How a Ukrainian founder rebuilt again and again | Founders Ep 2 transcript

I was approaching a very huge fire, and I felt like I'm losing my face. I'm just sitting on the ground for several seconds. And at that moment, I remember, I made a choice. You can sit and watch or you can do something. My name is Andrii Ilchenko, and I'm a co-founder of K.tex, located in Irpin, Ukraine. K.tex company was founded by my father, together with me. He had an idea that he should found three businesses for three sons, and I'm the smallest one.

So, together with him, we founded K.tex as a nonwoven manufacturer in Ukraine. We were the last on the market, but now we are one of the biggest manufacturers in Ukraine in our market. It took us not so long! Only 25 years of business, going through different obstacles, troubles and highlights. I joined the business as it was launched. I was 22 at those times. So, this change during your growth, would be sometimes painful for you because you understand that you are not good enough for the moment.

And so, you have to be adaptive and you have to change yourself. If you are not changing, your business will not grow. Nonwoven materials, you see it in many stuff. So this is soft wadding for insulation material for garments, the biggest market for us at the moment. Construction material, for example, geotextile to protect roads from destroying, to make reinforcements of the banks of the river, some products for medical applications.

At the moment, we are also delivering a new product range based on natural fibers, like hemp. And these products go to agriculture, to construction industry, mattress manufacturing, furniture manufacturing. So, this is a very, very wide range of products, which deliver you some kind of performance. As a consumer you touch them, you breathe the air after the filtration media also made by nonwoven. So, it's a very wide range of products, which we are now using in hundreds of applications.

You were still very young when the business nearly fell apart, not long after it was founded. What happened and when did you realise that you had to step up? So, the business was founded in 2003, and we had a group of investors, but in two years, the situation changed and no one wanted to invest in this business anymore. Many of them were just waiting for some cash flow from the business. But it's not working like that.

And so, you have to invest, you have to build, you have to grow your company. I just graduated my university and joined full time to the team. And my father asked, do you know what to do? Of course I know... I'm 23, I just graduated... of course, I know how to grow the business. I was confident that I know what to do. But the next 15 years, 20 years, shows me right now that maybe I shouldn't have been so confident. But this type of confidence in the very beginning is very important.

In my case, it was like several pillars. Self-confidence and the confidence and support of my father, who always gave me this opportunity to take my own responsibility, make my own mistakes, and grow together with these mistakes. Being very active and liking marketing very much, also gave me some base of knowledge to understand the market, to understand my customers and to change the approach of the company. As your kind of business mentor, what was the best advice your father gave you?

It was so many, for sure. The best advice was for sure, never give up. His story was pretty difficult because he was an aircraft engineer, so he graduated his university with a gold medal. As a student, he built a lap pipe to calculate the airflow of an airplane. He gave his life, like 20 years to this business, working in the biggest aircraft manufacturing company, Antonov. And, uh, he lost his job in one day. So, this was the first lesson.

Maybe I was in school in those times, and I just found him at home one morning, and I was very surprised. So, he lost his job and he had to go to the market and to find a new job. And first he worked as an employee, but in a few years, he became a shareholder in one company. And in several years, he started several new companies together with his mates. Unfortunately, his story was in a building partnership. He had a very, very bad experience.

And it influenced also much on me, because for a long time we were staying as a family business and losing some opportunities for growth. Because as a single company, you can grow only so fast if you are not entering and making partnerships together. His story influenced so much on me and gave me both good and bad examples which we talked through with him, trying to find out what to change and maybe this kind of approach was the best advice.

He passed away, I understand in 2019. How difficult was it to adjust in his absence and did you feel equipped at that point to lead the business without his guidance and support? Uh, yes. He died in 2019, at the moment when we were finishing delivering a new production line into our facility. He saw the line, but he never saw how it operates. That was a very hard time. And the time when you understand that you have to be the most grown up in the room.

You don't have this type of back up. And that was a time with very hard pressure. But luckily, at those moments, I already had my business partners who invested in our business like five years before. Both of them were my friends. The reason I had them as partners was a tragic story for business, because it was a big fire and we had to go to the market and to find some some partners to restart our operations. Their support gave me also this kind of strength.

So, this is also the kind of change I had in my life. When you start as a single family, like when you run all the business for yourself, you only have responsibility for you, for yourself and for your family. And when you join together with business partners, it reshapes everything in a business, in the kind of way you are making decisions, investment and so on. By 2014, the business was finally stable, and then this fire broke out, destroying most of the facilities and the new production line.

Take me back to that day. What went through your mind? How did you find out? It was the 10th year of business. So, we finally made a profit. We finally made our strategy to grow. And I like felt, okay Andrii, you did it. Of course I have to admit that there are no accidents in business. It's someone's failure. And in this case, it was mine. You think about the growth of your business - you want to sell more, you want to produce more, you want to hire better people.

