’ll solve this problem soon.
There is one more problem, however, – concerning the material for models. Plywood is a ‘seasonal’ product, and we need it regularly and at any time of a year. We have bought the material from domestic producers, but none of the Ukrainian companies want to cooperate with us. They can’t provide us with plywood all year round because most of their products are exported. That’s why we buy plywood abroad.
Sometimes parties of poor material come. Then the percentage of faulty workmanship increases. But this is a normal thing in any production.
An interesting observation: at first, your Facebook page was in Russian. Now it is in English. The UGEARS’s promotional video on the official page is also in English. Does it mean that you have changed the vector?
Gennadii Shestak: For a long time it was in Ukrainian. But you’re right – we are changing the vector. Our task is the world market, primarily European (we’ll start with Poland and Germany), then we’ll move to Australia and Canada. As for the Ukrainian area, it is too weak. The economic situation worsens, buyer’s possibilities get lower. This is especially true for hobby items segment where our product belongs.
By the way, the English language on a Facebook page is a thing we’ve apologized for. Our fellow Ukrainians, on the contrary, were happy to hear this, for they really care about our way to Europe and the US. Ukrainians are kind of a “fan club” rejoicing our success abroad.
We are one of the few projects that can join Kickstarter. This is our chance to understand to what extent the world market needs our work. Therefore, our nationals support us in this endeavor.
Kickstarter is only the next stage for us. Before you start this subjugation of the top, you need to thoroughly test the product and make it almost perfect. This process took us over a year.
A simple example: we’ve recently experienced the third package shift. We had to remake barcodes and instructions in order to make our product line with the European standards. The rebranding was also present: now we are UGEARS, not Ukrainian Gears.
Now we are negotiating with Indiegogo. Their manager has contacted us recently – he wrote that the company is interested in cooperation. This is a good sign – when you are wanted, not asking for cooperation.
It is known that Ukrainian startup needs a mediator who is a resident of the United States to hit on Kickstarter. Is it difficult to resolve this issue? Does it make difficulties for our starters?
It isn’t difficult. There are professional mediators. Roughly speaking, a startup can even choose between them. Our mediator is a good UGEARS’s partner with whom we’ve been working for a while now.
How does the mediator work? He collects money there, but if items don’t come from here, he won’t transfer funds. You know, for him Ukraine is some dark questionable country. A mediator undertakes legal responsibility. He is alert because the whole story can turn to his criminal prosecution in the US.
There is a mediation agreement, where the mediator’s obligations and his profit percentage or fee are spelled ($1-15, 000). The question here is different: whether the product needs branding. For example, some guys have been recently selling specific playing cards. Actually, they don’t need any branding, because similar products are produced a lot. Such projects don’t usually earn much.
Legally, it is a regular export. We get money from the company and fulfill orders. A mediator hires logistics specialist to send the production to the United States by sea or air. As a rule, those are the Amazon or US mail. Also, the products are stickered and packed – there are special terms for giving it the proper form before sending.
The startup is carefully examined by Kickstarter as well. The main purpose is to make sure no people will be deceived. After all, they risk their fair name when promoting any project. This is the thing Indiegogo lacks in. There are many projects that disappear into nowhere. Therefore, although Indiegogo is older than Kickstarter, the traffic is lower.
Your staff is quite friendly. What do you value the most in people?
Commitment, loyalty, and professionalism. Of course, the production is divided into sections. The attitude depends on each particular profession, but the main principles are the same. Occasionally, we had to fire some employees. Only best of the best left.
To be continued.
Photo: Vadym Sivak