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Graham Griffin
Graham Griffin
Articles (48) 

1,000 Entrepreneurs: Slava Khristich on Dodging the Collapse of the Soviet Union and Realizing His American Dream

Our 10th profile covers the founder of Tateeda

March 02, 2020

Over the last seven years, Slava Khristich has grown his business Tateeda to almost 50 employees in the United States and Ukraine. The company creates custom software solutions for clients in health care, real estate and field services technologies. With over 30 developers accessible to clients 24/7, the company has already completed over 100 custom projects. On top of solving communications issues with overseas outsourcing, the company has saved their clients over $5 million since going into business.

Before the business

Khristich first found himself coming to the U.S. in 1991 to visit some family right after college. This one trip would affect the rest of his life. Shortly after arriving stateside, his home country would overwhelmingly vote for independence from the Soviet Union. As history dictates, the Soviet Union would collapse in that same year with other countries also declaring independence. The collapse would force political and economic reform that would create waves throughout the next decade for these countries.

For Khristich, the timing of his trip would offer him a unique decision to be made. He could return to his home country in the midst of this upheaval or he could remain in the United States. “I decided I should probably stay because it was very unstable back there,” Khristich said. In his own words, it took a long time for him to get his paperwork sorted, but he would eventually find himself living permanently in the U.S.

Throughout his life, Khristich had planned on starting a business. Back in Ukraine, he had played with the idea and had been working on starting some smaller ventures. While none of these would find success, he saw the U.S. as a different beast where he could find his niche. However, as a Ukrainian who spoke no English, work in the U.S. would not have a glamorous start. “So my first job was putting rubber handles on golf clubs at Calloway,” said Khristich with a laugh.

With a stroke of luck, he would find a new job working as a technician with a company doing biology work. Here, Khristich would find his inspiration after being introduced to computers. The company was utilizing both computers and robotics within the lab, and he found himself fascinated by the capability of the computers.

“I had studied computers in college, but it was mainframes. I did not see the real use of that," Khristich said. "It was so slow, but here I started seeing people using the computers in the lab and what kind of information they could receive as well as some robotics systems. You could plug the computer into the robots and the robots would move and do something in the lab. It was really cool and I got really interested in that.”

From there he would dive in headfirst and seek out as much information as he could about software engineering. At the time, the internet was lacking in both usability and information. Alongside some classes at a local college, he found his nose stuck in books to gather as much knowledge as possible. Putting in anywhere from four to six hours a day after work, Khristich dedicated himself to becoming an expert software engineer. Fascinated by the technology, but seeing no business potential in it, Khristich initially considered going into the biology field. However, 2006 would see his first attempt at starting a business.

First failure

Prior to Tateeda, Khristich found himself on the forefront of technology working on his first business project. The company he started was working on developing internet browser-based television. While it may seem like a simple concept today as almost every major service provider offers this service, at the time, the technology was new and exciting.

Securing several angel investments, Khristich and his new company attempted to introduce a new platform for television. The company would find itself facing some major hurdles.

Running into a brick wall, the company found itself stymied by the established infrastructure at the time. In a best-case scenario, internet speeds at the time would allow for a download speed of three megabytes per second. Today, internet service providers boast of speeds over 1,000 megabytes per second. For video streaming, it is recommended to have at absolute minimum, a three megabytes per second download speed currently. Needless to say, Khristich and his new company ran into connection issues. Further compounding his problems were the content providers.

At the time, the internet was still untamed waters in which privacy and security were overlooked for access to information. Many of the content providers that Khristich was looking to work with were actually afraid of their content going live on the internet. This would put their copyrighted material in a prime location for theft and piracy from various sources. Many of the potential partners for the new platform simply refused to put their content into these circumstances.

With no supporting infrastructure and no trust from potential partners, Khristich was still able to keep the business afloat for around a year with over a dozen employees. With the technology ready, but the world still far behind, Khristich struggled to maintain funding for his business. Eventually the angel investors supporting his first venture would go bankrupt and funding would dry up overnight, effectively sinking the business.

Building the business

“I was depressed for like a year,” Khristich said, knowing that his previous business was on the edge of success. With his hard work, Khristich built himself a name in the software industry and was able to find work after the first business went under. Working as a consultant and eventually a lead engineer for several companies, he continued to build upon his resume.

Eventually landing a firm position working as a software engineer out of an office in San Francisco, Khristich once again found himself working a normal job lacking the entrepreneurial satisfaction he desired. However, as he had not initially seen the potential for starting his software company, he was not considering starting another business.

The company he was working for would fall on tough times and be forced to make cutbacks. The office Khristich was working in would be closed and he found himself without a job once again. As luck would have it, the timing could not have been more perfect. Six months prior to being laid off, Khristich was visiting friends and family in Ukraine and had theorized a new partnership with one of his friends from home.

