Experience On $100 Million: As The Three “white Collar” Launched The First Kazakhstan Startup In The Field Of Electronic Document

The publication of “the Steppe” talked with the co-founder and Director of the first Kazakh platform of electronic document flow between companies iDocs Maxim Gorbunov and learned how to build a tech startup in Kazakhstan, what is a “agashkin” assaults, as well as how to lose $100 thousand burnt the idea and start again. In 2014 Akmaral Umarova (28 years), Gauhar Saitbekova (29 years old) and Maxim Gorbunov (29 years) invested $100 thousand in a startup, but the project did not start — year of life, hundreds of sleepless nights and universal ambitions went down the drain. The young people did not give up and made new breakthrough, this time with experience.

Kazakhstans first full platform of electronic document management iDocs, started a year ago, is already used in several banks, pharmaceutical companies Santo, one telecommunication company and over 200 companies from SME. The startups plan to implement iDocs three thousand Kazakhstani companies by the end of 2017 and to enter the monthly turnover of 10 million tenge. ***. After graduating from KIMEP, I worked in several Kazakh banks in the departments of risk management and SME development. Before you start a business together, Gauhar worked as a financial analyst at Visor Capital, and Akmaral — in a large pharmaceutical company.

We met by chance we were introduced by friends. All were eager to start their own business. We knew nothing about startups, even words such did not know, but we had the idea to open an online service by type Naimi.kz that should have been called Dealz.kz. Idea shared with me a friend who told his friend. In General, such “word of mouth” turned out.

I decided to implement it. The essence of the service — post a job. To get out of the house, to take, to bring, to make the site. It responds to the performers. I wanted to do in Kazakhstan, something similar to Taskrabbit American and Russian project Youdo.

At this point, met Gauhar. She wanted to start a business. I told her about my idea and offered a partnership. She liked, she lit up and called in partners friend Akmaral. So we were three and we got down to business.

We do analytical reviews, do not know how to attract money. Decided that the idea of standing, and started intuitively. After that, met up with my father Akmaral. He was supposed to be an investor.

Then mom Gauhar and my parents. We made a presentation and convinced them to invest. We have received funding; for us it was a huge success. The share capital is distributed equally.

We started looking for developers. On the recommendation of friends came to a company whose Director was a girl of 21 years. They dashed us a commercial offer for $80 thousand. While developers were few and the demand for their services was great. They had many customers, including the richest — banks.

Much choice in the market. We felt it was a complete mess, and decided not to use their services. Through friends he went out again on one Studio. There we were charged the price of $35 thousand.

The prices were serious, as the site was not easy — using big data, complex program logic and so on. In the end we went to third party developers. Agreed on less than the previous one, of course. But in the end, with all the improvements about the sum and left.

I wrote the first technical task for the site on 24 sheets. It was just sloppy text. It is now I can shiny of reference to write, and then I just had to see the Russian Youdo, and borrow many things. In General, written “as God”.

Programmers started developing, we started to think about the design. Decided to put an ad in 99designs. For the future — to all those working through this site, I advise you never to buy a Gold pack. It is necessary to take the cheapest, to lay out the job and will return to you many designers. We did the opposite.

I ordered a very expensive logo. It was my greatest failure. I didnt understand what the logo is, and for some reason thought it must be expensive. The second mistake we found the designer, but he was a graphic (which we found out later) and needed a web designer.

He did design the first page, we liked it and we decided that he was going to do the whole site. I didnt know the difference between graphic and web designer. Now it seems so trivial, but doing something for the first time, so easy to stumble across any obvious errors. The designer was from Australia.

He was very difficult to work. We corresponded in English, I wrote to him comments to his work, he corrected, not all. With grief in half for two weeks we did the work, and there were still a lot of gaps. Then we had inconsistency. We accidentally sent him the balance payment and he disappeared.

We paid him about $2 thousand. I found a local designer. Just started to work with him, he screwed us. After was the designer who did everything in the style of “scoop”.

But it was cheap. We paid 100 thousand KZT, and he barely completed the remaining gaps. In short, it was very difficult to find good web designer. And it was just three years ago.

We thought now design fill and will run in November 2014. So I had to do. If we would start, it would be the first on the market. Similar site Naimi.kz start later. They still had other guys with this service, four young men from the “big four”.

They left work to do this business. But they had too few resources — 4-5 million tenge. They made the site even launched, but the service did not go, because it had a lot more money on development. They closed. Before them were two more of a similar service about which nobody knows.

