‘Put everything and lived on $200 a month’: how the Ukrainian startup has raised $5 million investment from the U.S.

Andrew Zurinski and Alexander HUD, the co — founders of Ukrainian startups Restream. This is a service that allows you to broadcast video in real time more than 30 global platforms, including YouTube, Twitch and others, says Mc.Today.

'Вкладывали всё и жили на $200 в месяц': как украинский стартап привлек $5 млн инвестиций из США

Photo: Depositphotos

Andrew and Alexander began to create a Restream in 2014. Now the service uses 2 million users, and he gets $5 million investment. I started the boys on their own savings and once due to a lack of money hardly has not lost a start.

Andrew Zurinski talked about how far we had to go to businessmen before the first investment, and as a company from Vinnitsa received a residence permit.

The error in the previous startup

Alexander Hood first met in the project Tutorsband, which he founded. I went there as a developer for several years before the “death” of a startup.

It was an educational platform where you could conduct stream and webinars. Users can stream video for free or for a fee. Platform earned Commission.

The main market for the project was Ukraine and the CIS. Tried to enter the Western market, but could not. This is perhaps the main reason why Tutorsband and failed to become a successful startup, although at the time there was a demand. For example, they are used “Privat”.

To attract new users to the platform, it was necessary to create quality content, and in order for this content to earn, needs an audience. It is very difficult to build a company with no initial audience. Restream, unlike Tutorsband is a streaming platform for users that already have their own audience.

Then followed the usual story. Start-up ran out of money, they are not even enough for a salary, the team began to disperse. Somewhere in this atmosphere arose the idea to create a Restream.

How did the idea Restream

As Alexander shared with me the idea of creating a service for streamers, which would give the possibility to stream videos on multiple resources simultaneously. We still sometimes laugh at the fact that this was the first idea, after hearing which from the first I said, “Might work”.

In fact, we didn’t have much time to analyze the idea, test it. Minimum viable product we created for the month. He, frankly, was in a terrible state, but we still launched it.

Began to share the idea on forms, Reddit and other sites, where users discussed the possibility of multistreaming. So we saw that come to us the first users, leave feedback, report bugs, recommend services to each other.

From the beginning it so happened that I was in our team studied the technical issues, and Alexander — promotion. He sent thousands of letters to the media. We are very hopeful that our project will write all about it know.

For a long time no one answered, but once we got TechCrunch. Their publication began to distribute other resources. At some point the number of registrations jumped sharply.

'Вкладывали всё и жили на $200 в месяц': как украинский стартап привлек $5 млн инвестиций из США

Andrew Zurinski. Photo: instagram screenshot/restreamio

About financial difficulties

When the number of users grew, first on the platform, of course, there were technical glitches. But that was not the main issue.

The main issue for us was the lack of funds to pay servers. Streaming in this respect – something very expensive. We launched the product free. It was our advantage over competitive services, but also a disadvantage, as the company did not earn.

We had some very difficult months when we didn’t know what tomorrow will bring. We borrowed money from friends and acquaintances. We called the hosting providers have come up with some nonsense that I have a problem with the card, “do not turn off, please our servers, we all pay”.

It was terrible knowing that we’ve found a product that people really need, but we can lose it due to the fact that we have several thousands of dollars.

Until we found the first investors had to borrow, spend their savings, to live on $100-200 a month.

Later, we added to the product website Donate button (donate). Users dumped on a few dollars. Received from donations $100 per month.

About why the search for investment — not a quick thing, and why should not search in Ukraine

Most importantly, we made a mistake: incorrectly calculated the time in which you can find investments. We were too optimistic.

Now I understand, if the investor is delayed for three or four months, that’s fine. No matter how attractive the growth performance, whatever the potential of this idea, still 99% of investors refuse. It’s normal to him from the very beginning should be treated patiently. We were not in despair because of the refusal, but, of course, was afraid of losing the project.

Had experience with the search for investor in Ukraine, after which we decided to move on. We spoke with several potential Ukrainian investors. They might could offer us more money than we got in the end. But most of them offered inadequate conditions — wanted to 20% stake in a startup at a pre-seed round (early stage — approx.ed.) required to coordinate all decisions.

I’m afraid that they just killed those startups that have agreed to such terms, after all, the next investor will automatically be refused, looking at such a distribution of shares in the company.

Our first pre-seed investors and angels are normal guys-entrepreneurs, who also built his business from scratch. They are not from Ukraine, but they believed in our idea and offered favorable conditions.

They gave us several tens of thousands of dollars in exchange for a small stake in the company. It was a relatively insignificant amount of money, but she saved us — closed current infrastructure costs and allowed to continue to work on Restream.

In addition to finances, they helped us a lot in building your own tips and advice. And that they recommended us to go to the States.

'Вкладывали всё и жили на $200 в месяц': как украинский стартап привлек $5 млн инвестиций из США

Photo: instagram screenshot/restreamio

About the accelerator and the first American investment

In search of financing, we also sent a lot of applications in the us accelerators and venture capital funds such as 500 Startups and YCombinator.

A long time did not receive any answer, but after a pre-seed round unexpectedly passed to the accelerator International Accelerator, which is located in Austin, Texas. In 2016, Alexander went to America for a few months to participate in the program, to learn and to get acquainted with investors.