In the end, losing his job would create the perfect situation for starting Tateeda. After working in the industry for close to 20 years, Khristich had seen first-hand the difficulties coordinating with overseas contractors. According to Khristich, all too often products would be delivered late and people were forced to work crazy hours just to communicate across time zones. With his friend and partner, he theorized they could handle all of the communication and, therefore, eliminate the struggle with outsourcing software development overseas.

Still working full-time as a consultant to a few firms, Khristich hired a single developer to work for the company while he took his earnings and poured them back into it. Using his reputation, the company would start small, bringing in a few acquaintances as their first clients. Alongside this, Khristich would use his consulting interviews to pitch the new business:

“I would go to interviews and they would offer certain dollar amounts that were kind of low for me at that point. I would approach them and say, ‘Hey guys I can still be involved. You can get actually better performance. You will be able to save more money and actually expand your team.’ It is funny, but I got a few clients from interviews with those companies.” 

Some of the companies would get angry, saying that Khristich was only showing up to the interview to do a sales pitch. In the end, the opportunity to avoid the headache of communication and the savings that Khristich offered would be enough to sign on their first clients and Tateeda was officially in business.

Operational success

Alongside his partner in Ukraine, Khristich bears the brunt of the long hours required for communication overseas. He begins his day around 6 a.m. and regularly does not go to sleep until after midnight. By doing so, he creates a bridge between his clients and his staff in Ukraine. His partner manages the overseas operations and handles management during the night time in the U.S. This allows for direct management over the close to 50 employees that Khristich now employs.

The two communicate on a daily basis to ensure there is no delayed communication between their clients. Khristich claims they are rarely late with their deliverables, but that if they are for any reason, their clients are the first to know. On top of this, clients are able to contact Tateeda’s developers 24/7 should any issue arise or if something needs to be changed in the middle of the process.

Creating this complete transparency has allowed Khristich to maintain his clients throughout the years without signing long-term contracts. Revenue is based upon products delivered rather than time, so clients are never overcharged for the products they are seeking. By doing this, Khristich says his clients are never held hostage.

“You know some people do it where they say ‘We are not going to release the code or we are not going to do this or that until you pay.’ When people are not paying, it is usually for two reasons. Either they are not happy or they do not have a way to pay. Maybe they lost some budget. When the second thing happens, we can find a way that works for both of us,” Khristich said.

This collaboration between Tateeda and its clients allowed for many of the early contracts to be extended and the company continues to work with these clients to this day. Alongside these early successes, the company saw a breakthrough while growing alongside one of its clients.

This unnamed client had been working with Tateeda for several years when they began to make changes within their own infrastructure. This allowed for their performance to improve rapidly and the company was able to double the speed of their product over a three-year period. The IT department grew from a single person to almost 50, and Tateeda worked alongside them the whole way. This brought in rapidly increasing revenue and Tateeda was also able to expand.

Building upon its solid structure and well-established procedures, the company has seen another breakthrough in just the last six months, over seven years after starting out. While the company continually reaches out to new clients, they have begun to see a flood of inquiry come in from recommendations. “We would have some small referrals before, where it was maybe once a year or twice a year. This past six months, we have had more and more incoming calls, emails and people actually reaching out to us wanting us to do work for them,” Khristich said.

Struggles

While the company has ultimately found success, it has not come without its hardships and mistakes. For Khristich, the biggest regret he has comes down to timing. “If I could start this business earlier, I definitely would. I do not know why I was procrastinating for so long. For me, losing my previous job was the best thing to ever happen to me. I should have started right after I failed my first business,” he said.

After the business was up and running, Khristich recalled the business running into some issues with paperwork. He said that the company initially did not have the proper legal documentation and that ended up having side effects. Khristich is now adamant about having proper structure and documentation when starting a business, even though the problem has since been sorted out.

Alongside these mistakes, running a business does comes with its own difficult times. One of the worst parts for Khristich is when “you have to let someone go.” During these times, he fully admits the company made a mistake in hiring someone, whether they were a wrong fit for the company or unable to do the job properly. At these times, both parties suffer. Someone loses their job and the company is stuck with a role that needs to be filled.

On top of these mistakes and struggles, Khristich has made personal sacrifices to ensure the business became the success it is. The main one of these is the detriment to his family. He finds himself working throughout the day and unable to spend the amount of time with his family that he feels they deserve. In an ideal world, he would be able to work less, but he knows that he must maintain the hours that he currently does so that he can maintain the line of communication with his clients.

Future of the business

Looking toward the future, Khristich claims to be kept alert, rather than worried, about the need for new projects. “If your business is not growing, it is dying,” he said. Fully knowing their current clients cannot keep them afloat, Khristich is always on the lookout for new clients and new projects. He said that if he is worried about anything, it would be of not having enough projects to keep the company in business. This worry is compounded by the competition in the software industry.