This is very important. Many, despite successful startups think that they have like in a fairy tale all was smooth. We had everything ready to start — program and design. Just had to combine them.

It took a couple of weeks. We were able to start 1 November 2014 as planned. But we thought that the design just needed a little more to Refine. And then we got.

I posted the vacancy of designer at HeadHunter. Came finally a real web designer and looked for our yellow-black website in the “blinowska” style logo in the form of buzzing bees. We would be called Dealz.kz. I thought that all providers will be “bees”. In short, anthropomorphism like this.

It was full of trash. The web designer looked at our design and said. “Are you chase. Who did.

Its graphic design!”. And we decided not to start on 1 November. Start Dealz.kz was postponed for another two months. We took the designers already good for 300 thousand tenge per month. He worked remotely, but he did everything for a long time.

It turns out that besides us, he made orders and other clients. We later learned. He redid the design from scratch. But we had other problems — there was something wrong in the program logic. Had to rewrite the main code.

We have become hostages of the “excellent pupil” — wanted it to be perfect. In fact, the market was still on the design. We had to run. We then didnt understand the business side; it seemed to us, it is necessary to produce a perfect product.

Now everywhere talking about the concept of the lean startup by Eric Rice, were about it knew nothing. Startups I advise you to study this literature. Also suggest to study the source from Steve blank. This teacher Eric Rice, who taught him at University, and then together they made a successful startup.

He has a book that everyone should read startups. It is an encyclopedia for startups. It contains much more information than the book Lean Startup. Its called The Startup owners manual. The step-by-step guide for building a great company.

This is just a brilliant book. He has another book Startup Genome is a statistic based on the research of 2,500 startups. Very valuable information. You should also read Oliver Samwer.

This is one of the founders of the Rocket Internet company, which clones successful startups in Silicon valley and scales them to the whole world (Lamoda, for example). The book is called Americas Most Successful Startups. The author began to write it when doing a thesis. He went to America and conducted hundreds of interviews with founders of startups. Eventually wrote a guide — “how to do a startup”.

Its just glitter. Removes all the myths out of your head. I would even say. If startups reads this book and sees that hes got something wrong, as it is written in the book, so he is not in the way.

The methods described in this book are unique and applicable in Kazakhstan. We checked on your experience. Initially we wanted to do Dealz.kz for individuals, then decided to make and legal to companies have placed orders and have found suppliers for these services. Something like tendering platform.

And to enable us to register you had to sign a contract. Not to go to each company to sign a contract, we wanted it signed by the electronic digital signature (EDS) using egov.kz. We found in social networks the number of Directors of CSCS. I called him and explained what we want to do.

He in disbelief said that the PSCs to EDS have no relationship, and advised to contact the national certification authority (NCA) and try to learn from them how to do the signing of the contract directly on our website. Naturally, we didnt even know about the existence of the NCA, not to mention the role that it plays in this whole process. All of this information together in my head. And then I unexpectedly visited a great idea.

It is possible to create electronic document management system for companies. Then there is no need to spend money, time, energy on paper documents. We all wondered, and said to each other that this is a really cool idea. I worked in banks, a bunch of documents were sent, brought.

I understand how this idea will simplify the lives of office workers. We caught fire in earnest, and was euphoric about 10 days. We thought that such a service is not in the world. Of course, we were flying in illusions.

Then we looked at the global market, saw DocuSign — American leader among the operators of electronic document flow. The company operates since 2004. On the Russian market saw a similar service — “Diadoch” which launched in late 2010. Now in Russia about 30 operators of electronic document flow. But in 2014 there were only a few.

He “Diadoch” though launched in 2010, really started to work in 2013. It turns out, from Russia, we had a small backlog. We looked at Kazakhstan market, there was nothing like this, the niche was free. We decided that this topic should be moved.

Analyzed the Kazakh market. There were companies that provide services for the electronic circulation of documents within companies, but online platforms for external legally significant EDO was not. Such a simple idea. Signed documents sent per second, got back and all this on the computer.

No need to go anywhere or pay for shipping, everything is in the cloud, in the office you can sort, quickly find and see the status of who has signed, reviewed, accepted. Documents are encrypted, all secure. We thought this idea would be easy to bring to market, but I was wrong. We started to shake the idea and went to the developers, which did the first project Deals.kz.