By the time we were still very limited financially, and the sum of fifteen thousand dollars, which had to be spend on a ticket to Austin and back, seemed to be just space. But your plane ticket Alexander gave one of our friends, which actually led us to this accelerator.

By itself, the accelerator doesn’t make a lot of training and a small amount of money that actually goes to reside in the United States. But thanks to the program we learned to communicate with the local business community to properly present themselves, found a lot of useful contacts. There we also met his main mentor, who helped not only with advice but also participating in the negotiations, calls.

Through the accelerator, we have received investment for the first round of a $700 thousand Money to build a complete team.

After the second round in 2018, when we raised $4500000 from the venture Fund, Silverton Partners, the startup first started to earn. The Foundation is based in Austin, it’s not such a big city, so we are with prospective investors introduced to the people who worked with us in the accelerator.

About the peculiarities of the Americans

The mentality of Americans is very different from the world view of people from Eastern Europe.

Americans are not inclined to openly criticize, to demonstrate dissatisfaction, or even directly to refuse negotiations. It’s the people who perceive everything positively.

You’re at the meeting say that everything is cool and the idea and the product. But in fact, it does not mean that they are ready to tell you Yes. They are “no” do not like to talk. Below you explicitly denied, it is necessary a very bad thing to do.

First, this is puzzling. You think that the meeting went well and it actually came to nothing.

About the team formation and the opening of an office in the United States

From the beginning, our entire office was in Vinnitsa, in our hometown. Last year we moved to Kiev. Here we have the entire engineering team, marketing, tech support.

The first time was hard with the set command. In Ukraine, especially in the winery, it was difficult to find developers focused on productive work. That is, those who are really responsible attitude to what they do.

However, for the first year our team grew to 10 people. Now we are a little over 35.

On Friday, January 31, we opened our first office in Austin. We chose the United States for registration of a company, because here is clear and transparent process of opening and running a business. Clear taxes. Very easy to get paid from anywhere in the world. I think that in Ukraine this could be difficult.

Many say that Austin is becoming the new Silicon valley in the United States. The city is developing very fast. Here and there were many major corporations and start-UPS, but now a real boom.

Business deliberately moving to Austin, open R & D centers, because market access is the same and life is cheaper than in San Francisco, which out to fly a few hours, and domestic flights are very cheap. However, prices in recent years are growing in Austin.

This is a classic American city business center, where a large part of the business, offices and entertainment. Without a car to move out of the centre it is impossible, there are no sidewalks and virtually no public transport. Overall in Austin to live, except in summer it gets unbearably hot.

I’m not planning to move there, but long-term plans in a startup — it’s useless. Anything can happen.

In the American office yet three persons. Moved Alexander to build a team. Also there will be to work with one of the developers, he is involved in work on a new product that helps brands to promote their offers using streamers.

Our specialist business development located in San Francisco, because there is a large concentration of companies with which we work. But the product we are developing in Ukraine.

'Вкладывали всё и жили на $200 в месяц': как украинский стартап привлек $5 млн инвестиций из США

Photo: instagram screenshot/restreamio

Audience and profit

It is difficult to name the country, where we now have no registration. For almost four years we grew to 2 million users.

A third comes from North America, mainly the United States. Another third were from Europe, 25% from Asia. Also highlighted Russia and Brazil, where our service is very popular.

From the beginning most of the content was broadcast online gaming. Now the trends are changing gradually in favor of a lifestyle, when people are just telling something to the camera. Increasingly companies are developing a live streaming as another kind of content in order to promote their services, show production.

We are growing rapidly in Asia. The content there is quite specific, for example, a very popular streamers that just eating on camera. For me, it’s weird but people like it judging by what a huge audience of bloggers on this collect.

Six months ago Restream reached the breakeven point, we no longer depend on investment and, therefore, feel more confident.

Our subscription itself is free. All the features that were initially free such now remain. Later we added additional features for those users who are willing to pay and subscribe. We also added a business membership. This brings the platform main source of income.

Recently we launched a product that allows brands to access audiences of our streamers. The brand creates an ad campaign and we offer advertising streamers.

The model is very similar to Google AdWords, brands are advertising streamers — pay for it, and we earn the fee. We have just started to develop this area, it is very promising, but there is still a lot of work.

About competitors and future plans

Despite the fact that streaming is very popular now, we don’t have a lot of competitors. There were a few similar services, when we started, but they eventually disappeared or they were replaced. There are several services that focus on the B2B segment, but they have very high prices, but free access is non-existent.

We spend a lot on the part of users, which we do not pay, but receive fast growth and we believe this is our main marketing channel.

There were cases when our service is copied, but no copy of it has not become a full-fledged competitor. In 2016 Mail.ru offered to sell them the company, but we refused, because they thought that they can do better. Then they began to threaten that will copy us. Copied, launched its streaming platform. For a long time about it heard nothing, perhaps it is already closed.

In General, our plans depend on trends and new opportunities that appear in our industry. In addition to the growth ambitions plan to develop an advertising model and create simple solutions for streaming, which can be used without any technical knowledge.

With regard to the growth of the team, the big plans we have in Kiev now looking for engineers, designer, and recruiter.

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