Everyday there are new startups emerging in almost every industry. For a company that focuses on technology development, this is very visible. Almost every industry has companies progressing the technologies used and Khristich is well aware that he has new competitors appearing everyday.

Alongside this, he says the price of doing business is rising around the world. “Labor is getting spread more equally around the world and you can find good resources all over the place. The risk is that the cost is getting higher. It is not like certain parts of the world have better rates. It is almost like all rates are getting level and going higher,” Khristich said.

Due to this, companies are seeing the required labor getting more expensive and, therefore, their costs going up. However, for the industry in general, Khristich sees many positives. New technologies are emerging everyday and communication is getting faster. 5G connectivity is specifically one that he looks forward to that will significantly increase the speed of communication.

Tateeda is also planning on moving into the fields of artificial intelligence and machine learning. Khristich said the company only has basic knowledge of the fields at this point, but that he is very excited about the prospect of learning more and finding ways to utilize them in their software development.

Closing out

With big goals in mind and a bright future ahead, Khristich plans on maintaining control of the business for the foreseeable future. Claiming that he has big goals and that he will not give up until he reaches them, selling the business is currently out of the question. It could be considered in the future. At the same time, he feels that his business is like a family and that selling would be like selling loved ones, so it is unlikely that he would do so down the road.

While the decision to sell will ultimately fall on his shoulders in the future, for the time being, he is happy to enjoy the perks of the position he holds. One of his favorite parts is that he can travel anywhere for business. If there is a conference he thinks will be beneficial, he attends regardless of the location. At the same time, he can take a vacation whenever he chooses, though he has not taken one for the last two years.

In the end, Khristich enjoys that he works for himself and that ultimately everything he does is for the company he has created. “When you are the owner of the company you can do whatever you want. I like what I do and this is not a job for me, so I never get tired of what I am doing,” Khristich said.

Question and answer

GuruFocus: Were there any other key individuals along the way that led to the business’ success?

Khristich: There are quite a few actually. Our clients who believed in us. People who knew me and they gave me a try. They helped us to succeed. There is no one single individual. There is a group of people who believe in what we do. They saw potential. They saw how they could benefit and how they could help us. Our first clients are big contributors to our success today.

GuruFocus: Do you have a favorite person or quote that you like to look to for inspiration at any point in time?

Khristich: I do actually have a few, but one of them is really simple. It is from Churchill. He said “If you are going through hell, keep going,” and that is exactly the point with startups. You will go through hell. Some days you will cry. You will say, “Hey, I do not want this anymore. Just give me a stable job. Something nine to five. I do not want to deal with that.” You need to bite your lip and go through that. Just do it. Sometimes it is really hard, especially when other people depend on you. It can be hard. It is not just you failing. It is the people who are working with you. If you employ somebody, it is their family. If you do not succeed, you have to let those people go. It is a big chain of responsibilities.

GuruFocus: What are you most grateful for at this point in your life?

Khristich: Well I am grateful for my family because they do understand that I cannot spend as much time as I would like with my family. My parents for giving me an education and they taught me how to behave with different situations and different people. I am really grateful to this country for giving me this opportunity to make my dream come true. I am really grateful for my ex-country that I grew up in, who is growing great resources right now for our business to succeed. On the personal level, it is pretty much my family at this point. They support me. They understand and they enjoy what I am doing and the benefits right now.

Khristich’s advice for entrepreneurs

Find a group of peers:

For Khristich, one of the biggest improvements in the business occured when he joined a Vistage group. This group is comprised of business owners and CEOs who all join together and share their mistakes and advice. This has allowed Khristich to learn from others' mistakes and further expand on his knowledge. At the same time, it has taken some of the weight off of his shoulders as he now has peers that share common issues. Finding these types of groups will normalize the issues that you may be having and allow you access to a vast amount of resources. Seek out peers and learn from their mistakes so that you do not make the same ones in the future.

Seek out the best help:

At times there will inevitably be questions that you simply do not know the answer to or do not have the skillset to solve. Find the best people to help you. Upfront, these types of people might seem like an expensive or unobtainable option. According to Khristich, in the long run they will end up being cheaper. You will have less problems down the road to fix and you will not waste as much time. Find the best people to help you and make sure that you keep them happy. Your investment will pay off in the end.

Be an expert:

You must be an absolute professional at what you do. Learn everything that you can and be the best at what you do. Khristich maintains the belief that at some point in time, your resources will fail you and you will be forced to pick up the slack. By maintaining your expert knowledge, you will always be able to support yourself and your company regardless of what happens. Being an expert at what you do is the ultimate safety net if things go wrong.

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