Business

This 36-Year-Old Ukrainian CEO Shares Tough Lessons on How to Run a Start-Up in Wartime

Like all CEOs, Aleksandr Volodarsky bears the heavy responsibility of the success or failure of his company.

But the 36-year-old has to make hard decisions that most CEOs don't have to — he is running a start-up in war-torn Ukraine.

"The biggest problem is not to have people in place. One of the [employees] who's fighting on the front line is our chief marketing officer," said the founder of Lemon.io, an online freelance marketplace for software developers. 

When Russia's invaded Ukraine in February, Volodarsky told his 60-strong staff that their jobs will be retained and they will continue to receive salaries — even if they are mobilized or fight voluntarily. 

"A lot of people were misplaced and lost their jobs … this helped a lot because if you have to go through this experience and also worry about your income, it's like double anxiety," Volodarsky said. 

"If you lost your job, it's much harder to go through this."

What are the lessons this CEO learned from running a start-up during wartime? CNBC Make It finds out. 

1. Questions with 'no good answers'

As the war drags on, Volodarsky is now faced with uncertainties for the future. 

"One of the hardest questions right now is, how do we hire another person — or not hire another person — and keep the [first] person?"

He added: "I want to take this job [chief marketing officer] but actually suck at the job … it's not efficient, it's not good for the company in the long run. But we need someone to do the job." 

That's not the only dilemma he has "no good answers" for. For example, should he hire men right now, given that there could be "full mobilization" at any time? 

"On one hand, excluding someone is just an ugly thing to do. But on the other hand, I have 60 people that I'm responsible for, and if I do something that can hurt the company and their future income, I cannot do that," Volodarsky said. 

He added that he is still "debating" on the right thing to do, but one thing for sure — he wants to keep his promise to all of his staff.

"Decisions I make right now are not the decisions to make [the situation] better. It's just … to suck less." 

2. Thinking ahead

Volodarsky also decided to pay his employees in advance — and in cash. 

"Closer to the war, people got more nervous and we said, let's try to make some plans so people feel confident," he said. 

"We decided to give people two months' salary in advance so they have cash. Whatever happens, people always need cash … the banking system can go down, whatever can happen."

True enough, the Ukrainian central bank suspended electronic cash transfers on the same day that Russia invaded the country.

As the invasion proceeded, ATMs across the country started to run out of cash, and some people stood in line for hours only to face a $33 limit per transaction.

"It's been challenging. The last five months have been a bit messy … but people are confident that if we are working, they have [a sense of] security." 

3. Celebrating wins

Russia's invasion of Ukraine sent 3 million people fleeing their homes and into neighboring countries in less than three weeks. Because of that, a lot of people couldn't work, said Volodarsky.

"They had to relocate, make their own plans and help their families. At the beginning, we said, 'Screw all the goals [for the company], we just want to make sure that people can get settled.'"

But Volodarsky realized that didn't help with his employee's morale. 

"When everything is a mess and uncertain … having a sense of accomplishment actually helps [them] to live a normal life. At least you can see that there is some progress in what you do, instead of sitting and waiting for the war to be over."

He added that he started steering his team to push for the goal that was set before the war, which was for the platform to be "the main source of income" of software engineers. 

"We also have smaller goals to improve the platform and user experience … People [in the company] are excited because they actually can provide jobs [for] a lot of Ukrainian developers," said Volodarsky. 

The start-up says it will provide jobs to 1,000 engineers by the end of 2022.

"You feel there's a little more meaning in what you do. I saw people get very excited every little win that we had." 

4. Giving is 'not hard'

Volodarsky's decision to give "all profits" to the Ukrainian military has also given his company a good dose of motivation. 

"Not everyone can do something [for the war], but they know that if they can keep contributing to the company and the company is growing … they actually have influence."

However, Volodarsky stressed that giving up profits is less "heroic" than it sounds. 

"Actually what are profits? You make revenue and whatever you need to spend on — salaries, advertisements … and then whatever's left you give to the army," he said. 

"Giving people money is not hard. We are able to do this because we've been able to generate some cash and we're still profitable."

Volodarsky added that the company has always been "capital efficient," while taking "very little outside funding." 

"It cannot hurt you because you give only the profits … we're very happy that we've given a lot of money and it is very fulfilling to help the army get closer to victory." 

Don't miss: They dropped out of Stanford to run a startup. Now, it’s close to becoming India’s next tech unicorn

Like this story? Subscribe to CNBC Make It on YouTube!

Copyright CNBCs - CNBC
Contact Us