Founder of ‘Ukrainian uni­corn’ GitLab happy with life in Kharkiv

Kyiv Post - - National - BY DENYS KRASNIKOV KRASNIKOV@KYIVPOST.COM

While most of Ukraine’s suc­cess­ful tech en­trepreneurs long ago re­lo­cated to Eu­rope or the United States, Dmitriy Za­porozhets, the founder of GitLab, a startup now worth $1 bil­lion, is de­ter­mined to stay put.

Za­porozhets lives and works in his na­tive Kharkiv, the city of 1 mil­lion peo­ple lo­cated 400 kilo­me­ters east of Kyiv. Liv­ing in his home­town means his liv­ing ex­penses — and the salary his com­pany pays him — are less than those of his em­ploy­ees who live and work abroad.

"I've got a house, friends in Kharkiv. It's cozy here and I can fo­cus on my work, not over­spend­ing money on liv­ing,” Za­porozhets told the Kyiv Post dur­ing IT Arena, a three-day tech fo­rum held in Lviv in west­ern Ukraine on Sept. 27–29.

“If I moved to Sil­i­con Val­ley, it would be more ex­pen­sive for my com­pany. I don’t want that."

Mod­est start

The story of GitLab started back in 2011, when Za­porozhets worked as a web de­vel­oper at Ukrainian IT com­pany Sphere Soft­ware. He used to pro­gram us­ing what is now Mi­crosoft’s GitHub, a ser­vice to store and edit pro­gram­ming code, but found it in­con­ve­nient. Since there weren’t any al­ter­na­tives, he de­cided to cre­ate one for him­self. The re­sult was GitLab.

For the next 18 months, GitLab con­tin­ued to be just a hobby for the Ukrainian, but then he met Dutch-born Sytse Si­jbrandij who sug­gested build­ing a busi­ness out of it. They set­tled for a sub­scrip­tion model, of­fer­ing more fea­tures for sub­scribers.

Za­porozhets and Si­jbrandij be­came the startup’s co-founders and split their roles: the Ukrainian was in charge of the tech­ni­cal side of GitLab, while the Dutch­man took on the busi­ness side.

Grad­u­ally, the ser­vice gained pop­u­lar­ity among pro­gram­mers and at­tracted at­ten­tion from the cor­po­rate world — mod­ern or­ga­ni­za­tions rely on soft­ware and need a place to write, share and store code.

To­day 100,000 firms use GitLab, in­clud­ing heavy­weights like IBM, Sony, Alibaba, SpaceX; and the world’s lead­ing science or­ga­ni­za­tions, NASA and CERN.

And along with the pop­u­lar­ity came fi­nan­cial suc­cess.

The com­pany started to grow, al­most ev­ery year at­tract­ing money from in­vestors and ex­pand­ing its team to 350 peo­ple.

Just two weeks ago, on Sept. 20, GitLab car­ried out its sixth in­vest­ment round, rais­ing $100 mil­lion. The de­tails of the share pur­chases by in­vestors have not been dis­closed, but GitLab now says the com­pany is worth over $1 bil­lion.

Thus, the Ukrainian-born startup is now what the tech com­mu­nity calls a “uni­corn” — a com­pany val­ued at over $1 bil­lion.

"A bil­lion dol­lars! That sounds in­sane," Za­porozhets said. "It is men­tally dif­fi­cult to get used to this sum. For so many years I've been work­ing for food and salary, and now peo­ple keep telling me I’m a mul­ti­mil­lion­aire.”

Za­porozhets says his next step is to take GitLab pub­lic in 2020. As the com­pany has taken money from in­vestors there are now only two op­tions to pay it back: sell to some­one big­ger or go pub­lic.

"Since we don't want to lose GitLab as a brand and want to re­tain what we've cre­ated and re­main in­de­pen­dent, we ought to be­come a pub­lic com­pany," Za­porozhets said, adding that sell­ing GitLab might ruin the brand the co-founders have care­fully built.

Ukrainian uni­corn?

Although Za­porozhets works from Ukraine, GitLab has no of­fice — its 350 em­ploy­ees are scat­tered across 45 coun­tries; they work from the com­fort of their own home coun­tries.

How­ever, the fact that the com­pany was co-founded and its code ini­tially writ­ten by a Ukrainian meant lo­cal tech play­ers and me­dia have been happy to dub GitLab a “Ukrainian uni­corn.”

Za­porozhets, in con­trast, thinks of his com­pany as be­ing a global one, but he un­der­stands why Ukraini­ans have laid claim to GitLab, as they are look­ing for some pos­i­tive news.

“Maybe in this way we’re try­ing to make our­selves be­lieve that we’ve made some progress amid this tough time for the coun­try,” he said. "Ukrainian peo­ple of­ten fo­cus on the bad things around them, but at the same time, they com­pen­sate for that by overem­pha­siz­ing the good things as well."

“Let’s be hon­est, Ukraine doesn’t have so many pos­i­tive mo­ments, so peo­ple tend to cher­ish the good things. For Ukraine, GitLab is some­thing to be proud of."

Ukraine’s tech scene

In fact, apart from Za­porozhets, GitLab only has two other Ukraini­ans on staff — a de­vel­oper and a mar­keter. The rea­son is that peo­ple here are “not proac­tive,” Za­porozhets said.

"Ukraini­ans for some rea­son don't seem to have the drive to find a com­pany they'd love to work for,” he said. “Peo­ple ap­ply for the jobs that are avail­able, not the jobs they'd like to do. If more (Ukrainian) peo­ple sent us re­sumes, more would work for us, nat­u­rally.”

An­other thing hold­ing Ukraine’s IT sec­tor back, ac­cord­ing to Za­porozhets, is the low num­ber of tech star­tups. Ukraine’s slug­gish econ­omy and tan­gled leg­is­la­tion are the rea­son for that, he thinks.

With con­di­tions be­ing un­fa­vor­able for new star­tups, Ukraine has in­stead be­come fer­tile ground for out­sourc­ing com­pa­nies, which cur­rently em­ploy about 50,000 lo­cal tech spe­cial­ists.

“(Out­sourc­ing firms) are gen­er­ally not bad: they teach peo­ple, cre­ate jobs. But they mostly just re­sell the work­ing time of their staff pro­gram­mers to for­eign clients,” Za­porozhets said.

That means pro­gram­mers quickly hit a glass ceil­ing, he added.

“Look­ing for a ca­reer growth, they seek com­pa­nies that cre­ate prod­ucts,” he said. Since there are few of th­ese in Ukraine, pro­gram­mers go abroad to work.

GitLab suc­ceeded in Ukraine mainly be­cause of luck, Za­porozhets said.

“I am lucky my co-founder has a busi­ness mind. He’s why GitLab is not just a pop­u­lar open source project, but also a suc­cess­ful com­pany that’s now worth $1 bil­lion,” he said.

“I might’ve been a good pro­gram­mer, but with­out (Si­jbrandij’s) un­der­stand­ing of how to run GitLab, I’d have failed.”

The Kyiv Post’s tech­nol­ogy cov­er­age is spon­sored by Cik­lum and NIX So­lu­tions. The con­tent is in­de­pen­dent of the donors.

GitLab co­founder Dmitriy Za­porozhets talks to IT Arena con­fer­ence at­ten­dees on Sept. 29 in Lviv. On Sept. 20, GitLab car­ried out its sixth in­vest­ment round, rais­ing $100 mil­lion. The de­tails of the share pur­chases by in­vestors have not been dis­closed, but GitLab now says the com­pany is worth over $1 bil­lion. (Lviv IT Arena)

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