SHCHASTLYVE, Kyiv Oblast – Stanislav Matvienko, a 20-year-old student of Taras Shevchenko National University in Kyiv knows how to make money with the help of his Facebook friends. He created a website called Advice Wallet, where people get discounts for sharing information about eateries and clubs with their friends.
After studying
in Austria, Matvienko decided to start the business, which now brings in
$10,000 a month, he said.
Essentially,
people recommend venues on Advice Wallet to their friends, who in turn get
discounts or special offers as customers, while the referrer is rewarded with a
fixed amount of cash. The system works by using online payment services, such
as PayPal and until recently WebMoney. All the recommendations can be shared on
Facebook or Twitter, giving Advice
Wallet a
potentially global reach. The application is also available on Apple’s App
Store and Google’s Play markets.
“It’s going
to be a closed network, where you can recommend some spots only to your
friends. So, the more places you offer – the more sales you can get,” Matvienko
added.
It’s this
bond of trust between friends that he’s is banking on. About 92 percent of
internet users all over the world trust recommendations from people they
personally know, a 2011 Nielsen Global Trust in Advertising survey found.
Matvienko
spent some time working on the project with his partner, Anna Polishchuk, at
Happy Farm, a business incubator outside Kyiv. In early April, Advice Wallet
was named a top-10 Ukrainian startup by Forbes Ukraine.
Established
in the village of Shchastlyve by Ukrainian businessman Anatoliy Yurkevych,
Happy Farm has invested about $70,000 in every project, which includes
accommodation, mentorships, trainings and a trip to Silicon Valley in
California to find investors. In exchange, the business incubator gets a 15
percent share of the future company.
Alena
Kalibaba, Happy Farm’s education manager, said the incubator gives residents a
successful beginning because it doesn’t simply gather ideas but rather existing
projects that have potential. Thus, it selected six prospective startups among
65 IT projects. Some, like Matvienko, came equipped with a successful track
record.
Matvienko’s
first brush with business came in his hometown of Mykolaiv where he created a
website with a similar name – Advice World. It offered discounts in cities like
Simferopol, Yalta, Donetsk, Odesa and Kharkiv. First a customer registers their
phone number with the site and recommends places to visit from a list of
partner companies to their friends. The customer gets a discount starting at 10
percent when they provide a friend’s phone number. The person who shared the
recommendation gets money for their phone bill or to their bank account, while
Advice World gets a 5 percent commission. Now that Matvienko is busy with his new
project, his brother runs the old one.
The
business incubator outside Kyiv was set up to affirm the competitiveness of
Ukrainian IT-entrepreneurs. Anna
Degtereva, the head of Happy Farm gathered a pool of local and foreign mentors
to take successful projects off the ground.
The
five-month program has three stages. Teams get to pitch their projects and seek
angel investors, with the best going to the U.S. to promote their projects.
Everything starts with pre-trainings. During this period teams have mentor-driven
meetings, and receive consultation from the incubator’s board. Then they visit
Silicon Valley to meet potential investors. In the last stage, a list of
clients is formed as teams prepare for early-stage investment.
Currently
Advice Wallet team is looking for new markets to target.
“After the
U.S. trip we understood that we should keep an eye on (former Soviet) markets,
as they appear to be the most advantageous for our business. Now we are
negotiating with several Russian investors, especially with Imperious
Group venture capital firm,” Matvienko told the Kyiv Post.
Kyiv
Post staff writers Olena Goncharova can be reached at [email protected] and Daria Zadorozhnaya can
be reached at [email protected]