At that moment, completely by chance, my classmate sent information about the competition for grants from the technology commercialization Center at the Ministry of education. There were two types of grants. One at 22.5 million tenge (at the rate of $120 thousand), the other is generally a huge 75 million tenge ($430 million). We were on second serve.

But we were afraid, how did not expect to get so much money. In the end, a second grant won a simple app, which is a maximum of 5 million tenge. He was given 53 million tenge, if Im not mistaken. We applied for a second grant of 22.5 million tenge.

It was in November of 2015. In December, we defended and passed the first round. There were about 800 participants. First, we have been in the top 200. Then was the presentation, where we proved the commercial viability of the project.

In the end, we received a grant. We had to obtain all the tranches in six months, but in the end received a year. It was a great experience. We realized that in Kazakhstan it is actually possible to win grants.

These 22.5 million tenge from January 1, 2015, we began developing iDocs. Under the contract, grant, we needed to spend the money. At this time, we had just finished development and web design Dealz.kz and suddenly it became clear that we applied the wrong logic to search for performers of the task. Instead of looking for them at the nearest location to the customer, the service selected artists from among those who had been online (on the website) at the time of placing jobs.

Plus, there was the fear that was later confirmed — this service is unlikely to be successful in the Kazakhstan market. In connection in all of this, we decided to postpone the launch until March 1, 2015. At that point, we came across a book by Oliver Samwer Americas Most Successful Startups. There was a moment.

“If you understand that the project will not go, no illusions, just get rid of it”. And, thinking that we cant afford two projects at the same time, and that Dealz.kz hardly “fly”, we have decided that we will not even start it. We could start now, but it wouldnt have mattered. You have to understand that just running will do nothing. Great importance is promotion and marketing.

This is a huge cost, much more than the development. In the entire epic Dealz.kz spent about $100 thousand. We were in a depression. Its hard when so many are doing and invest, and all for nothing.

But thanks to this we got a lot of experience. Now I personally have no regrets. This Chapter of life was closed. We have almost paid my startup MBA.

It was April, 2015. For iDocs we had a development plan for the 6 months from 1 January 2015, on which much has been accomplished. As we were detained by tranches of grant, had to do a lot at their own expense. We wanted to launch beta on 1 July 2015.

And then accidentally found out that Kazakhstan has developed a state information system of electronic invoices (IP, ESF). We wanted to do a full service electronic document management where there is invoices, invoices, acts of acceptance, invoices, acts of reconciliation, treaties, i.e. all the documents needed for business. Without invoices, the service would have been incomplete. We started to look for information.

Talked to people, they said as soon as the project starts, any electronic invoice needs to be handled in this system. That is, if the document was not created in it, it will have no legal significance, hence, our invoices will automatically become unnecessary. We started panicking and even thought to stop developing. We didnt know what to do.

Here we learn about such a thing, as the application programming interface (API). Its essence is that program “A” can use the functionality of the program “B”, provided that both products are cloud services, and program “B” has documentation on the API publicly available. Since the IP of ESF was API and it was in the public domain, we can integrate with them without any permission on their part. Of course, we didnt know.

We thought that you need to meet with representatives of this system, to talk, to take a resolution on integration through API. We didnt understand that if someone puts free your API, this means that it can join anyone. We went to the Ministry of Finance, where we are enlightened. Then began the integration.

We had to change their technical architecture under their program logic. So we became the first commercial structure, which is integrated with the state system of electronic invoices. The work took three months. In the end, we did everything right, shoveled the whole system. Now any company can send documents, including invoice, via our interface, and they will automatically appear in the IP of ESF.

After six months of development, we have a feeling that the electronically signed and sent via iDocs documents will not have legal force. Our potential customers asked about it. We couldnt answer exactly.

We began to read the law. Turned into a major law firm and asked to give an opinion whether the documents are legitimate. Plus, I contacted several law firms and tax. We all began to say that the documents are legitimate, that is, will have no legal significance.

We believed them, and thought that it was over. Two months went in a disabled state. We thought that it is necessary to change a product to make another or similar. I personally had no idea what we will do.

One habit I have read something on the Internet, and came across an article which said that in Russia the court found a legally significant document, which was signed by the electronic digital signature. I thought. “Whats the deal?. If Russia can do it, so we should be”.

