CodeGym co-founder Alex Yelenevych tells us what it’s like to run a start-up in the shadow of war, and the bold and creative steps being taken to keep the team together.
The full-scale Russian invasion became a tragedy for all Ukrainian people. It also pushed many businesses to the edge of survival.
According to a survey from the Institute for Economic Research and Policy Consulting, more than 70pc of Ukrainian companies cut their production in April, and the number of employees decreased by 58pc.
First days, first steps
The beginning of the war was incredibly difficult. Panic, sounds of missile strikes, air raid sirens, running to the basement, and an almost unbearable feeling of uncertainty. This was the emotional state familiar to all our team members. During the first days, everyone had to decide: should I stay or leave? And if I leave, go where?
Some went to villages to protect themselves and their families, and some escaped to large western Ukrainian cities. Some went abroad.
Every choice was difficult, and even though it’s been half a year, we are all still struggling in different ways. For example, people who fled Ukraine are homesick and trying to decide if it is time to return.
The CodeGym team scattered. Work tasks seemed obsolete. All we wanted to know in the first few days was: How are you? Where are you?
We wanted to support the team as much as possible and ensure they were safe and healthy. And if a team member needed help, we tried to provide it.
‘We needed to understand how to develop further, what our strategy would be and what our future could look like’
– ALEX YELENEVYCH
Those first days were filled with stories. Maybe one day we’ll make a movie out of them. Stories such as our employee who went to Vinnytsia from Kyiv by bicycle. He was cycling day and night, passing military checkpoints, and hearing explosions. Another colleague joined the army, and we collected money to buy a bulletproof vest, a backpack, a laptop, and other things for him. Some evacuated their relatives from hotspots, and someone left a house in Irpin because it was shelled.
After our team members settled down in different places, we established communication. We tried to talk to people a lot and held psychological sessions with our game designer, who’s also a counsellor. We shared our stories and traumas. Eventually, our state became more stable as we adjusted to the new reality.
Then, we could think about the business, estimate the damage, comprehend the consequences, and analyse possible scenarios. We needed to understand how to develop further, what our strategy would be and what our future could look like.
Wartime challenges
CodeGym faced many problems, and we weren’t prepared for them to happen simultaneously.
First, as I said, our team was struggling. People were in a state of shock, they felt scared and disoriented. Also, not everyone could work because of technical issues. If you escaped to a small village, you most likely wouldn’t have a good internet connection. And if you were hiding in the subway when air raid sirens were on, you couldn’t work.
Even employees who managed to evacuate to safe places experienced problems. Some were leaving their homes in a hurry, so they forgot their laptops. Several people from our sales team were working from their phones. Later, we organised the delivery of the equipment to everyone who needed it.
The second big problem was the significant drop in revenue – 40pc during the first month. Before the war started, we had a lot of users from Ukraine, Belarus and Russia. We stopped accepting payments from Russia and some Belarusian banks, and Ukrainian users couldn’t study because of obvious reasons. In just a few days, the number of payments decreased to an extent we hadn’t seen in years.
Third, about three months before the war started, we hired 15 new employees. We were working on a new project and investing a lot of money in its development. It meant we had almost no free financial resources to keep the business afloat for a long time.
‘We were seriously discussing our possible steps in case large banks crashed’
– ALEX YELENEVYCH
And, of course, in the first few weeks, nobody knew if the government was capable of keeping control over the financial situation. There was a high probability that the financial system would collapse, leaving us with no way to pay salaries, perform transactions etc. We were seriously discussing our possible steps in case large banks crashed.
The situation looked grim. We were afraid that we would have to lay off some people, even though doing so would hurt them. We knew many of our employees’ family members had already lost their jobs, and we couldn’t leave people without income. We always considered our team to be a family. We have known many of our employees for years, and we respect and appreciate them.
Also, over the years, we’ve created an extremely strong team with a unique set of competencies, and our employees have gained tremendous experience in edtech. Every team member is a high-skill professional, and firing any of them would be a huge loss for the company.
That’s why there was no disagreement among executives and owners: our main goal was to keep the whole team and help everyone through this difficult time.
No layoffs, more action
Cutting costs is one of the first things companies do when they find themselves in a difficult situation. And even though typically, our rule is trying to earn more rather than buttoning up the purse, now we had to do both.
On the one hand, we temporarily cut salaries for some employees. It was a hard decision and tough choice: for whom should we cut the pay? Finally, we devised a solution. We would reduce salaries for employees who earned more than the specific sum we agreed upon. Other people’s salaries remained the same. The logic was straightforward: each family must have enough financial support to survive. Also, we approached every employee individually because their situations were quite diverse, and we wanted to ensure everyone felt financially secure.
Moreover, we decided that this pay cut was only a temporary measure. In August, we have already started paying out the rest and, as of September, all the salaries should return to their previous level.
On the other hand, we started acting fast and bold to survive. First, as soon as possible, we launched a promotional campaign offering a 50pc discount for all users. It helped us significantly increase sales. Over the first month, 1,000 users took the deal.
Then, we decided to develop and launch new products for the US, EU and Chinese markets. We’ve been working on this idea for some time, but the war sped up the creative process. By now, we have already launched new Java and Android courses with mentors. New products allowed us to engage more users (more than 200 so far), boosted our profits and made some losses less painful.
‘Desperate times call for desperate measures’, they say. In our case, desperate times helped us dare to move in a new, totally unknown direction. We started researching and targeting several new markets: the Netherlands, Romania, Serbia, Croatia, Latvia, Estonia, Lithuania and more. And we can already see the first results – an additional 5pc to profit.
Last but not least, we started looking for big projects which, within six months, could help us reach a new level and lead to a multifold increase in income. That’s how the idea of a Java course with a guaranteed job offer was born, as well as the idea of creating our own out-staffing company. Now we’re implementing all of them.
Our new reality
Over the last six months, the company has changed a lot. We’ve turned into a completely remote business. We’ve also begun managing risks better; for example, now we duplicate critical elements of the value creation process.
We’ve become more focused and – if it’s possible – started working even more. Besides performing work tasks, many of us participate in volunteer projects (such as Donor.ua). Also, CodeGym helps Ukrainians who have lost their jobs due to the war. We’re teaching about 1,000 people Java for free. We believe learning will allow them to find a new job in the IT industry.
I think we became stronger as a team. The morale of the team members improved because they saw we really cared about them, and they were grateful for our efforts to keep the whole team.
As individuals, we all can add ‘resilience’ to our CVs. It sounds like a joke, but it’s not funny; it’s our reality. Of course, most of us are mentally and physically tired. But even now we’re trying to support each other and maintain a positive attitude.
Financially, we’re feeling more stable. Nobody knows what will happen in the future. But, right now, we’re doing our best to grow and develop our business. And we’re sticking together.
Alex Yelenevych is the co-founder and chief marketing officer of CodeGym, an interactive educational platform where people can learn Java programming from scratch.
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