IT business in Eastern Europe

The US or Western Europe investors willing to run the business in Eastern Europe should consider a lot of things and undertake many risks.

Motivation. Some classical approaches don’t work here while others do. You can hardly expect organizational commitment, but people will greatly appreciate even minimum social package besides the salary. Stock option plan may not function well, but bonuses will be appreciated.

Education. There is a lack of the Western style education in Eastern Europe countries. It is a fact – even though USSR died several decades ago the overall approach to the education remains different. Different doesn’t mean worse and when it takes the technical education can be even better. But if we talk about economics and management then you may end up with the people who though young speak a different language with you. There are several possible solutions here.

  1. Bring the middle level or X level staff from your country here.
  2. Train your employees. Western-style education can be easily found nowadays.
  3. Hire only right people. Those educated in USA or EU or those who completed Western courses locally.

Government and legislation. Government and law are probably the trickiest issues for Western investors. Not knowing the ways and roundabouts may cost you business. And using the right approaches can save you a fortune. You will need local consultants and lawyers as well as local accountants and, at least, one local X-level manager who can show the path.

Exit strategy. For IT businesses, you will have a problem with the Exit Strategy and with the investors ready to undertake the above-listed risks. Proper positioning and duly registration of the company addresses the Exit problem. Many companies with Eastern Europe roots were successfully sold to the big guys or underwent IPO.

Artem Berman

Artem Berman

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