Sometimes you lose some risk management. So, it was a pretty tough lesson. It was a Saturday afternoon, I got a call from my head of production that we have trouble. And my only question was, how hard is it? It's very hard. So, when I was approaching our facility and saw this fire, we had, at those times, four and a half thousand square meters of production halls, and three of them were on fire. A very huge. A very huge fire.

I was approaching and I felt like I'm losing my face. I'm just sitting on the ground for several seconds. And at that moment, I remember, I made a choice. You can sit and watch, or you can do something. Of course, I took the second choice. Yes. And I stood up and gave some orders to my colleagues, to firefighters. We started some activities to secure what is possible to secure, and to help the firefighters to do their job.

And this also was the kind of experience when you understand that some bad things may happen, but you always have a choice what to do. And this is a choice you are making by yourself. Sometimes there is no one to support you in the moment. But yeah, it was a pretty, pretty bad experience. But it changed the direction of our business. And now I consider it as some kind of blessing, because for a long time we were looking inside, not looking around, and this is also a very bad situation for companies who want to grow, who want to scale.

So, it almost allowed you like a reset. It was like an evolution - because the damage was so bad, you had to look at it in a different way for the rebuild. Yeah, we were planning to make a reconstruction for a long time. So, this gave us a pretty good opportunity to reconstruct the whole production facility to deliver new lines. In only four years, we delivered a new line, built a new warehouse, and hired a lot of great people.

We also found out that many employees in our company consider this business as their own. They were so dedicated to the business, and they helped me as well, helped me much to restart our operations. Because they told me, don't bother even about salary. Let's try to relaunch. So, this kind of support, both from family, from my future business partners – who decided to invest in this facility, which was completely burned out – and my coworkers.

Joined together, it gives you strength. Did you feel a weight of responsibility to those employees? Is that part of the reason that you were so philosophical about what happened? You know, we started as a small company. And many people had worked with us at that moment for like 10 years. You start to consider them as a part of your family. You talk to your team more than you talk to your family. I spend usually in the office, like, 10-12 hours in the production hall, in the office, in warehouses, just to chat, to chat a little bit.

I'm happy to choose who is in my surrounding as employer. So, of course I'm trying to get people with a with a proper mindset, with proper skills and some values. I understand that it's much better to have values than some skills, because skills you can develop, but values are something that are given to the person. After the fire, why rebuild instead of walking away? First you don't have a choice. You have some obligations.

You have workers, you have clients, you have suppliers, you have the bank. You have some debts. Sometimes, when you start a business when you are 22, you spend all your lifetime in this business, you start to think, come on, what will I do if I lose it? It's always a combination of what you are capable of and what you are given. I was lucky to have a good team I told you about, and so they supported me very much. I was lucky to have my family, and they supported me as well.

We found a way to relaunch very quickly our operations,. How to outsource some products with our competitors, how to find new equipment and to deliver it to make semi-finished products that we can pre-order something, finishing at our factory. If you have some trouble, you should always try, because if you're not trying, you will fail. And if you try hard, you will find a way. You'll find supporters, you'll find investors, you'll find clients.

It's a kind of magic, maybe. But in my story, it happened several times. After the fire, you rebuilt with two friends, even though your father had advised against bringing friends into the business. Why them? What choice did I have? For me to run the business by myself, was a pretty hard pressure. You have to talk to someone about ideas, about the approach, about the decisions. It was clear enough that you lose a lot of competence because you have these talks like only between myself and my father.

This fire also gave me this opportunity to invite partners. Both of them were my friends, so one of them was my classmate. He was working in a bank business. He was a risk manager, so he looked at the area and decided to make an investment. So, it was pretty funny. The other one was in a consulting business. So, he was consulting many companies in Ukraine. He was the one who was responsible for the football competition, Euro 2012 in Ukraine.

So, he had so many experiences in different fields, a great network, and he could work anywhere. But he decided to invest in our company. So, in those times he was looking for an opportunity to enter into a manufacturing business. It was his decision. He wanted to not be in a consultancy business. He wanted to build some manufacturing facility. Luckily, I was open to this opportunity and my father also supported me with this decision.

We talked a lot about the risks that might change our relationship with friends. That, money is money and business is business. But we managed to build our relationship inside, keep it as a family, make it 100% transparent and 100% like a single voice. We talked to each other and we decided that every decision we make, we make like with 100%. Not like shares, but as partners. The reason was that if one of us thinks that a decision is bad, that we should in this case think about it more, because we are different people with a different approach, with a different experience.

And if one of us thinks that we are doing wrong thing, we should pay attention to that. And at the moment, we are like more than 12 years together. The growth of the company due to their contribution was, from the one side, it was very fast growth. From the other side, we changed the business. We split some responsibilities. For me, it became much easier to plan my life. To go on vacation for the first time in my life.

