If Myroslaw Prylypko had to decide which project would keep him busy, his choice would fall on the horse. It took the engineer several years to ponder until 370 individual parts interacted in such a way that the idea became a reality: a wind-up toy horse that is able to walk through the children’s room. And that is made entirely of wood, just like the carriage for the wedding of Prince Harry and Meghan Markle or the still secret models for the American Disney group.
With their inventions, the 200 employees of the Ukrainian toy factory Ugears achieved remarkable success in a short space of time – despite a rather difficult environment: in a country that is still characterized by war, corruption and bureaucracy.
It has been just four years since the Kiev designer Dennis Ochrimenko presented the manager Gennadij Schestak with a business idea: model kits made of wood – of course not simple, but made up of hundreds of individual parts and designed so that even ambitious hobbyists spend days or even weeks assembling them , Ochrimenko had the idea, but not the capital for computer-controlled design programs and laser cutting machines for the production of such kits.
Schestak, now 45 years old, had gained a great deal of experience in early Ukrainian capitalism at that time: with the sale of American Cadbury chocolate and Palmolive products, Wilkinson blades from Solingen and articles for office supplies or with the renovation of fire-damaged industrial buildings. Schestak also traded in children’s toys from the Belgian brand Egmont or the German Haba; he imported cheap wooden puzzles from China.
At that time, only a few months after the revolution in the Kiev Maidan, Ukraine and its economy were weakened by the war in the Crimea and in the east of the country. On the other hand, Shestak considered, there was just now worldwide interest and sympathy for Ukraine. And so Schestak invested $ 120,000 from his savings in founding Ugears. He and Ochrimenko bought machines and enlisted engineers as designers. Engineer Prylypko, for example, put together submarine and aircraft kits as a child, studied aviation technology at Kiev University and designed lighting systems before joining Ugears.
Ugear’s first test product, a wooden business card dispenser, sold well in Ukrainian supermarkets. In the long run, however, Schestak believed that the business would only be viable if the young start-up not only sold in the comparatively poor Ukraine, but above all internationally. But before that came the answer to the question: “Did the market need wooden kits from an unknown company in Ukraine?”
To find out, the Ugears founders presented the kit model of a wooden steam locomotive with a trailer on the Kickstarter start-up platform in November 2015. “If we hadn’t been successful here, we wouldn’t have continued,” says Schestak. The response was overwhelming: Instead of the $ 20,000 requested to produce the steam locomotive, the Ugears founders received $ 406,000 from the Kickstarter campaign.
In Ukraine, the success of the young company in the war-torn autumn 2015 was rare good news. “Even television came to us,” says Schestak. “So we quickly became known across the country.” Ugears soon delivered its wooden locomotive and nine other wooden kits not only to the USA, but also to France, Germany and Asia. The biggest bestseller to date: a wooden safe for the desk, with self-adjustable code.
What is the company’s recipe for success? According to company boss Schestak, the mixture of imagination and precision. “Our designers are fanatics, who have been building models or making up their own ideas since childhood. Our kits are made with high precision: in the beginning we had cases in which an entire shift ended up in the trash. The kits bring back joy in tinkering and assembling that has largely disappeared from our automated everyday life. And it arouses emotions in many buyers because they remind them of their own childhood. In fact, not even a fifth of our kits are bought for children – 85 percent go to adults. ” Ugears accompanies every model on the Internet with a video – professional marketing of this kind is rare in Ukraine.
And one more thing is not self-evident for a company in Ukraine: working legally. The International Association of Chartered Accountants (ACCA) estimates the proportion of undeclared work and tax evasion in the country at 46 percent of economic output – one of the highest values worldwide. According to company boss Schestak, Ugears, on the other hand, relies on “100% legality: we officially employ all employees and pay all taxes and duties.” This has already earned the relatively small start-up an honor as one of the 20 largest taxpayers in the Kiev region.
Schestak paid out his partner Ochrimenko last year, there were differences about the company’s direction. Today Ugears delivers around 40 kits to 85 countries, even to Russia: The Russian importer chooses to go through a middleman in another country. And Ugears is already fighting plagiarism. “In China, we find stores that offer Ugears kits both as original and as fake,” reports Schestak. “It is a constant struggle for us, but it is not hopeless: Chinese trade giants must now also observe the international rules of the game, including copyrights.”
The international business is still expandable for the toy company: At the beginning of 2018, the English sales department asked whether Ugears could deliver a kit for a royal carriage in time for the wedding of Prince Harry and Meghan Markle. Designer Prylypko and his colleague Andrij Sacharchenko pondered even more intensely than usual until 290 parts interlocked and the carriage drove several meters after being opened – including a miniature Meghan markle and a mini Harry in uniform (the wedding couple can fight Queen models Elizabeth and Prince Philip are exchanged). The company sent the first 2,000 carriage kits to England in good time before the wedding date.
In the United States, Ugears kits are now even sold in the shop of the prestigious Guggenheim Museum in New York. The real breakthrough, however, hopes that company boss Schestak is just around the corner. In September 2017, an auditor was on behalf of the Disney group at the Ugears headquarters in a suburb of Kiev for several days. “Before Disney places orders with other companies, the company has everything checked: whether we work legally, pay our taxes, don’t exploit children, and pay decent wages,” says Schestak. Ugears employees take home the equivalent of 500 euros a month, well above the Ukrainian average.
The test was positive. And so Myroslaw Prylypko and his colleagues in the design department are working on the final details for five special models that Disney plans to sell in 700 company-owned shops and amusement parks from autumn 2018. 15,000 kits have been ordered for the first delivery. “If everything works, this is a colossal advertisement for us,” says Schestak. In the meantime, he regularly gives lectures on starting a business to Ukrainian students – and emphasizes the advantages of legal work. “If we hadn’t worked transparently and legally at Ugears from the start, we would never have been a partner for Disney.”
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