I realized that I myself need to examine the legislation, to conduct legal due diligence and come to a conclusion. I took the Civil code, Tax code, Law on Informatization Law on electronic document and electronic digital signature and all that could be associated with electronic documents and electronic signatures. Two weeks read, studied, stressed, and on the basis of the information gathered came to the conclusion that our documents are legitimate. To make sure finally, I wrote a letter to the state revenue Committee of the Ministry of Finance, which raised three questions, referring to specific articles of the laws lead to that conclusion.

Everything posted. We waited for an answer for two weeks and got it signed by the Executive Secretary of the Ministry of Finance Natalia Korzhova. All questions was in the affirmative. And now we had an official letter stating that all the documents in our system legally significant, does not require duplication on paper and accepted by the court and tax.

It really helps us in sales and resolution of customer legal issues. After this incident, I realized that you should never be afraid to sort out their problems. Do not trust the authoritative opinion strictly. If we did, we would never have launched iDocs.

All these legal companies to this day would say that it is impossible. January 1, 2016, we have launched a beta version of the iDocs. The development took eight months, and to finalize four. During testing, we realized one thing you didnt know before.

Accountants began to speak, what to create documents in iDocs is double the work. First you need to make the document into 1C, and then re-create the document in iDocs. We realized that we need integration with 1C for accountants to create and sign documents directly in 1C. The first two months we did not understand how to solve this problem.

But in April we started to do the integration, in August 2016 we have completed. Then there was system check. And in September 2016 the product was ready. It finally can be sold. How it works.

No manual input. For example, the user creates a document in 1C, the same signs, and sends to another company. Received immediately loads the document in 1C, signs and sends back. No need to print the document, sign the paper, send the courier again to drive in the 1C and so on. This saves working hours, money and strength.

All our clients documents are safely stored on servers and is encrypted. No one will ever forge a digital signature. Access to these documents from anywhere where there is Internet.

We are already working with the banks, for which privacy and digital security in the first place. I think businesses should not even worry about it. We now do mobile app. Until the end of February are done and place it on the iOS platform.

We did it for executives who are constantly on trips and at meetings. They asked about such a possibility. We have two “borrowed” the idea and tried to start a similar site. One launched and then closed.

He was not terribly thought out. So I assumed that they would not be able to do normal service. Now another team is going to run. They also “borrowed” from an idea.

We wanted using their channel to sell our product and were willing to give 50% of profits. They were supposedly interested. We met with their CEO — I spoke for two hours in a Starbucks. He could not understand the term.

In the end, we explained to him on the fingers. “Thats a large client that we work with 10 of thousands of small and medium-sized companies. Imagine that each of them will pay us a thousand KZT”. And he saw the amount in millions.

Apparently, it is struck. He promised to contact us. Instead, we saw a post in social networks that they run the same project. The most unpleasant — the man blatantly lied that they will be the first on the market.

By the time when they will start, we are already more than a year will be. I am not against competition in the market, it gives the development of. But I dont like when it appears that way, through clever scouting information and low deeds. People dont realize that everything is interconnected.

Nobody can take someone elses. Everyone will get their just deserts. If they said they also want to launch such a service and want to cooperate, we would have gladly agreed, as planned. But people dont want fair opportunities, they want everything at once.

Were being sued for two contests Kazakh startups. It turned out, among the judges were representatives of the company. This is the reality of Kazakhstan. Every start-up entrepreneur, especially the young, should be ready for this.

We have a standard package tariffs for small and medium businesses — 100, 250, 500 and one thousand documents per month the price from 10 thousand to 50 thousand tenge. If it is a large business, there is in most cases necessary to carry out the customization (adaptation) of the product into the business processes of the company. It happens that we have to work on integration of our services with internal it systems that the company uses. Depending on this calculated time at the products introduction.

From a week to a month. It all depends on the requirements of the company and volume of work. After completion of all processes for customization we negotiate special rates with individual conditions. Depending on the number of documents is determined by the cost of sending a single document.

As a rule, the more documents, the cheaper the company can do the service. When we employ a sufficient number of companies we will greatly reduce prices on our services. We had two round of investment. Both rounds we have already successfully closed.

We earn and grow, increasing the number of our permanent clients in the SME sector. Also, soon we plan to organize an event and attract many customers. We hope to create a mass effect. Plan to return before the end of this year. Goal is before the end of 2017 to meet the monthly turnover of 10 million tenge.