It was in 2013, I guess. Sometimes, when you are trying to reach some new horizons, but you are not making the first step, destiny will push you. Sometimes, it will make it in a very painful way, but you still have to look around and to see the best in the worst situations. What did each of them bring to the business that you didn't have in that moment? They bring a lot. I was an operational guy, so I was in the business, in the field, in the production hall, in the warehouse, in sales, and so on.

Igor was a guy from a bank system, so he knew how this system operates. And he took all the financials and built and reshaped the approach working with the banks, and other finance agents. Andriy, with his experience of international trade, international communications and his strategic mindset, because he was working in a strategic consultancy, pushed me to read more, to look over, to see different technologies, even those not suitable for our factory in the moment.

To build like five, ten years perspective. We start to move very fast with our decisions, because one of us could give some strategic side, the other from a risk management perspective would tell us why we'll fail and to pay attention to these risks. Russia invaded Ukraine in 2022, and once again, your production facilities were badly damaged, including another major fire. What was it like to go through that destruction a second time?

As my partner Andriy told me, you once burned your factory and rebuilt it. You do it twice, it's not a problem anymore for you. Of course, it was very hard times, as many of us were not prepared. We couldn't even imagine such a kind of situation. But, happened what happened. In the first days, our main concern was to remove our families, and remove our coworkers to find some way to relocate in safe regions. So, we called all our workers and we gave them information about a camp that we are launching in a safe area of Ukraine.

We were supported by our business partner who provided us a free territory, and at first, even free meals for our workers, but we still had to find like, beds, blankets, clothes, medicines. And this first maybe four weeks, we spent trying to make this camp workable. 40 families moved to this safe area, others had some relatives in safe areas, so, they didn't need some help. Our first decision was when we knew about the invasion, we called our accountant and made a payment, all the money we have on our account we just paid to people as a salary.

So, it was not huge money, because, just four days before we had made a down payment for new equipment. So, we so strongly believed that everything would be okay. Of course, we had several ideas about how we wanted to scale our business. We reshaped it for investment opportunities to third parties. Something to focus on, we started to go around looking for some investment opportunities and choosing some real estate to make maybe some relocation, if we would be lucky to save something from our factory.

In one month, in the Kyiv region, Russians were pushed away and we found that our location is in very, very good condition. Of course, we had a fire and we lost a lot of raw materials and products, but the equipment was in pretty good condition. As we had this camp for our workers, our core team was secured and we came back to Irpin and launched our operations in three months. It wasn't easy. We were lucky to have to have all our equipment safe, but it was not operating.

We couldn't find the reason. It was launching and stopping, launching and stopping. We decided to go out from the production hall just to think about it, trying to figure out a new approach. And I saw a small hole in the wall. Just in front of this wall, we had our electrical cabins, and can you imagine the amount of luck we get at the moment, because that was the exact hole and the exact problem. A small piece hit this electrical box and made some electrical signal not operational.

So, we found it and we fixed it. So, once more, if you're not giving up, if you are trying to solve a problem, you will definitely move forward. If you are sitting and doing nothing, nothing will happen. I told honestly to my team, that I'm not capable to pay a salary at the moment. So, we all will work for the lowest rate, and as soon as we come back to the market, as soon as we will relaunch our operations, then of course we will run business as usual.

No one left the company from this team. So, we worked like day and night to restart. And, yeah, it also gives you some confidence. It's always about people. You can have the best equipment, but without the team, you are nothing. K.tex is based in Irpin, a place that the world came to associate with some of the worst moments of the war, especially after what happened in nearby Bucha. What was it like to experience that as someone who lived and worked in that area?

We were lucky to relocate our families in the very first days. We were in contact with our coworkers. My business partner, he had decided to stay in Kyiv for a longer time. So, we were calling everyone, just telling them that you should leave, you should leave because the situation is getting worse. You have - we have - a place to go. We will support you. You just, in this case, you first should think about your family, about your safety.

Property will not give you a life. Property could be earned. It was a pretty difficult period of time when we lost all connections with those members of our team who decided to stay. Several of them were lucky to live all this time in Bucha, for example,. When I first saw them after the occupation of this territory, I asked what you are thinking of and what were you doing all this time? So, we just lived in the basement of our house.

We were lucky not to lose anyone of our team, but of course there were losses in their families, grownups, like parents. Our first time we were seeing each other coming back to Irpin, it was like hugs, smiles, tears, and it was the kind of feelings that you just can't imagine to feel to coworkers. It's like you're so happy that they are safe and alive, and the approach in the company changed. Some situations in families changed and so on.

But we became more like a family, less as coworkers. Sometimes it's good, sometimes it's bad. In any situation, you have like two sides. But with those who go through these hard times and go through with like open heart and open mind, supportively, of course, you build your relationships for like decades. So, it's another kind of relationship. Getting back, it was also a pretty difficult experience when you came back from some safe zone.

In Irpin, it was a territory of a battlefield - a lot of damage still on the ground. My wife, when she first came back, she asked me, how are you driving every day to your work and seeing all this destruction and thinking about all this terrible stuff that's happened here. So, I'm not seeing it as destruction. We just go back. We just understand that if we will not work, nothing will change. So, this is what we can do.

The guys on the front line are doing the most dangerous and the most important work. We all like owe them, because they sacrifice the most - their lives, their time, their health, their families. We have a lot of coworkers whose husbands are serving Army. And it's also changed the approach in how you communicate to them, even in some business situations when you have to understand that in this case, they are in a very difficult position.

So, yeah, of course, war changed everything, but the history of humankind is all about wars and a small period of time in peace. And unfortunately, we now have to live this time again. But I hope that everything in the end wlll be fine for all of us. How do you lead people when the danger isn't economic, but real and immediate. We are full of new ideas. When we came back, we saw an opportunity. It was also our decision that you can sit and wait, or you can try to do something extraordinary even.

So, we launched two new projects, completely different. They're both about textiles, but they're completely different. One is growing hemp, and we are actually, we are rebuilding the whole industry, starting from the field. We found an investor for this project, and a delivery team for that. It's a separate business at the moment with 200 people inside. And, one of the biggest investment projects in the Zhytomyr region.

The other project is in textile recycling. It sounds like a little bit crazy, why you should think about sustainability and recycling of waste during the war, but we see it in a completely other way. We have to think about the future. What will happen in five years, in ten years. Ukraine was Russia oriented in all the businesses, and this is destroyed completely for decades. What will be our new markets, how do these markets look?

So, of course, it's Europe, the United Kingdom, maybe United States, but mostly it would be Europe - not as a European Union - but as a region. And you both have opportunities right now to find some new funding, and to find new partnerships. That support of Ukraine and Ukrainians goes through people, and it's not the decision of governments, it's the decision of like societies. And we decided that we should try to use this opportunity.

For our employees, these projects we are now delivering - they are both challenging, interesting, and valuable for them inside. So, like, they tick all the boxes in their values. And we all believe that if you're not serving in the army right now, you have to do as much as possible - trying so hard to make the economy more sustainable, to make Ukraine more independent. So we are not, we don't want to be on international aid.

We want to be self-sustainable. We want to build our country, build our business. We want to shape other business approaches, because now Ukraine is very collaborative. Everyone is supporting one another. Of course, we have competition inside, but even the type of competition is different right now. So, for our team, for myself as well, being challenged with this type of project, a very difficult one, with a new investment, with a new product, gives us, like not only confidence in the future, because we build our future today.

It gives you some aim to wake up in the morning, to go to work. You do the right thing. What do you think the war has changed in you as a person? I guess none of us could say for sure at the moment because the world already changed us. It is changing us, and it will change something, and even peace will change us someday. Spending more time with the family, for me, since I started my business, it's both my job, my passion, my hobby, and all the results I have in my business is my like, lifetime results.

As an entrepreneur, you always pay a lot of time and efforts to the business, and you always lose some time with your family. This is maybe the main change, because I had to live separately for like five or six months. I was in Irpin, my family stayed in the safe zone. Then they moved for a few months abroad, to visit our relatives in Europe, and then started this hard bombing of Ukrainian infrastructure. We had no idea how it would be, whether there would be electricity or not.

You start to think more about some simple things. This is a very, very powerful shift right now in Ukraine. For our businesses, this shift from Russia to worldwide markets will benefit, but of course, first we should survive and stay strong in the moment. You've had to rebuild more than once through setbacks that would've ended many businesses and tested anyone's resolve. Where does that resilience come from? Of course, it's a part of like, maybe some personal aspects of my personality.

But it was, during my lifetime, shaped by some events and some people. For sure my father's experience - his failures and his success - gave me a perfect example that if you stop, you lose. If you continue to do something, you may succeed and everything will be fine. On the other hand, I was lucky, for sure, I was lucky to have people around. I was lucky to have some support around in the right time, the right people came and helped me.

My personal, like achievement, was to make this decision to go forward. The success or failure was shaped only with this surrounding, with the people who support you, with opportunities you see. Some new knowledge you get and for sure, it's always a combination of people around you. But this choice you have to make by yourself, no one will come over and make the choice for you to step forward and to try hard to do something.

After everything you've faced, what keeps you going? We have so many ideas to fulfill. The business gives you an opportunity to create every day. I'm lucky to have a good team as my business partners, as my coworkers. I just don't imagine another kind of life.