For iDocs we have connected 250 companies, of which more than 50 are actively using the service. We are aiming at a figure of 3 thousand connections by the end of this year, a thousand of which must be paid by customers. Among our customers there are banks, a large pharmaceutical company, telecommunication company, company, dealer. One oil company we are now at the stage of negotiations.

This year we expect a large influx of large clients who wish to translate the document into electronic form. 1C in addition, we have integration with SAP. This is the same as 1C, but only for large companies. Now companies that use SAP, are obliged to submit e-invoices for certain types of goods.

It is necessary to integrate SAP c IP details of ESF. We are one of the first on the market that solved this problem. The company can integrate its SAP c IP details of ESF using the technical solution offered by us. This development brought us the first major client.

In September 2015, we sent letters describing our product and offer to use different companies. The product was still in test mode, we wanted to know the opinion of market. We also used all sorts of connections to spread more information about yourself. In the end it was a bunch of meetings. We met with the company of the “big four”, investment company Halyk Finan and Santo.

The latter said that they like the idea, and they think. From September to December 2015 we sat in the space of Almaty Tech Garden on the 17th floor “Nurly Tau”. We were a resident of the state of the startup incubator. And the head office of JSC “Chimpharm” — a subsidiary of Santo in Kazakhstan — was on two floors above.

Once we got back down the Elevator to the dining room and met CIO Santo. Again we talked and he confirmed that our product is of interest to them. After that we moved to a different office, come 2016 and we learned that from 1 January 2016, the state ordered the company to send an electronic invoice for some goods of foreign economic activity, in particular pharmaceutical products. Naturally, we immediately sent the commercial offer of Santo.

Had an appointment. We came and made a presentation. They listened and said we have a great product, but they prefer to work with the SAP. We are told that they have nothing, and they will do this development have at least six months. Later we met with SAP Kazakhstan, offered cooperation, but they refused.

In the end, they realized that the development only after 9 months. This moment was a turning point. Santo almost refused, but we persuaded them, offering a completely free implementation of the system.

We were told that they would consult with the Chairman of the Board. Then the officer sent us a questionnaire for analysis of our software, which we have fully described the technical features of iDocs. After that we waited another two weeks. And in parallel tried to find someone who knows the Chairman of the Board of the company.

He said that we can trust and we are not guys off the street. Because we understood that the question was not in the product itself, and in trust. We were a mere start-up that has never worked with big business. In the end, we through one company found out the Chairman.

He called and said that we are responsible guys and you can trust us. Just like human beings. I think it influenced his decision, he got some kind of confirmation that we at least know someone. I think he wanted to hear. That is, in the technical part, we said that we are the best option, but, from the point of view of corporate PR, about us, of course, nobody knew at the time.

We waited another 2-3 weeks. And then my four hours of the day, the Director called it Santo and says they want to meet. We steam run to this meeting. We thought that again there will be a lot of questions and check.

But we were immediately told that they are ready to cooperate. It was so sudden that we dont believe. But I tried not to look. So we got my first serious contract. We quickly implemented and the company started to work in a comfortable mode.

To this day they are our clients. In Kazakhstan, about 200 companies installed SAP, and they are very large. Oil, gas, pharmaceuticals, banks, national companies. 95% of companies use 1C.

These are the main two categories of our potential customers. There is also a third direction. We call it “customized product”. For example, a process in large companies need to digitize. We come and set up the iDocs to business processes this company.

In this direction we already have seven big customers. Electronic document management is already a necessity. We estimate the long-term potential of the Kazakhstan market at least $1 billion. Plan to enter the market of Astana by the end of this year, then — all over Kazakhstan.

We can cover the whole market. We have come a long way. We have a unique understanding of how to create a new product that is not yet on the market. We learned from our mistakes and know all the processes “to the nines”.

Many people look at successful people, successful startups, and I think. “What a handsome young man. He achieved this, he failed!”, but I dont see millions of mistakes made prior to this success. I dont want to be under the impression that we were born in a shirt.

In search of their paths and of your favorite things, people make mistakes, sometimes very stupid. People succeed not because even step to him go and do it right. Its all nonsense. People fall, get up, bursting all the doors, climb through Windows. And suddenly, they finally, deservedly get lucky.

At some point I came to a realization that life is full of chance. In the words of Warren Buffett, he became Warren Buffett, not because a lot and worked hard, but just a good coincidence. Looking at my life, I find a lot of evidence that. Photo.

Anwar Rakishev.

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